International Journal of Retail & Distribution Management

Exploring logistics performance management in supplier/retailer dyads

Helena Forslund

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Exploring logistics performance

management in supplier/retailer
dyads
Downloaded by National Institute of Industrial Engineering NITIE At 20:30 24 November 2014 (PT)

Helena Forslund
School of Business and Economics, Linnaeus University, Vaxjo, Sweden
Abstract

Logistics
performance
management
205
Received 9 January 2013
Revised 13 March 2013
17 June 2013
Accepted 5 July 2013

Purpose The first purpose of this study is to explore logistics performance management practices
and lessons learned in some supplier/retailer dyads across retail industries. A second purpose is to
suggest a continued research agenda for logistics performance management across retail industries.
Design/methodology/approach Case studies are conducted in four supplier/retailer dyads in
different retailing industries in Sweden. The analysis is of a cross-case character and uses a pattern
matching approach.
Findings Large differences in practices within and between dyads are found. Some problems were
indicated: lack of trust; difficulties in developing a collaborative culture; difficulties in relating metrics
to customer value and lacking IT support. A previously unknown obstacle, the internal collaboration
with category management, was identified. A good example was found in an industry standard.
State-of-the-art descriptions, international comparisons, exploring the interface with the stores and
combating identified problems were found to be relevant topics for continued research.
Research limitations/implications The limitations are mainly related to the small number of
cases, but since the purpose of this study is exploratory, this should be acceptable. The theoretical
contribution is a first step in the expansion of knowledge on logistics performance management from
manufacturing to retailing companies.
Practical implications The practical contribution includes insights in the shape of descriptions
and lessons learned in different retail industries.
Originality/value No identified study has explored logistics performance management as a whole
across retail industries with a dyadic approach.
Keywords Case study, Research agenda, Logistics performance management, Dyad, Retailer
Paper type Research paper

Introduction
In order to succeed for brand suppliers, it is important to operate an effective and
efficient down-stream supply chain via retailers to end consumers (Lorentz and
Lounela, 2011). Marketing aspects, such as category management, are evident strategy
components to reach financial performance (Amato and Amato, 2009). Category
management was described by Lindblom and Olkkonen (2006) and Hamister (2011) as
the supplier/retailer practice of managing distinct product categories by focusing on
end consumer value. However, hand in hand with marketing come logistics aspects,
which are as important to create differentiation advantages and competitiveness of
retail supply chains (Lorentz and Lounela, 2011). Logistics performance is important
for customer satisfaction and loyalty, which at the same time are targets for category
management (Schramm-Klein and Morschett, 2006).

International Journal of Retail

& Distribution Management
Vol. 42 No. 3, 2014
pp. 205-218
q Emerald Group Publishing Limited
0959-0552
DOI 10.1108/IJRDM-01-2013-0020

IJRDM
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206

Logistics performance can be lead time, on-time delivery, and service level. Measuring
logistics performance moves the focus from strategic, financial performance to
operational performance enabled by information sharing between supply chain actors
(Papakiriakopoulos and Pramatari, 2010). It is not enough to merely measure
performance. Rather measurement should be expanded into performance management,
which implies that a number of sequential activities from strategy to action are
viewed as a whole (Forslund and Jonsson, 2007; Papakiriakopoulos and Pramatari, 2010).
Knowledge about logistics performance management is mainly based on manufacturing
companies (e.g. Bourne et al., 2002; Forslund and Jonsson, 2007). The retail sector is
continuously growing, competition is increasing, and logistics performance is a critical
competitive aspect (Menachof et al., 2009; Ganesan et al., 2009; Fernie et al., 2010; ECR,
2011; Lorentz and Lounela, 2011; Hamister, 2011; SAP, 2012). In an extensive study of
retail supply chain executives, performance management was identified as one key area
for future competitiveness (ECR, 2011).
Fragmented knowledge exists on logistics performance management in retail.
Theodoras et al. (2005) conducted an interesting study that identified important
performance metrics and suggested improvements between suppliers and retailers in
one industry. Wang et al. (2008) discussed the importance of setting specific and
differentiated performance targets. However, no identified study described logistics
performance management as a whole in retail. Descriptions can bring managerial
relevance both to suppliers and retailers by showing best practices to benchmark and
problems to avoid or prevent. We do not know if problems found among
manufacturing companies also are valid in retail. Descriptions of practices are
furthermore important as previous studies have shown a relation between logistics
performance management practices and the actual performance levels. Forslund and
Jonsson (2010) found relationships between performance management practices and
on-time delivery performance levels in supplier/manufacturer dyads. Sheu et al. (2006)
found supplier/retailer collaboration to improve logistics performance. Hamister (2011)
related supply chain management practices between suppliers and retailers, however
moderately implemented, to increased performance. Since suppliers and retailers have
knowledge in different domains, the combination can create unique knowledge
(Hamister, 2011, p. 431). This implies that it is of both theoretical and practical
relevance to describe operational logistics performance management practices in
supplier/retailer dyads. So how can practices be illustrated and what lessons are
learned from both actors perspective? Addressing both actors, supplier and retailer,
was encouraged by Lindblom and Olkkonen (2006) and Hamister (2011). Different
practices are expected to be found in different retail industries (Amato and Amato,
2009). Therefore, it is relevant to explore and show practices across retail industries.
The fact that no so few studies previously described logistics performance
management in retail, indicates a need for a research focus from scholars. Wiese et al.
(2012) found that retail research lag ten years behind the corresponding manufacturing
research on environmental performance, and that retail practice not is completely
reflected by academic literature. Managing logistics performance in retail seems
especially relevant, given the complexity with a large number of articles and the length
and number of retail chains (Wiese et al., 2012). In what areas does it seem important
that scholars focus their continued research efforts, in order to expand theoretical
knowledge? This should enable retail chains to improve logistics performance, which

