Logistics Capability, Logistics Outsourcing and Firm Performance in Manufacturing Companies in Pakistan

Abstract

This study investigates the role of logistics capability and logistics outsourcing on the performance of manufacturing companies in Pakistan. It examines how logistics capability affects firm's performance, why outsourcing is essential and how firms benefited if they outsource the service rather than establishing their own logistics capability. This research is based on a survey using structured a questionnaire to collect the primary data. The target population is logistics specialists of manufacturing companies in Pakistan with head offices based on Karachi, that have their own logistics or outsource their logistics. The questionnaire has been distributed to 500 respondents in 113 manufacturing companies in Pakistan. Confirmatory factor analysis has been used as statistical techniques to check the factor loading of the components, and SEM (Structural Equation Model) is used to check the impact of logistics capability on firm's performance as well as the role of logistics outsourcing as a mediator. The findings of the research suggest logistics capability has positive impact on the performance of the manufacturing companies in Pakistan, and logistics capability has also an impact on logistics outsourcing. On the other hand, the study found that logistics outsourcing has no significant impact on the manufacturing companies in Pakistan.

Competitive advantage in SMEs: effect of supply chain management practices, logistics capabilities and logistics integration in a developing country

“…More generally, it is argued that logistics capabilities, if well managed, can become core competences for a firm geared to achieving competitive advantage and superior performance (Cho et al, 2008;Gligor and Holcomb, 2012;Ralston et al, 2013). In the same line, recent studies have underlined that logistics capabilities positively influence firms' competitive advantage (Bag et al, 2020;Aziz et al, 2020;Keskin et al, 2021). This contradictory finding may be attributed to the context of SMEs in developing countries and Uganda in particular, where it is reported that logistics capabilities and logistics performance are generally deficient (World Bank report, 2017; Langley and Infosys, 2018).…”

“…For example, Mellat-Parast and Spillan (2014) found that supply chain strategies influence logistics integration, which in turn significantly influences firms' competitive positions. Furthermore, prior research indicates that logistics capabilities are positively related to logistics integration (Zacharia et al, 2011;Gligor and Holcomb, 2012;Wiengarten et al, 2014) and competitive advantage Holcomb, 2012, 2014a;Bag et al, 2020;Aziz et al, 2020;Keskin et al, 2021) (see Figure 1). This discussion leads to the final set of hypotheses:…”

“…It is also recommended that firms should develop the logistics capability of innovativeness, which can act as a catalyst for logistics service differentiation, developing new logistics processes or services in response to a competitors' new offering, resulting into a competitive advantage (Ralston et al, 2013). Finally, recent researchers have also confirmed that logistics capabilities positively influence firms' competitive advantage (Bag et al, 2020;Aziz et al, 2020;Keskin et al, 2021). This leads to the following hypothesis: H2.…”

An analysis on E-Business in Manufacturing Logistics

“…Irrespective of the fact that CRM and ERP have provided effective and enhanced operational systems, the management find that they are still running out of time and accurate data about the organization. Some of the sole purpose because CRM and ERP systems have basically failed to establish effective firms' analytics and reporting include: the idea of systems being incorporated over the enterprise data model as defined in [10]. The model is incorporated as a standalone turnkey framework founded on top of the various models.…”

A study on the interaction between logistics industry and manufacturing industry from the perspective of integration field

“…In recent years, economic globalization and manufacturing resource globalization, as two key factors, have prompted enterprises to change their business processes in order to survive in a competitive environment. Logistics is the key factor of modern networked manufacturing [ 12 ], effective logistics control is the main factor determining the competitiveness of manufacturing industry [ 13 ], logistics performance has become the key factor for the success of modern manufacturing enterprises [ 14 , 15 ], logistics management has also become an important part of many manufacturers’ competitive strategies [ 16 , 17 ]. Logistics can help manufacturing and distribution meet the increasingly stringent requirements of the global market [ 18 ], while manufacturing control more directly affects logistics objects [ 19 ], and logistics performance can be improved by taking advantage of the flexibility potential in manufacturing and assembly [ 20 ].…”