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Role of Logistics Service Providers in Building

Competitive Advantage and Logistics Excellence


of firms in Selected Industries in Kerala

Thesis submitted to the University of Calicut


for the award of the Degree of
Doctor of Philosophy in Commerce

By

Rahul. K

Under the guidance of

Dr. P. Mohan
Pro-Vice Chancellor
University of Calicut

Department of Commerce and Management Studies


University of Calicut, Kerala 673 635

May 2018
Declaration

I, Rahul. K., hereby declare that the thesis entitled “Role of Logistics

Service Providers in Building Competitive Advantage and Logistics Excellence

of firms in Selected Industries in Kerala” is a bonafide research work done by me

under the supervision of Dr. P. Mohan, Pro-Vice Chancellor, University of Calicut.

I further declare that no part of this thesis has been presented before for the award of

any degree, diploma or other similar title or recognition in any university.

University of Calicut Rahul. K


May 05, 2018 (Doctoral Candidate)
Department of Commerce and Management Studies
School of Business Studies
University of Calicut

Dr. P. MOHAN
Pro-Vice Chancellor
University of Calicut

Certificate

This is to certify that the thesis entitled “Role of Logistics Service

Providers in Building Competitive Advantage and Logistics Excellence of firms

in Selected Industries in Kerala” is a bonafide record of research work carried out

by Mr. Rahul. K. under my supervision and guidance for the award of Ph.D. Degree

of the University of Calicut and no part of the thesis has been presented for the

award of any degree, diploma, or other similar title or recognition before.

He is permitted to submit the thesis.

University of Calicut Dr. P. Mohan


May 05, 2018 (Supervising Teacher)
No Correction Certificate

This is to certify that no corrections/ suggestions were pointed out by the

examiners in the thesis titled “Role of Logistics Service Providers in Building

Competitive Advantage and Logistics Excellence of firms in Selected Industries

in Kerala” submitted by Rahul K., PhD Scholar.

Place: CU Campus Supervising Guide

Date: 14.01.2019 (Name with Seal)


Dedicated To

My Mother
Smt. Rukmini. K.M

My Father
Sri. K. Rajan

My Guide
Dr. P Mohan

And

The Goddess Saraswati


Acknowledgement

With the deepest sense of gratitude, I express my warm feelings towards my


supervisor and Guide, Dr. P. Mohan, Pro-Vice Chancellor, University of Calicut,
Kerala, who meticulously brought me to this platform. His critical concern towards
my shortcomings inculcated in me self confidence and methodological sharpness.
With reverence I express my sincere gratitude to him for all the pains he took and
the valuable time that he spared from his very busy schedule for me.

I am thankful to Dr. B. Johnson, Professor & Head, DCMS, Dr. K.P.


Muraleedharan, Dr. B. Vijayachandran Pillai, Dr. A.K. Sarada, Dr. M.A. Joseph, Dr.
E. K. Satheesh and Dr.Aboobacker Sidheeq K. T, the faculty members of the
DCMS, University of Calicut for their support to, and critical feedback on, this
research project.

I express my thankfulness to Mr. Abdulla Moozhikkal (Librarian, DCMS), Mr.


Moytheen Kutty (Library Assistant, DCMS), Mr.K. P. Krishnaprasad (Section
Officer, DCMS), Mr.M. Sooriasen (Assistant Section Officer, DCMS), Ms.E.D.
Daisy (Typist, DCMS) and Ms.Molley Varghese (Assistant, DCMS) for their
valuable support and assistance towards my research work. I express my
thankfulness to Mr. Habeeb Koya Thangal (Former Librarian, DCMS) and Mr.
Abhilash (Former Library Assistant, DCMS). I would like to thank University
Grants Commission (UGC) for awarding me Junior and Senior Research
Fellowships that made my PhD work possible.

I express my sincere gratitude towards the respondents to my survey for the valuable
information and helpful comments, which helped much to improve the quality of the
work.