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in turn would improve competitiveness. By suggesting a research agenda for logistics

performance management across retail industries, this study complements existing
knowledge and expands it into the retail sector.
The first purpose of this study is to explore logistics performance management
practices and lessons learned in some supplier/retailer dyads across retail industries. A
second purpose is to suggest a continued research agenda for logistics performance
management across retail industries. The expected theoretical contribution is to
expand knowledge on logistics performance management from manufacturing into
retailing companies. The expected practical contribution is to provide insights and
lessons learned from supplier/retailer dyads in different retail industries.
Literature review logistics performance management in retail
Forslund and Jonsson (2007) have described logistics performance management between
suppliers and manufacturers as a sequential process the performance management
process. It consists of five activities selecting metrics, defining metrics, setting targets,
measuring, and analysing/acting that could be carried out in a collaborative manner.
However, Brewer and Speh (2001) found difficulties in developing a collaborative culture
regarding performance management in supply chains, as well as lack of trust (also
Forslund and Jonsson, 2009) and lack of knowledge. In this section, retail-based studies
complement the knowledge on performance management.
Selecting metrics
The performance management process should be linked to the companys strategy;
selecting metrics concretizes strategic choices (Lohman et al., 2004). This study focuses
on metrics that are shared with other actors and less attention is paid to
company-internal metrics. In a supply chain, it is important that the actors discuss and
agree on which logistics performance metrics to apply (Brewer and Speh, 2001;
Forslund and Jonsson, 2010).
Brewer and Speh (2001) found that companies had difficulty selecting metrics that
were linked to customer value. Forslund and Jonsson (2007, 2010) showed that on-time
delivery is a dominating metric among manufacturing companies. Theodoras et al. (2005)
identified some logistics metrics as important between food suppliers and retailers:
service level; complete orders; delivery of products without defects; efficient handling of
returns; information about shortages in the orders; on-time delivery; and efficient
handling of emergency orders. Lorentz and Lounela (2011) mentioned out-of-stock as a
critical logistics metric. A development in retail supply chains is the acknowledgement of
environmental metrics such as reduced packaging and alternative fuels (Fernie et al.,
2010). Wiese et al. (2012) found carbon footprint to be a promising metric, however only
analysed very rarely in retail research. Papakiriakopoulos and Pramatari (2010)
mentioned the importance of limiting the number of metrics used.
Defining metrics
According to Papakiriakopoulos and Pramatari (2010), studies on performance
measurement seldom include the definition of each performance metric, which is an
important link between the metric and the accessible data. Bourne et al. (2002)
concluded that companies characterised as successful in performance management
understood the importance of using validated and sufficiently specified metrics

