The frequent occurrence of supply chain disruptions highlights the importance of sharing supply chain risk information (SCRI) among buyers and suppliers in third-party logistics (3PL) services. Business relationships and long-term collaboration among supply chain partners (SCP), such as 3PLs and their clients, lead to the sharing of SCRI. Risk information sharing (RIS) cannot be effectively carried out unless these relationships are based on more than just transactional information sharing. Therefore, a better understanding is needed of how personal relationships influence RIS among these partners.
The purpose of this study was to explore the role of personal relationships in supply chain RIS from the perspective of buyers and suppliers in 3PL services in South Africa.
The study was conducted among buyers and suppliers in 3PL services in South Africa.
A generic qualitative research approach was followed to conduct 18 semi-structured interviews with senior managers, employed by buyers and suppliers of 3PL services.
A personal relationship among buyers and suppliers of logistics services is the cornerstone to ensure that risk information is shared effectively. Accountability, reliability, and approachability are the main behavioural attributes required to ensure RIS among SCPs. Supply chain partners struggle to determine where the boundaries of a personal relationship lie, especially when risk information is shared. The most common mitigation strategies, when dealing with RIS, are the use of a code of conduct, a code of ethics and a standard non-disclosure agreement (NDA).
The study provides insight into the role of personal relationships in supply chain RIS, the behavioural attributes required for RIS, and the challenges associated with RIS when a personal relationship is present. The study is, arguably, among the first empirical studies in the South African logistics services context to investigate the role of personal relationships in supply chain RIS.
Keith Ferrazzi, a
Information sharing between 3PL partners may lead to risk exposure (Colicchia et al.
Supply chain risk is significantly influenced by supply chain integration (Jüttner & Maklan
Research investigating the role of personal relationships in the logistics context only recently started receiving attention (Gligor & Holcomb
The purpose of this qualitative study is to investigate the role of personal relationships in supply chain RIS from the perspective of buyers and suppliers in the South African 3PL context. Furthermore, in this study the required personal behavioural attributes to ensure the sharing of SCRI, as well as the challenges and the types of security risks associated with RIS, are explored, including how information-sharing risks are mitigated. In the study a generic qualitative research design is used combined with semi-structured interviews to collect data from buyers and suppliers of 3PL services in South Africa.
The following research questions guided the study:
What role do personal relationships play in supply chain RIS between buyers and suppliers of logistics services?
Which personal behavioural attributes are required to ensure supply chain RIS between buyers and suppliers?
What are the challenges associated with supply chain RIS when a personal relationship exists between buyers and suppliers of logistics services?
What are the security risks associated with supply chain RIS when a personal relationship exists between buyers and suppliers of logistics services?
How is RIS mitigated when a personal relationship exists between a buyer and supplier of logistics services?
The contribution of this study is threefold: firstly, it was undertaken in response to the call of Liao et al. (
The remainder of the article is structured as follows: firstly, a comprehensive review of current literature is provided; secondly, the methodology of the study is discussed; thereafter, the findings are presented and discussed. Finally, a discussion of the findings is followed by the limitations and future research opportunities.
The outsourcing of logistics is a growing field of business and the services provided progress from single service types to a broad range of services, together with supply chain solutions, contributing to the trend of logistics outsourcing (Karrapan et al.
The 3PL industry has grown exponentially in the global market through its vast range of services and activities of warehousing, IT services, order fulfilment and management, supply chain consulting and freight-forward services (Karrapan et al.
Personal relationships can be defined as an interpersonal bond between the managers of different firms, based on strict and formal business exchanges, and distinct from their formal business relationship (Porterfield, Macdonald & Griffis
Unique benefits and actions evolve when a personal relationship exists between a buyer and a supplier (Gligor & Holcomb
The collaboration and mutual connection between individuals lead to the establishment of personal relationships and interdependence (Gligor & Holcomb
To achieve effective information sharing, four attributes are required on a personal relationship level among the SCPs, namely collaboration and relationship length, trust and commitment (Li et al.
Trust within a personal relationship is a professed competence, which includes consistency, confidence, fairness, goodwill, objectivity and the expectation that the partners will be supportive in their actions and not exploit one another (Van Riper et al.
Finally, trust influences social interaction among SCPs and the quality of the personal relationship positively (Barnes et al.
Supply chain information sharing is the degree to which proprietary and critical information are communicated to SCPs (Huong Tran et al.
Traditional supply chain management investigations focused predominantly on the operational components by emphasising the efficiency of the product and service flow (Du et al.
When a firm implements RIS, the firm and its SCPs agree to exchange SCR-related information with one another in an accurate and timely manner. Supply chain RIS refers to communication beyond the standard exchange of business information about the possibility of unexpected events causing disruptions in the firm’s supply chain (Ali, Hird & Whitfield
Risk information sharing is also capable of facilitating the integration of the firms’ logistics by maintaining a consistent flow of inventory and materials between the firm and its suppliers (Kim & Chai
Establishing a sense of communal value among SCPs improves the sharing of SCRI, as the partners become more concerned, not only about maintaining an existing relationship, but also about the welfare of both parties (Ali et al.
