article review – performance management in supply chains: logistics service providers

INTRODUCTION

This paper critically reviews the journal article titled as “performance management in supply chains: logistics service providers’ perspective” which published in international journal of physical distribution & logistics management. Critical review is done using bullet point approach with respect to following chapters.

  • Introduction
  • Literature review
  • Methodology
  • Analysis and discussion
  • Conclusion, contributions, limitations and future research
  • References

Introduction Chapter

  • Research is constructed by incorporating Performance management concepts into Supply chain management process.
  • This study published in International Journal of Physical Distribution & Logistics Management Journal Vol. 42 No. 3 in the year 2012. This study was forwarded for publication in March 2011 but it was revised 4 times and finally accepted in November 2011.
  • Latest literatures are used to construct this study. However, most interesting thing is author used her previous 5 studies (Forslund and Jonsson, 2007; Forslund et al., 2009; Forslund and Jonsson, 2009; Forslund, 2010; Forslund and Jonsson, 2010) in to this research to develop most of the concepts. As a result, certain justifications behind choosing certain concepts are not given (conflict of interest) that is also highlighted in following sections.
  • Author primarily used the literature related to supply chain management highlighting its process and importance to increase the weight of this study.
  • Author largely used the term logistics service providers (LSPs) and their contribution towards this supply chain management process such as transportation and warehousing, and supplementary services (ex, order administration and track-and-trace services).
  • After highlighting the nature of LSPs operation, author brought performance management concept to evaluate the Logistics performance in supply chains, such as lead-time, flexibility and on-time delivery.
  • Author clearly highlighted the necessity of performance management to improve the logistic performance, which ultimately encouraged author to conduct this study.
  • After credibly constructing the concept and research gap, the study poses the following research questions:

RQ1. How are LSPs handling the performance management process?

RQ2.With what scope of the supply chain do LSPs handle the performance management process?

  • Author identified the research gap by claiming that study related to performance measurement in supply chain from the perspective of LSPs is scarce even though studies related to perspective of customer and supplier are done in different aspect. Due to this scarcity, author formulated an additional research question:

RQ3. Which obstacles for supply chain performance management are perceived by LSPs?

  • To find answers for all above three research questions, author formulated the aim as “to explore the handling of the performance management process and its obstacles from the perspective of LSPs”.
  • Author used clear title for this article to communicate readers to what this article about. Hypothesis were not created in this article, instead formulated three research questions to give clear direction towards achieving research aim. If hypothesis were created for formulated three research questions, which would have made the researcher and reader more curious about the research result.
  • Due to exploratory nature of research questions, author wisely chose and adopted following philosophies and research paradigms in to this study, which however not directly mentioned in this journal article.
  • Research Type: Descriptive
  • Role of theory in research: Inductive
  • Epistemological orientation: Interpretivism
  • Ontological orientation: Constructionism
  • This paper mainly focuses on the LSPs’ key account customers and on their most important service (road freight). Overall, sufficient background knowledge is given with proper content.
  • Study makes descriptions from the perspective of LSPs with the encouragement of studies made from customer perspective by Hertz and Alfredsson (2003) and Maloni and Carter (2006). Even though, author claimed that plenty of studies are been conducted from the perspective of supplier and customer, references of such studies are not highlighted in this study.
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Literature Review Chapter

