Evaluation of 4PL operating models: A decision making approach based on 2-additive Choquet integral

By being a supply chain integrator who can assemble and manage the resources, capabilities, and technology of its own organization with those of complementary service providers, fourth party logistics (4PL) providers deliver comprehensive supply chain solutions and form an important option for business outsourcing. The adequate design of the partnership between companies in this type of outsourcing activities is essential. In order to support the effective usage of 4PL services, this paper proposes an analytical multiple criteria decision making approach to evaluate 4PL operating models. While decision criteria and their hierarchy were identified, it is observed that there exist interactions, e.g. simultaneous satisfaction of two or criteria is sometimes required. This situation can not be handled with traditional multi-criteria decision making methods which assume criteria independence. 2-additive Choquet integral is appropriate to model criteria interactions by pairs and is used in this study. The proposed framework is applied for a logistics company willing to expand its operations. Finally, an application is provided to demonstrate the potential of the methodology for 4PL operating model selection.     

Outsourcing reverse logistics of high-tech manufacturing firms by using a systematic decision-making approach: TFT-LCD sector in Taiwan

Reverse logistics are increasingly crucial for the supply chain strategy of global high-tech manufacturing firms. As reverse logistics operations are significantly more complex than traditional manufacturing supply chains, many high-tech manufacturers are examining the feasibility of outsourcing reverse logistics activities to third party logistics providers (3PLs) from a strategic planning perspective. Internal resources and capabilities are thus examined from a resource-based perspective to identify which reverse logistics service requirements could be fulfilled in-house or outsourced. Therefore, this work presents a systematic approach using the analytical network process (ANP) not only to investigate the relative importance of reverse logistics service requirements, but also to select an appropriate 3PL. Empirical results based on the case of the TFT-LCD sector in Taiwan indicate that information technology management is of priority concern in reverse logistics services. In addition to providing a valuable reference for manufacturers concerned with service requirements for outsourcing, results of this study significantly contribute to the efforts of 3PLs in evaluating whether they comply with potential customer requirements based on their service capabilities.     

The impact of third-party logistics providers' capabilities on exporters' performance

Third-party logistics (3PL) services have experienced unprecedented growth. However, we are not aware of any study that explores the relationships among logistics outsourcing, competitive advantage, and business performance. We study the mediating role of logistics outsourcing as a strategy to develop firms' capabilities in the strategy-performance relationship. Drawing on the resource-based view (RBV) of the firm, we develop a research model grounded in the outsourcing-competitive advantage-performance paradigm. We apply structural equation modeling to empirically test the model using data collected from 150 exporters in Hong Kong and the Pearl River Delta region of China. The results show that there are positive relationships among exporters' strategic orientation towards third-party logistics (3PL) providers, 3PL providers' basic and augmented capabilities, exporters' competitive advantage, and exporters' export performance. We also find that 3PL providers' augmented capabilities and exporters' competitive advantage are strong mediators, supporting the theorized model underpinned by RBV.     

Guanxi and organizational dynamics: organizational networking in Chinese firms

This paper focuses on the utilization of guanxi, which is an important cultural and social element in China, and the impact of guanxi on firm performance. Although guanxi is embedded in every aspect of Chinese social life, companies demonstrate different needs and capacity for guanxi cultivation. Chinese firms develop guanxi as a strategic mechanism to overcome competitive and resource disadvantages by cooperating and exchanging favors with competitive forces and government authorities. We develop an integrative framework theorizing guanxi utilization according to institutional, strategic, and organizational factors, and we explore the impact of guanxi on firm performance, primarily sales growth and net profit growth. Our findings, based on a survey of 128 firms in central China, provide strong support that institutional, strategic, and organizational factors are critical determinants of guanxi with competitive forces. However, only institutional and strategic factors are significant for guanxi utilization with government authorities. In general, guanxi leads to higher firm performance, but is limited to increased sales growth, and has little impact on profit growth. Guanxi benefits market expansion and competitive positioning of firms, but does not enhance internal operations. Copyright © 2001 John Wiley & Sons, Ltd.     