Although RIS is used to reduce supply chain complexity and challenges, it comes with its own set of challenges. The most common challenges associated with RIS is the lack of trust among SCPs, because if you do not trust your partner you are not going to share risk information with them. Furthermore, the lack of SCP commitment is a challenge experienced by partners when risk information is shared, which could lead to inconsistency in supply and fluctuations in customer demand (Huong Tran et al.
The risk associated with RIS in the supply chain requires rigorous investigation (Du et al.
Another critical security risk associated with RIS is information leakages (Colicchia et al.
Lavastre et al. (
Furthermore, SCPs may agree to a code of conduct and ethics. The compliance of suppliers to a code of conduct will increase once the personal relationship among multi-principal collaborators and 3PLs is governed by a behaviour-based contract, linked to monitoring protocol (Delbufalo & Bastl
In this study a generic qualitative research design is employed. Generic qualitative research was appropriate because the researchers possessed some prior knowledge of the specific phenomenon under investigation and wished to fully describe the topic from the perspectives of participants (Percy, Kostere & Kostere
The unit of analysis in the study was the personal relationship between a buyer and a supplier of logistics services in South Africa. The units of observation in the study were the individual participants employed at either the buyer or the supplier firm. The final sample size was based on the principle of data saturation (Guest, Bunce & Johnson
Homogeneous sampling, a form of purposive sampling was used in the study. This entails the deliberate selection of firms and individuals based on distinct similarities (Creswell
Participants from 3PL and client firms had to meet the following inclusion criteria. Firstly, participants needed to be in a middle or senior management position, as this ensured that participants had experience in their field and would make a valuable contribution to the study. Secondly, the participant had to be engaged in a personal relationship with a staff member of the client or 3PL. The purpose of the interaction was to ensure a direct link between the two firms. Thirdly, the participants needed to have a minimum of two years’ experience in the firm, as this is generally the time it takes employees to familiarise themselves with the operations of a firm (Oakes
Profile of study participants.
Participant code | Job title | Gender | Years at firm | Duration of interview (minutes) |
---|---|---|---|---|
B1 | Inbound logistics manager | Female | 3 | 28 |
B2 | Transport operations manager | Female | 8 | 17 |
B3 | National logistics manager | Male | 4.5 | 19 |
B4 | Head of supply chain and strategic sourcing | Female | 8 | 32 |
B5 | Operation manager | Male | 11 | 23 |
B6 | District assistant manager | Male | 17 | 24 |
B7 | Non-executive logistics manager | Female | 7 | 34 |
B8 | Logistics director | Male | 28 | 23 |
B9 | National equipment and risk manager | Male | 6 | 15 |
S1 | Transport operations manager | Male | 23 | 27 |
S2 | Regional executive | Male | 4 | 26 |
S3 | Managing director | Male | 3.5 | 29 |
S4 | Business development executive | Male | 15 | 26 |
S5 | Director of operations and solutions | Male | 13 | 19 |
S6 | National customs manager | Male | 15 | 40 |
S7 | Contract logistics manager | Male | 5.5 | 17 |
S8 | Senior outbound manager | Male | 2 | 23 |
S9 | Customer service parts and warehousing manager | Male | 6 | 24 |
Semi-structured interviews were held to collect data. These interviews were conducted to understand the experiences and perceptions of participants (Myers
Thematic analysis was used to analyse the data. It entails a systematic process of identifying codes, grouping the codes, and then organising the codes into themes and sub-themes (Creswell & Plano Clark
A four-criterion framework, consisting of credibility, dependability, confirmability, and transferability, was used to ensure the trustworthiness of the findings (Polit & Beck
Thirdly, the study should be a true reflection of the participants’ experiences and not those of the researcher (Polit & Beck
The relevant Research Ethics Committee at the University of Pretoria approved the study. All participants in the study were required to read and sign an informed consent form before the interview was conducted. The informed consent form clearly explained the purpose of the study, that participation was voluntary, that the participant could withdraw at any time, and assured them of their confidentiality and anonymity. Aliases were used in the transcripts and the final presentation of data instead of the names of the participating firms and participants. The study’s findings are presented in the next section.
Five main themes were identified from the data, namely the role of personal relationships in RIS, the behavioural attributes required for RIS, the challenges associated with RIS, the security risks associated with RIS and the risk mitigation of information sharing. Each of the themes was examined and supported by quotations from the participants. The sections that follow discuss each of the identified themes, highlighting the most significant views in each theme, as mentioned by participants.
Participants emphasised the primary role of a personal relationship among 3PLs and client firms in relation to RIS, as seen in
Frequencies of the role of personal relationship in risk information sharing.