Logistics
performance
management
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208

definitions. Lohman et al. (2004) suggested a detailed metrics dictionary to ensure

common and shared metrics definitions in a supply chain. Metrics definitions are
especially critical in a supply chain context, as more than one actor should be able to
understand the metric (Forslund and Jonsson, 2007).
In order to define logistics metrics such as on-time delivery, service level and
lead-time, detailed aspects must be agreed on by the supply chain actors. One is the
measurement object, whether it is the order, order line, unit/product, value, etc. The
second is the time unit, whether it is a week, day, hour, or some kind of delivery
window. A third aspect is the measurement point; where along the supply chain a
measurement takes place;, e.g. delivered from the supplier, accessible to the retailer, or
at the point of consumption. The fourth is the comparison; whether it is the retailers
wished or the acknowledged demand that is compared (Forslund and Jonsson, 2007).
For service level, one definition can be the percentage of available stock on every
product to satisfy the retailers demand (Theodoras et al., 2005).
Setting targets
Soltani et al. (2004) reported problems with setting targets, such as missing or vague
targets, or inconsistency between targets. Targets are often based on the suppliers
subjective interpretations of the customers needs; to avoid this tendency they should
be set in a joint manner (Holmberg, 2000). Brewer and Speh (2001) found it common for
targets to differ between supply chain actors. Wang et al. (2008) mentioned the lack of
conceptual frameworks to handle differentiated targets for different distribution
channels. Theodoras et al. (2005) and Wang et al. (2008) meant that suppliers should set
differentiated targets for their retailers. Furthermore, Theodoras et al. (2005) suggested
that suppliers should frequently update their knowledge of retailers targets in order to
capture changes. Schramm-Klein and Morschett (2006) found differences in targets
between the category management function and the logistics function in retailing
companies. Category management has implied increased collaboration between
supplier and retailer (Lindblom and Olkkonen (2006).
Measuring
In measuring, it is recommended that the supply chain actors agree on who should
measure, how often, with which methods, and how to communicate the reports or
outcomes of the measuring (Forslund and Jonsson, 2007). Capturing and reporting
performance data were often found to be done manually in manufacturing companies
(Forslund and Jonsson, 2007, 2010). However Papakiriakopoulos and Pramatari (2010)
meant that retailers often have good data capturing capabilities by their access to
point-of-sales (POS) data. Papakiriakopoulos and Pramatari (2010) further suggested
sharing daily or weekly measurement outcomes in a web-based measurement portal.
Forslund and Jonsson (2010) showed that those supplier/manufacturer dyads that had
automatic and therefore high-frequency measurement reports perceived higher
logistics performance levels than those dyads that had manual and low-frequency
measurement reports.
Analysing/acting
Collaboration in the supply chain is a critical success factor for improved performance
(Sheu et al., 2006; Papakiriakopoulos and Pramatari, 2010). Forslund and Jonsson

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(2007) showed that analysing and acting were weakly performed activities in
performance management in manufacturing dyads. Menachof et al. (2009) found that
the internationalisation of retail chains has lead to improved performance, where less
developed logistics systems have been forced to conform to an international standard.
Forslund and Jonsson (2010) showed that those supplier/manufacturer dyads that had
common analysis and improvement actions perceived higher logistics performance
levels than those that had not.
Methodology
In order to make a description on logistics performance management across retail
industries, a survey methodology could be possible. However, this study has an
exploratory purpose, as current knowledge is fragmented and immature. It is therefore
not judged possible to formulate accurate survey items. A case study approach is more
appropriate for exploratory purposes (Yin, 2009). According to Papakiriakopoulos and
Pramatari (2010), case studies are a good consolidation tool between theory and
practice. Consequently this study has a case study approach, where the advantages of
understanding have been more important than the possibilities to broadly generalise
results. Clearly defining the study object in case studies in the supply chain was
encouraged by Mann et al. (2009) and Barratt et al. (2011). The study object is
supplier/retailer dyads; the interface between suppliers (product manufacturers or
sales organisations) and retail chains. The contact point is the retailer headquarters,
where managers involved in logistics performance management are identified. It is not
obvious which manager to address, as this responsibility can be found in different
positions in the studied companies (see Table I). This is another reason for not
conducting a survey. The retailer headquarters suggested an important supplier to
include in the dyad. The companies and respondents are all shown in Table I. Four
retail chains are selected to represent different retailing industries in Sweden; daily
groceries, home decoration, non-food and sports. They all handle fast-moving
consumer goods (FMCG, e.g. Lindblom and Olkkonen, 2006; Amato and Amato, 2009)
and are among the market leaders in their specific industries. By this selection different
practices and lessons learned are expected to be discovered (Amato and Amato, 2009).
The use of multiple cases is likely to create more robust theory (Barratt et al., 2011).
The data collection followed the procedures recommended by Yin (2009), such as
basing interview questions on the literature review, providing definitions, and letting
each respondent validate their case description in order to increase validity. To
increase reliability, multiple respondents are addressed where possible (source
triangulation, Barratt et al., 2011), and other data sources complemented the interviews,
such as documents and measurement reports (method triangulation, Yin, 2009). Fifteen
mainly personal, semi-structured interviews, lasting from between 30 and 90 minutes,
were conducted during late 2011 and early 2012. These provided descriptions of
characteristics and logistics performance management pratices. The analysis is mainly
of a cross-case character and uses a pattern matching approach (Yin, 2009).
Case descriptions
The supplier/retailer dyads characteristics are shown in Table I. They are named after
each retail chain; the daily groceries dyad, the home decoration dyad, the non-food
dyad and the sports dyad. The logistics performance management practices are

