Factors influencing decision-making in buying process of express logistics services

Abstract

Background: Logistics is an integral component for success of an organisation. So correct decision on express logistics procurement plays a critical role in success in delivering right product at right place and right time. Procurement of express logistics service is not very straight forward, instead it requires evaluation of multiple factors.

Objective: The objective of this research is to create a framework of influencing factor on express logistics buying decision.

Method: For the study, researchers has adopted secondary research along with primary research with group of 14 subject matter experts in field of Indian logistics sector. A group of experts comprises of senior managers, consultants and academicians with deep understanding of subject. We have used ISM (Interpretive Structural Modelling) and Cross Impact Matrix Multiplication Applied to Classification (MICMAC) to drive conceptual framework for logistics buying decision.

Results: Framework shows that the decision making in logistics procurement should be highly driven by factors like network reach of Logistics Service Provider (LSP), technology followed by information sharing and strategic partnership. While service quality and cost of logistics remains as frontend factors in logistics procurement decision.

Conclusion: The model output clearly suggests that final objective in buying process of express logistics is driven towards lower cost and improved service level, but it is driven by factors which directly adds value in supply chain like time to market and reverse logistics, technology and reach.

Contribution: The model provides a framework for practitioners, which can enable them in decision making process of logistics procurement.