Sub-themes | Participants |
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---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | 11 | 12 | 13 | 14 | 15 | 16 | 17 | 18 | Total | |
Enhancing the degree of trust between buyer and supplier | ✓ | ✓ | ✓ | ✓ | - | ✓ | ✓ | ✓ | ✓ | - | - | ✓ | ✓ | - | ✓ | ✓ | - | ✓ | 13 |
Enhancing the degree of openness between buyer and supplier | ✓ | ✓ | ✓ | ✓ | - | - | ✓ | ✓ | - | ✓ | ✓ | - | ✓ | - | - | ✓ | - | ✓ | 11 |
Enhancing the willingness to share risk information | ✓ | ✓ | ✓ | ✓ | - | - | ✓ | - | - | ✓ | ✓ | ✓ | - | - | ✓ | - | ✓ | ✓ | 11 |
Contributing to the longevity of the relationship between buyer and supplier | ✓ | - | ✓ | - | - | ✓ | ✓ | - | ✓ | - | ✓ | - | ✓ | ✓ | - | ✓ | ✓ | - | 10 |
Enhancing the degree of collaboration between buyer and supplier | - | - | - | ✓ | - | - | ✓ | ✓ | - | - | ✓ | ✓ | ✓ | - | - | ✓ | ✓ | ✓ | 9 |
Enhancing the degree of comfort between buyer and supplier | - | ✓ | ✓ | - | - | ✓ | ✓ | ✓ | - | ✓ | ✓ | - | - | - | - | ✓ | - | ✓ | 9 |
Ensuring the sharing of similar values | ✓ | - | - | ✓ | - | ✓ | ✓ | - | - | - | - | - | - | ✓ | - | ✓ | - | ✓ | 7 |
Enhancing the degree of understanding of each other’s operations | ✓ | - | - | - | - | ✓ | - | - | ✓ | - | ✓ | - | ✓ | - | - | - | ✓ | - | 6 |
Representing the cornerstone to RIS | ✓ | - | - | ✓ | - | - | ✓ | - | - | - | - | - | ✓ | - | - | - | ✓ | ✓ | 6 |
Enhancing the degree of honesty between buyer and supplier | - | ✓ | ✓ | - | - | ✓ | - | - | - | - | - | ✓ | - | - | - | - | ✓ | - | 5 |
Enhancing the degree of integrity between buyer and supplier | - | ✓ | ✓ | - | - | - | - | - | - | - | - | ✓ | - | - | - | ✓ | ✓ | - | 5 |
Contributing to greater business retention | ✓ | - | - | - | - | - | - | - | ✓ | - | - | - | - | ✓ | - | ✓ | - | - | 4 |
Reducing operational complexity between buyer and supplier | ✓ | - | - | ✓ | - | - | - | ✓ | - | - | - | - | - | - | - | - | ✓ | - | 4 |
RIS, risk information sharing.
Participants indicated that the role of a personal relationship is to build trust among SCPs; thus, when trust is present, SCPs are more willing to share risk information and confidential information with one another as supported by the following quotation:
‘You’re able to gain their trust on that person and you then are able to express more confidential information.’ (P18, male, customer service parts and warehousing manager)
This finding is in alignment with literature as the establishment of a personal relationship enhances trust among SCPs (Gligor & Holcomb
Several participants indicated that a personal relationship promotes openness among buyers and suppliers. As a result of not feeling restricted, SCPs are more open to sharing SCRI with one another. This expands on current literature and is supported by the following quotation:
‘Because if you do have that kind of relationship, that’s going to be a lot easier to talk about stuff that you shouldn’t be talking about. Um, well, sharing information when you have an open friendly relationship is differently risky.’ (P10, male, district assistant manager)
The closer the personal relationship among SCPs, the greater the willingness to share risk information with one another as indicated by participants. This is the benefit of a personal relationship. The following quotation clearly illustrates this point:
‘The better my relationships with my 3PL management, the more willing they are to divulge what’s actually going on.’ (P2, female, transport operations manager)
Participants indicated that in order to share risk information more freely with SCPs, a long-term personal relationship must first be established. The longevity of the personal relationship may ensure the sharing of risk information on a regular basis, as seen in the following quotation:
‘It’s just the extent of that … that relationship, which becomes important.’ (P6, male, managing director)
The findings regarding the willingness to share risk information and the longevity of a personal relationship are in alignment with those in current literature as the existence of a close personal relationship increases the willingness to share risk information with SCPs (Gligor & Esmark
Furthermore, the establishment of a personal relationship ensures a long-term relationship among parties, resulting in the regular sharing of SCRI (Li et al.
‘Obviously the better the relationship a buyer has got with the supplier in this particular category, the better the chances [
Participants stated that a personal relationship makes SCPs more comfortable. When people are at ease in a personal relationship, risk information is shared more openly beyond the contractual obligations. The following quotation clearly illustrates this point:
‘If you’re more comfortable with someone, you [
These findings regarding better collaboration and more comfort are in alignment with the findings in current literature. Collaboration, as a result of a personal relationship, can be described as working towards improvement for either SCP (Jin et al.
