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METHOD DEVELOPMENT OF LOGISTICS SERVICE QUALITY EVALUATION
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Introduction 6
CHAPTER 1. STATE OF THE ART OF LOGISTICS SERVICE QUALITY CONCEPT 8
1.1 Logistics service: definition and key stages of concept development 8
1.2 Logistics service quality: evolution of definition 12
1.3 Conceptual models of service quality evaluation 15
1.4 Research gap 22
CHAPTER 2. METHOD OF LOGISTICS SERVICE QUALITY EVALUATION 24
2.1 Research design 24
2.2 Selection of logistics service quality attributes 25
2.3 Methods of multiple criteria decision making and ranking 27
2.4 Survey creation and description of developed method for data analysis 33
CHAPTER 3. APPLICATION OF DEVELOPED LOGISTICS SERVICE QUALITY
EVALUATION METHOD TO RZD LOGISTICS COMPANY CASE 36
3.1 Company case data collection 36
3.2 Evaluation of logistics service quality of RZD Logistics with the implementation
of developed method 37
3.3 Empirical research results interpretation and discussion 41
Conclusion 44
List of references 46
Appendices
CHAPTER 1. STATE OF THE ART OF LOGISTICS SERVICE QUALITY CONCEPT 8
1.1 Logistics service: definition and key stages of concept development 8
1.2 Logistics service quality: evolution of definition 12
1.3 Conceptual models of service quality evaluation 15
1.4 Research gap 22
CHAPTER 2. METHOD OF LOGISTICS SERVICE QUALITY EVALUATION 24
2.1 Research design 24
2.2 Selection of logistics service quality attributes 25
2.3 Methods of multiple criteria decision making and ranking 27
2.4 Survey creation and description of developed method for data analysis 33
CHAPTER 3. APPLICATION OF DEVELOPED LOGISTICS SERVICE QUALITY
EVALUATION METHOD TO RZD LOGISTICS COMPANY CASE 36
3.1 Company case data collection 36
3.2 Evaluation of logistics service quality of RZD Logistics with the implementation
of developed method 37
3.3 Empirical research results interpretation and discussion 41
Conclusion 44
List of references 46
Appendices
Forced by the process of globalization, supply chain nowadays is constantly transforming from fragmentation stage to total integration and even collaboration. Thus, various separate functions, such as purchasing, sourcing, transportation, warehousing etc., are not performed consequently, but are united in an integrated system of business activities of a specially created type of company - logistics provider, an enterprise, rendering complex logistics services.
The level of competition in services sector in general and logistics service in particular is constantly increasing, and the ability of companies to understand their customers and ensure their satisfaction with the services received has become fundamental for organization’s competitive advantage formation. Thus, the evaluation of logistics service quality with a reliable instrument on a periodic basis is transforming into obligatory process for successful development of logistics service provider business.
The subject of this study is represented by the peculiarities of logistics service quality evaluation and assessment of its potential for improvement on the basis of the chosen method. Logistics service quality of RZD Logistics company, in turn, is considered as the object of the research, in particular - the empirical study conducted. The choice of the case company is determined by its successful business performance: the organization has become the largest multimodal logistics operator in the Commonwealth of Independent States (CIS) and Baltic countries and is rapidly growing in line with the concept of logistics business segment development of JSC Russian Railways Holding, the biggest transportation company in Russian Federation.
The main goal of current research addresses the actuality of chosen topic described above, and is formulated as method development of logistics service quality evaluation. In order to achieve the formulated goal, the following range of tasks should be successfully completed:
- On the basis of academic literature review define the most appropriate method of logistic service quality evaluation;
- Specify and improve the chosen method of logistic service quality evaluation;
- Apply the modified method of logistic service quality evaluation to the case company.
The above mentioned research tasks are formulating the basic structure of current master thesis. The paper includes introduction, three chapters, each unfolding one of the research tasks, conclusion, list of references and appendices. The first chapter is devoted to the justification of the theoretical relevance of the chosen research topic, identification of the research gap and formulation of research objective basing on the conducted analysis of academic literature about existing methods of logistics service quality evaluation. Firstly, various interpretations of logistics service concept formation are described. Secondly, the term «logistics service quality» is defined.
Thirdly, the existing models of logistics service quality evaluation are outlined and the potential for the improvement of chosen SERVQUAL model is determined.
The second chapter describes the methodology used for sequential mixed method research. Methods were chosen in accordance with the specifics of the investigated subject, their reasonability and relevance is explained and justified. In particular, the research design is introduced in this part of the paper and the process of logistics service quality attributes’ selection is explained; various methods of multiple criteria decision making are considered and the choice of aggregated preference index method is justified; the process of survey creation is described.
The third chapter demonstrates the results of conducted empirical study aiming to provide a comprehensive description of developed logistics service quality evaluation method. The chapter is structured in the following way: the data collection for a chosen case company is firstly described; logistics service quality of the company is secondly evaluated with application of proposed methods; thirdly, the results are interpreted, providing with the possibility to formulate theoretical contribution and practical implications of developed method.
