Supply chain collaboration and logistical service performance

Stank, Theodore P

The supply chain management philosophy stresses that maximizing service to customers of choice at the lowest total cost requires a strong commitment to close relationships among trading partners. The philosophy requires a movement away from arms-length interactions toward longer term, partnership-type arrangements to create highly competitive supply chains. It is generally believed that increased collaboration among supply chain participants leads to lower total cost and enhanced service performance.' Ideally, collaboration begins with customers and extends back through the firm from finished goods distribution to manufacturing and raw material procurement, as well as to material and service suppliers. Thus, integration is needed both internally (intraorganizationally) and externally (interorganizationally).2 Although cost savings from reduced operational duplication and redundancy are important, the focus of this research is the relationship between collaboration and service improvement.

Both the popular press and academic research focus on the importance and frequency of collaborative action, and the role of collaboration in overall business performance.' Much of this work is prescriptive, whereas our study develops and tests measures to examine empirically the relationships between internal and external supply chain collaboration and logistical performance. Post hoc analyses offer further insights.

BACKGROUND

Best practice logistics embraces the concepts of cost-to-cost and cost-to-service tradeoffs that allow simultaneous improvement in economic performance and service quality. Within the firm, a high degree of operational integration is required, ranging from procurement of raw materials, to delivery of products and services to end-users, to the return of unsalables and disposables from customers.' In the last decade, the concept of world-class logistics has expanded outside the boundaries of the firm to include customer and supplier integration. Top firms are developing extremely close relationships with selected clients and are placing significantly more emphasis on improved working arrangements with suppliers. The motivation is the desire to extend the effective control of the enterprise. The needs and capabilities of material suppliers, service suppliers, and especially customers are incorporated into strategic planning as firms view operations in terms of supply chain interactions and strategies.

The challenge of coordinating operations across all facets of a business has become known as supply chain management (SCM). Copacino highlights the importance of integration in his definition of SCM:

"The new vision of supply chain management links all the players and activities involved in converting raw materials into products and delivering those products to consumers at the right time and at the right place in the most efficient manner."I (p. 5)

Other definitions are similar. For example, Stein and Voehl describe the "systematic effort to provide integrated management to the Supply Value Chain in order to meet customer needs and expectations, from suppliers of raw materials through manufacturing and on to end-- customers."?As Cooper, Lambert, and Pagh note it is "the integration of business processes from end user through original suppliers that provides products, services, and information that add value for customers. Supply chain management is not just another name for logistics. It includes elements that are not typically included in a definition of logistics, such as information systems integration and coordination of planning and control activities."' Larson and Rogers merged various ideas into the following definition: "Supply chain management is the coordination of activities, within and between vertically linked firms, for the purpose of serving end customers at a profit." Bowersox, Closs, and Stank define SCM as "a collaborative-based strategy to link interorganizational business operations to achieve a shared market opportunity."'

SCM is generally considered to involve integration, coordination, and collaboration across organizations and throughout the supply chain. The concept includes the broad array of activities needed to plan, implement, and control sourcing, manufacturing, and delivery processes from the point of raw material origin to the point of ultimate consumption.

Logistics is viewed as a value-adding supply chain process. Logistics customer value is generally created through effectiveness, efficiency, and/or differentiation.' Therefore, a primary goal of SCM is to create or enhance value provided to the end-customer. Ideally, a firm should attempt to fulfill customers' orders and simultaneously meet all their expectations-delivering 100% of the exact items and quantities ordered on time, damage free, and with errorless invoicing. Although perfection is an admirable goal, it is not always achievable at reasonable cost. The focus should be on creating as much value for the end-customer as is profitable, and doing this requires coordinated effort among all firms in the entire supply chain.

Adversarial attitudes have long dominated business relationships, but SCM entails a new perspective. Managers identify operational tradeoffs with customers and suppliers in order to reduce supply chain duplication and eliminate non value-adding work. Thus, leading logistical practice has shifted from an exclusively internal focus to collaboration across the full range of supply chain participants."

Growth of information technology and communication capabilities such as the Internet and e-commerce enhance the ability to integrate the chain. With these tools, firms can forge relationships that yield dramatic performance benefits in terms of end-customer satisfaction and reduced cost due to the elimination of operational duplication and resource waste."