Participants mentioned that by establishing a personal relationship with an SCP, both individuals gain a higher level of understanding of each other’s operations. The quality of understanding of operations for the SCPs leads to improved RIS. The following quotation clearly illustrates this point:
‘Better understanding between the two parties.’ (P11, female, non-executive logistics manager)
A personal relationship would ensure that SCPs share similar values, which will support the sharing of risk information. Therefore, the existence of a personal relationship forms the cornerstone of the successful sharing of risk information, as without the personal relationship, partners will not be open to RIS. The following quotations illustrates this point:
‘You would probably tend to gravitate to somebody that is like-minded and that has a similar mindset.’ (P4, male, regional executive)
‘Well, the relationship between the partners is very important. It’s something, as far as I’m concerned, [
The aforementioned findings are in alignment with those in current literature, as personal relationships support communication, allowing individuals to share information with one another and gain a mutual understanding (Barnes et al.
The findings indicate that a personal relationship enhances the level of honesty and integrity among SCPs; as a result, the partners are more prone to sharing SCRI. These findings expand on current literature and are supported by the following quotations:
‘Level of honesty and there is a corresponding level of … of trust between the two parties that … that might favour, that you [
‘Um, I think definitely honesty, integrity, making sure that you always communicate the right stuff.’ (P2, female, transport operations manager)
Participants also mentioned that a personal relationship contributes towards greater business retention and reduced complexity, because SCPs are more inclined to share SCRI with each other. These findings represent an expansion on current literature and are supported by the following quotations:
‘There’s really only one … um, that sits right at the top of everything. And that’s business retention.’ (P14, male, national customs manager)
‘Having a good relationship or a good working relationship that allows the business to be a bit more flexible and a little more agile … so you get things done quicker.’ (P8, male, operations manager)
The behavioural attributes required in a personal relationship to share risk information can be seen in
Frequency of behavioural attributes required in a personal relationship to share risk information.
Sub-themes | Participants |
||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | 11 | 12 | 13 | 14 | 15 | 16 | 17 | 18 | Total | |
Honesty | - | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | - | ✓ | ✓ | - | - | - | ✓ | - | - | ✓ | 11 |
Trust | ✓ | ✓ | - | ✓ | - | - | ✓ | ✓ | - | ✓ | ✓ | - | ✓ | - | - | ✓ | ✓ | ✓ | 11 |
Reliability | ✓ | - | ✓ | - | ✓ | - | ✓ | ✓ | ✓ | - | ✓ | - | ✓ | ✓ | - | - | ✓ | - | 10 |
Accountability | - | ✓ | ✓ | - | - | ✓ | - | - | ✓ | ✓ | ✓ | - | - | ✓ | - | ✓ | ✓ | - | 9 |
Approach- ability | - | ✓ | ✓ | - | - | ✓ | - | - | ✓ | - | ✓ | - | ✓ | - | - | - | - | ✓ | 7 |
Humbleness | - | ✓ | - | ✓ | - | ✓ | ✓ | - | - | - | - | ✓ | - | - | - | ✓ | - | ✓ | 7 |
Willingness to go the extra mile for one another | - | ✓ | ✓ | - | - | - | ✓ | - | - | - | ✓ | - | ✓ | - | - | ✓ | - | ✓ | 7 |
Consistency | ✓ | - | - | - | - | - | ✓ | - | - | ✓ | ✓ | - | - | ✓ | ✓ | - | - | - | 6 |
Integrity | - | ✓ | ✓ | - | - | ✓ | - | - | - | ✓ | - | - | ✓ | ✓ | - | - | ✓ | - | 6 |
Longevity | ✓ | - | - | - | - | - | - | ✓ | ✓ | - | - | ✓ | - | - | - | - | - | - | 4 |
Extroversion | - | ✓ | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | ✓ | 2 |
Participants suggested that honesty and trust are the most desired behavioural attributes in a personal relationship before sharing risk information. Participants indicated that without honesty and trust, they would not consider sharing risk information. This can be seen in the following quotations:
‘Someone that’s honest. Honesty, trusting, trusting is … is vital.’ (P18, male, customer service parts and warehousing manager)
‘I think trust is … definitely has [
Some participants stated that the longevity of the personal relationship is vital to the sharing of risk information, as SCPs are not willing to share risk information with individuals with whom they have not spent an adequate amount of time. This is supported by the following quotation:
‘Without a doubt, time spent in your organisation, in that organisation [
The aforementioned findings are in alignment with existing literature, as logistics managers are more willing to share risk information when they can be honest with their SCPs (Gligor & Esmark
In this study, behavioural attributes identified , not evident in the literature, include accountability, reliability, approachability, humbleness, willingness to go the extra mile for one another, consistency, integrity and extroversion. Supply chain partners need to be approachable as a personal relationship is a two-way street and the sharing of risk information requires SCPs to be able to communicate in all simplicity and assurance with one another. Supply chain partners have no need being arrogant; rather one should be humble and empathetic to others in their circumstances, as today you might be the one sharing risk information; however, tomorrow you might be in need of such risk information. The willingness to go the extra mile for one another is vital in any personal relationship. Consistency among SCPs is important as it refers to being stable and dependable, both attributes required in order to effectively share SCRI. Integrity refers to SCPs being true to their word, whether it is sharing risk information or keeping shared information confidential. Finally, a SCP must be extroverted and easy to communicate with, otherwise the sharing of risk information will be a difficult and formal process. These findings are supported by the following quotations, which are presented in the same sequence as discussed:
‘Someone whom you would be accountable to for the actions.’ (P16, male, senior outbound manager)
‘Reliability, consistency. Um … we are in it together and [
‘He’s very approachable.’ (P3, male, transport operations manager)
‘Because of our relationship … I do … I do go the extra mile and … and likewise, they on that side of the fence, they tell me stuff and they … whenever there’s red, then they’ll flag it to me.’ (P3, male, transport operations manager)
‘Integrity. So true to your word.’ (P8, male, operations manager)
’It helps to be an extrovert. If you’re an introvert, you don’t like people. I have found that they do struggle.’ (P2, female, transport operations manager)
The challenges associated with RIS when a personal relationship exists are presented in
Frequency of challenges associated with risk information sharing.