I am grateful to the Librarian and all the staff of CHMK Library, University of
Calicut, Centre for Development Studies (CDS) Thiruvananthapuram, Kannur
University Central library and Indian Institute of Management (Kozhikode), for
giving me access to information pertinent to my study.
I also express my sincere gratitude to Mr. Biju Joseph, Assistant Professor of
Commerce, St. Pius X College, Rajapuram and Mr. Mohammed Nishad, Assistant
Professor of Commerce, Farook College, Kozhikode for their immense help in the
successful completion of my research work. I gratefully remember my beloved
teacher Mrs. Maya Devi Thampatti, Assistant Professor, Zamorin’s Guruvayurappan
College, Kozhikode, who has been a constant source of inspiration and
encouragement for me. I also place on record my gratitude to Ms. Arathi Mohandas,
Assistant Professor, Mahe Co-operative College of Higher Education and
Technology, Pondicherry University for their help and support.

I express my fondest gratitude to Ms.Amritha N.P., Ms.Vijayalakshmi C and


Ms.Niranjana C. for their invaluable comments, suggestions and support that helped
in improving the quality of this research work. My special word of thanks to all the
fellow research scholars of the Department for their encouragement, especially Ms.
Dhanisha M, Ms.Uma K,, Mr.Abdussalam P.K, Ms.Divya M, Ms.Yasmin. C.K,
Mr.Shahar. K, Ms.Smisha. K, Mr.Subeesh. M. M, and Ms.Nafeesathul Thansila
Beevi.

It has been a long journey to attain this fulfilment in life. Without cooperation,
support and guidance from my family, friends and colleagues it would have been
difficult to attain this goal. So let me thank those who directly or indirectly
encouraged me in this endeavour.

Above all, I bow to goddess Saraswati for Her blessings that kept me on the quest
path for knowledge and inspired me to pursue this research study.

University of Calicut
May 05, 2018 Rahul K
Contents

List of Tables
List of Figures
List of Abbreviations

Chapter Title Page No.

1 Introduction 1 – 26

2 Review of Literature 27 – 85

3 Theoretical Framework 86 – 164

4 Research Methodology 165 – 259

5 Data Analysis and Interpretation 260 – 319

6 Summary, Findings and Recommendations 320 – 338

Bibliography i – xxviii

Appendix i – xii
List of Table

Table No. Title Page No.