Integration and Collaboration

The need for integration in the physical distribution of product is not a new concept. In the 1970s, Lambert, Robeson, and Stock viewed distribution activities as a process to be managed." More than a decade ago, Staude called for a systems approach to integrate both inter-and intradepartmental efforts.'" Within a supply chain setting, integration extends beyond the firm to encompass channel participants. Firms must be willing to work together, but that is not enough to ensure integration. Investments in the relationship and/or resource sharing may be required as well. It has been suggested that effective integration involves mutual understanding, a common vision, shared resources, and achievement of collective goals."

Simply stated, integration focuses efforts, whether from a corporate wide or functional perspective. Such focusing is especially critical for logistics operations, which span a number of boundaries. Research confirms that logistics integration is linked to increased efficiency and productivity.'6 More integrated firms perform better than less integrated firms.

Initial investigations of integrated logistics focused on internal applications, that is, interrelationships and trade-offs within the firm."Today, functional integration is typically viewed within a much broader context. Recent work emphasizes the importance of achieving integration not only across internal operations but also with customers and material and service suppliers." Both intra- and interorganizational coordination are needed. "

Research usually focuses on one of three perspectives of integration: as a series of interactions, as collaborative behaviors, or as a composite of the two.' Each viewpoint provides insights, but in this study we concentrate on the collaborative dimensions of integration.

Collaboration is a process of decision making among interdependent parties. It involves joint ownership of decisions and collective responsibility for outcomes." Schrage defines it as "an affective, volitional, mutual shared process where two or more departments work together, have mutual understanding, have a common vision, share resources, and achieve collective goals."" Key dimensions are a cross-department (or organization) scope, a commitment to working together, and some common bond or goal.

Managers who adopt a collaborative perspective work to build an esprit de corps across departments or organizations in order to unite efforts and achieve collective goals through synergy. Although individuals (or organizations) must relinquish some control, complete control over an ineffective process is not nearly as exciting as shared control over a dynamic and value-added process. The success of collaboration depends upon the ability and willingness of managers to build meaningful relationships and create trust.'

At an operating level, collaboration requires significant change from standard business practice, particularly in the area of information exchange. It entails "sharing of data, operating plans, and even some financial information."24 A new initiative called collaborative planning, forecasting, and replenishment (CPFR) is an excellent illustration of the scope of collaboration in many of today's best practice firms.21 Trading partners jointly develop long-term demand projections rather than rely upon separate, independently generated forecasts. The estimates are constantly updated, based upon actual demand and market changes. The result is a better match between supply and demand through the use of realistic, informed, and detailed estimates.26

Research Hypotheses and Conceptual Model

Managers confront many and varied obstacles to a seamless flow of products, services, and information from sourcing, to manufacturing, to distribution to end-customer. Most managers strive to integrate these processes in order to increase value by reducing waste, excessive work delays, and redundancy. The objective is the lowest total landed cost without sacrificing superior service. Data collected by the Supply Chain Council indicates that excellent supply chain performance can lower cost by up to 7% and enhance cash flow by more than 30%.27 Collaboration, as a critical element of integration, contributes to these performance improvements.'

Cost effectiveness is highly desirable and is a building block in gaining competitive advantage. Business success derived from cost orientation, however, is usually short-term at best. The managerial tools and techniques used to achieve lower costs are typically easy to imitate, which means that performance differences gained from such programs are difficult to sustain. A firm will only outperform competitors if it can establish a preservable difference. Customized logistical service is an opportunity for a supplier to become an integral part of a customer's business.29 Collaboration helps firms tailor service offerings to the specific requirements of customers of choice by identifying their long-term requirements, expectations, and preferences.' A company that seeks to attain a competitive edge through external collaboration also must become more focused internally, so that it may better respond to customer expectations and accommodate customer needs. The relationship between collaboration and logistical service performance is the focus here.

Benefits emerge when partners are: 1) willing to work together, 2) understand other viewpoints, 3) share information and resources, and 4) achieve collective goals. The benefits are reduced resource duplication, greater relevance to customer needs, and flexibility in responding to unique customer requests and accommodating change. Research indicates that collaboration should lead to improved operational performance." Therefore, higher levels of internal and external collaboration are expected to result in improved logistical service performance.32 One objective of this research is to determine empirically whether this relationship is supported.

H1: Internal collaboration has a positive influence on logistical service performance outcomes.

H2: External collaboration has a positive influence on logistical service performance outcomes.

