Logistics Outsourcing: Performance Models and Financial and Operational Indicators
The growing outsourcing of logistics services
resulting from the ongoing current in firms of costs
reduction/increased efficiency means that it is becoming more and
more important for the companies doing the outsourcing to carry out
a proper evaluation.
The multiple definitions and measures of logistics service
performance found in research on the topic create a certain degree of
confusion and do not clear the way towards the proper measurement
of their performance. Do a model and a specific set of indicators exist
that can be considered appropriate for measuring the performance of
logistics services outsourcing in industrial environments? Are said
indicators in keeping with the objectives pursued by outsourcing? We
aim to answer these and other research questions in the study we have
initiated in the field within the framework of the international High
Performance Manufacturing (HPM) project of which this paper
forms part.
As the first stage of this research, this paper reviews articles
dealing with the topic published in the last 15 years with the aim of
detecting the models most used to make this measurement and
determining which performance indicators are proposed as part of
said models and which are most used. The first steps are also taken in
determining whether these indicators, financial and operational, cover
the aims that are being pursued when outsourcing logistics services.
The findings show there is a wide variety of both models and
indicators used. This would seem to testify to the need to continue
with our research in order to try to propose a model and a set of
indicators for measuring the performance of logistics services
outsourcing in industrial environments.
[1] Y.-Y. Song, T. Maher, J.D. Nicholson, N.P. Gurney, "Strategic alliances
in logistics outsourcing". Asia Pacific Journal of Logistics and
Marketing, , 2000, 12(4), 3-21.
[2] R. Wilding, R. Juriado, "Customer perceptions on logistics outsourcing
in the European consumer goods industry." International Journal of
Physical Distribution & Logistics Management, 2004, 34(7), 628.
[3] R. Rajesh, S. S. Pugazhendhi, K. Ganesh, C. Muralidharan, R.
Sathiamoorthy, "Influence of 3PL service offerings on client
performance in India"), pp Transportation Research Part E: Logistics
and Transportation Review, 2011, 47(2), 149-165.
[4] A. Krizman, "Involvement, knowledge sharing and proactive
improvement as antecedents of logistics outsourcing performance."
Economic and Business Review for Central and South - Eastern Europe,
2009,11(3), 233.
[5] P. Gaiardelli, N. Saccani, L. Songini, "Performance measurement of the
after-sales service network-evidence from the automotive industry."
Computers in Industry, 2007, 58(7), 698.
[6] J.B. Heide, and G. John, "Do norms matter in marketing
relationships?", Journal of Marketing, 1992, Vol. 56, pp. 32-44.
[7] C. Engelbrecht, Logistikoptimierung durch Outsourcing. Erfolgswirkung
und Erfolgsfaktoren, Wiesbaden: Deutscher Universitat Verlag, 2004.
[8] J. Deepen, Logistics Outsourcing Relationships: Measurement,
Antecedents and Effects of Logistics Outsourcing Performance,
Heidelberg: Physica-Verlag, 2007.
[9] F. Krakovics, J.E. Leal, P. Mendes, Jr.; R.L. Santos, "Defining and
calibrating performance indicators of a 4PL in the chemical industry in
Brazil." International Journal of Production Economics, 2008 115(2),
502.
[10] B.M., Beamon, "Measuring supply chain performance" International
Journal of Operations and Production Management, 1999, 19, 275-292.
[11] F. Wynstra, B. Axelsson, W. Van der Valk, "An application-based
classification to understand buyer-supplier interaction in business
services." International Journal of Service Industry Management, 2006,
17(5), 474−496.
[12] C. Chee-Cheng, "A model for customer-focused objective-based
performance evaluation of logistics service providers." Asia Pacific
Journal of Marketing and Logistics, 2008, 20(3), 309-309-322.
[13] C-C.Sum, C-B. Teo, K-K. Ng, (2001). "Strategic logistics management
in singapore." International Journal of Operations & Production
Management, 2001, 21(9), 1239-1239-1260.
[14] D. Power, M. Sharafali, V. Bhakoo, "Adding value through
outsourcing: Contribution of 3PL services to customer performance
MRN." Management Research Review, 2007, 30(3), 228.
[15] B S. Sahay, R. Mohan, "3PL practices: An indian perspective."