A framework for measuring logistics performance in the wine industry

Nowadays, in order for wine companies to reach a world-class standard, it is necessary to implement the industry best practices and continuously adapt their logistics processes. Through benchmarking, these enterprises can find opportunities for improvement. So far, little research in benchmarking and performance measurement has been developed for the wine industry. In this paper a logistics benchmarking framework for the wine industry is proposed. A benchmarking study considering several wineries from Mendoza (Argentina) is presented as a case study, in order to demonstrate the validity of the developed framework.     

The role of supplier operational adaptation on the performance of IT-enabled transport logistics under environmental uncertainty

The use of information technology to facilitate transport logistics activities in support of responsive product movement is essential for contemporary supply chain operations to succeed. One neglected area towards achieving this goal is concerned with the role of supplier adaptation on the performance impact of IT-enabled transport logistics. Based on the General Theory of Network Governance, we argue that supplier operational adaptation serves to realize the cost improvements of those firms practicing IT-enabled transport logistics. Our propositions are validated with survey data collected from 188 trading firms, highlighting the importance of supplier operational adaptation for IT-enabled transport logistics to gain cost performance particularly when firms face environmental uncertainty where they lack the ability to predict the outcomes of their actions. Managerial attention should be directed at developing supplier operational adaptation for technological adoption in transport logistics activities to bring performance.     

The relationship between supplier management and firm's operational performance: A multi-dimensional perspective

This paper presents an empirical study on the multidimensional relationships between supplier management practices and firm operational performance. Specifically, we focus on three supplier management practices, namely strategic long-term relationship, supplier assessment, and logistics integration, and test their effects on four operations performance measures, namely quality, delivery, flexibility, and cost. We use data collected from 232 manufacturing firms in Australia to conduct the study. Ten hypotheses were tested simultaneously using Structural Equation Modeling (SEM) technique. The results show that different supplier management practices have different unique effects on different operations performance measures. Supplier assessment has a positive relationship with quality performance. Both strategic long-term relationship and logistics integration have positive relationships with delivery, flexibility, and cost performance. From a theoretical perspective, this study demonstrates the relative contributions of different kinds of resources (i.e., supplier management practices in our case) to different performance measures. Our research findings provide practical insights for managers to understand the effectiveness, as well as the limitations, of different supplier management practices in enhancing different operations performance measures of firms.     

Investigating the influence of velocity performance on satisfaction with third party logistics service

The Third Party Logistics (3PL) service industry is characterized by customer relationships that can extend over several years, involving multiple instances of service delivery. When services are delivered on an ongoing basis, customers are able to not only evaluate positional (current) performance, but also velocity (rate at which the service changes) performance. This research presents findings from an empirical study utilizing an online survey of 3PL customers to examine the influence of these two types of performance on 3PL service satisfaction. Environmental moderators including market turbulence and competitive intensity are also examined, and results indicate that velocity performance is a more important driver of satisfaction when customers operate in industries characterized by high market turbulence. The findings suggest that 3PL service providers should implement velocity performance metrics, especially for customers operating in rapidly changing environments, and use velocity performance information during the sales process and customer negotiations.     

企业物流服务组织模式与决策动因的对应分析

企业物流服务组织中的主要模式一般包括物流外包、物流自营以及部分外包部分自营。在现实中,由于受到复杂主、客观环境因素的影响,企业在进行物流服务模式的选择时必须考虑诸多因素,以形成合理的、具有针对性的决策方案。因此,研究企业物流服务组织模式与决策动因之间的关系非常重要。本文通过对物流服务需求方实体企业的抽样调查分析,从企业所在系统和环境因素入手来挖掘企业决定其物流组织模式的主要动因,运用对应分析方法对不同物流服务模式与决策动因之间的关系进行研究,从而为企业的物流决策行为提供借鉴。     

Managers’ view of a new inventory paradigm

The significance of inventories in business operations have never been denied. The actual role of inventories, however, is changing over time, as required by the business environment. This paper provides empirical background to the thesis, which says that the role of inventories in the “Golden Era” of inventory research, which was in the 1950s, was significantly different from that of today because of fundamental changes in business. This development requires new approaches in research as well.After a summary of the antecedents, the results of a survey are analysed, and they support the above thesis. The lack of difference between the inventory performance measured by the turnover rate of those companies, whose managers accept and those who deny the birth of the new paradigm calls attention to the need for the elaboration of a more complex inventory performance measurement.     

