(3) Logistics competency will increasingly be viewed as a competitive
differentiator in industries and thus potentially a key competency for the firm.
(4) Logistics measurement at a supply chain level is limited at best.
There are at least three basic reasons why a firm would want to measure logistics
performance. Firms can reduce operating costs, use these measures to drive revenue
growth, and hence to enhance shareholder value. When we measure operating costs we
can identify whether, when and where to make operational changes to control expenses
and this also, and very importantly, points outs areas for improved asset management.
We can attract and retain valuable customers by improving the price value relationship
of products offered through cost reductions and service improvements. Finally, returns
to stockholder investments and the market value of the firm can be significantly
impacted by logistics performance improvements working through the processes that
lead to share price and dividend policy.
Research described above has provided some insights, but there is a need for a
comprehensive study to define exactly what we mean by logistics performance and then
to examine more thoroughly the state of logistics performance measurement in US
industry both internal to the company and from a supply chain perspective.
Accordingly, the aim of this paper is to describe a research project that was undertaken
to more explicitly define aspects of logistics performance measurement and then to
describe the current state of practice. More specifically, we will answer the following
research questions:
RQ1. What do we mean by logistics measurement?
RQ2. What is the current state of logistics performance measurement?
RQ3. What are the perceived specific enablers and barriers to improving logistics
performance measurement and, hence, actual performance both with the firm
and across the supply chain?
RQ4. How does management in general view logistics as a function within the firm?
RQ5. What is the relative importance of logistics measurement as a management
issue?
RQ6. What is the perceived quality of the measures captured by the firm?
We will begin with a comprehensive review of the literature, which is somewhat limited.
We will then outline the various facets of our research methodology, which included a
Delphi study and in-depth interview case studies, which then led to a comprehensive
mail survey. We will direct our analysis of that research toward answering the above
questions and then supply both managerial implications as well as future research
directions.
2. Literature review
To put the logistics performance literature in perspective it is necessary to briefly
review the work done in supply chain performance measurement. The work of the
supply chain council with their supply chain operations reference (SCOR) model
dominates the practice of supply chain management and its performance measurement