1.1 Types of Research 8
1.2 Definitions of Study Variables 17
2.1 Year wise classification of studies 27
2.2 Sources of Review 28
2.3 Literature review 29
2.4 Dimension wise classification of reviews 67
2.5 Identification of research gap 68
2.6 Scope of the study 72
3.1 Military Logistics- Definitions 88
3.2 Third Party Logistics- Definitions 93
3.3 Process Capabilities: Definitions 107
3.4 Flexibility Capabilities: Definitions 107
3.5 3PL Trends: in world 111
3.6 Shippers Experiences with 3PLs 112
3.7 Logistics Services and Percentages 113
3.8 Share of Third Party Logistics Market 114
3.9 Elements of Logistics Cost 115
3.10 LPI of BRICS Countries 117
Description of Gaps in Service Quality Model
3.11 132
(Parasuraman, et al, 1985)
Evolution of management thought (Bowersox, Closs and
3.12 134
Cooper, 2010)
Integrative management value proposition (Bowersox,
3.13 138
Closs and Cooper, 2010)
3.14 Between Goods-Dominant (G-D) logic and S-D logic 140
Table No. Title Page No.
4.1 Population 169
4.2 Sample size 170
4.3 Measurement scale for AHP 172
4.4 Reasons for logistics outsourcing 173
4.5 Criteria for selecting a logistics service provider 173
4.6 Constructs and number of statements 176
4.7 KMO and Bartlett's Test (Customer Service) 182
Rotated Component Loadings (RCL) with percentage of
4.8 183
variance (PV) explained (Customer Service)
4.9 Factor Names and Reviews (Customer Service) 185
4.10 Model fit indices (Customer Service) 187
Details of Factors after confirmatory factor analysis
4.11 187
(Customer Service)
Standardized factor loadings of construct items
4.12 188
(Customer Service)
Composite Reliability and AVE of Constructs
4.13 190
(Customer Service)
4.14 Correlations among constructs- Customer Service 192
4.15 Tests of Normality (Customer Service) 192
4.16 Skewness and Kurtosis (Customer Service) 193
4.17 KMO and Bartlett's Test (Customer Satisfaction) 195
Rotated component loadings (RCL) with percentage of
4.18 196
variance (PV) explained (Customer Satisfaction)
4.19 Factor Names and Reviews (Customer Satisfaction) 197
4.20 Model fit indices (Customer Satisfaction) 199
Variables after confirmatory factor analysis (Customer
4.21 199
Satisfaction)
Standardized factor loadings of construct items
4.22 200
(Customer Satisfaction)
Table No. Title Page No.
Composite Reliability and AVE of Constructs
4.23 201
(Customer Satisfaction)
4.24 Correlations among constructs (Customer satisfaction) 202
4.25 Tests of Normality (Customer Satisfaction) 202
4.26 Skewness and Kurtosis (Customer Satisfaction) 203
4.27 KMO and Bartlett's Test (Customer Success) 205
Rotated Component Loadings (RCL) with percentage of
4.28 206
variance (PV) explained (Customer Success)
4.29 Factor Names and Reviews (Customer Success) 207
4.30 Model fit indices (Customer Success) 208
Variables after confirmatory factor analysis (Customer
4.31 209
Success)
Standardized factor loadings of construct items
4.32 209
(Customer Success)
Composite Reliability and AVE of Constructs
4.33 210
(Customer Success)
4.34 Tests of Normality (Customer Success) 211
4.35 Skewness and Kurtosis (Customer Success) 212
4.36 KMO and Bartlett's Test (Customer Accommodation) 213
Rotated component Loading (RCL) with percentage of
4.37 214
variance (PV) explained (Customer Accommodation)
4.38 Factor Names and Reviews (Customer Accommodation) 215
4.39 Measurement Fit Indices (Customer Accommodation) 216
Variables after confirmatory factor analysis (Customer
4.40 216
Accommodation)
Standardized factor loadings of construct items
4.41 217
(Customer Accommodation)
Composite Reliability and AVE of Constructs
4.42 217
(Customer Accommodation)
4.43 Tests of Normality (Customer Accommodation) 218
Table No. Title Page No.
4.44 Skewness and Kurtosis (Customer Accommodation) 218
4.45 KMO and Bartlett's Test (Value Creation) 219
Rotated component Loadings (RCL) with percentage of
4.46 220
variance (PV) explained (Value Creation)
4.47 Factor Names and Reviews (Value Creation) 221
4.48 Model fit indices (Value Creation) 222
Variables after confirmatory factor analysis (Value
4.49 223
Creation)
Standardized factor loadings of construct items (Value
4.50 223
Creation)
Composite Reliability and AVE of Constructs (Value
4.51 224
Creation)
4.52 Correlations among constructs (Value Creation) 225
4.53 Tests of Normality (Value Creation) 225
4.54 Skewness and Kurtosis (Value Creation) 226
4.55 KMO and Bartlett's Test (Competitive advantage) 228
Rotated component Loadings (RCL) with percentage of
4.56 229
variance (PV) (Competitive advantage)
4.57 Factor Names and Reviews (Competitive advantage) 230
4.58 Fit Indices (Competitive advantage) 232
Variables after confirmatory factor analysis
4.59 233
(Competitive advantage)
Standardized factor loadings of construct items
4.60 233
(Competitive advantage)
Composite Reliability and AVE of Constructs
4.61 234
(Competitive advantage)
4.62 Correlations among constructs (Competitive advantage) 235
4.63 Tests of Normality (Competitive advantage) 236
4.64 Skewness and Kurtosis (Competitive advantage) 237
4.65 KMO and Bartlett's Test (Logistics Excellence) 238
Table No. Title Page No.

