Leveraging logistics learning capability to enable logistics service capabilities and performance for international distribution center operators in Taiwan

• Date: 08 August 2016
• DOI: https://doi.org/10.1108/IJLM-09-2014-0157
• Pages: 284-308
• Published date: 08 August 2016
• Author: Ching-Chiao Yang
• Subject Matter: Management science & operations,Logistics

Leveraging logistics learning

capability to enable logistics

service capabilities and

performance for international

distribution center operators

in Taiwan

Ching-Chiao Yang

Department of Shipping and Transportation Management,

National Kaohsiung Marine University, Kaohsiung City, Taiwan

Abstract

Purpose –The purpose of this paper is to empirically assess the impacts of logistics learning

capability on logistics service capability and organizational performance in the context of international

distribution center operators (IDCOs) in Taiwan.

Design/methodology/approach –Data for this study were collected by questionnaire survey.

A two-steps structural equation modeling (SEM) approach was performed in this study to test the

research hypotheses. The first step is performing confirmatory factor analysis (CFA) to assess the

validity of the measurement model. The second step proceeds to estimate the structural model between

latent variables.

Findings –A five-dimension scale including open-mindedness (O), commitment to learning (C),

system perspectiv e (E), partner learning (A), and shared vis ion (N) was proposed in t his study and

was supported by CFA analysis to measure IDCOs’logistics learning capability in this study.

Results of SEM indicated that logistics learning capability is positively related to logistics

service capability, whereas logistics service capability is also positively related to

organizational performance. Although logistics learning capability has no direct relationship

to organizationa l performance, we found it in directly affects organizational performance via logistics

service capability.

Research limitations/implications –This study primarily focusses on the effect of logistics

learning on organizational performance. Future research could incorporate environmental uncertainty

as a moderator to assess its impact on the relationship between logistics learning capability and

organizational performance.

Practical implications –IDCOs can enhance customer service and financial performance by

developing logistics learning capability and specifically focussing efforts on supply chain partner

learning.

Originality/value –This study presents the first to examine the effects of logistics learning

capability on logistics service capability and organizational performance in the context of IDCOs.

Particularly, this study proposes a five-dimension logistics learning capability scale from a supply

chain perspective.

Keywords Strategic management, International distribution center, Logistics learning capability,

Logistics service capability, Testing and instruments

Paper type Research paper

The International Journal of

Logistics Management

Vol. 27 No. 2, 2016

pp. 284-308

©Emerald Group Publishing Limited

0957-4093

DOI 10.1108/IJLM-09-2014-0157

Received 30 September 2014

Revised 4 February 2015

Accepted 19 March 2015

The current issue and full text archive of this journal is available on Emerald Insight at:

www.emeraldinsight.com/0957-4093.htm

This research was sponsored by the Ministry of Science and Technology (MOST) under grant

number NSC 99-2410-H-022-003-MY2.

284

IJLM

27,2

1. Introduction

The source of a sustainable competitive advantage is reliant upon a firm’s ability to

learn faster than its competitors (De Geus, 1988; Stata, 1989; Kapp, 1999).

All businesses thus seeking to compete in this dynamic and competitive marketplace

must pursue the processes of learning (Slater and Narver, 1995; Organization for

Economic Co-Operation and Development (OECD), 1996). The mutual learning between

divisions or organizational units can create new knowledge and lead to superior

organizational performance (Tsai, 2001). In particular, knowledge with the features of

tacitness, inimitability, and immobility, has been viewed as a strategic resource in

today’s turbulent marketplace (Grant, 1991; Hult et al., 2006). As international logistics

is a knowledge and labor intensive service sector, logistics service providers must

quickly get knowledge of logistics operations and customers’requirements to improve

their service quality. Typically, the knowledge of logistics operations can be explicit

and tacit (Nonaka, 1994). Explicit knowledge can be easily recorded and transferable in

systematic methods, such as in rules and procedures for inventory management,

quality control, storage, human resource management, and accounting. It also includes

the knowledge of logistics equipment for designing, using, and maintaining.

Conversely, tacit knowledge refers to knowledge that cannot be verbalized such as

marketing strategy, determinant of location, and layout of distribution center. Since an

international distribution center (IDC) involves a series of processes and using of

equipment in a global supply chain, both explicit and tacit knowledge are important to

logistics firms for providing high-quality services.

An IDC functions as a consolidation point for the receipt of material shipments from

suppliers to support manufacturing in the context of international logistics. Thus, it

plays a significant role in integrating the entire supply chain and delivering high-

quality services to customers. A distribution center is virtually synonymous with the

warehouse that emphasizes the rapid movement of goods ( Johnson and Wood, 19 96).

The four core functions of IDCs in a global supply chain are consolidation, break bulk

and cross-dock, processing and postponement, and stock piling (Lu and Wang, 2014).

Generally, it involves a number of processes including procurement, goods receiving

and inspection, put away into storage, value-added processing, order processing, order

picking and packing, consolidation and shipping, and delivery/distribution (Taiwan

Association of Logistics Management (TALM), 2011; Mangan et al., 2012). Compared to

traditional warehouse, a distribution center specifically can provide several logistics

service activities to support manufacturing in the context of international logistics such

as storage, cargo tracking, customs clearance, packaging, kitting, assembly, labeling,

consolidation, and documentation services (Copacino, 1997; Lu, 2003; Lu and Yang,

2010). Its performance thus has been shown to have a direct correlation with

manufacturers’/suppliers’performance (Sharma et al., 2004). In this study, an IDC is

defined as a place that integrates the operations of manufacturing with land, sea and

air transportation, storage, port, and customs in order to achieve the efficient

distribution of goods (International Maritime Organization, 1991; Lu and Yang, 2010).

A firm’s competitive advantage is determined not only by the external environment

but also by its capabilities to add value to clients (Barney, 1991; Russo and Fouts, 1997).

Logistics service capability is thus viewed as a core competence in leading to supe rior

performance and creating customer value (Yang et al., 2009). After Taiwan entered into

the World Trade Organization and signed an economic co-operation framework

agreement with the Mainland China, the logistics industry in Taiwan became highly

competitive, and the percentage of foreign logistics service providers entering this

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Capabilities

and

performance

for IDCOs