International Journal of Physical Distribution & Logistics Management,
2006, 36(9), 666
[16] A.D. Neely, Measuring Business Performance. Economist Books,
London, 1998.
[17] A. Neely, J. Mills, K. Platts, H. Richards, M. Gregory, M. Bourne, M.
Kennerley, "Performance measurement system design: Developing and
testing a process-based approach." International Journal of Operations
& Production Management, 2000, 20(10), 1119-1145
[18] R.S . Kaplan, D.P. Norton, "The balanced scorecard - measures that
drive performance" Harvard Business Review, 1992, January-February.
71-9
[19] D.P. Keegan, R.G. Eiler, C.R. Jones, "Are your performance measures
obsolete?" Management Accounting, 1989, June, pp. 45-50.
[20] L. Fitzgerald, R. Johnston, S. Brignall, R. Silvestro, C. Voss,
Performance Measurement in Service Business. CIMA, London, 1991.
[21] G. Azzone, C. Masella, U. Bertele, "Design of performance measures
for time-based companies." International Journal of Operations &
Production Management, 1991, 11(3), 77-85.
[22] A.D. Chandler, The Visible Hand: Managerial Revolution in American
Business, Harvard University Press, Boston, MA, 1977.
[23] R.L. Lynch, K.F. Cross, Measure Up - the Essential Guide to
Measuring Business Performance, Mandarin, London, 1991.
[24] M. Brown, Keeping Score: Using the Right Metrics to Drive World
Class Performance, Quality Resources, New York, NY, 1996.
[25] A. Neely, C. Adams, P. Crowe, "The performance prism in practice."
Measuring Business Excellence, 2001, 5(2), 6
[26] A.F.D. Toni, A. Fornasier, M. Montagner, F. Nonino, "A performance
measurement system for facility management: The case study of a
medical service authority." International Journal of Productivity and
Performance Management, 2007, 56(5), 417.
[27] C. Medina López, J.A. Marín García, R. Alfalla-Luque, "Una propuesta
metodológica para la realización de búsquedas sistemáticas de
bibliografía." Working Papers on Operations Management, 2010, 1(2),
13-30.
[28] J.A.D. Machuca, M.M. González Zamora, V.G. Aguilar Escobar,
"Service operations management research". Journal of Operations
Management, 2007, 25(3), 585−603.
[29] S. Grimaldi, C. Rafele, "Current applications of a reference framework
for the supply chain performance measurement." International Journal
of Business Performance Management, 2007, 9(2), 206-225
[30] M. Giannakis, "Performance measurement of supplier relationships."
Supply Chain Management, 2007, 12(6), 400.
[31] K.L. Choy, H.K.H. Chow, W.B. Lee, F.T.S. Chan, "Development of
performance measurement system in managing supplier relationship for
maintenance logistics providers." Benchmarking, 2007, 14(3), 352.
[32] H. Min, S.J. Joo, "Benchmarking the operational efficiency of third
party logistics providers using data envelopment analysis." Supply Chain
Management, 2006, 11(3), 259.
[33] D. Hannon,. "3PL performance metrics: Michelin keeps it simple."
Purchasing, 2003, 132, 106-109.
[34] B. Jiang, & A. Qureshi, "Research on outsourcing results: Current
literature and future opportunities." Management Decision, 2006, 44(1),
44-44-55.
[35] P.S. Drucker, The Practice of Management, Harper & Row, New York,
NY, 1954.
[36] J.B. Holmstrom, & P. Aavikko, ÔÇÿÔÇÿAchieving a management
breakthrough in inbound logistics by improving the efficacy of
operational decisions--, Production and Inventory Management Journal,
1994, Vol. 35 No. 3, pp. 1-8.
[37] D.N.P. Murthy, O. Solem, & T. Roren, ÔÇÿÔÇÿProduct warranty logistics:
issues and challenges--, European Journal of Operational Research,
2004, Vol. 156, pp. 110-26.
[38] H.L. Richarson, "Logistics help for the challenged", Transportation &
Distribution, 1995, Vol. 36 No. 1, pp. 60-4
[1] Y.-Y. Song, T. Maher, J.D. Nicholson, N.P. Gurney, "Strategic alliances
in logistics outsourcing". Asia Pacific Journal of Logistics and
Marketing, , 2000, 12(4), 3-21.
