The impact of logistics performance on organizational performance in a supply chain context

Abstract

Purpose The paper's aim is to theorize and assess a logistics performance model incorporating logistics performance as the focal construct with supply chain management strategy as antecedent and organizational performance, both marketing and financial, as consequences. Design/methodology/approach Data from a national sample of 142 plant and operations managers are analyzed using a structural equation modeling methodology. Findings The results indicate that logistics performance is positively impacted by supply chain management strategy and that both logistics performance and supply chain management strategy positively impact marketing performance, which in turn positively impacts financial performance. Neither supply chain management strategy nor logistics performance was found to directly impact financial performance. Research limitations/implications To compete at the supply chain level, manufacturers must adopt a supply chain management strategy. Such a strategy requires integration and coordination of key external processes such as purchasing, selling, and logistics with supply chain partners. In this study the focus is limited to the impact of logistics performance on organizational performance within a supply chain context. Practical implications As manufacturers work to improve the logistics processes, they support their organization's supply chain strategy, resulting in improved performance for the overall supply chain and ultimately their manufacturing organizations. Originality/value Organizational managers are being asked to focus directly on supply chain functions such as logistics to bolster the competitiveness of the supply chains in which their organizations are integral partners. Does such a supply chain focus ultimately result in improved organizational performance? This study provides evidence that a supply chain focus will enhance logistics performance, which will ultimately result in improved organizational performance.