lOMoARcPSD| 49221369
THE UNIVERSITY OF DANANG
UNIVERSITY OF ECONOMICS
FACULTY OF INTERNATIONAL BUSINESS RESEARCH PROPOSAL
THE IMPACT OF LOGISTICS PERFORMANCE ON E-COMMERCE Course: Research Methodology
( RMD3001_44K01.1_44K01.2) Lecturer: Bui Huynh Nguyen, Ph.D Group: MANGO (44K01.1) Student: Tran Thi Ngoc Lam Doan Bui Thao Ngan Huynh Thi Thuy Tien Nguyen Minh Thu Ngo Nguyen Thuy Trang Danang, June 19th , 2021 0 lOMoARcPSD| 49221369 Table of Contents
1. RESEARCH RATIONALE.......................................................................................2
2. RESEARCH OBJECTIVES & RESEARCH QUESTIONS......................................2
3. LITERATURE REVIEW:..........................................................................................3
4. RESEARCH METHODS: INSTRUMENTS & PROCEDURES..............................6
5. EXPECTED RESULTS.............................................................................................7
6. RESEARCH CONTRIBUTIONS..............................................................................8
REFERENCES..............................................................................................................9 1 1. RESEARCH RATIONALE lOMoARcPSD| 49221369
Nowadays, the appearance of smartphones and modern devices in the 4.0
technology industry makes people’s lives and habits change gradually. Moreover,
thanks to the continuous development of the Internet, mobile devices,... commerce are
also moving in a new direction and applying scientific achievements of 4.0 technology.
Traditional commerce is gradually being replaced by e-commerce and this is a trend
predicted to grow strongly in the future.
Unlike traditional commerce, where buyers and sellers will meet directly, in
ecommerce, buyers and sellers will only transact through telecommunication devices
connected to the Internet. E-commerce becomes more convenient and increasingly
popular with consumers, so the growth rate of e-commerce is growing rapidly. In
ecommerce, buyers and sellers do not directly meet each other but transact online
through the Internet, so another step has arisen, which is the stage of transporting goods
from sellers to buyers. That has created a close connection between the development of
logistics activities to meet the development of e-commerce activities.
With the continuous development of e-commerce and the increasing demand of
consumers, the development of logistics in Vietnam has not kept pace to meet that
demand. According to the Logistics Report 2018 of the Ministry of Industry and Trade
of Vietnam, the growth rate of e-commerce is 24% while the growth rate of logistics is
only 12% - 14%, much lower. That said, urgent measures are needed to improve logistics
performance to promote the development of e-commerce - an industry that is trending
in the world. Logistics service development is known as development in breadth or
development in depth. Development in breadth means increasing logistics size and sales.
Development in depth means increasing the operational performance of logistics. In this
study, our MANGO team will research the impact of the national logistics performance index on e-commerce.
2. RESEARCH OBJECTIVES & RESEARCH QUESTIONS:
The aim of this research is to determine the influence of logistics performance on
e-commerce, and simultaneously it also will show which logistics’ factors are most
essential in the growth of e-commerce in the various regions by analyzing the data
collected. As a result, some recommendations for developing business strategies are proposed too.
To attain this goal, the study has to answer these following research questions:
(1) What impact does logistics performance have on e-commerce?
(2) What are the most effective factors for promoting e-commerce? lOMoARcPSD| 49221369 3. LITERATURE REVIEW:
To evaluate the impact of logistics activities on e-commerce, the author relies on three research branches as follows:
a. The impact of logistics activities on commercial activities of enterprises
and international trade activities between countries:
From the perspective of commercial activities of enterprises, there is a study by
the group of authors Schramm-Klein & Morschett (2006). In the research, the authors
study the importance of logistics performance to the business performance of retail
companies. This research has shown that logistics performance will bring long-term
benefits to marketing performance (customer satisfaction and loyalty) leading to the
increased business performance of retail enterprises. Moreover, improving logistics
productivity can easily improve and achieve business performance in the short term, and
in fact, it is one of the most important business strategies of retailers. The study also
shows that logistics coordination in the supply chain of enterprises (within the
manufacturing company and between the manufacturing company and the distributor)
plays a particularly important role in affecting the operational efficiency of retail companies.
From the perspective of international trade, there is a study by Hausman et al.
(2013). This paper investigates the impact of logistics performance on bilateral trade on
a global scale. The authors have made specific suggestions to improve logistics
performance (time, cost, and reliability) in increasing bilateral trade.
b. The factors which have impact on E-commerce:
The research of Ho et al. (2007). In the research, the authors have recommended
3 methods which illustrate basic structures for raising E-commerce revenue on a national
level: Endogenous Growth Theory, Exogenous Growth, Mixed Growth Theory. The
study has shown that the above variables are important factors affecting the development
of e-commerce in countries. In addition, the exogenous theory (meaning the impact of
external factors on a country) also significantly affects the development of e-commerce,
or even more specifically, the development of ecommerce is influenced by the regional
countries surrounding a country.
c. Logistic Performance Index and Measuring Logistic Performance:
Logistic Performance is a very difficult concept to define and can be seen as a
sub-concept in a broader concept of enterprise performance. What is the performance?
