Evolving a Theory of Performance‐based Logistics Using Insights From Service Dominant Logic

Randall, Wesley S.; Pohlen, Terrance L.; Hanna, Joe B.

doi:10.1002/j.2158-1592.2010.tb00142.x

Cited by 110 publications

(187 citation statements)

References 36 publications

(68 reference statements)

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“…Both PBL and non-PBL managers focus on gaining efficiency and effectiveness with regard to inventory management, repair, and overhaul. Yet for the PBL manager, the money spent purchasing spares, repairs, and overhaul is continuously calculated against Explaining the effectiveness of PBL an investment in new materials, processes, and technology that will improve reliability and correspondingly drive out demand for that particular spare part (and its warehouse, inventory, and transportation cost), along with repair or overhaul tasks (Kim et al, 2010(Kim et al, , 2007Randall et al, 2010). The PBL contract uses cost avoidance incentives to focus upstream trading partners on the outcome that matters most to the end-user -an operational system at the lowest possible cost.…”

Section: The Economics Of Pbl: Investment Driven By Cost Avoidancementioning

confidence: 99%

“…A strength of SDL is that it considers value from both the perspective of the end customer and from the supplier network, thus making SDL a robust supply chain framework (Lambert and García-Dastugue, 2006). Using this framework, Randall et al (2010) found that practitioners essentially operationalized the outcome of SDL by assigning some measure of performance (e.g. system up time) as the desired customer value proposition.…”

Section: The Economics Of Pbl: Investment Driven By Cost Avoidancementioning

confidence: 99%

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Explaining the effectiveness of performance‐based logistics: a quantitative examination

Randall

Nowicki

Hawkins

2011

The International Journal of Logistics Management

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Purpose -Performance-based logistics (PBL) strategies are providing governments and for-profit organizations with a contractual mechanism that reduces the life cycle costs of their systems. PBL accomplishes this by establishing contracts that focus on the delivery of performance not parts. PBL establishes a metric based governance structure where suppliers make more profit when they invest in logistics process improvements, or system redesign, that reduces total cost of ownership. While work has been done to outline an overall PBL theoretical framework, the underlying theory explaining the enablers that lead to organizational and team-level, team-goal alignment associated with the PBL governance structure requires testing. The purpose of this paper is to quantitatively test previously posited relationships between enablers of PBL and PBL effectiveness. An additional objective is to explore any differences in PBL effectiveness between different business sectors. Design/methodology/approach -A multiple regression model was developed, tested and validated to explain the effectiveness of PBL. The model was externally validated with exploratory cross-sectional survey data of 61 practitioners. Findings -This study strongly supports recent PBL theory explaining PBL effectiveness. Key antecedents include investment climate, relational exchange, PBL leadership, and business sector. Further, government organizations lag behind their commercial counterparts in PBL effectiveness and PBL leadership. Practical implications -PBL business arrangements are more effective in more favorable investment climates. Thus, leaders should welcome new ideas, empower employees, and encourage entrepreneurship. Since PBL effectiveness increases with relational exchange, building trust and communicating with suppliers is key. Leadership is also important to PBL effectiveness. Leaders should accept risk, focus on long-term affordability and performance, and align activities to achieve end-user goals. Originality/value -This research is the first quantitative test of previously posited factors affecting PBL effectiveness. Additionally, this research unveils key differences in business sectors' use of PBL strategies.Keywords Logistics management, Leadership, Performance-based logistics, Investment climate, Sustainment, Outcome-based contracting, Post-production support, Logistics, Supportability Paper type Research paper IntroductionThe post-production logistics and product support costs associated with sustaining large-scaled, complex systems such as aircraft fleets, rail, and power generation facilities quite often exceed two to three times the research, development, and production costs associated with these systems (Berkowitz et al., 2003). Adding complexity to this costly reality is the fact that as systems age post-production logistics and support costs tend to increase (MaClean et al., 2005). These costs represent a significant logistics-related segment of the economy. For instance, the US commercial airline industry spends in ex...

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Section: The Economics Of Pbl: Investment Driven By Cost Avoidancementioning

confidence: 99%

Section: The Economics Of Pbl: Investment Driven By Cost Avoidancementioning

confidence: 99%

Explaining the effectiveness of performance‐based logistics: a quantitative examination

Randall

Nowicki

Hawkins

2011

The International Journal of Logistics Management

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“…In the PBL, responsibility of the product/service system management is on the supplier of the system, unlike in the traditional end-user -supplier relationship [29]. PBL is in use in military context and it is "a contractual mechanism".…”

Section: Discussionmentioning

confidence: 99%

A Comprehensive Assessment Model for Critical Infrastructure Protection

Häyhtiö¹,

Zaerens²

2017

Management and Production Engineering Review

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International business demands seamless service and IT-infrastructure throughout the entire supply chain. However, dependencies between different parts of this vulnerable ecosystem form a fragile web. Assessment of the financial effects of any abnormalities in any part of the network is demanded in order to protect this network in a financially viable way. Contractual environment between the actors in a supply chain, different business domains and functions requires a management model, which enables a network wide protection for critical infrastructure. In this paper authors introduce such a model. It can be used to assess financial differences between centralized and decentralized protection of critical infrastructure.As an end result of this assessment business resilience to unknown threats can be improved across the entire supply chain.

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“…In performance-based logistics (PBL) responsibility of the product/service system management is on a supplier of the system, unlike in the traditional enduser -supplier relationship [19]. In PBL according to Berkowitz et [20].…”

Section: Performance Based Logistics (Pbl) -A Service Management Modementioning

confidence: 99%

Requirements as Operational Metrics? – Case: Finnish Defense Forces

Häyhtiö¹

2016

Management and Production Engineering Review

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The purpose of this paper is to study how requirements management could be utilized in connection to a service performance measurement system. Public private partnership (PPP) in Finnish Defence Forces' (FDF) catering operations is studied as a case example. There are two research questions, which are studied: Firstly, do catering operations create KPI's, which enable inter-functional co-operation and service development? Secondly, do these KPIs support both efficiency and effectiveness of PPP catering operations? Evidence from the previous studies on the subject indicates that there should be a single "power-by-the-hour" metrics unit, which enables a transparent follow-up of the performancebased operations. This research highlights requirements value in creation of economic efficiency and effectiveness from the end-user point-of view and reciprocal value creation between inter-functional service systems. This research's results show that focus on portion control can produce information, which enhances inter-functional co-operation between PPP stakeholders.

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Evolving a Theory of Performance‐based Logistics Using Insights From Service Dominant Logic

Cited by 110 publications

References 36 publications

Explaining the effectiveness of performance‐based logistics: a quantitative examination

Explaining the effectiveness of performance‐based logistics: a quantitative examination

A Comprehensive Assessment Model for Critical Infrastructure Protection

Requirements as Operational Metrics? – Case: Finnish Defense Forces

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