Logistics flexibility and its impact on customer satisfaction

Abstract

Purpose: To succeed in an uncertain environment, firms must respond to changing customer needs, and logistics flexibility is an important part of the response. This paper defines logistics flexibility, creates a framework to understand it, and shows how it relates to customer satisfaction.Design/methodology/approach: The study uses a large sample survey (n=273) from the Society of Manufacturing Engineers to develop valid and reliable instruments to measure logistics flexibility and to test the relationships among the variables using structural equation modeling.Findings: The results indicate strong, positive, and direct relationships between flexible logistics competence and capability, and between flexible logistics capability and customer satisfaction.Research limitations/implications: The dependent and independent variables were measured through a single respondent, which may introduce common‐method bias. The respondents were manufacturing executives, which provides only a single perspective.Practical implications: The dichotomy of flexible logistics competence and capability can help managers differentiate between the elements of logistics flexibility that are critical to customers from the elements that support these capabilities. Standing alone, flexible competence may not be sufficient to build a sustainable competitive edge.Originality/value: The paper organizes literature on logistics flexibility and classifies it according to competence and capability theory. It describes a framework to explore the relationships among flexible competence, flexible capability, and customer satisfaction.