Major Factors Influencing the Performance of Local Private Third Party Logistics Service Providers in southern China

Abstract

The increase in foreign trade resulting from China's membership of the World Trade Organization (WTO) created substantial pressure on its logistics system and made change inevitable for local private third party logistics service providers (3PLs) in China who found themselves unable to compete with the global logistics players who began operating in China after it joined the WTO. This study provides an empirically-based model to help local private 3PLs formulate appropriate strategies for improving their performance. Although there is a plethora of literature relating to the improvement of organizational performance and the development of quality management models, most of the studies have been conducted in Western countries and used only one or two organizational performance variables. This study sought to redress that by conducting a study of local 3PLs in southern China to empirically investigate the relationship between the four performance variables of the Balanced ISSN 1941-899X 2012 www.macrothink.org/jmr 2 Scorecard and the six quality management factors developed for the Malcolm Baldrige National Quality Award. Although it was found that the six factors have a strong relationship with the four organizational performance variables, not all factors are significant constructs to each performance variable. The findings provide local private 3PLs in China with indicators as to which factors do and which factors do not have a positive and significant effect on each of the four organizational performance variables considered. The study clearly shows that performance improvement should not be considered from the financial perspective alone, but should also include customer orientation, business process, and learning and growth. Journal of Management Research

Quality Management as Driver of Vertical Integration in Service Chain: A Study of 3rd Party Logistics Industry

“…KMO test value is 0.934 and the significant value for Bartlett's Test of Sphericity with a p-value of 0.0001 which is less than the significant level of 0.05 and as a rule of thumb there is no identity matrix in the inter-correlation of variables. All Cronbach's Alpha coefficient values computed for QMP scales ranged between 0.82 and 0.91 which are much higher than the minimum requirement of 0.6 established by Nunnaly (as cited by Poon & Tong, 2012). It also established that constructs related to QMPs were measured reliably and they fulfilled the condition for convergent and discriminant reliability.…”

“…This section had three subsections to measure the constructs for quality management practices, integration competency and social capital. To ensure the content validity, the statements were chosen from similar studies like Ding (2011) and Poon and Tong (2012) to scale and measure the independent and moderating variables. To ensure that content or questions/statements are easily understandable and fully reflect and represent the local business culture, the CEOs/owners of five well established 3PL businesses were requested to review the statements and the indicators for company strength.…”

“…As suggested by Coakes, Steed and Price (2008), internal consistency and reliability of data was confirmed through computation of Cronbach's Alpha coefficient for all scales in the model and an Alpha coefficient value of 0.70 or higher was considered good for established scale. Since all measures in the questionnaire were developed from already validated researched studies published in reputed research journals, and referred above, so according to Poon and Tong (2012) it can be assumed that the content and construct validity should be reasonably good. Hierarchical Multiple Regression (HMR) was run in three steps; initially between independent variable (six QMPs) and dependent variable (Integration Competency) and then in step two and step three the two moderating variables (Social Capital and Company Strength) were included in the analysis.…”

“…This researcher while reviewing related material found a discussion on many internationally renowned and regionally adopted and applied QMPs and BEMs. Akyuz 2015, Brown (2014), Cauchick Miguel (2001), Davies (2004), Hussein (2014), Poon and Tong (2012) analyzed and advocated different quality models in different studies at different timings, Malcolm Baldrige National Quality Award (MBNQA), European Foundation Quality Management Model (EFQM), Canadian Framework for Business Excellence (CFBE), Australian Businesses Excellence Framework (ABEF), Malaysian Business Excellence Framework (MBEF), Singapore Quality Class Business Excellence Framework (SQCBEF) Egyptian Quality Award (EQA); Hong Kong Quality Award (HKQA); Japan Quality Award (JQA); New Zealand Business Excellence Award (NZBEA); are few of the renowned and well researched models. There are numerous other BEMs developed and used in other Asian countries and especially the member countries of Asia Productivity Organization (APO) which include Bangladesh, Cambodia, China, Fiji, India, Indonesia, Iran, Korea, Laos, Mongolia, Nepal, Pakistan, Philippines, Sri Lanka, Thailand and Vietnam (Mann, Mohammad & Theresa, 2013).…”

“…Pearce and Robinson (2013) mentioned that assets are the major category of resources that include facilities, raw material, financial resources and information communication technology. Many other researchers like Ding (2011) and Poon and Tong (2012) while studying the impact of managerial quality on logistics competencies and performance of LSPs in china studied the moderating effect of various internal resources like business age, staff size, nature of ownership, quality and standard of assets owned, information communication sophistication, extent of automation and guanxi which is the Chinese term for social capital. According to Brian (2007) social capital are "those intangible assets [that] count for most in the daily lives of people: namely goodwill, fellowship, sympathy, and social intercourse among the individuals and families who make up a social unit" According to Putnam (2000), social capital is the "collective value of all social networks".…”