Logistics
performance
management
209

Confectionery manufacturer:
Logistics manager
100 items with an important brand

The confectionery manufacturer is a

tactical partner supplier to the daily
groceries retail chain, who in turn is
an A customer. There is a long-term
relationship both on a company and
personal level, with shared logistics
projects and an EDI connection

The retailer exchanges forecast

information 3-4 times per year with
the Swedish supplier. Daily order
planning, to a large extent based on
automatic replenishment, is
transferred to the supplier by EDI.
Picking takes place day 2, then
outsourced transportation to the
distribution centers. The business
processes are mature, efficient, and
collaborative

Supplier
respondents

Products

Relationship

Business
processes

Table I.
Overview and
characteristics of the four
supplier/retailer dyads
Daily groceries chain:
replenishment manager, supply
chain manager, planner, manager
order support

Aggregated six-month forecasts

and monthly orders are
transmitted to the Turkish
manufacturer by e-mail. MTO is
done with four weeks lead-time.
There is monthly, outsourced
transport to the Swedish
distribution center. The business
processes are fairly mature but
not collaborative; the actors do
not have good knowledge of each
others processes

The textiles manufacturer is a

strategic partner supplier to the
home decoration retail chain,
who in turn is one of four key
account customers. The
relationship is long-term on a
company but not a personal level.
Many successions of purchasers
have led to little trust and
collaboration in the relationship

150 items, design-driven

products with the chains own
brand

Textiles manufacturer: sales

manager

Home decoration chain: logistics

manager

Home decoration dyad

The non-food retail chain sends

forecasts and daily inventory
records to the Swedish supplier,
which operates a VMI solution
with this retailer. The supplier
applies both MTS and MTO and
handles the transportation to the
distribution center. The business
processes are mature, efficient,
and collaborative

The chemical manufacturer is the

second largest supplier to the
non-food retail chain, who in turn
is a large and important
customer. The actors have a
long-term relationship on a
company but not a personal level,
with contracts and shared
logistics projects

600 items, branded products with

seasonal variation

Chemical manufacturer: sales

manager, supply chain manager

Non-food chain: purchasing

manager, purchaser

Non-food dyad

Forecasts are transmitted to the

Swedish sport shoe sales
organisation, which has several
supply chain actors before the
Chinese manufacturer. Orders
are automatically generated and
transmitted to the Nordic distribution center, which delivers to
the Swedish distribution center.
The business processes and the
logistics knowledge are under
development

The sport shoe sales organisation

is an important brand supplier to
the sports retail chain, which in
turn is the largest Swedish
customer. This relationship is
one of the first supplier
relationships that the sports
retail chain developed in terms of
logistics. Traditionally, the
industry is sales-driven and
dominated by category managers

