Doctor of Philosophy
School of Information Systems and Technology
Sumantri, Yeni, An analysis of the logistics service provider (LSP) industry in a developing country: a focus on Indonesia, Doctor of Philosophy thesis, School of Information Systems and Technology, University of Wollongong, 2012. http://ro.uow.edu.au/theses/3793
This research focuses on the logistics service provider (LSP) sector in Indonesia. The desire of Indonesia to achieve an effective and efficient logistics system is influenced by geographical state of Indonesia which has 17,504 islands, 225 million population and abundant natural resources such as oil, gas, coal and palm oil. The geographical condition that the country only has 22% of the land means quality of logistics service is important for the country. In addition Indonesia is one of the countries in which LSP research has not been developed. This study aims to gain a better understanding of logistics service quality in Indonesia in relation to perceived logistics service value.
The research aims to identify main variables which influence logistics service value and to identify inter-relationship among the identified variables in influencing logistics service value. The research framework is inspired by the customer valuebased theory of the firm and the resource-based value theory of the firm. In this framework, logistics service value is defined as an evaluative judgment or assessment of what customers of the LSP perceive they receive from the LSP compare to what they give in a commercial relationship between LSP and their customers.
Research paradigm utilized in this research is post-positivism. Quantitative approach and survey research design is used as research approach and strategy of inquiry. This research investigates LSP and their customers in Indonesia as the target population. The sample frame of this study consists of two source. For the population of LSP, the sample frame is identified from the GAFEKSI (Indonesian Forwarders and Logistics Service Providers Association) membership; while for the population of LSP’s customers, the sample frame is identified from the information given by the respondents in the LSP organization. The hypotheses are examined in the business to business relationships context between LSPs and their customers at the firm level. The unit of analysis of this research were employees’ perceptions in the LSP firm about quality management practice in their LSP; perceptions of LSP’s customers about logistics service quality provided; and perceptions of LSP’s customers about benefit, cost and value of logistics services delivered by their LSP. The data of this research is analysed by descriptive statistics analysis and partial least square analysis. To perform a descriptive analysis, this study uses SPSS version 19 and to examine hypotheses sctructural equation modelling (SEM) technique by SmartPLS Program is used.
Result of descriptive analysis shows the LSP’s customers perceive logistics service value that they receive from LSP is above average whilst the logistics service benefit is relatively high. They perceive that the LSP contributes mainly to improving their operational level and customer service. In terms of logistics service cost, the LSP’s customers perceive logistics service cost that they should incur to obtain the service offered by the LSP is relatively below average in which the psychological cost has higher cost and financial risk shows lower mean score value. Logistics service process quality perceived by the LSP’s customers is above average in which service order procedure shows higher mean score whilst emergency service shows lower mean score value. Regarding logistics service outcome quality, LSP’s customers perceive this variable to be above average. Shipment quality shows higher mean score and timeliness shows lower mean score value. In relation to quality management practice in LSP organization, the mean score value shows above average value in which strategic quality planning shows higher mean score value while human resource management shows lower mean score value.
Results from the partial least square analysis shows that logistics service value is mainly derived from logistics service process quality, logistics service outcome quality and logistics service cost. The logistics service cost and logistics service benefit are mainly influenced by logistics service process quality. The role of logistics service process quality is significant because it influences logistics service outcome quality, logistics service benefit, logistics service cost and logistics service value. Quality management practice influences logistics service value indirectly through logistics service process and outcome quality. Quality management practice influences logistics service outcome quality and logistics service benefit positively and significantly.
In relation to theories used in this study, the research findings support the customer value-based theory of the firm and the resource-based value theory of the firm. Both theories are complementary to explain business developments of the LSP. By dividing logistics service quality into logistics service process and outcome, more indepth analysis has been conducted. For each industry and country, the influence of logistics service process and outcome quality show different results. The results indicate that contextual condition influences the role of logistics service process and outcome quality. The results also show that logistics service directly influence logistics service value and indirectly influence logistics service value through logistics service cost.
In term of the implication of research model for the LSPs in Indonesia, they should continuously keep feedback from their customers so that they have the same point of view with their customers about their service. Practice of quality management should be aimed not only to increase logistics service outcome quality and logistics service benefit but also to increase logistics service process quality and to decrease logistics service cost. In term of the direct effect to logistics service value, LSP should focus on logistics service process and outcome quality and logistics service cost as well. In term of the indirect effect to logistics service value, logistics service process quality has a critical role to drive logistics service outcome quality, logistics service benefit and logistics service cost.
Based on the results in this study, it is desirable for the LSP industry in Indonesia to improve logistics service benefit and logistics service value for the import-export industry, especially for customers that have less than 100 employees and use LSP for more than 10 years. The LSP industry in Indonesia should also seek to improve logistics service cost, logistics service process quality and logistics service outcome quality for the chemical industry, especially for customers that have 5000 or more employees and use LSP for 1 to 5 years. This implication should be considered particularly for LSP that have 5000 or more employees.