Determinants of Logistics Performance: a Validation of Some Conceptual Relationships

Abstract

Today's highly competitive environment places increased pressures on firms to perform competitively. In such an environment logistics has become and area of increasing focus in attaining competitive advantage. It has been suggested that it offers benefits for both cost reduction and increased revenue. Through increased customer satisfaction customer service increases revenue, and through efficient logistics management costs can be reduced. This cost/service benefit of logistics has brought considerable attention to logistics management resulting in the development of the Integrated Logistics Concept. Discussion in the current literature has centred on the implications of this concept for the firm in terms of structure and management practices, and recommends a variety of strategies appopriate in different circumstances The objective of the research presented in this thesis is to investiate the nature of logistics in New Zealand firms and to test some of the relationships proposed by the extant literature. Relationships were sought between aspects of logistics structure, management and strategy, and the logistics performance of New Zealand firms. The impact of the external and internal environments was also measured. A mail survey has been been conducted sampling New Zealand manufacturing firms, targeting both the general manager and the "logistics executive". One hundred and twenty-five usable responses were received. In addition twenty personal interviews were undertaken in a variety of manufacturing firms throughout the country. The findings of the quantitative study supported all but one of the relationships predicted. It was found that organisation for logistics, and aspects of managment practice have an impact on the logistics performance of the firms studied. As predicted, adoption of a specifiec logistics strategy does not impact performance, but emphasis on service objectives such as rapid delivery arc important. The contracting of some of the logistics decisions to third party distributors also enhances performance. The competitive intensity of the respondent firms' markets was not shown to result in an increased recognition of the value of logistics in attaining corporate goals and objectives. However, the external and internal environments were shown to have an impact on each of the key areas of logistics in the firm, in particular, the development of a logistics strategy. These findings have implications for both general and logistics management, and for the development of theory in logistics.