2,100 items, design-driven

products with an important
brand

Sport shoe sales organisation:

logistics manager, key account
supply chain manager

Sports chain: supply chain

manager, logistician

Sports dyad

210

Retailer
respondents

Daily groceries dyad

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described in Table II, together with collaboration and logistics performance level. The
use of tables to display and summarise case study descriptions is recommended by
Barratt et al. (2011).
Result and discussion
Exploring logistics performance management practices
Characteristics. The dyads characteristics split them into two groups. The daily
groceries and non-food dyads have high logistics performance demands (derived from
the stores), mature business processes, collaborative performance management, and
high perceived performance levels. The home decoration and sports dyads have lower
logistics performance demands (not expressed by the stores), less mature business
processes, less collaborative performance management, and lower perceived
performance levels. The sports dyad especially highlights the large number of small
stores, with unclear logistics performance demand and low logistics competency as
possible reasons. The studied retail chains are dominant actors in their respective
industries, which may indicate that logistics demand and performance are generally
lower in home decorating and sports than in daily groceries and non-food retail chains.
Selecting metrics. The literature review showed many possible metrics
(e.g. Theodoras et al., 2005; Lorentz and Lounela, 2011). The metrics that are found
in this study are on-time delivery, service level, lead time and damages. Few metrics
are used in the cases, which corresponds to the recommendations from
Papakiriakopoulos and Pramatari (2010). Furthermore, surprisingly little interest in
environmental performance metrics is found, contrary to the findings of Fernie et al.
(2010) and Wiese et al. (2012). In the daily groceries retail chain, service level is the
central metric, in accordance with Theodoras et al. (2005). In the home decoration and
sports retail chains, there is instead a clear focus on on-time delivery from the
suppliers. This can be interpreted as a desire to follow up on the suppliers reliability
rather than to select the more customer-focused service level metric. Also, in the
non-food retail chain, on-time delivery from the supplier is in focus, which is a paradox
when VMI is applied. By definition, the supplier then has a freedom to replenish the
inventory when it suits them, as long as the agreed on service level is held. This is in
accordance with the findings of Brewer and Speh (2001), who mentioned difficulties
and importance in linking metrics to customer value. This study has provided evidence
for their claim.
Defining metrics. The only dyad that clearly defines their metric in writing is the
daily groceries dyad, which follows an industry standard. In the other chains,
definitions had to be discovered during the interviews. Unclear and differing metrics
definitions between the actors correspond to earlier findings by Lohman et al. (2004),
Forslund and Jonsson (2007), and Papakiriakopoulos and Pramatari (2010). If metrics
definitions are studied in detail, one can see that a number of measurement objects
exist: retail package, order, order line, order volume, value and item. The measurement
points found are delivered, accessible for delivery, arrived and invoiced. The time units
found are day, week-based delivery window, and in the non-food retail chain, there is a
move towards hour. In the sports retail chain, a time unit is not yet decided. Different
functions have different demands, and furthermore, logistics work with different time
units than category management, similar to the findings of Schramm-Klein and
Morschett (2006). The comparison in the dyads are ordered, acknowledged, and

Logistics
performance
management
211

R: High demands on logistics

performance are derived from
the stores. The target is 98 per
cent service level from all
suppliers

Setting targets

S: The target is 98 per cent

service level for all retailers

R: For service level, the

measurement object is the
number of retail packages, the
measurement point is
delivered, the time unit is day,
and the comparison is the
ordered number of retail
packages
S: For service level, the
measurement object is number
of retail packages, the
measurement point is
delivered, the time unit is day,
and the comparison is ordered
number of retail packages. This
retail chain uses an industry
standard for logistics
performance management

Defining metrics

Table II.
The logistics
performance
management processes,
collaboration and
performance levels in the
four supplier/retailer
dyads
R: Service level
S: Service level

Non-food dyad

Sports dyad

R: Medium demands on
logistics performance are not
derived from the stores but
decided by the headquarters. 80
per cent on-time delivery is the
target from the supplier, but
this is not communicated
S: 100 per cent on-time delivery
to the home decorating retail
chain is the target

R: For on-time delivery, the

measurement object is order
line, the measurement point is
accessible for delivery, the time
unit is a window 2 1 week
and the comparison is
acknowledged number of order
lines
S: For on-time delivery, the
measurement object is 2 5
per cent order volume, the
measurement point is
accessible for delivery, the time
unit is day, and the comparison
is acknowledged order

R: On-time delivery is not yet

defined, but the measurement
object is order, the
measurement point is notified,
and the time unit will be week
(the logic for category
management) or day (as in the
ERP system). The comparison
is acknowledged order
S: For on-time delivery, the
measurement object is item, the
measurement point is
delivered invoiced, the time
unit is week, and the
comparison is acknowledged
order