  • Literature review mainly provided the understanding of concepts such as Performance management, Supply chain management, Logistics service providers and Obstacles. Author properly constructed the concept by highlighting positive and negative findings of previous studies.
  • The term “LSP” is used throughout this study without a validation, although several synonyms are available for this term such as carriers, forwarding companies, transportation companies, third-party logistics providers and logistics service companies.
  • This research mainly used performance management process model suggested by Forslund and Jonsson (2007) which consists 5 steps such as selecting performance variables, defining metrics, setting targets, measuring and analysing.
  • The literature on Performance management (Kaplan and Norten, 1992; Otley, 1999; Epstein et al., 2000; Ittner and Larcker, 2001) offers various modern integrated models to measure the performance of the organisations, which include Balanced Scorecard (BSC), Business Excellence Model (BEM), Key Performance Indicators (KPI) and Capability Maturity Model (CMM), which are failed to highlight in this study. Moreover, being an author of both this study and as well as in performance management model of Forslund and Jonsson (2007), sufficient justification is required behind choosing this model in this study which creates the situation of conflict of interest.
  • Most of the logistic performance variables are identified from the study solely based on Wilding and Juriado (2004). However, author used multiples studies to support remaining steps of performance management process model.
  • After bringing performance management literature, study shifted the focus to supply chain and highlighted the importance of incorporating performance management model into broad supply chain scope by bringing stacks of previous studies such as (Brewer and Speh, 2001; Busi and Bititci, 2006; Morgan, 2007; Forslund and Jonsson, 2007).
  • Author managed to find out the various obstacles to use performance management model in supply chain with extensive literature. Obstacles such as the lack of understanding, competence and knowledge, difficulties in dealing with performance outside one’s own areas of responsibility, difficulties in developing a collaborative culture with supply chain partners, and lack of trust, conflicting priorities and targets are mainly discovered.

Methodology Chapter

  • When considering the research aim and the nature of this research, it is obvious that this study needs careful observation of human interactions and behaviours. According to Smith et al. (2002), ‘Interpretivism’ is one of the philosophies where the reality is determined by people rather than by objective and external factors. Therefore, interpretivism research philosophy is adapted in this research. However, such justification is not mentioned in this research.
  • As per author, “case study approach” is selected under qualitative method due to high availability of survey based LSP research which justification is not convincing enough on choosing the research approach. Yin (1994) states case study research is useful when, a ‘how’ or ‘why’ questions are being posed, when the investigator has little control over events and when the focus is on a existing event within a real life context. Hence, highlighting such literature behind choosing case study approach would have provided ideal justification.
  • As per Transport Intelligence (2009), mainly three cases (logistic organisations) are selected from Sweden due to their high domination in Swedish LSP market.
  • Three cases are named as LSP1, LSP2 and LSP3 and below table shows the glance of interview respondents.
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Case Name

Respondent’s designation

# of Respondents

LSP1

Key Account Manager, Development Manager E-solutions

2

LSP2

Vice President Operations & Customer Service, Senior Director Domestic

2

LSP3

Director Business Development, Director Process Management, Manager Operations Performance, Responsible Customer Portal

4

  • Empirical data collections are carried out through structured interview guide with open-ended questions, which strengthened the construct validity of the study. Mainly Telephone calls of 1 hour to 2 hours and email modes are used to conduct interviews due to high restriction of getting appointments and have meetings with senior level managers.
  • Among three cases, author managed only in LSP 3 to interview respondents who directly deal with performance management process. LSP 2 and LSP1 respondents were partially involved with performance management process due to their different functional activity.
  • Due to high access in LSP 3 organisation, author managed to interview 4 respondents where in other two organisations (LSP 1 and LSP 2), only two respondents were interviewed which resulted high information inflow only from LSP3 that created some biased situation.
  • The structured interview guide eases to develop interview transcript and coding. Hence, cross case comparisons and pattern matching are used as analysis methods.
  • In the methodology, author could have defined and maintained the same number of respondents from selected cases with similar designations to interview and collect data, which could have improved content validity.

Analysis and Discussion Chapter

  • With cross-case analysis, author managed to discover how LSPs handling the performance management process. Mainly process such as selecting performance variables, defining metrics and capturing real time data shows plenty of similarities among selected cases that support that performance management process is existed in LSP arena.
  • However, some differences are also found in performance management step such as target setting, measuring, report making and analysing. By highlighting these, author could have emphasised more on the requirement of structured model to maintain the uniformity among LSPs to yield the benefits of performance management that might have added more weight in to this study.
  • The study reveals that having a broad supply chain scope, which is sharing performance related activities among the partners (Suppliers, LSPs and customers) that has the best capabilities of improving efficiency in supply chains.
  • Author identified obstacles such as lack of understanding and knowledge; poor capabilities for incorporating performance metric norms and lack of IT solutions for performance report creation, which are preventing to incorporate performance management in supply chain.
  • The findings are steadily answered the established three research questions that have the proper flow and it supports each other too.