Rotated component Loading (RCL) with percentage of


4.66 239
variance (PV) explained (Logistics Excellence)

4.67 Factor Names and Reviews (Logistics Excellence) 239

4.68 Model fit indices (Logistics Excellence) 240

Variables after confirmatory factor analysis (Logistics


4.69 241
Excellence)

Standardized factor loadings of construct items


4.70 241
(Logistics Excellence)

Composite Reliability and AVE of Constructs (Logistics


4.71 242
Excellence)

4.72 Tests of Normality (Logistics Excellence) 243

4.73 Skewness and Kurtosis (Logistics Excellence) 243

Measurement scale after factor analysis and scale


4.74 245
Validation

5.1 Demographic Profile of the Respondents’ 261

5.2 District wise details 262

5.3 Districts and Industry wise comparison 263

5.4 Analytical Hierarchy Process (AHP) Scales 264

Pair wise comparison and priority weights (Reasons for


5.5 268
outsourcing)

Pair wise comparison and Priority Weights (Reasons for


5.6 270
outsourcing- Food Processing Industry)

Pair wise comparison and Priority Weights (Reasons for


5.7 271
outsourcing- Textiles and Apparels)

Pair wise comparison and Priority Weights (Reasons for


5.8 272
outsourcing- Rubber and Agro products)

Pair wise comparison and Priority Weights (Reasons for


5.9 273
outsourcing-North Zone)

Pair wise comparison and Priority Weights (Reasons for


5.10 274
outsourcing- Central Zone
Table No. Title Page No.

Pair wise comparison and Priority Weights (Reasons for


5.11 275
outsourcing- South Zone)
Pair wise comparison and Priority Weights (Factors
5.12 277
considered while selecting a logistics service provider)
Pair wise comparison and Priority Weights (Factors
5.13 considered while selecting a logistics service provider- 278
Food Processing)
Pair wise comparison and Priority Weights (Factors
5.14 considered while selecting a logistics service provider- 280
Textiles and Apparels)
Pair wise comparison and Priority Weights (Factors
5.15 considered while selecting a logistics service provider- 281
Rubber and Agro products)
Pair wise comparison and Priority Weights (Factors
5.16 considered while selecting a logistics service provider- 282
North Zone)
Pair wise comparison and Priority Weights (Factors
5.17 considered while selecting a logistics service provider- 284
Central Zone)
Pair wise comparison and Priority Weights (Factors
5.18 considered while selecting a logistics service provider- 285
South Zone)
5.19 Summary of ‘Reasons for outsourcing’ 286
Summary of ‘factors considered while deciding a
5.20 287
logistics service provider’
5.21 Customer accommodation level 1-Customer Service 289
5.22 Test of Homogeneity of Variances- Customer Service 290
5.23 ANOVA- Customer Service 290
Customer Accommodation level 1I-Customer
5.24 291
Satisfaction
Test of Homogeneity of Variances- Customer
5.25 292
Satisfaction
5.26 ANOVA- Customer Satisfaction 292
Table No. Title Page No.
5.27 Customer accommodation level III-Customer Success 293
5.28 Test of Homogeneity of Variances- Customer Success 294
5.29 ANOVA - Customer Success 294
5.30 Summary of Section III 295
5.31 Model Fit Indices (for entire sample) 299
5.32 Results of hypothesis testing (for entire sample) 300
5.33 Model Fit Indices - food processing industry 302
5.34 Model Fit Indices- textiles and apparels industry 303
5.35 Model Fit Indices- Rubber and Agro-Products Industry 304
5.36 Results of hypothesis testing- (for each industry) 304
5.37 Results of hypothesis testing 305
5.38 Model Fit Indices- aggregate model 308
5.39 Results of hypothesis testing- aggregate model 310
5.40 Model Fit Indices- food processing industry 311
5.41 Results of hypothesis testing- food processing industry 312
5.42 Model Fit Indices- textiles and apparels industry 313
Results of hypothesis testing- textiles and apparels
5.43 314
industry
5.44 Model Fit Indices- rubber and agro products industry 316
Results of hypothesis testing- rubber and agro products
5.45 316
industry
List of Figures

Figure Page
Title
No. No.