MERCHANT TRANSMISSION INVESTMENT*

We examine the performance attributes of a merchant transmission investment framework that relies on ‘market driven’ investment to increase transmission network capacity needed to support competitive wholesale markets for electricity. Under a stringent set of assumptions, the merchant investment model has a remarkable set of attributes that appears to solve the natural monopoly problem and the associated need for regulating electric transmission companies. We expand the merchant model to incorporate several attributes of wholesale power markets and transmission networks that the merchant model ignores. These include market power in wholesale electricity markets, lumpiness in transmission investment opportunities, stochastic attributes of transmission networks and associated property rights definition issues, strategic behavior by potential merchant transmission investors and issues related to the coordination of transmission system operators and merchant transmission owners. Incorporating these more realistic attributes of transmission networks and the behavior of transmission owners and system operators leads to the conclusion that several potentially significant inefficiencies may result from reliance on the merchant transmission investment framework. Accordingly, it is inappropriate for policymakers to assume that they can avoid dealing with the many challenges associated with stimulating efficient levels of investment in electric transmission networks by adopting the merchant model.     

The impact of marketing capability, operations capability and diversification strategy on performance: A resource-based view

Using resource-based view (RBV) of the firm as a theoretical backdrop; we aim to find out the relative impact of a firm's functional capabilities (namely, marketing and operations) and diversification strategies (product/service and international diversification) on financial performance. We hypothesize that this linkage depends on the firm's relative efficiency to integrate its resource-capabilities-performance triad. Using archival data of 102 UK based logistics companies, we find marketing capability is the key determinant for superior financial performance. This study highlights that a market-driven firm is likely to have better business performance than a firm focusing solely on operational capabilities. Also, firms are better off when they focus on a narrow portfolio of products/services for the clients and concentrate on a diverse geographical market. Our findings provide a new perspective to model a firm's functional capabilities and diversification strategy on its financial performance and offer a benchmarking tool to improve resource allocation decisions.     

Specific customer knowledge and operational performance in apparel manufacturing

Customer knowledge is an important organizational asset that can be exploited to yield competitive advantage to a firm. However, empirical research on the application of customer knowledge to improve operational performance has been lacking in operations management. In this study we explore how customer knowledge can be used to improve operational performance under a supply chain environment in the clothing industry. We first conceptualize the relationship between customer knowledge and operational performance and delineate their attributes based on a review of the pertinent literature. We then formulate several hypotheses based on past studies and interviews with experienced industry personnel. We develop a self-reported questionnaire to collect data to test the hypotheses. Finally, we conduct a number of regression analyses to identify the key attributes (constructs) of customer knowledge that have a significant impact on operational performance. This paper contributes to research by demonstrating that there are relationships between specific customer knowledge and different facets of operational performance, and provides practitioners in clothing manufacturing with managerial insights on how to leverage customer knowledge for operational performance improvement.     

Logistics in Bulgarian manufacturing companies

This paper reports the results of a survey conducted to explore the development of logistics in Bulgarian manufacturing companies. Two areas have been examined in more detail: logistics organizational developments and logistics management practices. The results for three subsets of the investigated companies—state owned, private and foreign have been compared. The conclusions of the study suggest that during the last years logistics is becoming popular among Bulgarian manufacturing companies. This is reflected in their organizational structures as well as in the applied management practices. However, in every aspect of the analysis companies of Bulgarian ownership are lagging behind foreign companies operating in Bulgaria.     

Antecedents and consequences of logistics value: And empirical investigation in the Spanish market

In business practice and the academic study of logistics, the incorporation of concepts such as quality followed by value has been truly revolutionary. In addition, the use of information and communication technologies (ICT) has substantially modified the way inter-company relationships are managed. This has meant that logistics is no longer considered a routine, merely operational activity but a strategic variable which is a deciding factor in achieving customer satisfaction. There are, however, still a large number of companies which continue to ignore the differentiating potential of logistics and consider it to be a routine activity. Our contribution comes within the framework of this new perspective which is analysed on the basis of an emerging concept: logistics value. The objective of this study is to contribute to the knowledge on what logistics value consists of and how it is formed, in business to business (B2B) relationships in particular. On the basis of a theoretical framework obtained from the literature review of perceived value from a trade-off perspective, we carry out an empirical analysis to determine the antecedents and consequences of logistics value. Our results, through SEM analysis show that ICT, the benefits derived from supplier-customer relationship, logistics service quality and the sacrifices associated to logistics service delivery in terms of costs, contribute to creating logistics value which is the antecedent to the classic satisfaction-loyalty chain.     

