PAPER FROM THE 2011 ISL CONFERENCE Operational routines and supply chain competencies of Chinese logistics service providers

Purpose – Though resource based view (RBV) has been applied extensively in supply chain studies to examine how firms utilize logistics resources to attain superior performance, relatively little attention has been directed to exploring the effects of operational routines on logistics and supply chain (L&SC) competencies. The purpose of this paper is to examine the causal linkages between operational routines and L&SC competencies of Chinese logistics service providers (LSPs). Design/methodology/approach – A conceptual model on the relationships between operational routines and L&SC competencies was developed based on RBV. In total, 76 valid responses from a survey of Chinese LSPs provided the empirical data for the testing of the formulated hypotheses. Confirmatory factor analysis was used to develop the constructs for the model and hierarchical multiple regression analysis was performed to test the hypothesized relationships. Findings – Not all operational routines were drivers of L&SC competencies in the Chinese logistics market. Processes for increasing responsiveness are most important in contributing to building positioning, distribution support and agility competencies. Processes for increasing flexibility are only effective in developing positioning competency, while performance benchmarking has little contribution to competency building in the Chinese market. ICT support strengthens the relationship between performance benchmarking and distribution support, but weakens that between processes for increasing flexibility and distribution support as well as that between processes for increasing responsiveness and agility. Research limitations/implications – This study raises more questions than it attempts to answer, opening up a number of horizons for further research into the logistics market of China. Several followup studies have been suggested, including a multiple case study on how Chinese LSPs contrive their operational routines to respond to the exigencies of market situations. Practical implications – Findings from this study have significant managerial implications in resource investment and competency building to generate competitive advantage in the Chinese logistics market. Originality/value – This research sheds new insights on the routine-capability-competency building chain in China’s fragmentary logistics industry. It indicates that despite over three decades of economic reform, and ascension to the World Trade Organization, China remains a distinctively unique market environment with ingredients for operation success vastly different from those of the developed economies.

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