Conclusion, Contributions, Limitations & Future Research Chapter

  • The author has successfully achieved the research aim through literature and empirical data that is to explore the performance management process and the obstacles for performance management in supply chains from LSPs’ perspective.
  • However, establishing RQ2 that is to find out what scope of the supply chain do LSPs handle the performance management process, which seems bit irrelevant to the research aim. Hence, author could have omitted this and pay more attention on other two questions.
  • In terms of research implication, study mainly contributes to performance management theory from two aspects that are by bringing exploratory knowledge of performance management into supply chain process and its difficulty of usage from the perspective of LSPs.
  • Author acknowledged that due to exploratory nature of this study, prevented the possibility of generalising the findings outside the sample and whatever findings are revealed in the study that certainly can be applied in above three organisations. However, if author conducted a pilot survey prior to case study in Swedish LSPs to check the familiarisation on performance management process in supply chain, this could have generalised at least within Sweden.
  • Author recommended further research on performance management in supply chain from customer perspective. However, further it can be extended to the perspective of other business micro environment such as supplier, employee, competitors, shareholders and media)
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References Chapter

  • Harvard reference system is used throughout this research.
  • Consistency of the research is presented especially in citations.
  • Author captured most of the references from reliable source like Journal Articles, which correctly presented in bibliography section.
  • Using plenty of author’s previous studies in to this research creating biased situation.

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Word count: 1889 words

REFERENCES

  • Brewer, P. C. and Speh, T. W., 2001. Adapting the balanced scorecard to supply chain management. Supply chain management review, March/April, 48-56.
  • Busi, M. and Bititci, U., 2006. Collaborative performance management: present gaps and future research. International journal of productivity and performance management, 55 (1), 7-25.
  • Epstein, M., Kumar, P. and Westbrook, R., 2000. The drivers of customer and corporate profitability: modelling, measuring and managing the causal relationships. Advances in management accounting, 9 (1), 43-72.
  • Forslund, H. and Jonsson, P., 2007. Dyadic integration of the performance management process: a delivery service case study. International journal of physical distribution & logistics management, 37 (7), 546-567.
  • Forslund, H. and Jonsson, P., 2009. Obstacles to supply chain integration of the performance management process in customer-supplier dyads: the buyers’ perspective. Journal of operations & production management, 29 (1), 77-95.
  • Forslund, H. and Jonsson, P., 2010. Integrating the performance management process of on-time delivery with suppliers. International Journal of Logistics: Research and Applications, 13 (3), 225-251.
  • Forslund, H., 2010. ERP systems’ capabilities for supply chain performance management. Industrial management & data systems, 110 (3), 351-367.
  • Forslund, H., Jonsson, P. and Mattsson, S. A., 2009. An order-to-delivery process performance model for delivery scheduling environments. International journal of productivity and performance management, 58 (1), 41-53.
  • Hertz, S. and Alfredsson, M., 2003. Strategic development of third party logistics providers. Industrial marketing management, 32 (1), 139-149.
  • Ittner, C. and Larcker, D., 2001. Assessing empirical research in management accounting: A value-based management approach. Journal of accounting and economics, 1 (32), 349-410.
  • Kaplan, R. S. and Norton, D. P., 1992. The balanced scorecard- measures that drive performance. Harvard business review, 70 (1), 71-79.
  • Maloni, H.J. and Carter, C.R., 2006. Opportunities for research in third-party logistics. Transportation journal, Spring, 23-38.
  • Morgan, C., 2007. Supply network performance measurement: future challenges?. International journal of logistics management, 18 (2), 255-273.
  • Otley, D., 1999. Performance management: a framework for management controls systems research. Management accounting research, 10 (4), 363-382.
  • Smith, M. E., Thorpe, R. and Lowe, A., 2002. Management research: an introduction. London: Sage publications.
  • Wilding, R. and Juriado, R., 2004. Customer perceptions on logistics outsourcing in the European consumer goods industry. International journal of physical distribution & logistics management, 34 (8), 628-644.
  • Yin, R. K., 1994. Case study research: design and methods. 2nd ed. New York: Sage publications.

Prepared by Mohamed Aashik 1

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