An Empirical Investigation of the Application of Production Competence Theory to Logistics Outsourcing

With respect to the logistics management activities of transportation, warehousing, order processing, and related information technology support, outsourcing has become a prominent strategy for logistics operations. Logistics development can benefit from borrowing from other theories in disciplines such as information technology, strategy, and organizational behavior, and its research is suited to approaches that adopt multidisciplinary methodological theories. Being relatively new in theory-development terms, the evolution of logistics, and its role in the supply chain, can benefit from understanding how it fits in established theoretical frameworks. Our paper studies production competence theory, applying to the logistics outsourcing domain. Using survey data from 197 shippers, the results empirically confirm our hypotheses and show that the alignment of logistics strategic objectives and logistics capability are positively related to logistics performance. In turn, logistics performance is positively related to a firm’s competitive advantage and business performance. Our research provides an adaptation of production competence theory to logistics outsourcing, and is the first study to empirically test an adaptation of production competence in the logistics domain.