LOGISTICS PERFORMANCE: EFFICIENCY, EFFECTIVENESS, AND DIFFERENTIATION

This research examines the nature of logistics performance and the contribution of logistics to the firm by empirically investigating the impact of logistics performance on organizational performance. Logistics performance is tested as a second-order formative construct comprised of three dimensions: logistics efficiency; logistics effectiveness; and logistics differentiation. Results indicate that logistics performance positively impacts organizational performance. Theoretical and empirical support is also provided for measuring logistics performance as a second-order formative construct, indicating that efficiency, effectiveness, and differentiation are not necessarily trade-offs, but rather are complementary. Importantly, perceptual measures for organizational performance collected from managerial respondents were strongly correlated with secondary financial data for participating organizations obtained from Compustat, lending empirical credence to the logistics performance organizational performance relationship.