The next hypothesis relates to the interrelationship of internal and external collaboration. The literature suggests that firms must achieve a relatively high degree of collaboration among internal processes before initiating supply chain arrangements." Evidence also suggests that the inability to integrate fully within the firm's logistics operations is a leading cause of strategic alliance failure. Breakdowns in internal operations inhibit delivery of promised performance levels.'

Interviews we conducted in preparation for this research raise concerns regarding this relationship. Many firms reported more meaningful collaboration with suppliers and/or customers than with other functional areas within the firm. Although the specific relationship between internal and external collaboration is not well defined, research suggests that they should positively influence each other.35

H3: Internal collaboration and external collaboration are positively related.

Figure 1 depicts the theoretical constructs and the hypothesized relationships.

RESEARCH METHODS

First, we will describe development of measures and the sample design. Second, the procedures used to analyze the data will be discussed.

Development of Measures

The questionnaire designed for the 1995 World Class Logistics Research at Michigan State University" is the basis for our instrument. The measures were developed from a pilot survey completed by almost 3,700 respondents in North America, Europe, and the Pacific Rim. Subsequent refinements through in-depth interviews with 111 top logistics firms established a tool for assessing logistical proficiency across a range of integrative and collaborative elements."

During summer 1997, we completed case studies of 26 firms to broaden the measures into a supply chain perspective." Items to assess logistical process performance also were developed. The case study group of fifteen manufacturers, six wholesalers/distributors, and five retailers represented firms from the automotive, chemical, consumer durable, food manufacturing and wholesaling, health care, mass merchant, food and general retailing, and paper industries.

A set of questions was then developed and tested. These are listed in Table 1. For most items, respondents were asked to indicate agreement based on a five-point scale where 1 = strongly disagree, 5 = strongly agree. Items regarding logistical service performance used a slightly different scale where 1 = worse than competitors, 5 = better than competitors.

Sample Design

In late 1998, a survey population was selected from the Council of Logistics Management (CLM) membership list. Given the strategic focus of the research, it was decided to mail questionnaires to the senior logistics or supply chain executive in each firm based in North America (Canada, Mexico, and the United States) in the categories of manufacturing, wholesale/distributing, and retailing. They were chosen because of their frequent interaction with key customers and supply chain partners regarding logistical processes and performance outcomes. Furthermore, executive compensation and promotions are highly dependent on achieving established logistics service goals. Therefore, these executives are likely to understand and assess the logistical service of their firm compared to competitors. Due to the competence and awareness of senior logistics and supply chain executives, their perceived evaluation is reasonably credible.

Only one questionnaire was sent to each firm or strategic business unit (SBU). The total sample was 2,680 firms, from which 306 fully validated responses were received. Nine CEO/ presidents, 13 senior/executive vice presidents, 70 vice presidents, 4 senior/executive directors, and 186 directors/managers completed the questionnaire. Twenty-four respondents declined to provide their title. The industry breakdown is as follows: appliances, furniture, and hardware-14 firms; building/lumber, mining, metals-27 firms; chemicals and petroleum-23 firms; clothing and textile-12 firms; computers and electronics-16 firms; food processing and distribution-58 firms; health/beauty aids and pharmaceutical-38 firms; motor and transportation-40 firms; mass merchandising and retail-23 firms; office equipment and supplies-17 firms; and other or missing value-38 firms.

The 11.5% response rate may be related to the length and comprehensive nature of the questionnaire as well as the confidential nature of the information requested. Anonymity was guaranteed, but it is likely that some executives doubted this assurance. Also, senior executives have little free time and typically are inundated with surveys. The 306 usable responses provide sufficient data to confirm the general conceptual framework.

An analysis of nonresponse bias was conducted.' The procedure requires that responses be numbered sequentially in the order in which they are received. Next, mean scores of the first quartile assumed to be most motivated to participate are compared to those of the last quartile assumed to be most similar to nonrespondents. No significant differences (at p

Analytical Techniques

To ensure valid and reliable conclusions, an analysis of the psychometric properties of the scales was conducted. The items were derived from the literature and refined on the basis of 26 case studies. These steps allowed for a thorough understanding of the concepts during the item generation stage. The final survey was reviewed and critiqued by professionals and academics in the field. Procedures such as these ensure constructs with high content and substantive validity.'

