Organizational structure, service capability and its impact on business performance of logistics providers in the B2B context

Borella, Margareth Rodrigues de Carvalho; Barcellos, Paulo Fernando Pinto; Sachdev, Harash; Merz, George Russ; Galelli, Ademar

doi:10.1590/0104-530X1538-16

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Articles • Gest. Prod. 24 (2) • Apr-Jun 2017 • https://doi.org/10.1590/0104-530X1538-16 copy

Organizational structure, service capability and its impact on business performance of logistics providers in the B2B context

Authorship SCIMAGO INSTITUTIONS RANKINGS

Abstract:

This study aims to verify what aspects related with organizational structure and service capability contribute to the performance of logistics providers in the business-to-business (B2B) context with client companies in supply chains. A sample of 80 logistics provider companies of the South of Brazil was surveyed, from a universe of companies that develop logistics activities, such as warehousing and inventory control, transportation, scheduled deliveries, port operations and customs clearance. The survey instrument consists of multiple scales to represent the construct variables related to organizational structure, service capability, and business performance. The answers reflect the logistics providers’ perception of their work performance for the main customer in the supply chain. Resorting to multivariate statistical analysis based on structural equations modeling – LV-PLS (Latent Variable – Partial Least Squares) with bootstrapping, we found that the sole attribute that contributes for a better business performance of the logistics provider is its ability to meet, both technically and operationally, the service contracted by the customer. The ability to provide logistics service is positively and significantly influenced by an organizational structure endowed with both autonomy and organization.

Keywords:
Logistics providers; Supply chain management; B2B relationship; Business performance

Observed Variables/ Measurement Items	Autonomy	Formality	Information Sharing	Logistics Services	Client Service Management	Satisfaction with Client	Perceived Performance
Client gives feedback of our products/services.	0.335	0.459	0.163	0.199	0.842	0.252	0.275
Review of failures due to the client loss.	0.435	0.311	0.249	0.406	0.769	0.300	0.274
Clients are the most important factor to the company.	0.063	0.249	0.166	0.062	0.460	0.148	-0.197
Search of prior solutions for logistic troubles.	0.520	0.505	0.323	0.816	0.349	0.284	0.415
Reverse logistics operations are developed.	0.438	0.371	0.452	0.486	0.306	0.078	0.273
Logistic services differentiate themselves from the competitors.	0.427	0.475	0.154	0.745	0.303	-0.002	0.427
Creative solutions for specific situations and for clients.	0.532	0.371	0.237	0.807	0.196	0.179	0.433
Simplification of the general logistic process.	0.505	0.417	0.239	0.796	0.149	0.121	0.502
Consistent approach to the key performance of logistics.	0.428	0.483	0.081	0.713	0.252	0.127	0.442
Employees have strategic autonomy.	0.777	0.274	0.335	0.477	0.300	0.252	0.332
Employees have influence on the operational decisions.	0.873	0.387	0.385	0.632	0.435	0.110	0.475
Employees have operational autonomy.	0.884	0.380	0.256	0.514	0.394	0.060	0.482
A great number of rules and policies written.	0.437	0.961	0.108	0.552	0.546	0.233	0.475
Presence of manual with rules and procedures.	0.444	0.954	0.094	0.560	0.435	0.264	0.448
Presence of complete description of functions.	0.258	0.861	-0.067	0.444	0.402	0.053	0.287
Individual performance register for employees.	0.359	0.889	0.032	0.616	0.396	0.322	0.440
Sharing of operational information with selected providers and clients.	0.222	0.003	0.795	0.210	0.065	0.209	-0.061
Database for information sharing.	0.293	0.128	0.646	0.171	0.281	0.017	0.023
Sharing of strategic information with selected clients.	0.388	0.022	0.927	0.355	0.259	0.217	0.190
According to our expectation, we are satisfied with this client relationship.	0.018	0.094	0.132	0.015	0.024	0.785	0.070
According to the ideal relationship, we are satisfied with this one.	0.225	0.283	0.199	0.176	0.272	0.899	0.241
The main client fulfills with the promises from the beginning of our relationship.	0.119	0.231	0.202	0.239	0.075	0.899	0.230
The relationship with the major client is positive.	0.090	0.137	0.124	0.099	0.157	0.852	0.133
Net profit margin in comparison to the major competitors.	0.407	0.294	0.082	0.428	0.182	0.220	0.843
ROA in comparison to the major competitors.	0.555	0.282	0.128	0.477	0.290	0.103	0.793
ROI in comparison to the major competitors.	0.354	0.267	0.053	0.425	0.114	0.127	0.782
Overall Competitive Position in comparison to the major competitors.	0.301	0.532	0.030	0.448	0.228	0.182	0.633
General Profitability in comparison to the major competitors.	0.323	0.347	0.075	0.387	0.300	0.224	0.762
AVE – Variance Extracted in each Construct	0.716	0.841	0.636	0.542	0.504	0.739	0.586
Cronbach’s Alpha – Reliability of scales	0.802	0.937	0.713	0.823	0.561	0.889	0.820
R² for endogenous variables of the model	-	-	0.165	0.549	0.313	0.067	0.365

