LOGISTICS PERFORMANCE: EFFICIENCY, EFFECTIVENESS, AND DIFFERENTIATION

TLDR

The study empirically investigates how logistics performance affects organizational performance. Logistics performance is modeled as a second‑order formative construct comprising efficiency, effectiveness, and differentiation. Results show that logistics performance positively influences organizational performance, with the three dimensions acting as complementary factors and managerial perceptions closely matching financial data.

Abstract

This research examines the nature of logistics performance and the contribution of logistics to the firm by empirically investigating the impact of logistics performance on organizational performance. Logistics performance is tested as a second‐order formative construct comprised of three dimensions: logistics efficiency; logistics effectiveness; and logistics differentiation. Results indicate that logistics performance positively impacts organizational performance. Theoretical and empirical support is also provided for measuring logistics performance as a second‐order formative construct, indicating that efficiency, effectiveness, and differentiation are not necessarily trade‐offs, but rather are complementary. Importantly, perceptual measures for organizational performance collected from managerial respondents were strongly correlated with secondary financial data for participating organizations obtained from Compustat, lending empirical credence to the logistics performance–organizational performance relationship.