Unidimensional characteristics for each factor were assessed using principal components analyses and confirmatory factor analyses. The appendix outlines the results of tests for validity and reliability of the latent constructs. The measures demonstrated unidimensionally valid and reliable characteristics. The results of tests of hypotheses and overall model fit are presented in the following section.

RESULTS

A primary purpose of this research was to explore both internal and external collaboration. An additional purpose was to test how collaboration is related to firm performance. To this end, the theoretical framework illustrated in Figure 1 was subjected to an analysis using structural equations modeling via Lisrel 8.

Establishing an acceptable fit of the model to the data provides one explanation of the phenomenon. Results in Table 2 support a good fit. Because no single statistic is considered superior regarding assessment, a review of multiple fit indices is desirable." Although the chi-square statistic was significant (326.79, df = 130, p = .00), a thorough examination of alternative indices yielded support for the hypothesized model (GFI = .90; CFI = .92; IFI = .92, NNFI = .91).

Hypothesis Tests

Individual hypotheses were assessed by reviewing the significance, magnitude, and direction of each parameter coefficient. Figure 2 is a visual portrayal of the results presented in Table 2.

Evidence suggests that internal collaboration is associated with higher levels of logistical service performance. This relationship is statistically significant.

Further Analysis and Post Hoc Assessment

The lack of support for a relationship between external collaboration and logistical service performance but the significant correlation between external and internal collaboration suggests a relationship we did not anticipate. The results imply that external collaboration may influence internal collaboration and, in turn, indirectly affect a firm's logistical service. Further analysis was conducted to determine whether internal collaboration plays an intermediary role.

A three-step regression analysis was used to assess the potential mediating influence of internal collaboration on the external collaboration-service performance relationship." First, the proposed mediator was regressed on the independent variable, external collaboration. If the model produces a significant relationship, then there is mediation among the variables. Second, the ultimate dependent variable, logistical service performance, was regressed on the independent variable. Again, a significant relationship indicates a mediating influence between the two. Third, service performance was regressed on both the proposed mediator and independent variable. If internal collaboration significantly predicts service performance, but the association between external collaboration and service performance (supported in condition two) is insignificant or is reduced in magnitude, then internal collaboration is said to mediate the relationship between the independent and dependent variables.

Table 3 presents the results of the three-step regression. Model one indicates the satisfaction of condition one, and the significant coefficients in model two support condition two. Model three reveals the reduced effect of external collaboration on logistical service performance when internal collaboration is included. Accordingly, the latter mediates their relationship. That is, firms that foster externally focused information, measurement, reward, and risk collaboration, can best influence logistical service performance outcomes through enhanced internal collaboration.

IMPLICATIONS AND CONCLUSIONS

The findings reveal that internal collaboration significantly influences logistical service performance, which implies that firms should promote cooperation and collaboration across internal processes to achieve logistical effectiveness. The lack of support for a direct link between external collaboration and service performance is interesting and, on the surface, suggests that collaboration with customers and suppliers will not improve performance. Further investigation revealed, however, that collaboration with external supply chain entities influences increased internal collaboration, which in turn improves logistical service. Therefore, best practice firms focus on both.

The relationship between external and internal collaboration may be the key in facilitating behavioral change, that is, the shifting from traditional arms-length or even adversarial attitudes to a partnership perspective that fosters cooperation and a freer exchange of information. Collaboration is needed both within and beyond the firm's boundaries. The benefits are synergistic. Collaborating and information sharing focuses more resources (human and financial) on business operations, which allows more informed decisions and reduces risks. The result is a win/win situation that should improve service performance.

External collaboration is essential. Boundary-spanning personnel from trading partners collect the necessary intelligence, such as information on order patterns, planned product promotions, and valuable service feedback. They also provide the contact that enables coordination of operations across business entities. To accomplish these tasks, they must be informed and educated; they need to know what questions to ask and what information to provide. It is critical that the information they pass on reach the right people within the organizations and mere delivery may not be adequate; they may have to "sell" the ideas internally, to convince the appropriate people to follow through. It helps if boundary spanners are politically empowered, so that managers from different organizations will be motivated to act on their information. Empowerment is often derived from metrics that encourage all managers to focus on total system performance rather than narrower results.

Internal collaboration is essential as well. It facilitates the close interactions that bring greater expertise to day-to-day operations, focusing efforts and targeting resources as needed. Often task forces or cross-functional teams are involved. Their cooperative decisions on the use of internal resources are supplemented with information from external collaboration, which ensures that internal processes are customer focused.

