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Performance-based logistics – an illusive panacea or a concept for the future?

Martin Holmbom (Department of Quality Technology & Management, Luleå University of Technology, Sweden)
Bjarne Bergquist (Department of Quality Technology & Management, Luleå University of Technology, Sweden)
Erik Vanhatalo (Department of Quality Technology & Management, Luleå University of Technology, Sweden)

Journal of Manufacturing Technology Management

ISSN: 1741-038X

Article publication date: 26 August 2014

1134

Abstract

Purpose

The purpose of this paper is to summarize previously reported benefits, drawbacks and important aspects for implementation of performance-based logistics (PBL), and to identify knowledge gaps.

Design/methodology/approach

This is a literature review based on 101 articles. The reviewed articles are relevant to PBL in particular, but also to performance contracting, product-service systems (PSS) and servitization in general. The research method involved database searches, filtering results and reviewing publications.

Findings

PBL is a business concept that aims to reduce the customer's total costs for capital-intensive products and increase the supplier's profit. The design of the contract, performance measurements and payment models are important aspects for successful implementation. However, the authors find a reason for concern to be the lack of empirical evidence of the profitability of PBL for the customer and the supplier.

Originality/value

This literature review of PBL also includes publications from the related research areas: performance contracting, PSS and servitization. Developing PBL can benefit from results in these research areas.

Keywords

Acknowledgements

The authors are grateful for the financial support provided by the Swedish Governmental Agency for Innovation Systems (Vinnova). The authors thank our colleagues Dr Rickard Garvare, Helena Ranängen and Peder Lundkvist for their constructive criticism and creative ideas that have improved this paper. The authors also thank the anonymous reviewers for valuable comments that significantly improved this paper.

Citation

Holmbom, M., Bergquist, B. and Vanhatalo, E. (2014), "Performance-based logistics – an illusive panacea or a concept for the future?", Journal of Manufacturing Technology Management, Vol. 25 No. 7, pp. 958-979. https://doi.org/10.1108/JMTM-06-2012-0068

Publisher

:

Emerald Group Publishing Limited

Copyright © 2014, Emerald Group Publishing Limited

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