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ABSTRACT
Purpose - This paper empirically models the correlation of outsourcing success to the proposed theoretical constructs of the production competence model as applied to logistics outsourcing. A new logistics competence model is proposed.
Design/methodology/approach - Path analysis was conducted to assess the measurement models including mediation and moderation factors.
Findings - Logistics capabilities and the alignment of these capabilities with the logistics strategy are not sufficient to drive improved business performance; this alignment must also be driven by a well-developed business strategy. In addition, the presence of business strategy alone does not drive firm performance; logistics strategy must be in alignment with logistics capabilities and with business strategy to drive improved firm performance.
Research limitations - The perception of the logistics-outsourcing provider was not captured in the data and the respondent pool was primarily U.S.-based. Objective measures should be used to match the perceptual measure, especially those that are related to financial performance.
Practical implications - This research demonstrates the strategic importance of the logistics function within an organization. Managers need to integrate logistics into the overall corporate strategic planning, and incorporate those strategic objectives into the functional logistics strategy.
Originality/value - No other study has empirically tested the theory of production competence, as related to logistics outsourcing.
Keywords Logistics outsourcing, Production competence, Logistics competence, 3PL, 4PL
Introduction
Since the seminal work of Skinner (1969), several researchers have studied the contribution of manufacturing strategy to business performance (Swamidass and Newell, 1987; Kim and Arnold, 1993; Demeter, 2003; da Silveira, 2005, Amoako-Gyampah and Acquaah, 2008). Production competence has been studied in manufacturing theory as the relationship between manufacturing strategy and business performance, and has been defined as the degree of to which manufacturing supports a business strategy (Vickery, 1991), the degree of fit between competitive priorities and manufacturing strength (Kim and Arnold, 1993), and the degree to which manufacturing performance supports the strategic priorities of a company (Vickery et al., 1993, 1994). GonzalezBenito (2007) was the first researcher to apply the production competence theory to an area outside of manufacturing, defining purchasing competence. No other attempts have been made to apply the production competence framework to other functional areas. Logistics could readily be adapted to this model, assessing the need for improved logistics performance...