If the pattern is reversed, and internal collaboration drives external relationships, then performance improvements may not be achieved. A food service firm, for example, developed an internal focus on improving basic delivery capabilities. These were measured by internally generated and jointly agreed operating parameters that totally ignored the perspective of the customer. One manager of a fast food restaurant received a delivery from the food service firm at lunchtime. The delivery truck blocked the restaurant parking lot, and the manager could see potential diners pulling away because they could not enter the lot. When told of the problem, the driver said he needed to complete his route on time. The food service firm was working toward an inappropriate and myopic performance goal that totally ignored the customer.

Viewed from another perspective, lack of a direct relationship between external collaboration and performance may stem from a breakdown in internal collaboration. In other words, external collaboration is a necessary but not sufficient condition for performance improvement. A firm can "drop the ball" internally after receiving positive input and direction from external partners. Thus, a positive relationship between external and internal collaboration fosters better performance.

Future research should explore ways in which managers can influence the behavioral change needed to facilitate collaboration. Two recommended methods are empowerment and cross-functional work teams." When front-line managers and employees can use their own discretion, within policy guidelines, to make timely decisions, the firm can respond more flexibly and quickly to the needs of customers. Empowered employees have the authority and information necessary to do a job, and they are trusted to perform it without intense over-the-shoulder supervision. Crossfunctional teams that manage day-to-day operations can work closely with customers to tailor responses to unique opportunities. Teams typically have representatives from sales, marketing, logistics, production, and accounting. The team is authorized to make tactical decisions and is held accountable for its performance.

We found that internal collaboration mediates the relationship between external collaboration and logistical service performance. In other words, if firms want to improve service performance through collaboration with external customers and suppliers, they need to enhance internal collaboration. Future research is needed to understand how managers can accomplish this. Also, what factors contribute to meaningful relationships with external partners, and is the relationship with customers or suppliers more meaningful?

Two important areas for future research involve methodological issues. First, satisfaction with service performance should be assessed from the customer perspective. Data collection on both sides of the buyer-seller dyad would alleviate concern about biased performance assessments by service providers. One methodology would be to ask sellers to evaluate their logistical offerings and also identify customers who would be willing to report on their satisfaction with the seller's services. This design also could explore customer loyalty as a performance outcome, which affects a provider's financial performance. Second, alternate operationalizations are possible. Measures of internal and external collaboration that capture joint problem solving, performance measurement, and crossfunctional teaming should be developed, and constructs targeted at either suppliers or customers would enable comparisons. Finally, the logistical performance construct should include cost as well as service elements so that it can be examined using both objective and perceptual measures.

NOTES

1Joseph C. Andraski, "Leadership and the Realization of Supply Chain Collaboration," Journal of Business Logistics 19, 2 (1998): 9-11.

2Edward A. Morash and Steven R. Clinton, "Supply Chain Integration: Customer Value through Collaborative Closeness versus Operational Excellence," Journal of Marketing Theory and Practice 6 (Fall 1998): 104-20.

3Jeanne M. Liedtka, "Collaborating across Lines of Business for Competitive Advantage," Academy of Management Executive 10, 2 (1996): 20-37; Francis J. Quinn, "Cooperation and Collaboration: The Keys to Supply Chain Success," Logistics Management & Distribution 38 (February 19, 1999): 35; and Theodore P. Stank, Patricia J. Daugherty, and Alexander E. Ellinger, "Marketing/Logistics Integration and Firm Performance," International Journal of Logistics Management 10, 1 (1999):11-23.

'Donald J. Bowersox, David J. Closs, and Theodore P. Stank, 21st Century Logistics: Making Supply Chain Integration a Reality (Oak Brook, IL: The Council of Logistics Management, 1999).

5William C. Copacino, Supply Chain Management. The Basics and Beyond (Boca Raton, FL: St. Lucie Press/APICS Series on Resource Management, 1997), p. 5.

6Martin Stein and Frank Voehl, Macrologistics Management (Boca Raton, FL: St. Lucie Press, 1998).

'Martha C. Cooper, Douglas M. Lambert, and Janus D. Pagh, "Supply Chain Management: More Than a New Name for Logistics," International Journal of Logistics Management 8, 1 (1997); 1- 14.

