A Comprehensive Framework for Measuring Performance in a Third-party Logistics Provider

Today, Third-Party Logistics Providers (3PL) face a great pressure in order to meet their clients’ needs: customers demand a high level of time and place value for their deliveries, at lower prices, making the last mile activity not only a challenge whilst meeting the clients’ requirements but likewise in managing the profitability and the financial balance of the operation. In order to meet the logistics’ operation efficiency, several 3PL monitor their activity assisted by a variety of ex-post systems of performance indicators that assess the quality and efficiency of the logistic process. However, most of the time 3PL do not fully exploit the potentiality of those performance systems. The objective of this paper is to provide a comprehensive and innovative performance measurement framework for a Third-Party Logistics Provider, transferable for other stakeholders. The framework is supported in a thorough revision of the existing literature regarding performance indicators systems, with particular significance in the field of logistics and freight transport. The rich variety of logistics performance indicators arrays frequently focus on a specific domain or follow a typical framework which includes metrics for cost and asset management, customer service, productivity and quality. In order to meet the specifics of a 3PL, the authors believe that a more detailed framework would be beneficial. The framework the authors propose is organized in three levels: the activities dimension (e.g. transport, warehousing, and customer service), the decision level dimension (operational, tactical and strategic) and the different actors dimension (e.g. carriers, 3PL and consolidation centers). A case study of Urbanos, a Portuguese 3PL firm, was used to validate the proposed framework.

[1]  M. Pandey,et al.  Performance Measures in Supply Chain Management , 2011 .

[2]  Michael R. Bartolacci,et al.  Optimization Modeling for Logistics: Options and Implementations , 2012 .

[3]  Gordon Stewart,et al.  Supply‐chain operations reference model (SCOR): the first cross‐industry framework for integrated supply‐chain management , 1997 .

[4]  Mauricio Camargo,et al.  A framework for measuring logistics performance in the wine industry , 2012 .

[5]  Peter Baker,et al.  The handbook of logistics & distribution management , 2014 .

[6]  M. Schut,et al.  PERFORMANCE INDICATORS IN LOGISTICS SERVICE PROVISION AND WAREHOUSE MANAGEMENT – A LITERATURE REVIEW AND FRAMEWORK , 2013 .

[7]  A. Gunasekaran,et al.  Performance measures and metrics in a supply chain environment , 2001 .

[8]  Carlo Rafele,et al.  Logistic service measurement: a reference framework , 2004 .

[9]  Marc Wouters,et al.  Designing a performance measurement system: A case study , 2004, Eur. J. Oper. Res..

[10]  K. N. Subramanya,et al.  A Review of Literature on Performance Measurement of Supply Chain Network , 2009, 2009 Second International Conference on Emerging Trends in Engineering & Technology.

[11]  D. Lambert,et al.  Fundamentals of Logistics Management , 1998 .

[12]  Donald J. Bowersox,et al.  Supply Chain Logistics Management , 2002 .

[13]  Elfriede Krauth,et al.  Performance Measurement and Control in Logistics Service Providing , 2005, ICEIS.

[14]  Andy Neely,et al.  Designing performance measures: a structured approach , 1997 .

[15]  M. Christopher.  Logistics and Supply Chain Management: Strategies for Reducing Cost and Improving Service (Second Edition) , 1999 .

[16]  José Eugenio Leal,et al.  Defining and calibrating performance indicators of a 4PL in the chemical industry in Brazil , 2008 .

[17]  P. K. Bagchi.  Role of benchmarking as a competitive strategy: the logistics experience , 1996 .

[18]  Chris Fill,et al.  The outsourcing dilemma: a composite approach to the make or buy decision , 2000 .

[19]  A. Gunasekaran,et al.  A framework for supply chain performance measurement , 2004 .

[20]  Lennart Nørreklit,et al.  Business Performance Measurement , 2007 .

[21]  Yanzhi Li,et al.  A decision method for supplier selection in multi-service outsourcing , 2011 .

[22]  S. Holmberg,et al.  Systems Thinking in Supply Chain Measurements , 2000 .

[23]  Christof Schulte.  10.2 Supply Chain Operations Reference-Modell , 2012 .

[24]  L. Ojala,et al.  Connecting to Compete 2012: Trade Logistics in the Global Economy , 2012 .

[25]  C. Waters.  Logistics: An Introduction to Supply Chain Management , 2003 .

[26]  Hanne Nørreklit,et al.  Management accounting and decision making: Two case studies of outsourcing , 2015 .

[27]  E. Frazelle.  Supply chain strategy : the logistics of supply chain management , 2002 .

[28]  E. Aktas,et al.  The use of outsourcing logistics activities: The case of turkey , 2011 .

[29]  Lisa M. Ellram,et al.  Fundamentals of Logistics Management: First European Edition , 2006 .

[30]  Maria Lindholm,et al.  A sustainable perspective on urban freight transport: Factors affecting local authorities in the planning procedures , 2010 .