Characteristics of sample	Results
• Total Respondents (N) • Major Client - Distributor / Retailer - Manufacturer of own brand final products or the manufacturer uses other firm brands in these products - Raw material supplier - Supplier of service and materials for manufacturing plants maintenance - Others	80 36.3% 25.0% 20.0% 8.7% 10.0%
• Product/Service provided for this client Transportation Transportation and storage Logistics in general Container stripping Receiving and storage	56.3% 17.5% 12.5% 8.7% 5.0%
• Service/Product Characteristic for this major client Technical/No Technical Highly Standardized/Highly Personalized Complex/Simple Small Profit Margin/High Profit Margin	Median at scale from 1 to 7 4 4 4 4
• Number of employees of Logistic Providers 1 to 99 employees – Small size 100 to 499 employees – Middle size Over 500 employees – Large size	72.5% 18.8% 8.7%

	Autonomy	Formality	Sharing Information	Logistics Services	Client Service Management	Satisfaction with client	Perceived Performance
Autonomy	0.846	0	0	0	0	0	0
Formality	0.414	0.917	0	0	0	0	0
Sharing Information	0.389	0.052	0.797	0	0	0	0
Logistic Services	0.648	0.596	0.328	0.736	0	0	0
Client Service Management	0.450	0.488	0.256	0.349	0.710	0	0
Satisfaction	0.160	0.246	0.202	0.185	0.181	0.860	0
Perceived Performance	0.513	0.456	0.097	0.571	0.295	0.2239	0.765
AVE (Variance Extracted)	0.716	0.841	0.636	0.542	0.504	0.7393	0.586
R² of exogenous variables of model	-	-	0.165	0.549	0.313	0.0669	0.3645

	Hypotheses	Standardized β Coefficients	Bootstrapping Results Standardized Statistics Error t		Significance p
Autonomy - > Information Sharing	H1a	0.443	0.114	3.894	0.000
Autonomy - > Logistics Services	H1b	0.484	0.087	5.545	0.000
Autonomy - > Client Service Management	H1c	0.300	0.151	1.984	0.000
Formality - > Information Sharing	H2a	-0.132	0.157	0.838	n.s.
Formality - > Logistics Services	H2b	0.395	0.099	3.999	0.020
Formality - > Client Service Management	H2c	0.364	0.164	2.217	0,010
Information Sharing - > Satisfaction with client	H3a	0.1405	0.172	0.817	n.s.
.Information Sharing -> Perceived Performance	H3b	-0.140	0.132	1.058	n.s.
Logistics Services - > Satisfaction with client	H4a	0.101	0.151	0.666	n.s.
Logistics Services - > Perceived Performance	H4b	0.553	0.123	4.477	0.022
Client Service Management - > Satisfaction with client	H5a	0.110	0.2412	0.455	n.s.
Client Service Management - > Perceived Performance	H5b	0.115	0.171	0.673	n.s.
Satisfaction with client - > Perceived Performance	H6	0.129	0.106	1.222	n.s.

Universidade Federal de São Carlos Departamento de Engenharia de Produção , Caixa Postal 676 , 13.565-905 São Carlos SP Brazil, Tel.: +55 16 3351 8471 - São Carlos - SP - Brazil
E-mail: gp@dep.ufscar.br

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[1] Eigenvalue ≥ 1. Standardized variables from 0 to 1. Source: By authors based on analysis. Significance at 0.05 level. Source: The authors.