Sub-themes | Participants |
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---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | 11 | 12 | 13 | 14 | 15 | 16 | 17 | 18 | Total | |
Not knowing where to draw the line in RIS | - | - | ✓ | ✓ | ✓ | ✓ | - | ✓ | ✓ | ✓ | ✓ | - | ✓ | - | ✓ | ✓ | ✓ | - | 12 |
Making oneself and the company vulnerable | - | - | ✓ | ✓ | ✓ | ✓ | - | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | - | ✓ | - | ✓ | - | 12 |
Management of confidential information | - | - | - | ✓ | ✓ | - | - | ✓ | ✓ | - | ✓ | - | - | ✓ | ✓ | ✓ | - | ✓ | 9 |
Damaging the relationship with the company | - | - | ✓ | ✓ | - | ✓ | - | - | ✓ | ✓ | - | ✓ | - | ✓ | - | ✓ | - | - | 8 |
Not knowing where the personal relationship ends | - | ✓ | - | - | - | ✓ | - | ✓ | - | ✓ | ✓ | - | - | - | ✓ | - | ✓ | ✓ | 8 |
Going to rivals with confidential information | - | - | ✓ | ✓ | ✓ | - | - | - | ✓ | - | - | ✓ | - | - | - | ✓ | ✓ | - | 6 |
Developing a sense of obligation towards that individual, due to the personal relationship | - | - | - | - | ✓ | ✓ | - | - | - | ✓ | - | - | - | ✓ | - | - | - | ✓ | 5 |
RIS, risk information sharing.
Participants stated that the main challenge, associated with RIS, is when SCPs do not know where to draw the line regarding the sharing of risk information, resulting in SCPs sharing risk information with their SCP that they are not supposed to or are not authorised to share. This finding is an addition to literature and can be seen in the following quotation:
‘If you don’t know where to draw the line, yeah, then … then you’re going to open yourself [
The study found that the possibility of making oneself vulnerable when sharing risk information is a challenge to participants. Furthermore, managing the sharing of risk information is also a major challenge, because once the risk information is shared, preventing that information from being shared again by the SCP is extremely difficult, if not impossible. This is apparent in the following quotations:
‘You could say things that you really shouldn’t have said and then the other guy, you know, have a conversation in the corridor in their company and shares it with somebody else in confidence and then that person goes and tell somebody, and then, you know, it ultimately could open you up to risk and liability issues.’ (P13, male, director of operations and solutions)
‘There are huge problems that come with that because, for example, if our manufacturing [
These findings are supported by literature. The vulnerability caused by RIS increases parallel to an increase in supply chain complexities (Bode & Wagner
Participants identified two challenges, which are not included in existing literature, namely damaging the personal relationship with either the 3PL or client firm, due to RIS, because once risk information is shared with a SCP, it creates an expectation. Should risk information then again not be shared, it could create conflict and in the end damage the personal relationship. In addition, when SCPs do not know where the personal relationship ends in terms of RIS, it also becomes a challenge. Supply chain partners who develop too close a personal relationship expose themselves to the challenge of sharing risk information beyond the recommended and authorised boundaries. These challenges are illustrated in the following quotations:
‘The challenge is the degradation of the relationship. Um … and then also the loss of the business, loss of the partnership.’ (P14, male, national customs manager)
‘If the relationship becomes very close, you’ve always got to be careful of not talking beyond certain boundaries.’ (P15, male, contract logistics manager)
Finally, the last two notable challenges indicated by some of the participants were the development of a sense of obligation towards the SCP when sharing risk information due to the personal relationship. The personal relationship makes one feel obliged to share risk information with the SCP; thus, the information is shared, not based on the value of the information, but rather on that of the personal relationship. Furthermore, SCPs could use the shared risk information against you by going to rivals with the confidential information. These challenges expand on current literature regarding the challenges associated with personal relationships and RIS. The following quotations touch on these challenges:
‘I mean, you kind of feel obligated to the person that you’re dealing with that you’re friends with.’ (P5, male, national logistics manager)
‘Inevitably you … you work in an environment where you can share information that a supplier might use with some of his other clients.’ (P10, male, district assistant manager)
The security risks associated with RIS, when a personal relationship exists, are presented in
Frequency of security risks associated with risk information sharing.