R: Medium demands on
logistics performance are not
derived from the stores but
decided by the headquarters.
There are improvement targets
instead of absolute targets and
penalties when delays occur
S: The targets are 98 per cent (however never claimed)
on-time delivery on a selected S: There are no explicit targets
range of products and 99.5 per
cent on four key products
(continued)

R: High demands on logistics

performance are derived from
the stores. No targets, but there
are penalties when delays occur

R: For on-time delivery, the

measurement object is order
line, the measurement point is
arrived, the time unit is day
(but wants hour), and the
comparison is acknowledged
number of order lines. For
service level, the definition is
invoiced value/ordered value
S: For on-time delivery, the
measurement object is order
line, the measurement point is
arrived, the time unit is day,
and the comparison is notified
number of order lines

R: On-time delivery, lead time, R: On-time delivery and service R: On-time delivery
and damages
level
S: On-time delivery
S: On-time delivery
S: On-time delivery

Home decoration dyad

212

Selecting metrics

Daily groceries dyad

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Notes: R: retailer, S: supplier

Logistics performance level

Collaboration in logistics
performance management

R: Internal analysis explains

deviations from targets. There
is discussion and shared
improvement actions in the
dyad
S: Internal analysis explains
deviations from targets. No
improvement actions are taken
with the retailer
Logistics performance
Logistics performance
Logistics performance
management is carried out with management is carried out with management is carried out with
large similarities between the differences between the actors similarities between the actors
actors and collaboration in the and little collaboration in the
and collaboration in the nondaily groceries dyad
home decoration dyad
food dyad
The logistics performance level The logistics performance level The logistics performance level
is perceived high by retailer
is perceived low by the retailer is perceived high by retailer
and supplier
and high by the supplier
and supplier

R: Manual data capturing is

used. Internal monthly
reporting out of the ERP
system is complemented with
Excel. Performance feedback to
the supplier occurs 3-4 times/
year
S: Manual data capturing is
used. Internal monthly
reporting out of the ERP
system is complemented with
Excel, but there is a desire to do
this on a weekly basis. No
performance feedback is given

Analysing/ acting

R: Manual data capturing is

used, but barcodes are
successively implemented.
Internal monthly reporting out
of the ERP system is
complemented with Excel. The
outcome varies from 20-100 per
cent, on average 78 per cent, ontime delivery
S: No data capturing or
measurement is used; the home
decoration retailers orders are
prioritized through the
production. There is no
performance feedback in the
dyad. The outcome is 100 per
cent on-time delivery
R & S: Due to the high
R: Internal analysis and action,
performance level, there is
and no such actions together
currently just monitoring.
with the supplier
Historically, joint analysis and S: Due to the perceived high
action have been prioritized
performance level, there is
currently little analysis or
action taking place

Non-food dyad

R: Automatic data capturing,

supplier-specific measuring out
of the ERP system,
complemented with Excel.
Daily, weekly, and monthly
reporting and performance
feedback 3-4 times/ year. The
outcome is 99 per cent service
level
S: Automatic data capturing,
retailer-specific measuring out
of the ERP system. Daily,
weekly, and monthly reporting
and performance feedback 3-4
times/year. The outcome is 99
per cent service level

Home decoration dyad

Measuring

Daily groceries dyad

Logistics performance
management is carried out with
differences between the actors
and little collaboration in the
sports dyad
The logistics performance level
is perceived low by retailer and
supplier

R & S: There is an increasing

focus on logistics and dialogue
in meetings. Exchanged action
plans

R: Automatic data capturing

through the logistics service
provider is used. There are
good reporting capabilities in
the ERP system. There is
reporting ahead of meetings
with the sport shoe sales
organisation
S: Manual data capturing leads
to a low reporting frequency.
There is no performance
feedback between the actors

Sports dyad

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Table II.