'Paul D. Larson and Dale S. Rogers, "Supply Chain Management: Definition, Growth, and Approaches," Journal of Marketing Theory and Practice 6 (Fall 1998), p. 1-5.

'Same reference as note 4.

10Mary C. Holcomb, "Customer Service Measurement: A Methodology for Increasing Customer Value through Utilization of the Taguchi Strategy," Journal of Business Logistics 15, 1 (1994): 29-52.

"Same reference as note 6.

"Same reference as note 6.

"Douglas M. Lambert, James F. Robeson, and James R. Stock, "An Appraisal of the Integrated Physical Distribution Management Concept," International Journal of Physical Distribution and Materials Management 9, no. 1(1978):74-88.

"Gavin E. Staude, "The Physical Distribution Concept as a Philosophy of Business," International Journal of Physical Distribution and Materials Management 17, no. 6 (1987): 32-37.

"Kenneth B. Kahn and John I Mentzer, "Logistics and Interdepartmental Integration," International Journal of Physical Distribution and Logistics Management 26, no. 8 (1996): 6-14.

"Craig M. Gustin, Patricia J. Daugherty, and Theodore R Stank, "The Effects of Information Availability on Logistics Integration," Journal ofBusiness Logistics 16, no. 1 (1995): 1-21; and Paul D. Larson, "An Empirical Study of Inter-Organizational Functional Integration and Total Cost," Journal ofBusiness Logistics 15, no. 1 (1994): 153-69.

"Same reference as note 14.

"Same reference as note 4.

"Same reference as note 2; Donald J. Bowersox, "The Strategic Benefits of Logistics Alliances," Harvard Business Review 68, (July-August 1990): 36-45; Alexander E. Ellinger, Patricia J. Daugherty, and Craig M. Gustin, "The Relationship between Integrated Logistics and Customer Service," Transportation Research Part E.- Logistics and Transportation Review 33, No. 2 (1997): 129-38; James M. Kenderdine and Paul D. Larson, "Quality and Logistics: A Framework for Strategic Integration," International Journal of Physical Distribution and Materials Management 18, no. 7 (1988): 5- 10; Bernard J. La Londe and Richard F. Powers, "Disintegration and Re-integration: Logistics of the 21 st Century," International Journal of Logistics Management 4, no. 2 (1993): 1-12; Michael Treacy and Fred Wiersma, "Customer Intimacy and Other Value Disciplines," Harvard Business Review 71 (January-February 1993): 84-93; and Joan M. Phillips, Ben S. Liu, and Thomas G. Costello, "A Balance Theory Perspective of Triadic Supply Chain Relationships," Journal of Marketing Theory and Practice 6 (Fall 1998): 78-91.

"Abbie Griffin and John R. Hauser, "Integrating R&D and Marketing: A Review and Analysis of the Literature," Journal of Product Innovation Management 13, no. 1996): 191-215; Kenneth B. Kahn, "Interdepartmental Integration: A Definition and Implications for Product Development Performance," Journal of Product Innovation Management 13, no. 2 (1996): 137-51; Kenneth B. Kahn and John T. Mentzer, "Marketing's Integration with Other Departments," Journal of Business Research 42, no. 2 (1998): 53-62; and Alexander E. Ellinger, Patricia J. Daugherty, and Scott B. Keller, "The Relationship between Marketing/Logistics Interdepartmental Integration and Performance in U.S. Manufacturing Firms: An Empirical Study," Journal of Business Logistics 14, no. 1 (forthcoming).

"Barbara Gray, Collaborating (San Francisco: Jossey-Bass, 1991), p. 227.

Michael Schrage, Shared Minds: The New Technologies of Collaboration (New York: Random House, 1990).

"Same reference as note 3 to Liedtka.

'Same reference as note 3 to Quinn, p. 35.

'Richard J. Sherman, "Collaborative Planning, Forecasting & Replenishment (CPFR): Realizing the Promise of Efficient Consumer Response through Collaborative Technology," Journal of Marketing Theory and Practice 6 (Fall 1998): 6-9.

'Theodore P. Stank, Patricia J. Daugherty, and Chad W. Autry, "Collaborative Planning: Supporting Automatic Replenishment Programs," Supply Chain Management 4, no. 2 (1999):75-85.

"Integrated Supply Chain Benchmarking Study (Weston, MA: PRTM Consulting, 1997). 'Same reference as note 20 to Kahn.

