Connectivity and collaboration: the role of performance measures

Supply chains and their underpinning logistics systems are critical to international trade and the economic development of regions. Efficient and effective logistics systems in a region facilitate its development by providing seamless freight movements through connectivity. The physical logistics network forms a multi-modal freight system and, equally important, creates a network of interdependent organisations and logistics providers, connected by freight movements and relationships.

Collaboration is a strategy that facilitates the management of connections between organisations and logistics providers. Increasingly collaboration is regarded as a way to improve connectivity. Collaboration provides strategic benefits, including cost savings and improved customer service; it requires major resource commitments, such as senior management involvement and information sharing. Initiating and managing collaboration to achieve ongoing net benefits is complex. Performance measures can assist in their management.

The paper reports findings from in-depth telephone interviews with 32 senior managers in the Australian logistics industry. The interviews reveal that the use of performance measures in collaborations with other logistics providers remains at a basic level. Few organisations use performance measures that assess the resources committed to the relationship, benefits achieved or include key milestones. Implications for the use of performance measures to improve connectivity through collaboration in the logistics system, particularly for key nodes such as ports, are included. Suggestions for further research are also indicated.