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notified. None of the companies compare to customers wished delivery time, which
would be another way of increasing the customer value of metrics (Brewer and Speh,
2001).
Setting targets. The daily groceries dyad has shared targets, as recommended by
Holmberg (2000). Targets vary between the actors within the home decoration and
non-food dyads. Most companies have general, non-specific targets, similar to what
was found by Forslund and Jonsson (2007) among manufacturing companies. In the
sports dyad, no targets are set.
Measuring. Measuring is most often a company-internal issue. Only in the daily
groceries dyad is there a shared measurement method for logistics performance
management. It specifies performance metrics definitions, measurement, analysis,
improvement work and role division, and enables similar practices in all business
relations. The non-food dyad conducts a lot of manual performance data capturing, and
wishes that POS data were used more frequently for automatic replenishment. In all
dyads, limitations were found among the ERP systems capabilities in creating efficient
measurement reports, and Excel is a complementary solution. This is similar to the
indications from manufacturers (Forslund and Jonsson, 2007, 2010). Manual reporting
can be related to un-standardised and low-frequency reports, which may delay
analysis, improvement actions, and collaboration. In the sports dyad, the actors even
disagree whether they feed back reports to each other or not. Many possibilities for
improvement exist in measuring.
Analysing/acting. Analysis is a poorly conducted activity, just as found by Forslund
and Jonsson (2007) among manufacturers. Less priority for analysis can happen for at
least two different reasons. In the daily groceries dyad, the actors mean that the
performance levels are so high and stable that no analysis is required. The sports dyad
on the other hand is in a phase of establishment where the business processes are not
yet stable, and analysis is considered of low importance. When the business processes
are either functioning poorly or functioning well, analysis is not a priority. In the home
decorating and non-food dyads, analysis is a company-internal activity. This is in line
with the findings of Forslund and Jonsson (2010), who showed that those dyads that
had common analysis and improvement actions perceived higher logistics
performance levels than those dyads that did not. This may imply lower
performance levels in home decorating and non-food industries.
Lessons learned
Lessons learned can be in the shape of problems and best-practices. Two problems or
obstacles with logistics performance management, recognised from manufacturing
company research, were found. In three dyads; home decoration, non-food and sports,
difficulties were found in establishing a collaborative culture (Table II). This is an
obstacle described by Brewer and Speh (2001). Little or no collaboration was going on.
One concrete sign of this were differences in defining metrics which were discovered
during the interviews, which indicates that they were not discussed previously.
Another was the lack of performance feedback between the actors. In the non-food
dyad, the actors even disagree whether they do analysis and action collaboratively or
not.
Another problem, lack of trust in the other actor (Brewer and Speh, 2001; Forslund
and Jonsson, 2009) was expressed. This was mainly related to the frequent changes or

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successions in purchasers in the home decoration chain, which implied that no trust on
a personal level was built up with the textiles manufacturer. This in turn hindered the
development of collaboration in logistics performance management.
A third problem was not mentioned as a problem in logistics performance
management previously. In the sports retail chain, the internal collaboration between
logistics and category management implies practical problems. Both functions make
decisions that affect logistics performance management. They have different meetings,
documents, and agreements with the supplier, and lack knowledge about each others
work. This can act as an obstacle to collaborative logistics performance management
and implies lower performance levels. Papakiriakopoulos and Pramatari (2010) found
it problematic to study logistics aspects in retailing companies without considering
decisions in category management. Collaboration both within and between companies
seems to be important, which is in accord with previous findings in studies of retailing
companies (Lindblom and Olkkonen, 2006; Schramm-Klein and Morschett, 2006;
Hamister, 2011). No identified study specified obstacles for logistics performance
management in retail, and this study has, with its exploratory approach, just indicated
some obstacles in retail chains.
The industry standard for logistics performance management found in the daily
groceries dyad is lifted up as a best-practice. It has developed over 15 years, which is a
sign of maturity in logistics performance management in the industry. The standard is
spread to companies and managers through seminars and web pages. It is perceived as
important for obtaining the high logistics performance levels in the daily groceries
industry.
A continued research agenda
Some suggestions for continued research have emerged along this study.
State-of-the-art descriptions of logistics performance management. This study was of
an exploratory nature and showed logistics performance management practices in four
retail industries. It indicated large differences in practices between the studied industries,
corresponding to the observations of Amato and Amato (2009). It would be relevant to
study the practices on a broader basis and to conduct more descriptive mapping within
and across retail industries. This could possibly be done in collaboration with industry
organisations. With the current study as a basis, surveys could be developed and
conducted. Decisions have to be made concerning which actor that should be surveyed,
suppliers and/or retailers headquarters. Furthermore, respondents must be carefully
identified; it is not obvious which manager has the responsibility for logistics
performance management. State-of-the-art descriptions are important to understand
practices, suggest industry standards and provide benchmarking possibilities. A study
with a quantitative approach can clarify the existence of best-practice and obstacles, and
furthermore, can measure the impact of different obstacles on collaboration and
performance levels. Such a study should also have theoretical relevance, as no identified
study described obstacles in logistics performance management in retail.
International comparisons. This study has provided early exploratory results based
on Swedish companies. It would be interesting to conduct comparative studies in other
national settings after having conducted the broad, state-of-the-art study above. This
could create understanding, reveal best-practices, and improve understanding about
the global competitive situation in which retailers act.