Taking operations strategy into practice: Developing a process for defining priorities and performance measures

Enterprises’ operations systems and environments, characterized by their complexity and dynamics, are challenging operations strategic management models. The study presented in this paper develops a process to integrate operations strategy content to operations performance measurement system design. Essentially, the developed methodology is based on Process Approach (Cambridge Approach) technique that systematizes procedures for generating a performance measures set coherent to operations strategy objectives and also produces a consistent strategy implementation process. To illustrate the development and the application of the proposed design methodology, findings of two case studies related to telecom engineering services companies are used. Results are discussed focusing on testing the proposed methodology in terms of its feasibility, usability, and utility. A refined process, organized in phases, steps, and procedures, is the final result of the presented study.     

Cost Accounting and Performance Measurement in a Just-in-Time Production Environment

There are normative statements in the literature, backed up by case observations and anecdotal evidence, which indicate that manufacturing companies operating just-in-time (JIT) production management systems should also change their cost accounting systems and place greater reliance on non-financial performance indicators. This study provides empirical evidence suggesting that JIT manufacturing companies which have made some degree of modification to their costing system demonstrate higher performance than JIT companies which have not made changes. The results also suggest that greater use of non-financial performance indicators is associated with higher performance irrespective of the production management system adopted.     

Supply network dynamics as a source of new business

Supply networks where operational control extends well over organizational boundaries have emerged in industries producing relatively complex and customized products with tight profit margins. Products like ships, automobiles and telecommunication systems incorporate complex design and engineering skills that are produced through a tier-structured, multi-level supply networks. Efficiency in these networks has stemmed from specialization and cost efficiency in individual value adding operations. This paper demonstrates how supplier networks have evolved and how the inherent dynamics of these networks generate constantly new business opportunities for fast moving companies with a clear focus on operational efficiency. We use action research methodology on cases from the shipbuilding and constructions industry to document some of the dynamic features of supply networks. This insight is then applied to the electronics manufacturing services business to explain the fundamentals of successful operations in this highly competitive business with ever narrowing margins. In this dynamic market of contract manufacturing companies with constant focus on the reduction of production lead times by incorporating value added operations either physically or logically to maintain and recreate profitable business. To succeed in doing this, issues related to industrial parks, local tacit knowledge and reverse/repair logistics must be managed in cross-organizational manner. We conclude that there is an ever-changing limit to the expansion of supplier networks through specialization and cost efficiency, and that at one point contracting and integrating parts of the supply network will create operationally outperforming business models that further boost the inherent dynamics of supply networks.     

Context effects in the evaluation of business-to-business brand alliances

Brand alliances in the business-to-business domain are becoming increasingly popular. This study investigates the impact of context-related effects on the formation of evaluation perceptions in B2B brand alliances. Assimilation and contrast effects represent the conceptual framework. Employing an experimental design we test the influence of two contextual factors on a range of product attributes: quality perceptions of the known brand ally (valence), and amount of information provided for the brand alliance. Using data collected from a cross section sample of large B2B UK companies we report assimilation effects across different product attributes of the alliance. Positive valence of the known brand ally results in higher evaluations of the brand alliance. In terms of provision of information, we find that, (a) unlike consumer markets, in the B2B domain higher evaluations are the result of detailed information, and (b) the impact of detailed information is significant only for tangible product attributes. Further, we find that valence of the known brand ally and amount of information provided are independent factors. The results add significantly to the knowledge on context effects in B2B brand alliances and lead to a number of managerial recommendations on partner selection and marketing communication of new brand alliances.     

基于模糊信息熵的港口物流系统评估分析

综合分析了港口物流系统的研究现状,从物流系统角度构建多层次港口物流系统评价指标体系,结合信息熵和模糊综合评价方法,建立了基于模糊信息熵的港口物流系统评估方法。此方法综合了主客观权重,克服了主观因素的影响。最后,选定沿海16个港口的物流系统进行了实证分析,结果表明此方法具有可操作性,为港口企业衡量其物流发展水平提供了参考依据。