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Performance‐based logistics (PBL) strategies are providing governments and for‐profit organizations with a contractual mechanism that reduces the life cycle costs of their systems. PBL accomplishes this by establishing contracts that focus on the delivery of performance not parts. PBL establishes a metric based governance structure where suppliers make more profit when they invest in logistics process improvements, or system redesign, that reduces total cost of ownership. While work has been done to outline an overall PBL theoretical framework, the underlying theory explaining the enablers that lead to organizational and team‐level, team‐goal alignment associated with the PBL governance structure requires testing. The purpose of this paper is to quantitatively test previously posited relationships between enablers of PBL and PBL effectiveness. An additional objective is to explore any differences in PBL effectiveness between different business sectors.

A multiple regression model was developed, tested and validated to explain the effectiveness of PBL. The model was externally validated with exploratory cross‐sectional survey data of 61 practitioners.

This study strongly supports recent PBL theory explaining PBL effectiveness. Key antecedents include investment climate, relational exchange, PBL leadership, and business sector. Further, government organizations lag behind their commercial counterparts in PBL effectiveness and PBL leadership.

PBL business arrangements are more effective in more favorable investment climates. Thus, leaders should welcome new ideas, empower employees, and encourage entrepreneurship. Since PBL effectiveness increases with relational exchange, building trust and communicating with suppliers is key. Leadership is also important to PBL effectiveness. Leaders should accept risk, focus on long‐term affordability and performance, and align activities to achieve end‐user goals.

This research is the first quantitative test of previously posited factors affecting PBL effectiveness. Additionally, this research unveils key differences in business sectors' use of PBL strategies.

Research suggests that service-dominant logic (SDL) is well suited to support supply chain management (SCM) research and practice. Qualitative research has shown that SDL is particularly consistent with an outcome-based supply chain strategy known as performance-based logistics (PBL). The purpose of this paper is to extend theory and practice by exploring the degree to which SDL is utilized in practice. Specifically, PBL is examined for consistency with the underlying fundamental premises (FPs) of SDL. In doing so, this paper answers the positive question, “what exists”, at the intersection of SDL and SCM.

This study employs a mixed methodological approach. First, the FPs of SDL are operationalized using the language of PBL. The PBL FPs are tested quantitatively through an online survey of 52 supply chain PBL experts. A qualitative analysis is conducted using comments associated with each premise.

The survey results suggest that PBL is consistent with SDL. These results indicate that PBL is a supply chain context of SDL.

This is one of the first works to examine the degree to which SDL concepts are being utilized in practice.

This study proposes a dynamic performance evaluation model to support the material availability of the public institution under performance- based logistics (PBL) and to select the most appropriate service provider.

The model consists of four stages. In the first stage, a criteria set to evaluate alternatives is created. In the second stage, the DEA-MTFP index method is applied for performance evaluation of the alternatives by using crisp data. In the third stage, IFS theory is utilized for aggregating decision-maker judgments on alternatives, and in the last stage, the results of both methods are turned into single value, and it is selected as the most suitable alternative.

It is verified that the proposed approach can be implemented to the real-life dynamic multi-criteria decision-making (MCDM) problem that have crisp and fuzzy data under the PBL strategy.

This paper offers an integrated approach for performance analysis of service providers in a dynamic MCDM problem in which crisp and fuzzy data are used together. To illustrate applicability and validity of the proposed model, it is applied to a real-life problem.

This paper utilizes the DEA-MTFP index method and IFS theory in an integrated way.

The purpose of this paper is to explore key challenges of adopting, designing and managing performance-based contracts (PBC) for advanced logistics services, as seen by providers. The shift toward performance-based solutions has proved challenging since providers often struggle to link performance to their payment. Despite such managerial challenges, empirical research in this area has been limited.

A multi-case design was adopted. Three cases of logistics service providers were selected based on purposive sampling. Data were collected through 38 semi-structured interviews and review of 43 documents such as contracts and customer target letters.

Key PBC adoption challenges include customer and provider intention to align their goals and incentives as well as their views on risk and reward sharing. Contract design challenges center around performance metric definition and weighting, designing performance monitoring systems that consider service co-production effects and help improve customer relationship and designing incentives with appropriate intensity levels. Contract management challenges include fostering provider pro-activity, provider changes in terms of processes and resource investments, perceived fairness of designed incentives and contract re-design to allow for win-win relationship outcomes.

The study empirically contributes to extant logistics service provider literature by identifying specific challenges that extend also beyond PBC adoption and design and cover contract management (and potential contract re-design). It also unpacks the notion of performance attributability by analyzing its role also in terms of contract and performance management as well as its potential effects on customer relationship management.

The study presents implications for logistics provider managers regarding how the observed PBC challenges can be overcome.

The study unearths several challenges of PBC for advanced logistics services, particularly in connection to contract management and re-design.

Performance Based Logistics (PBL) is an acquisition reform that is intended to improve weapon systems logistics by reducing cost, improving reliability, and reducing footprint. PBL is an extension of a broad process of rationalizing and, in many cases, outsourcing government services. As with other examples of governmental service outsourcing, measurement issues arise in the gap between governmental objectives and service measurement, and in the contrast between clear profit-centered vendor metrics, and more complex mission-oriented governmental metrics. Beyond this, however, PBL presents new challenges to the relationship between governmental agencies and their service vendors. In many cases, weapons systems logistical support involves levels of operational risk that are more difficult to measure and more difficult to value than other government services. We discuss the implications of operational risk and other measurement issues on PBL implementation.