Sub-themes | Participants |
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---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | 11 | 12 | 13 | 14 | 15 | 16 | 17 | 18 | Total | |
Leakage of private information | - | - | - | ✓ | ✓ | ✓ | - | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | - | ✓ | ✓ | - | ✓ | 12 |
The loss of intellectual property | - | - | ✓ | ✓ | - | ✓ | - | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | - | ✓ | ✓ | - | ✓ | 12 |
Unintentional disclosure of confidential information | - | - | ✓ | ✓ | - | ✓ | - | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | - | ✓ | - | - | ✓ | 11 |
Intentional abuse of confidential information | ✓ | - | - | ✓ | ✓ | - | - | - | ✓ | - | - | ✓ | ✓ | - | ✓ | ✓ | - | - | 8 |
Supplier becoming a competitor | - | - | ✓ | ✓ | - | ✓ | - | - | - | - | ✓ | ✓ | - | ✓ | ✓ | ✓ | - | - | 8 |
Not willing to sign the company’s NDA | ✓ | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | 1 |
NDA, Non-disclosure Agreement.
Participants identified the leakage of private information and the loss of intellectual property as the main security risks associated with personal relationships in RIS. The loss of intellectual property is directly linked to risk information sharing, as in a personal relationship SCPs may acquire access to intellectual property:
‘Relationship leads to those security risks of leakage of information or the abuse of personal information.’ (P5, male, national logistics manager)
‘It gives them access to how we run and control managers, how we run our risk and security? Where do we store our firearms? You know, all of that information in the wrong hands can lead to a problem and … expose our weaknesses and include exposing things to clients that we don’t want to expose or to competitors.’ (P4, male, regional executive)
The aforementioned findings are in alignment with literature. The main security risk associated with RIS is information leakages (Colicchia et al.
Furthermore, participants mentioned that SCPs are faced with the challenge of unintentionally disclosing confidential information. This is evident in the following quote:
‘You’ve built this relationship, um … things are going well and stuff, and sometimes I think information is shared that shouldn’t be shared. Um, [
Some participants mentioned the intentional abuse and disclosure of confidential information as a security risk. Supply chain partners gain access to risk and confidential information through the established personal relationship and then abuse that relationship by disclosing confidential information to other SCPs and even possible competitors. This is evident in the following quote:
‘Like going directly tell customers that’s the risk on its own [
These findings confirm existing literature regarding security risks associated with personal relationships and RIS. The unintentional or intentional disclosure of confidential information to unauthorised parties is seen as a security risk of RIS (Tan et al.
Finally, the last two notable security risks indicated during the study expand on current literature regarding the security risk associated with personal relationships in RIS. Firstly, when a supplier becomes a competitor as a result of the sharing of risk information in a relationship. Risk information sharing comes to a point where the SCP has gained an adequate amount of risk information and uses it against one in order to serve the same market. Secondly, when SCPs are not willing to sign the company’s NDA, it is seen as a security risk, because the SCP will then have the right to share any and all information available to them as there are no legal requirements preventing them from doing so. These quotations illustrate the security risks mentioned:
‘So I think it goes back to, am I able to talk to you confidentially and are you … am I certain you’re not going to use that information for your own gain?’ (P4, male, regional executive)
‘But obviously we have risk where some suppliers do not want to sign our agreement.’ (P1, female, inbound logistics manager)
The strategies identified to mitigate information sharing risk are presented in
Frequency of codes for information sharing risk mitigation.
Sub-themes | Participants | ||||||||||||||||||
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1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | 11 | 12 | 13 | 14 | 15 | 16 | 17 | 18 | Total | |
Code of ethics | - | - | - | ✓ | - | ✓ | - | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | - | ✓ | - | ✓ | ✓ | 11 |
Code of conduct | - | - | - | ✓ | - | ✓ | - | ✓ | ✓ | ✓ | ✓ | ✓ | - | - | ✓ | - | ✓ | ✓ | 10 |
Making use of an NDA | ✓ | - | ✓ | - | - | ✓ | ✓ | ✓ | - | - | - | - | - | ✓ | - | ✓ | ✓ | - | 8 |
Proactive collaboration | - | ✓ | - | ✓ | - | - | - | - | ✓ | - | - | - | - | - | ✓ | ✓ | ✓ | ✓ | 7 |
Making use of SLAs | - | - | - | - | - | - | ✓ | - | - | - | ✓ | ✓ | ✓ | - | - | ✓ | - | ✓ | 6 |
Making use of KPIs | - | - | - | - | - | - | - | - | - | - | ✓ | ✓ | ✓ | - | - | - | - | - | 3 |
Removing the individual | - | - | - | - | ✓ | ✓ | - | - | - | - | - | - | - | - | - | - | - | - | 2 |
Integrity due diligence | - | - | - | - | - | - | - | - | - | - | - | - | - | ✓ | - | - | - | - | 1 |
NDA, non-disclosure agreement; SLA, Service level agreement KPI, Key performance indicator.
