logistics measurement. A case, or mandate, needs to be made to elevate the priority of
logistics measurement capability within the firm, and between firms, to achieve
organizational goals. Logistics planning and control systems cannot be effective
without measurement. The firm’s attention on internal utilization, productivity, and
cost measures is necessary but not sufficient for improved supply chain performance.
The firm needs to define the appropriate measures of its inter-firm processes. Trading
parties need to work together to define terms and processes of importance to the
relationship, and jointly agree on what is measured for comparison to desirable targets
for performance. The research suggests that this is not being widely done, but those
trading partners that do it enjoy mutual benefits.
It was evident from the case studies that two capabilities distinguished those firms
who were more advanced in logistics measurement, both internally and with trading
partners. These capabilities were the use of activity-based costing and data
warehousing. Having these capabilities permits the development of cost-to-serve
measures, which, when compared to the customer’s value of service, points to more
profitably engineered activities and services.
6. Conclusions
This research has provided a unique contribution in that it has provided a benchmark
for the state of logistics performance measurement in the USA. Several conclusions
from the research can be made. Logistics measurement can improve firm performance.
Most firms represented by respondents to the survey do not comprehensively measure
logistics performance. Even the best firms fail to realize their service and profit
potential available from logistics performance measurement. There is a need for
collaboration between trading partners on definitions of linking activities and
processes and their measures of performance. Those firms that understand the value
creation character of high-performance logistics are more likely to invest in enhancing
its capability, thus making it more valuable as a trading partner.
6.1 Limitations of the research
As with all self-report surveys, this one has limitations. Only a single respondent from
each firm did the evaluations. While that respondent was in most cases a very senior
person in the supply chain/logistics function (51 percent held titles of vice president or
senior vice president), they represent only a single perception of a member within the
firm and is not necessarily indicative of other firm member’s perceptions.
The sample frame, while slightly broader than a single professional association,
is still primarily from organizations that do not necessarily represent the universe of
companies/logistics-supply chain employees in the USA, and are not representative
of what happens in other parts of the world.
6.2 Future research directions
As this was an exploratory study meant to primarily discover and define constructs
of interest, there is a great deal of future research possible based on the findings.
First, simple replications of part of this study three to five years after the initial data
collection are in order, as the pace of change in this area appears high and thus being
able to compare samples from a longitudinal perspective will begin to help us
understand which issues are moving forward and which are not