[2] R. Wilding, R. Juriado, "Customer perceptions on logistics outsourcing
in the European consumer goods industry." International Journal of
Physical Distribution & Logistics Management, 2004, 34(7), 628.
[3] R. Rajesh, S. S. Pugazhendhi, K. Ganesh, C. Muralidharan, R.
Sathiamoorthy, "Influence of 3PL service offerings on client
performance in India"), pp Transportation Research Part E: Logistics
and Transportation Review, 2011, 47(2), 149-165.
[4] A. Krizman, "Involvement, knowledge sharing and proactive
improvement as antecedents of logistics outsourcing performance."
Economic and Business Review for Central and South - Eastern Europe,
2009,11(3), 233.
[5] P. Gaiardelli, N. Saccani, L. Songini, "Performance measurement of the
after-sales service network-evidence from the automotive industry."
Computers in Industry, 2007, 58(7), 698.
[6] J.B. Heide, and G. John, "Do norms matter in marketing
relationships?", Journal of Marketing, 1992, Vol. 56, pp. 32-44.
[7] C. Engelbrecht, Logistikoptimierung durch Outsourcing. Erfolgswirkung
und Erfolgsfaktoren, Wiesbaden: Deutscher Universitat Verlag, 2004.
[8] J. Deepen, Logistics Outsourcing Relationships: Measurement,
Antecedents and Effects of Logistics Outsourcing Performance,
Heidelberg: Physica-Verlag, 2007.
[9] F. Krakovics, J.E. Leal, P. Mendes, Jr.; R.L. Santos, "Defining and
calibrating performance indicators of a 4PL in the chemical industry in
Brazil." International Journal of Production Economics, 2008 115(2),
502.
[10] B.M., Beamon, "Measuring supply chain performance" International
Journal of Operations and Production Management, 1999, 19, 275-292.
[11] F. Wynstra, B. Axelsson, W. Van der Valk, "An application-based
classification to understand buyer-supplier interaction in business
services." International Journal of Service Industry Management, 2006,
17(5), 474−496.
[12] C. Chee-Cheng, "A model for customer-focused objective-based
performance evaluation of logistics service providers." Asia Pacific
Journal of Marketing and Logistics, 2008, 20(3), 309-309-322.
[13] C-C.Sum, C-B. Teo, K-K. Ng, (2001). "Strategic logistics management
in singapore." International Journal of Operations & Production
Management, 2001, 21(9), 1239-1239-1260.
[14] D. Power, M. Sharafali, V. Bhakoo, "Adding value through
outsourcing: Contribution of 3PL services to customer performance
MRN." Management Research Review, 2007, 30(3), 228.
[15] B S. Sahay, R. Mohan, "3PL practices: An indian perspective."
International Journal of Physical Distribution & Logistics Management,
2006, 36(9), 666
[16] A.D. Neely, Measuring Business Performance. Economist Books,
London, 1998.
[17] A. Neely, J. Mills, K. Platts, H. Richards, M. Gregory, M. Bourne, M.
Kennerley, "Performance measurement system design: Developing and
testing a process-based approach." International Journal of Operations
& Production Management, 2000, 20(10), 1119-1145
[18] R.S . Kaplan, D.P. Norton, "The balanced scorecard - measures that
drive performance" Harvard Business Review, 1992, January-February.
71-9
[19] D.P. Keegan, R.G. Eiler, C.R. Jones, "Are your performance measures
obsolete?" Management Accounting, 1989, June, pp. 45-50.
[20] L. Fitzgerald, R. Johnston, S. Brignall, R. Silvestro, C. Voss,
Performance Measurement in Service Business. CIMA, London, 1991.
[21] G. Azzone, C. Masella, U. Bertele, "Design of performance measures
for time-based companies." International Journal of Operations &
Production Management, 1991, 11(3), 77-85.
[22] A.D. Chandler, The Visible Hand: Managerial Revolution in American
Business, Harvard University Press, Boston, MA, 1977.
[23] R.L. Lynch, K.F. Cross, Measure Up - the Essential Guide to
Measuring Business Performance, Mandarin, London, 1991.
