Preliminary framework of logistics performance measurement systems for ocean freight industry

Abstract

Two third of ocean freight industry in Malaysia are classified as small and medium enterprise (SME) which they are currently struggling to stay in industry caused by the merging of global shipping alliances. The merging of alliances has impacted the SMEs in terms of competitiveness in getting business opportunities, where SMEs have to compete alongside established companies with well-known reputation. Therefore, differentiation is becoming very crucial factor in order to leverage their capabilities. Without differentiation factor, SMEs are unable to identify their competitive advantages that distinguishes them from competitors, hence causing difficulties to survive in the industry. Another issue arises is the absence of a unique Logistics Performance Measurement System (LPMS) that considers the eccentric characteristics of ocean freight industry, therefore causing slow adaptation of LPMS despite the size and maturity of this industry. Thus, this research attempts to develop a preliminary logistics performance measurement system (LPMS) framework for ocean freight industry and incorporates differentiation factor in the developed LPMS. The preliminary framework is developed based on extensive literatures in logistics performance measures, and consists of three logistics performance measurement dimensions (efficiency, effectiveness and differentiation). However, this framework is only a preliminary point for incorporating the views of logistics dimensions in the critical processes.