29Theodore P. Stank, Patricia J. Daugherty, and Alexander E. Ellinger, "Pulling Customers Closer through Logistics Service," Business Horizons 41 (September-October): 74-80.

-Malcolm Baldridge National Quality Award, Application Guidelines (Milwaukee, WI: the Award Consortium, 1997).

"Same reference as note 20 to Ellinger, Daugherty and Keller; Paul R. Lawrence and Jay W. Lorsch, Organization and Environment: Managing Differentiation and Integration (Boston, MA: Harvard Business School Press, 1986); Jay W. Lorsch, Product Innovation and Organization (New York: MacMillan, 1965); and William E. Souder, Managing New Product Innovations (Lexington, MA: Lexington Books, 1987).

"Same reference as note 20 to Kahn.

"Donald J. Bowersox, Patricia J. Daugherty, Cornelia L. Droge, Richard N. Germain, and Dale S. Rogers, Logistical Excellence: It's NQL Business as Usual (Burlington, MA: Digital Press, 1992).

'Global Logistics Research Team at Michigan State University, World Class Logistics: The Challenge of Managing Continuous Change (Oak Brook, IL: Council of Logistics Management, 1995).

"Same reference as note 4.

'Same reference as note 34.

"Same reference as note 34.

Same reference as note 4.

"J. Scott Armstrong and Terry S. Overton, "Estimating Non-Response Bias in Mail Surveys," Journal of Marketing Research 14, no. 3 (1977): 396-402.

'Michael S. Garver and John T. Mentzer, "Logistics Research Methods: Employing Structural Equation Modeling to Test for Construct Validity," Journal of Business Logistics 20, no. 1 (1999): 33-58.

41 Same reference as note 40.

'Reuben M. Baron and David A. Kenny, "The Moderator-Mediator Variable Distinction in Social Psychological Research: Conceptual, Strategic, and Statistical Considerations," Journal of Personality and Social Psychology 51, no. 6 (1986): 1177.

"Same reference as note 4.

"Richard G. Netemeyer, Scot Burton, and Donald R. Lichtenstein, "Trait Aspects of Vanity: Measurement and Relevance to Consumer Behavior," Journal of Consumer Research 21 (March 1995): 612-26.

-Joseph R Hair, Rolph E. Anderson, Ronald L. Tatham, and William C. Black, Multivariate Data Analysis (Englewood Cliffs, NJ: Prentice Hall, 1995), pp. 685, 686.

'Same reference as note 40; and David W. Gerbing and James C. Anderson, "An Updated Paradigm for Scale Development Incorporating Unidimensionality and Its Assessment," Journal of Marketing Research 25, no. 1 (1988): 63-70.

"Claes Fornell and David F. Larcker, "Evaluating Structural Equation Models with Unobservable Variables and Measurement Error," Journal of Marketing Research 18 (February 1981): 39-50.

'Same reference as note 46 to Gerbing and Anderson.

by

Theodore P. Stank

Scott B. Keller

Michigan State University

and

Patricia J. Daugherty

The University of Oklahoma

ABOUT THE AUTHORS

Theodore P. Stank (Ph.D. The University of Georgia) is Associate Professor of Logistics and Supply Chain Management at Michigan State University. He is co-author of 21st Century Logistics: Making Supply Chain Integration a Reality Logistical Management and has published numerous articles in the areas of logistics strategy, customer relevance, and internal and external integration in various journals including the Business Horizons, Journal ofBusiness Logistics, Journal of Operations Management, Supply Chain Management Review, and Transportation Journal.

Scott B. Keller is an Assistant Professor of Business Logistics in the Department of Marketing and Supply Chain Management at Michigan State University. He received his Ph.D. from the University of Arkansas, his MBA from Arkansas State University, and his BSBA from Troy State University. His research interests include assessing the impact on performance of employee relationships (internal marketing) within logistics organizations, evaluating inter-firm relationships of supply chain logistics providers and customers, and assessing the dispatcher/driver interface within motor carrier operations.

Patricia J. Daugherty (Ph.D. Michigan State University) is Siegfried Professor of Marketing at The University of Oklahoma. She received a Ph.D. in Marketing and Logistics from Michigan State University. She has published extensively in logistics journals and has co-authored two books. Her current research interests include customer responsiveness, integrated systems, and reverse logistics.

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