1. Analysis of the supply chain role of logistics service provider (LSP) at the Spanish pharmaceutical industry Marta Viu 1, José Mª Castán 2 1 Department of Economics and Business, Open University of Catalonia (UOC) 2 Department of Economics and Business Organization, University of Barcelona (UB) Contact: mviu@uoc.edu In the literature review by Fabbe-Costes and Jahre Roussat (2009) about the role of logistics service provider (LSP) in the supply chain, these authors state that this role can range from a more passive role as a mere tool to reduce logistics costs and increase efficiency (Christopher, 1998, 2005, Lambert et al. 1999), to a more active role as an actor or a partner over the supply chain (Mason et al. 2007). Moreover, the LSP are in a unique position to assume the role of facilitator (Bitran et al., 2007), being able to take a leadership role or orchestrator among members of the supply chain that facilitates the integration of the supply chain, to improve customer satisfaction and provide a competitive advantage through management, coordination and value creation network (Murphy and Poist, 2000; Knemeyer et al, 2003; Christopher, 2005, Fung et al. 2009; Zacharia et al. 2011). Bolumole, Frankel, and Naslund (2007) provide a theoretical framework to identify the main factors influencing the logistics outsourcing strategies, the resulting relationship and the role played by the LSP. This framework is based on the combination of three theoretical perspectives: the transaction costs theory, the resource-based theory, and the network theory. These three theories suggest that the role of the LSP in the supply chain is highly influenced by the approach of companies towards logistics outsourcing and can vary from a contractual emphasis (based on cost) to a responsibility for coordinating resources and/or, an emphasis on the integration of the logistics network. In other words, the roles of the LSP in the supply chain can go from contractual to integrator, through other intermediate forms (Bolumole, 2003). Traditional logistics management activities, such as transportation, warehousing, order processing, and related information technology support, are deemed as non core functions for many firms. In addition, logistics activities have significant assets requirements and offer the potential for large cost savings, making it a primary candidate for outsourcing. Historically, 3PLs provided traditional logistics services, such as transportation and warehouse management. However, the increased volume and scope of services, demanded from 3PLs have given rise to their changing role, where today they are engaged in strategic coordination of their customers’ supply chain activities. Over the last few decades, the consolidation and practice of the Supply Chain Management (SCM) concepts has led the logistics service provider business (3PL-Third Party Logistics) to play a more comprehensive and integrated role with its clients. Following this trend, new configurations of this role has appeared, such as logistics orchestrators or integrators (Vivaldini et al., 2008). According to Fabbe-Costes and Jahre Roussat (2009), Berglund et al. (1999), Hertz & Alfredsson (2003) and Bolumole (2003; 2007) is necessary to conduct further research to clarify and formalize the definitions of the logistics service providers roles, go deeply into what is written in the literature on LSP roles and confront these results with what companies make. Theoretical Framework Introduction The Method A great number of changes have occurred within this industry last years: - R&D productivity is declining - Effective patent lives are shortening - Even while active, patents provide lower barriers to entry - There are many product substitutes in therapeutic areas or off-patent generics - The players of healthcare are exerting strong price pressure Historically, the goal for the pharmaceutical supply chain was ensure Good Manufacturing Practices (GMP) compliant supply of medicines. But today, the industry requires more agile supply chain, reduce asset base, reduce working capital and reduce total cost of goods sold. The methodology will be qualitative. Mentzer (2000) suggest that qualitative research should become more accepted and useful to the field of logistics. Therefore, a multiple case design has been chosen as the basis for the study (Yin, 2002; Ellram, 1996). Through interviews with the major logistics operators of Spanish pharmaceutical industry and some representative pharmaceutical laboratories we develop a deeper and richer understanding of the supply chain role of LSP. So far we have conducted six interviews. Three with logistics service providers and three with pharmaceutical laboratories. Objectives The Pharmaceutical Supply Chain The objectives of this work are: - analyze the logistics service providers (LSP) roles in the pharmaceutical supply chain based on the established factors identified in the literature review. - know the skills and abilities developed by the LSP and perceived by the manufacturer (pharmaceutical laboratory) and how they influence the role played by the logistics service provider in the supply chain. - establish the LSP limitations to take on a greater role in the pharmaceutical supply chain. Hertz & Alfredsson (2003) researched the strategic development of 3PL and found that they can have a significant role in integrating supply chains depending of their skills and abilities. These have been supported by other researchers (Fabbe-Costes et al.,2009; Win, 2008; Mortensen & Lemoine, 2008; Stefansson, 2006; Halldorsson & Skjott-Larsen,2004)