Digital transformation at third-party logistics providers: Challenges and best practices

Abstract

Background: Digital transformation (DT) is key for service providers in the logistics industry to achieve or retain a sustainable competitive advantage. However, for many third-party logistics (3PLs) in South Africa, implementing DT remains a challenge.Objectives: To explore the challenges that hinder the implementation of DT and to present the best practices that are important for achieving success in DT among South African logistics service providers.Method: This study was exploratory and descriptive. Data were collected through semi-structured interviews with a sample of 10 managers employed by South African 3PLs companies. Thematic analysis was used to analyse the data, which involved manually coding the findings, the organisation of these ‘codes’ into related areas to construct ‘descriptive’ themes and the development of ‘analytical’ themes.Results: The challenges and best practices of DT implementation centre around leadership and strategic alignment, technological integration and innovation, data management and cybersecurity, and resource optimisation and cost management.Conclusion: Substantial challenges and best practices associated with DT implementation in the logistics sector were identified.Contribution: The significance of the study lies in examining DT through the lens of 3PLs providers in South Africa, a segment not conventionally associated with innovation. The outcomes contribute to academic research and industry practice. Firstly, the findings bridge a critical gap in the existing literature, providing insight into previously unexplored DT challenges and best practices. Secondly, this study provides valuable insights into key areas, offering practical guidance for industry practitioners.