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Exploring the interface with retail stores. In this study, the interface between supplier
and retailer headquarters has been in focus. It would be relevant to conduct an exploratory
study in the interface between retailer headquarters and the stores. A similar, dyadic
case-based methodology could be applied. Differences can be expected based on, e.g. the
type of integration in that interface. It would further highlight problems in linking metrics
to end consumer value. Metrics such as shelf availability is increasing in importance
(Papakiriakopoulos and Pramatari, 2010). Such a study complements the current study to
encompass a whole supply chain, which would be a theoretical contribution.
Combating obstacles for performance management in retail. This study has
identified some problems, challenges, and obstacles to logistics performance
management. One example is the difficulty in developing a collaborative culture. It
was beyond the purpose of this study to look for approaches combating these
obstacles, but this would be of theoretical and even practical relevance. The method for
such a study would be a continued dyadic case study.
Conclusions, contributions, and limitations
Not only marketing aspects but also logistics aspects are important components in
retailer strategy towards competitive advantage (Lorentz and Lounela, 2011). The first
purpose of this study was to explore logistics performance management practices and
lessons learned in some supplier/retailer dyads across retail industries. Four dyads are
described, indicating that there are large differences in practices which may be related
to, e.g. the respective industries characteristics. Both dyads that operate successfully
and those that are just starting up and developing their logistics performance
management practices have been included. Some problems, challenges, and obstacles
were indicated; lack of trust, difficulty developing a collaborative culture, difficulty
relating metrics to customer value and a lack of IT support for data capturing and
reporting. These obstacles are similar to those found in manufacturing companies, but
the company-internal collaboration with the category management function seems to
be a retail-specific obstacle. An interesting good example was found in the industry
standard for logistics performance management in the daily groceries dyad. A second
purpose is to suggest a continued research agenda for logistics performance
management across retail industries. State-of-the-art descriptions, international
comparisons, exploring the interface with the stores and combating of identified
obstacles were found to be interesting topics of continued study.
The theoretical contribution is an initial step in the expansion of knowledge about
logistics performance management into retail. Illustrating descriptions, problems and
good examples are provided, expanding the knowledge from, e.g. Theodoras et al.
(2005) with a recent, Swedish study across industries and with a dyadic approach. The
dyadic approach, encouraged by, e.g. Lindblom and Olkkonen (2006) and Hamister
(2011), creates unique knowledge and reveals differing opinions between supplier and
retailer, which had not been observed with another research approach. A research
agenda enables further proceedings. The managerial contribution includes insights in
the shape of descriptions and lessons learned in different retail industries. By
benchmarking the best-practice from the daily groceries industry, or trying to prevent
indicated problems, both suppliers and retailers can apply practices that may lead to
improved logistics performance. Awareness about the retailer-internal problem in
collaboration with category management seems particularly relevant.

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The limitations of the study are mainly related to the small number of cases, but as
the purpose is exploratory rather than descriptive, this should be acceptable.
Established procedures (Yin, 2009; Barratt et al., 2011) are followed throughout the
data collection and analysis and are described in the method section, which should lead
to valid and reliable conclusions.
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About the author
Helena Forslund is a Professor of Logistics at Linnaeus University, Sweden. She received her PhD
from Institute of Technology at Linkoping University, Sweden. Dr Forslund has published journal
articles in, e.g. International Journal of Physical Distribution & Logistics Management, International
Journal of Operations & Production Management, International Journal of Quality & Reliability
Management, International Journal of Logistics Research and Applications, International Journal of
Productivity & Performance Management and Industrial Management & Data Systems. She is on
the Editorial Boards of International Journal of Physical Distribution & Logistics Management and
of Industrial Management & Data Systems. Her research interests are in the areas of supply chain
management, performance management, process management and quality management. She is
also Director for the Masters program in Business Process and Supply Chain Management at
Linnaeus University. Helena Forslund can be contacted at: helena.forslund@lnu.se
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