A research and industry perspective on automotive logistics performance measurement

• Pages: 102-126
• Date: 13 February 2017
• DOI: https://doi.org/10.1108/IJLM-06-2015-0105
• Published date: 13 February 2017
• Author: Martin Dörnhöfer,Willibald A. Günthner
• Subject Matter: Management science & operations,Logistics

A research and industry

perspective on

automotive logistics

performance measurement

Martin Dörnhöfer and Willibald A. Günthner

Lehrstuhl für Fördertechnik Materialfluss Logistik,

Technische Universität München, Munich, Germany

Abstract

Purpose –The purpose of this paper is to assess the current state of performance measurement (PM) in

academic literature and in the automotive supply chain (SC). The research question is to what extent PM

systems (PMS) in academic literature and in industry are applicable in automotive logistics.

Design/methodology/approach –The authors use a combination of a systematic literature review (SLR)

and an industry survey. The SLR is used to identify literature on design aspects for PMS and current PMS

reported in academic literature. The survey adds an industry perspective and is used to validate the design

aspects found in literature. The synthesis aims to deliver both, current research gaps and needs in industry.

Findings –The findings from SLR indicate, there is a broad base of literature regarding design aspects for

PMS. Literature on PMS in context of automotive logistics is nevertheless rare. The industry survey leads to

the conclusion that conformity with design aspects from literature increases added value of PMS.

Nevertheless, current PMS show improvement needs in automotive context. Academic literature lacks

detailed process orientation, transparency and is seen as too high level to be helpful for practitioners. For

systems in industry, the SC perspective can be improved. In addition, applicability for continuous

improvement is identified as research need in industry and literature.

Research limitations/implications –Due to the selected survey approach, additional research is required

to obtain more generalizable results. To increase reliability and validity, a selection of the findings should be

further analyzed, e.g. by focusing on regions outside Western Europe or a more in depth analysis of selected

aspects. In addition insights into selected research topics highlighted in the paper should be assessed in detail

by applying different methodologies (e.g. case studies) to validate the findings.

Originality/value –The findings add to the research on PMS. Latest academic literature is reviewed. The

findings are combined with an industry perspective. The combination of SLR and a broad survey enables us

to draw conclusions which are relevant for researchers and practitioners alike. Where academic research

should focus more on the practical applicability, industry can benefit from the findings by integrating a more

holistic perspective into their PMS, especially with a SC wide evaluation.

Keywords Performance management, Supply chain management, Supply chain, Logistics,

Performance measurement system, Automotive

Paper type Research paper

1. Introduction

Manufacturing industry faces increasing competitive pressure, resulting in higher customer

orientation, which leads to product individualization and increases the complexity

(e.g. Melnyk et al., 2014; Joshi et al., 2013). A development which can be observed especially

in the automotive industry and which is expected to continue further. Effective logistics

processes are increasing in relevance with increased outsourcing levels and optimized

inventories. Low-inventories demand high-logistics performance (Gunasekaran et al., 2004)

to warrant the availability of parts at the original equipment manufacturers’(OEM)

assembly line. In addition, proper cost management is required to increase efficiency

(Melnyk et al., 2014), throughout the logistics chain as competitive pressure rises.

The focus on logistics process effectiveness and efficiency leads to a need for logistics

performance measurement (PM) (Gunasekaran et al., 2005). As competition over the last

years changed from competition of companies toward competing SCs, PM should also

The International Journal of

Logistics Management

Vol. 28 No. 1, 2017

pp. 102-126

© Emerald PublishingLimited

0957-4093

DOI 10.1108/IJLM-06-2015-0105

Received 22 January 2015

Revised 29 June 2015

14 August 2015

17 November 2015

Accepted 28 November 2015

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

www.emeraldinsight.com/0957-4093.htm

102

IJLM

28,1

include a SC perspective. SC in this context is the network of companies involved in the

value chain, whereas logistics focuses on the material and information flow between

companies. Appropriately designed performance measurement systems (PMS) can lead to

improved supply chain (SC) performance (Beamon, 1999), reduced uncertainties, enhanced

transparency (Danese and Romano, 2012) and serve as a benchmarking tool. Following the

opinion of De Leeuw and Beekman (2008) that the automotive industry is seen to be

advanced in SC management and therefore serves as good research base, we focus on

logistics in the automotive context.

In addition, the implementation of new manufacturing and logistics concepts in the

automotive industry due to the increasing complexity demands for aligned PMS (Pinheiro

De Lima et al., 2013). Therefore, our research topic can be considered relevant for the

automotive industry. Today, significant investments in new performance measures are

made, typically following an experimental search process to identify the best performance

measures (Schmitz and Platts, 2004). One reason can be that academic literature on PMS is

too high level and not appropriately designed for industrial application, often lacking a

process perspective. PMS in academic literature furthermore do not provide methodologies

and guidance for implementation (e.g. Melnyk et al., 2014; Neely et al., 2000; Rafele, 2004).

Considering these aspects, we focus on an assessment of the current state of PMS in the

context of automotive logistics in academic literature and industry. An overview on the

methodology is presented in Section 2. We use a systematic literature review (SLR) to

identify design aspects for logistics PMS (e.g. a balanced set of metrics) which we use to

assess PMS in academic literature. The results are presented in Section 3. We use an

industry survey in addition, aiming for validation of the results of the SLR and identification

of development needs in industry (Section 4). Using both methodologies in a combined

application, our research is designed to deliver insights for academics and practitioners

alike. A summary of the findings from literature and industry is discussed in Section 5,

followed by a conclusion in Section 6.

2. Research methodology

The following section explains our research methodologies. As we use the SLR together

with an industry survey, first the methodology for the literature review is presented,

followed by the industry survey. In this context we suggest to use the two methodologies

in combination to ensure the literature perspective from SLR is reflected in industry.

In addition, by using this approach, a reflection of the results based on two methodologies

can be seen as combining strengths and reducing weaknesses of especially the survey

methodology, increasing the quality of research (Mentzer and Flint, 1997) while maintaining

practical relevance. The results presentation reflects a combined perspective of the two

methodologies. Figure 1 summarizes the applied methodologies and the respective sections

for presentation of results.

2.1 SLR

A SLR is used to identify the current state of research in academic literature. SLR is selected

to ensure exhaustive coverage of academic literature, as well as transparency toward

potential replication by other researchers (Tranfield et al., 2003; Pilbeam et al., 2012; Seuring

and Gold, 2012).

We follow the five steps process which is described below.

2.1.1 Definition of research question(s). In line with Pilbeam et al. (2012) the research

question is split into sub-questions, further specifying the scope. As research question for

SLR, we use:

RQ1. How fit is performance measurement for the automotive logistics application?

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Research and

industry

perspective