Both buyers and suppliers predominantly use the legal aspect of the matter to mitigate the sharing of risk information among SCPs. Participants indicated that to mitigate the risk, they highly depend on the implementation of the code of conduct and the code of ethics to govern the sharing of risk information among SCPs. In addition, eight participants indicated that their firms implement a standard NDA to be signed by both parties as their strategy towards mitigating the sharing of risk information. See the following quotes:
‘So we do a bit of work around employee engagement; [
‘So we do have [
‘So I think the NDA is a big part of that.’ (P7, female, head of supply chain and strategic sourcing)
These findings are in alignment with existing literature regarding information sharing risk mitigation. Compliance with the code of conduct increases the effective sharing of information and reduces the risks associated with it (Delbufalo & Bastl
The study found that some participants make use of two strategies, namely collaborative planning, forecasting and replenishment (CPFR), as well as SLAs. By making use of CPFR, the firm is able to manage the information sharing risk by mitigating in advance the possibility thereof and by being proactive in its operations. The use of SLAs ensures that SCPs have to uphold a certain level of service and professionalism; it also ensures that risks regarding information sharing are addressed and mitigated in advance. As seen in the following quotations:
‘I think it does help us mitigate risk because we can be more proactive.’ (P2, female, transport operations manager)
‘We’ve just got service level agreements.’ (P11, female, non-executive logistics manager)
These findings are in alignment with existing literature regarding strategies for mitigating RIS as mentioned in literature, namely management of information flows and monitoring the relationships and risks (Lavastre et al.
The study found that a small number of participants make use of KPIs and the direct dismissal of individuals to mitigate the risk of sharing risk information when a personal relationship is present. These findings expand on current literature regarding the mitigation strategies of RIS in a personal relationship. These quotations illustrate these strategies:
‘We’ve got KPIs and service level agreements.’ (P12, male, logistics director)
‘At some stage you need to trust people. Um … and that’s the other thing. If somebody … if you give everybody trust and the first person that lets you down, then you’ve got to cut them out and cut them out [
Finally, a single participant indicated that their firm makes use of integrity due diligence (IDD) in order to mitigate the information sharing risk in a personal relationship. This finding expands on current literature regarding the mitigation strategies of RIS in a personal relationship. The following quotation supports the finding:
‘What we do, is what we call an IDD. It’s an integrity due diligence.’ (P14, male, national customs manager)
The purpose of this study was to investigate the role of personal relationships in supply chain RIS from the perspective of buyers and suppliers in the South African 3PL context. In this study findings in five areas are reported in an attempt to answer the corresponding five research questions. These areas relate to the following: (1) the role of personal relationships in RIS; (2) the behavioural attributes required for RIS; (3) the challenges associated with RIS; (4) the security risks associated with RIS; (5) information sharing risk mitigation. The first research question explored the role personal relationships play in RIS between the buyers and suppliers of logistics services. In the study it is found that personal relationships build trust, and strong trust results in increased RIS among SCPs. It was also found that due to the existence of a personal relationship with an SCP, the willingness to share risk information is enhanced, due to mutual interest. Furthermore, the findings show that in order for RIS to take place, a long-term personal relationship is important, otherwise SCPs will not feel secure enough to share risk information. The study’s findings confirm those of Li et al. (
The second research question discloses what personal behavioural attributes are required to ensure the sharing of SCRI between buyers and suppliers. The findings indicate that trust and honesty are the main behavioural attributes SCPs look for when establishing a personal relationship in order to share risk information. The findings demonstrate that the longevity of a personal relationship plays a vital role in SCPs being willing and open towards RIS, as longevity indicates a sense of commitment. In addition to existing literature, a vast range of behavioural attributes required within a personal relationship in order to share risk information were found such as: accountability, reliability, approachability, humbleness, willingness to go the extra mile for one another, consistency, integrity and a degree of extroversion. The most significant being the accountability and reliability of the SCP. These attributes expanded on existing literature.
The third research question examined what challenges are associated with SCRI sharing when a personal relationship exists between a buyer and supplier of logistics services. Sharing risk information in a personal relationship opens the possibility of making oneself vulnerable. These findings confirm the current literature regarding the increase in vulnerability, due to RIS and the complexity thereof.
The existence of a personal relationship increases the complexity of managing RIS, as risk information is shared more freely in a personal relationship; however, that information may also be shared easily in the following personal relationship outside the firm. The findings indicate that a major challenge in a personal relationship and RIS is when SCPs do not know where to draw the line with regard to RIS, which may result in SCPs sharing risk information they are not supposed to. The study further found that a challenge associated with RIS in a personal relationship is when SCPs do not respect the boundaries of the relationship and the SCPs may use the RIS against you by sharing the RIS with rivals.