[24] M. Brown, Keeping Score: Using the Right Metrics to Drive World
Class Performance, Quality Resources, New York, NY, 1996.
[25] A. Neely, C. Adams, P. Crowe, "The performance prism in practice."
Measuring Business Excellence, 2001, 5(2), 6
[26] A.F.D. Toni, A. Fornasier, M. Montagner, F. Nonino, "A performance
measurement system for facility management: The case study of a
medical service authority." International Journal of Productivity and
Performance Management, 2007, 56(5), 417.
[27] C. Medina López, J.A. Marín García, R. Alfalla-Luque, "Una propuesta
metodológica para la realización de búsquedas sistemáticas de
bibliografía." Working Papers on Operations Management, 2010, 1(2),
13-30.
[28] J.A.D. Machuca, M.M. González Zamora, V.G. Aguilar Escobar,
"Service operations management research". Journal of Operations
Management, 2007, 25(3), 585−603.
[29] S. Grimaldi, C. Rafele, "Current applications of a reference framework
for the supply chain performance measurement." International Journal
of Business Performance Management, 2007, 9(2), 206-225
[30] M. Giannakis, "Performance measurement of supplier relationships."
Supply Chain Management, 2007, 12(6), 400.
[31] K.L. Choy, H.K.H. Chow, W.B. Lee, F.T.S. Chan, "Development of
performance measurement system in managing supplier relationship for
maintenance logistics providers." Benchmarking, 2007, 14(3), 352.
[32] H. Min, S.J. Joo, "Benchmarking the operational efficiency of third
party logistics providers using data envelopment analysis." Supply Chain
Management, 2006, 11(3), 259.
[33] D. Hannon,. "3PL performance metrics: Michelin keeps it simple."
Purchasing, 2003, 132, 106-109.
[34] B. Jiang, & A. Qureshi, "Research on outsourcing results: Current
literature and future opportunities." Management Decision, 2006, 44(1),
44-44-55.
[35] P.S. Drucker, The Practice of Management, Harper & Row, New York,
NY, 1954.
[36] J.B. Holmstrom, & P. Aavikko, ÔÇÿÔÇÿAchieving a management
breakthrough in inbound logistics by improving the efficacy of
operational decisions--, Production and Inventory Management Journal,
1994, Vol. 35 No. 3, pp. 1-8.
[37] D.N.P. Murthy, O. Solem, & T. Roren, ÔÇÿÔÇÿProduct warranty logistics:
issues and challenges--, European Journal of Operational Research,
2004, Vol. 156, pp. 110-26.
[38] H.L. Richarson, "Logistics help for the challenged", Transportation &
Distribution, 1995, Vol. 36 No. 1, pp. 60-4
@article{"International Journal of Business, Human and Social Sciences:63382", author = "Carlos Sanchís-Pedregosa and José A. D. M achuca and María del Mar González-Zamora", title = "Logistics Outsourcing: Performance Models and Financial and Operational Indicators", abstract = "The growing outsourcing of logistics services
resulting from the ongoing current in firms of costs
reduction/increased efficiency means that it is becoming more and
more important for the companies doing the outsourcing to carry out
a proper evaluation.
The multiple definitions and measures of logistics service
performance found in research on the topic create a certain degree of
confusion and do not clear the way towards the proper measurement
of their performance. Do a model and a specific set of indicators exist
that can be considered appropriate for measuring the performance of
logistics services outsourcing in industrial environments? Are said
indicators in keeping with the objectives pursued by outsourcing? We
aim to answer these and other research questions in the study we have
initiated in the field within the framework of the international High
Performance Manufacturing (HPM) project of which this paper
forms part.
As the first stage of this research, this paper reviews articles
dealing with the topic published in the last 15 years with the aim of
detecting the models most used to make this measurement and
determining which performance indicators are proposed as part of
said models and which are most used. The first steps are also taken in
determining whether these indicators, financial and operational, cover
the aims that are being pursued when outsourcing logistics services.
The findings show there is a wide variety of both models and
indicators used. This would seem to testify to the need to continue
with our research in order to try to propose a model and a set of
indicators for measuring the performance of logistics services
outsourcing in industrial environments.", keywords = "Logistics, objectives, outsourcing, performancemeasurement systems", volume = "5", number = "11", pages = "1720-6", }
