Logistics Performance Dimensions

Logistics Performance Dimensions

After reading �Logistics Performance: Efficiency, Effectiveness, and Differentiation� identify and explain

Question #1

the underlying dimensions of logistics performance.

Answer

Your answer goes here

Question #2

Why do you think the authors of the paper �Logistics Performance: Efficiency, Effectiveness, and
Differentiation� came to the conclusion that logistics managers need to compare their logistical activities
with their competitors and also methodically search and scrutinize the results of other companies in their

industry?

1# Logistics Performance Dimensions

Logistics performance consists of three dimensions of efficiency, differentiation
and effectiveness. All logistics performance in the past is presented under the three dimensions
of differentiation, and efficiency effectiveness. According to the authors, logistics is multi-
dimensional performance view in the degree of effectiveness, differentiation and efficiency.
These three logistic performance dimensions are related to the logistics accomplishment of
activities for any organizations. Logistics performance is defined as efficient and effective
performance of activities of logistics. In addition, logistics differentiation is a vital component of
logistic performance because is used as a logistics performance indicator to show how customers
receive logistic activities (Fugate, Mentzer, and Stank, 2010).

Logistics differentiation helps logistics managers to create value through elements
of customer service such as consistency and timeliness of delivery, product availability and ease
of orders placing. For instance, if a logistics orders creates value through logistic activities’
inimitability, the company is able to differentiate from other competing firms in the logistics
field. Differentiation is excellent in logistics performance as it enhances superiority as compared
to rival firms. Logistics effectiveness is the ability to get resources and an absolute attainment of
outcome levels. In logistics, effectiveness helps in achieving pre-defined objectives such as
meeting requirements of customers in critical outcome situations. Therefore, effectiveness of
logistics is the degree to which function objectives of logistics are executed. Logistics efficiency
measures how well the company resources are expected to be utilized. Efficiency also shows the
internal functioning of logistics by using of the ratio of normal input levels to real output levels.
Efficiency helps to manage resources wisely by providing the desired service or product mix at a

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cost level that is widely satisfactory to customers. Effectiveness and efficiency are mutually
exclusive. Thus, logistic performance is a 2 nd construct which consists of effectiveness,
differentiation and efficiency (Fugate, Mentzer and Stank, 2010).
2# Comparison with Competitors

The comparison of performance to competitors is strongly rooted in strategic
management. Comparing logistics performance in terms of logistical activities is very important
in developing a competitive advantage for a firm, relative to its competitors. This enables logistic
managers to produce an offer for a logistic market segment that has superior value. Quality
management enhances the essential roles of the relative performance assessment process in
comparison to competitors. Logistics performance dimension helps to compare logistics activity
results to those of competing firms. Logistics differentiation helps logistics managers to compare
logistical activities of competitors. In addition, a logistics efficiency function process should
endeavor to reduce the resource ratio used against the derived outcomes and achieve pre-
determined goals under effectiveness. This helps managers to gain superiority in the logistics
industry (Rajagopal, Krishnamoorthy & Khanapuri, 2018).

Logistics differentiation is virtually important to logistics managers in comparing
the performance of competitors. Logistics differentiation helps to understand the results of
competitors and to draw strategies that will create value to customers through improved
superiority. Logistics managers should critically understand logistics activities in comparison to
competitors. This is an important aspect that enables managers to compare their performance
with rivals, learn new ways of promoting logistics as well as create value to customers through
service or product superiority. Therefore, logistics managers should methodically search and

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monitor the outcomes or results of competitors in the industry of logistics. In addition, they
should compare their activities of logistics with those of competing firms in order to gain logistic
performance perceptions as compared to competing firms. Logistics managers must use logistics
differentiation to survey customers and validate their perceptions as compared to competitors.
Therefore, logistics managers should evaluate their logistical activities to those of competing
firms as well as scrutinize and search their results in order to establish product or service
superiority and enhance value for their customers.

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References

Fugate, B. S., Mentzer, J. T., & Stank, T. P. (2010). Logistics performance: efficiency,
effectiveness, and differentiation. Journal of business logistics, 31(1), 43-62.
Rajagopal, S., Krishnamoorthy, B., & Khanapuri, V. B. (2018). Competitive logistics capability
for sustainable organisational performance: a study of the textile industry in
India. International Journal of Logistics Economics and Globalisation, 7(2), 105-124.