The fourth research question assessed the security risks associated with supply chain RIS when a personal relationship exists between a buyer and supplier of logistics services. The main security risks are the leakage of private information and the loss of possible intellectual property. The existing literature on security risks associated with RIS was corroborated during the study. The results show that the unintentional disclosure of confidential information and the intentional abuse and disclosure of confidential information are further challenges linked to RIS in a personal relationship. However, in addition, the study’s findings expand on current literature by identifying that SCPs becoming competitors and SCPs not willing to sign the NDA are challenges directly linked to personal relationships and RIS, because an SCP may gain access to the risk information due to the existence of a personal relationship and the risk information being shared.
The fifth research question determined how information sharing risk is mitigated when a personal relationship exists between a buyer and a supplier of logistics services. Most firms have a code of conduct, a code of ethics and a standard NDA in order to mitigate the sharing of risk information. The three methods are used because they govern the decision-making process of each employee regarding RIS, especially when working with a client with whom a personal relationship has been established, confirming existing literature on the mitigation of information sharing risk.
The findings indicate that firms make use of CPFR and SLAs when a personal relationship is present and risk information is being shared among SCPs in an attempt to ensure effective information sharing risk mitigation. Both CPFR and SLAs empower the employer to proactively try and manage any possible future risks associated with RIS, as both methods are implemented in advance in order to guide staff in the personal relationships they establish. In addition to existing literature, it was found that to mitigate risk, firms make use of either KPIs or the direct dismissal of an offending individual. It was also found that for information sharing risk to be mitigated, firms make use of IDD when a personal relationship exists among SCPs.
Firms need to identify a viable approach to managing personal relationships with SCPs. The reason for this is because the existence of personal relationships with SCPs is frequent and the RIS goes hand in hand with it. Personal relationships with SCPs predominantly build trust and enhance openness, collaboration and the willingness to share; for this reason, management should rather focus on proactively managing the personal relationships in order to gain a competitive advantage. By promoting the development of personal relationships with SCPs, a better quality of risk information will be shared by both parties leading to enhanced performance and business retention. However, managers must ensure that a clear distinction is made between an appropriate personal relationship and a personal relationship that is too close and, therefore, represents a risk to the firm. Managers must find a way to ensure that when a personal relationship is established with an SCP, the required behavioural attributes are present. This is especially important when risk information is to be shared. When firms identify a possible personal relationship between an employee and their SCP, they should consider reminding the employee of the desired behavioural attributes the firm looks for.
Thirdly, the findings identify possible challenges to sharing risk information when a personal relationship is present. Managers need to ensure that even though such relationships with SCPs are beneficial, the relationship should not increase the complexity of managing confidential information, as this may counteract the benefits gained. Managers must make sure that adequate measures are put into place to ensure that both parties clearly understand the difference between a business relationship and a personal relationship with an SCP. This can be done by implementing a process of frequent communication with staff members regarding the importance of discerning between the two at all times. Management must have greater control over the sharing of RIS among SCPs and be able to rely on the accountability of staff members. This can be ensured by having employees sign an agreement stating that they will not share confidential information with parties outside the firm. Furthermore, if one chooses to share confidential information, one would be held accountable for possible losses or damages as a result of the shared information.
Managers should stay up to date with current strategies in order to mitigate information sharing risk due to a personal relationship among SCPs. Current methods of mitigation, such as the use of codes of conduct, codes of ethics and NDAs, are well established; however, SCPs are still willing to share risk information in a personal relationship. Management needs to identify new ways of keeping employees accountable for their actions, especially when sharing risk information with SCPs in a personal relationship. This can be done by frequently reminding staff members that they are dealing with confidential and sensitive information and for that reason should not share it beyond what is expected of them.
This study utilised a qualitative research design with a relatively small sample to explore the role of personal relationships in supply chain RIS. Researchers may consider using other research designs and data collection methods such as survey research or mixed methods to assess the influence, the strength and the nature of personal relationships on the level of supply chain RIS. Furthermore, the study focused on the dyadic perspectives of the relationship between 3PLs and clients. Future studies may make use of a triadic approach by including first, second and third parties in the personal relationship. The study focused specifically on the 3PL industry in South Africa; therefore, research can be conducted in other industries and settings in a developed country with different laws, regulations, and community pressures.
The authors declare that they have no financial or personal relationships that may have inappropriately influenced them in writing this article.
This article is based on the M.Phil. dissertation of M.v.d.W. who was the main researcher. W.N. and A.M. acted as supervisors determining the conceptualisation, literature review, the research instrument and development of this manuscript.
This research received no specific grant from any funding agency in the public, commercial or not-for-profit sectors.
Data are stored according to institutional policy.
The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of any affiliated agency of the authors.