Gleason and Barnum (1986) have pointed out the definition of performance based on lOMoARcPSD| 49221369
effectiveness and efficiency. More specifically, effectiveness is a goal achievement,
while efficiency is an economically optimal level of resource allocation. According to
another method, Sink et al. (1984) have explained the performance concept including 6
criteria: effectiveness, efficiency, quality, productivity, the quality of working life,
innovation and profit. Because there has not been a clear and widely acceptable concept
of performance yet, not surprisingly, the meaning of Logistic performance is described
in many different ways. One of the outstanding examples is the definition shown by
Rhea and Shrock (1987), following that, pragmatism in allocation is defined as the
allocation aiming at satisfying customers. However, they also said that it is important to
include multi-target when explain “performance”. Based on this viewpoint, Chow et al.
(1994) have defined the Logistic Performance, that is the level on which these goals can
be reached: cost effectiveness, profit, social responsibility, on-time shipment, product
availability, flexibility, low damage and loss, promise keeping, reasonable prices for
materials, customer satisfaction, revenue growth and labor safety.
Following that, it seems to us that the Logistics performance concept is a
multidimensional concept. Therefore, there would not be a suitable measurement
method. Instead, the goal of authors and managers is figuring out a method for
measurement which can reflect mostly the crucial sides of performance in both short and long term.
Caplice and Sheffi (1995) have shown that Logistics consists of a complex set of
activities. Therefore, in order to measure Logistics performance, it is necessary to collect
enough data in a systematic way to provide managers with the most general overview
of the whole logistics system. Nevertheless, in fact, the systems measuring Logistics
Performance are not carried out regularly, the correlation between logistics indicators is
not evaluated, duplication and omissions lead to the lack of a correct overview about
logistics scenario in a company. Authors have dealt with the above drawbacks by
developing a set of evaluating criteria for the systems used for measuring Logistics
Performance and apply them in the model of Goodyear Tire & Rubber Co., Inc. and
Digital Equipment Corporation. Gunasekaran & Tirtiroglu (2001) presented a research
synthesis methodology then came to the final conclusion. The study analysed the
proficiency of factors in a supply chain (SCM), focusing on methods of negotiating with
suppliers, delivery performance, customer service, inventory and logistics costs. In
addition, the authors also pointed out the impact of those factors on customer
satisfaction, which enabled businesses to not only improve the efficiency of their supply
chains but also add more value to their products. Chow et al. (1994) applied the research
method of data collection, synthesis and evaluation analysis. This research worked with lOMoARcPSD| 49221369
definitions and measurements of competences in logistics. By reviewing and analysing
previous research papers, they realised the difficulties in drawing conclusions about the
relationship between a logistics strategy and logistics capabilities, therefore, proposed
possible suggestions for improvements for future researches.
The World Bank (WB) published the LPI index for the first time in 2007 and
updates are continuously made every two years for about 150 countries. The index has
played a statistically important role since it is established through a harmonized
measurement for all countries by which they can determine the barriers encountered by
bilateral trades and logistics requirements. To be more specifically, WB incorporates
key factors from international perspectives then calculates the LPI based on econometric
techniques to maximize the significance level and confidence intervals. As a result, The
LPI is estimated by conducting a global survey of companies who operate freight
forwarding and trade promotion businesses. The scale to evaluate LPI ranges from
1=low to 5=high through 6 criteria:
• Infrastructure: infrastructure related to trade and transport quality (ports,
railways, roads, information technology)
• International shipment: the ease to arrange for shipments with competitive prices
• Logistics quality and competence: Quality and competitiveness of logistics
services (transport operators, customs brokers)
• Tracking & tracing: the ability to track and control shipments
• Timeliness: the punctuality of shipments in reaching the destination
• Customs: the efficiency of the customs clearance procedures such as the speed,
simplicity, and predictability.
International studies have been carried out to indicate the relationship between
LPI and international trade in which LPI is used to reflect trade facilitation. For instance,
Sourdin & Korinek (2011) demonstrated the positive impact of LPI on international
trade generally and infrastructure particularly. Marti et al. (2014) came to the conclusion
that LPI would strike a larger impact on commodities with more complexity.
In summary, previous studies have provided specific analysis and assessment for
each of factors affecting e-commerce both nationally and internationally, as well as
measured the effectiveness of those on logistics competences. However, the relationship
between e-commerce and LPI has not been taken into consideration, which becomes the
reason for us to decide to examine the impact of LPI on ecommerce activities.
4. RESEARCH METHODS: INSTRUMENTS & PROCEDURES lOMoARcPSD| 49221369
In this research, our group will answer research questions by approaching
quantitative method and using existing (secondary) data.