Faced with reduced budgets and rising service expectations, public authorities are increasingly cooperating with private businesses. This paper examines an alternative procurement- and service delivery concept, Performance-based Logistics (PBL). It has been introduced by the US and UK armed forces. However, other nations, such as Germany, are still reluctant to follow. This article has two aims: First, to identify the conceptual characteristics of PBL, and second, to analyze potential reasons why although PBL is popular in some nations, others are so reluctant to introduce it. This will be done using a mixed method approach. The concept of PBL will be introduced by deductively developing a conceptual model of PBL using a business model framework. The analysis of PBL application will be performed using an in-depth case study from the German defense sector. This will be framed by a literature review and concluded by managerial recommendations.

The performance of service supply chains in terms of service levels and cost efficiency depends not only on the effort of service providers but also on the inputs of sub-contractors and the customer. In this sense, performance-based contracting (PBC) entails increased financial risk for providers. Allocating and managing risk through contractual relationships along the service supply chain is a critical issue, and yet there is scant empirical evidence regarding what factors influence, and how, provider willingness to bear PBC-induced risk. This paper aims to address this gap.

The paper draws on agency theory and two cases of logistics service supply chains, in the food retail and automotive industries respectively, to identify key influencing factors. Data were collected through semi-structured interviews with 30 managers of providers and sub-contractors and review of 35 documents, notably contracts and target letters.

Four influencing factors were found: performance attributability within the service supply chain; relational governance in service supply chain relationships; provider risk and reward balancing; and provider ability to transfer risk to sub-contractors. The propositions developed address how these factors influence provider willingness to bear PBC-induced risk.

The factors identified are external to the provider mindset and refer to the management of contractual relationships and service delivery interactions along the service supply chain. The paper contributes to agency theory by stressing the risk allocation implications of bi-directional principal-agent relations in service supply chains.

The study suggests ways in which providers can increase their capacity to bear and manage financial risk related to PBC design.

The paper identifies factors that influence provider willingness to bear financial risk induced by PBC in service supply chains.

Despite the significant increase in the adoption of performance-based contracting (PBC) in various industries, the primary value drivers of it are still not clear. Considering a lack of empirical evidence for PBC, this study investigates the effects of collaboration between the suppliers to understand the value offerings created in PBC by empirical findings. The purpose of this paper is to examine how supply chain collaboration (SCC) affects PBC benefits.

Using data from 381 survey participants who hold the title of manager or above, hypotheses are tested using structural equation modeling (SEM).

The results reveal that a strong and positive relationship between SCC and PBC benefits.

One of the limitations of this research is the collection of data through the Amazon Mechanical Turk online service. The experience level of participants in PBC and the absence of validation of these scale items by industrial experts are other limitations of this study. Nonetheless, the authors found convincing evidence that SCC has a positive effect on PBC benefits.

The findings highlight the importance of SCC to increase financial, operational and non-financial benefits of PBC for practitioners. The findings offer guidance for managers aiming to increase PBC benefits through SCC.

This is the first study to empirically examine the impact of SCC for better PBC and contributes to the body of knowledge by providing empirical findings in a PBC context. This research also develops valid and reliable instruments to measure PBC benefits through rigorous empirical and statistical analysis that can be used in future studies.

The purpose of this research is to analyse military logistics providing a decision support instrument for contracting in defence supply chains.

This instrument – the Performance‐Based Logistics (PBL) portfolio – is developed following the contingency approach. Qualitative interviews and illustrative examples from Germany, Austria and Switzerland are used to validate the portfolio.

The proposed portfolio examines a military demand in respect of its required effectiveness (robustness and resilience), and the suppliers' ability to influence efficiency (forecast and supply risk). In combination, the contingencies are used to recommend three alternative types of PBL contracting.

This paper is based on conceptual work with illustrative case examples. Therefore, although the authors believe that the PBL portfolio provides useful guidance for further research, the empirical applicability of this instrument must be proven.

The research on PBL is gaining importance, but still there remains a deficiency of theoretical grounding and management instruments. This study is a first approach to use the contingency framework for developing such an instrument. The value of the PBL portfolio lies in supporting normative decision making for contracting military supply.

This paper analyzes managerial practices currently used for outsourced logistics activities in mechanized cutting, loading and transportation (CLT) of sugarcane in a Brazilian company using performance-based logistics contracts (PBL) as reference.

The methodology draws on literature review, design of an analysis model, small group meetings with academics/industry professionals and practical application through a case study. The model is based on PBL and its construction involved choosing the analysis axes, defining evaluation items and respective measurement scale and the means and sources of data collection.

When comparing the evaluation results with PBL recommendations, it is possible to see that there are still many improvement opportunities. In contracting axis, decision-making process was poor-rated due to the absence of strategic considerations to support outsourcing decision. Procurement, contract and implementation are in intermediate level. Performance management is the most mature axis. However, quality analysis showed intermediate level. In relationship axis, the most relevant gap is the lack of expectations alignment. Remaining items showed intermediate levels of compliance but still need focusing on communication, establishing a structured relationship management development.

This study contributes first to develop an analysis model based on PBL to evaluate the level of relationship integration between company and logistics service provider, and second, to apply the model to an empirical case in a CLT company operation. As a result, the analysis model presents guidelines for the company, not to just contract/rent equipment and manpower but hire results.