1.1 Structural Equation Model for the Study 7

Ten stages of scale development adopted from Alenka


1.2 13
Slavec, Mateja Drnovsek (2012)

1.3 Scale development process 14

3.1 Collaborative logistics management (Stefansson 2006, 85) 96

Continuum of the different levels of customer-driven service


3.2 126
(Ellinger et al, 1997)

3.3 The service quality model (Parasuraman, et al, 1985) 132

Logistics value co-creation process in three phases


3.4 142
(Yazdanparast, Manuj and Swartz, 2010).

Logistics service value co-creation process with 3 phases


3.5 and 12 propositions (Yazdanparast, Manuj and Swartz, 143
2010)

Influencers of Relationship Design in the Learning phase


3.6 (Yazdanparast, Manuj and Swartz, 2010) Note: 144
*Consequence of the outcomes

Design and implementation of value creating solution in the


3.7 Innovation and execution phase (Yazdanparast, Manuj and 145
Swartz, 2010) (Berky Kong, Mae Fong Choe, 2011).

Characteristics of service provided and Customer/Provider


3.8 benefits in the Outcome phase (Yazdanparast, Manuj and 147
Swartz, 2010)

Logistics capabilities within the concept of Customer


3.9 149
Integration (Bowersox, Closs, and Stank (1999)

4.1 Scree plot- Customer service 182

4.2 Measurement model – Customer service 186

4.3 Scree plot- Customer satisfaction 195

4.4 Measurement model – Customer satisfaction 198


Figure Page
Title
No. No.

4.5 Scree plot- Customer success 205

4.6 Measurement model – Customer success 208

4.7 Scree plot- Customer accommodation 213

4.8 Measurement model – Customer accommodation 215

4.9 Scree plot- Value creation 219

4.10 Measurement model – Value creation 222

4.11 Scree plot- Competitive advantage 228

4.12 Measurement model – Competitive advantage 232

4.13 Scree plot- Logistics Excellence 238

4.14 Measurement model – Logistics Excellence 240

5.1 Measurement model for value creation. 298

5.2 Measurement model for value creation- Tested 299

Structural equation model for value creation -food


5.3 301
processing industry

Structural equation model for value creation -textiles and


5.4 302
apparels industry

Structural equation model for value creation -rubber and


5.5 303
agro products industry

5.6 Structural model for the study 306

5.7 Tested structural equation model 308

5.8 Structural model for food processing industry 311

5.9 Structural model for textiles and apparels industry 313

5.10 Structural model for rubber and agro products industry 315
List of Abbreviations

3PL Third Party Logistics

4PL Fourth Party Logistics

AGFI Adjusted Goodness of Fit Index

AHP Analytical Hierarchy Processing

ANOVA Analysis of Variance

CFA Confirmatory Factor Analysis

CFI Comparative Fit Index

EFA Exploratory Factor Analysis

FAHP Fuzzy Analytical Hierarchy Processing

GFI Goodness of Fit Index

GL Green Logistics

GoF Goodness of Fit

K-S Kolmogorov–smirnov

LPI Logistics Performance Index

LSP Logistics Service Provider

NFI Normed Fit Index

RFID Radio Frequency Identification

RL Reverse Logistics

RMSEA Root Mean Square Error of Approximation

SEM Structural Equation Modelling

TLI Tucker Lewis Index

TMS Transport Management System.

WMS Warehouse Management System

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