We use 100 samples form a panel data of 25 countries for 4 years: 2012, 2014,
2016, and 2018; namely Germany, the Netherlands, the United Kingdom, Sweden,
Norway, France, Denmark, Spain, Italy, Finland, the United States, Canada, Japan,
Australia, Korea, China, Vietnam, Indonesia, India, the Russian Federation, the United
States, Singapore, Brazil, Mexico, and Argentina. These countries were selected by
using purposive sampling technical and the criterion for selection is because of the
availability of statistical data. The dataset was checked for missing data and outliers.
Collected data will be encoded and analyzed by using the software Stata version
14. The analysis uses statistical techniques to summarize the data and examine the
relationships between variables in the study. Firstly, descriptive statistical tools are used
to describe the data. Then, we consider the coefficient correlation between the model's
variables. These variables are next analyzed in the linear regression model (OLS
method) to interpret analytical results.
• Dependent variables: Sales of e-commerce of countries (excluding Vietnam) as
recorded by e-market data and collated over the years. This data of Vietnam is
taken from the statistical data source of the White Paper on Vietnam Ecommerce.
• Independent variables:
(1) Data from the report of LPI (Logistics performance index) – the national logistics capacity index. - Overall score - Infrastructure - International shipment
- Logistics quality and competence - Tracking and tracing - Timeliness - Customs
(2) Data about countries’ GDP.
(3) Statistical data about countries’ population.
All these above independent are taken from data source of World Bank. 5. EXPECTED RESULTS lOMoARcPSD| 49221369
After referring to previous studies and based on the logistics knowledge learnt,
the team made some predictions about the following results:
(1) LPI has a positive effect on e-commerce in general, which means that when that
variable rises, so does E-commerce growth. As logistical capacity grows, the
flow of goods and information will be facilitated, resulting in increased consumer
satisfaction and, as a result, e-commerce growth.
(2) The following variables (GDP and population) have a beneficial impact on
ecommerce. When those variables improve, e-commerce improves though too;
because as the economy and population improve, the demand for online shopping
improves as well, resulting in a force for E-commerce development.
(3) The variables having the biggest impacts on the development of e-commerce are
transportation and infrastructure. Characterized by the continuous
movement of commodities in commerce in general and e-commerce in particular;
factors such as storage, highways, and modes of transportation play a critical role
because they have a direct impact on company strategies.
6. RESEARCH CONTRIBUTIONS:
E-commerce sector is constantly rapidly growing and evolving all over the
world and so is Vietnam. The functions of not only logistics enterprises but also the
policies set by management levels are critical in meeting development goals.
Understanding the role and impact of logistics on e-commerce will serve as a guide
for developing ideas for the development of logistics to catch up with the ecommerce
development trend as well as suggestions for management levels when issuing new policies. ---THE END--- REFERENCES:
Caplice, C., & Sheffi, Y. (1995). A review and evaluation of logistics performance
measurement systems. The International Journal of Logistics Management, 6(1), 6174.
Chow, G., Heaver, T. D., & Henriksson, L. E. (1994). Logistics performance:
definition and measurement. International journal of physical distribution & logistics management.
Gleason, J. M., & Barnum, D. T. (1982). Toward valid measures of public sector
productivity: performance measures in urban transit. Management science, 28(4), 379386. lOMoARcPSD| 49221369
Gunasekaran, A., Patel, C., & Tirtiroglu, E. (2001). Performance measures and metrics
in a supply chain environment. International journal of operations & production Management.
Hausman, W. H., Lee, H. L., & Subramanian, U. (2013). The impact of logistics
performance on trade. Production and Operations Management, 22(2), 236-252.
Ho, S. C., Kauffman, R. J., & Liang, T. P. (2007). A growth theory perspective on
B2C e-commerce growth in Europe: An exploratory study. Electronic Commerce
Research and Applications, 6(3), 237-259.
Korinek, J., & Sourdin, P. (2011). To what extent are high-quality logistics services trade facilitating?.
Marti, L., Puertas, R., & García, L. (2014). Relevance of trade facilitation in emerging
countries' exports. The Journal of International Trade & Economic Development, 23(2), 202-222.
Rhea, M. J., & Shrock, D. L. (1987). Measuring the Effecitveness of Physical
Distribution Custom. Journal of Business Logistics, 8(1), 31.
Schramm-Klein, H., & Morschett, D. (2006). The relationship between marketing
performance, logistics performance and company performance for retail
companies. International Review of Retail, Distribution and Consumer Research, 16(02), 277-296.
Sink, D. S., Tuttle, T. C., & DeVries, S. J. (1984). Productivity measurement and
evaluation: What is available?. National Productivity Review, 3(3), 265-287.
Vietnam E-Commerce Association (2018), Vietnam E-Business Index Report 2018.
Vietnam E-commerce and Digital Economy Agency (2018), White Paper on Vietnam E-commerce.
Vietnam Ministry of Industry and Trade (2018), Logistics Report 2018: Logistics and E-commerce.