Current research incorporates the use of both primary and secondary data. Primary data is represented by collected scores of service quality gaps and relative weights for 22 chosen logistics service quality attributes. Secondary data is derived from academic literature analysis with the purpose of most appropriate quality evaluation model and attributes identification. Periodic scientific and practical publications, cited in this paper, are accessible in EBSCO, Emerald, Elsevier, ScienceDirect, JSTOR databases. In addition, semi-structured expert interview was conducted within the current research with acting head manager of St. Petersburg branch of RZD Logistics company, subsidiary of JSC Russian Railways.
The level of competition in services sector in general and logistics service in particular is constantly increasing, and the ability of companies to understand their customers and ensure their satisfaction with the services received has become fundamental for organization’s competitive advantage formation. Thus, the evaluation of logistics service quality with a reliable instrument on a periodic basis is transforming into obligatory process for successful development of logistics service provider business.
The subject of this study is represented by the peculiarities of logistics service quality evaluation and assessment of its potential for improvement on the basis of the chosen method. Logistics service quality of RZD Logistics company, in turn, is considered as the object of the research, in particular - the empirical study conducted. The choice of the case company is determined by its successful business performance: the organization has become the largest multimodal logistics operator in the Commonwealth of Independent States (CIS) and Baltic countries and is rapidly growing in line with the concept of logistics business segment development of JSC Russian Railways Holding, the biggest transportation company in Russian Federation.
The main goal of current research addresses the actuality of chosen topic described above, and is formulated as method development of logistics service quality evaluation. In order to achieve the formulated goal, the following range of tasks should be successfully completed:
- On the basis of academic literature review define the most appropriate method of logistic service quality evaluation;
- Specify and improve the chosen method of logistic service quality evaluation;
- Apply the modified method of logistic service quality evaluation to the case company.
The above mentioned research tasks are formulating the basic structure of current master thesis. The paper includes introduction, three chapters, each unfolding one of the research tasks, conclusion, list of references and appendices. The first chapter is devoted to the justification of the theoretical relevance of the chosen research topic, identification of the research gap and formulation of research objective basing on the conducted analysis of academic literature about existing methods of logistics service quality evaluation. Firstly, various interpretations of logistics service concept formation are described. Secondly, the term «logistics service quality» is defined.
Thirdly, the existing models of logistics service quality evaluation are outlined and the potential for the improvement of chosen SERVQUAL model is determined.
The second chapter describes the methodology used for sequential mixed method research. Methods were chosen in accordance with the specifics of the investigated subject, their reasonability and relevance is explained and justified. In particular, the research design is introduced in this part of the paper and the process of logistics service quality attributes’ selection is explained; various methods of multiple criteria decision making are considered and the choice of aggregated preference index method is justified; the process of survey creation is described.
The third chapter demonstrates the results of conducted empirical study aiming to provide a comprehensive description of developed logistics service quality evaluation method. The chapter is structured in the following way: the data collection for a chosen case company is firstly described; logistics service quality of the company is secondly evaluated with application of proposed methods; thirdly, the results are interpreted, providing with the possibility to formulate theoretical contribution and practical implications of developed method.
Current research incorporates the use of both primary and secondary data. Primary data is represented by collected scores of service quality gaps and relative weights for 22 chosen logistics service quality attributes. Secondary data is derived from academic literature analysis with the purpose of most appropriate quality evaluation model and attributes identification. Periodic scientific and practical publications, cited in this paper, are accessible in EBSCO, Emerald, Elsevier, ScienceDirect, JSTOR databases. In addition, semi-structured expert interview was conducted within the current research with acting head manager of St. Petersburg branch of RZD Logistics company, subsidiary of JSC Russian Railways.
The constantly increasing level of competition in logistics service business sector has transformed the evaluation of rendered service quality into obligatory procedure. Such process allows organizations to identify the existing quality gaps, take necessary actions and contribute to increasing customer satisfaction, forming a competitive advantage in the market.
However, the majority of methods, used for LSQ evaluation nowadays, only determine the significance of «Expected - Perceived service quality level» gaps, but do not take into account the importance of each evaluated attribute from customers’ side. The necessity of considering relative weights of quality attributes, on the other hand, is supported by the existence of both budget and time constraints, which do not allow a decision maker - company’s responsible manager, to improve all imperfect quality factors simultaneously.
The goal of current research was formulated as the development of logistics service quality evaluation method, which addresses the idea of relative weights considering. The goal was achieved by the implementation of APIS approach for service quality evaluation method basing on fundamental SERVQUAL model, and further approbation of the developed method on RZD Logistics case company.
The proposed improvements of SERVQUAL model application for logistics service quality evaluation included the analysis of collected data via DSS APIS, treating logistics service quality criteria as attributes and clients - respondents of the survey, as alternatives in terms of chosen decision supporting system. The application of developed method included three sequential rounds of calculations. The first round aimed to determine 22 attributes’ weight-coefficients estimations, which are developed as a result of aggregation of their «Expected - Performed quality» gap and their relative importance. The second round’s objective was to distinguish the five weight-coefficients estimations for each logistics service quality dimension. The final stage - pair multiplication of calculated weight coefficients, allowed to arrange all analyzed quality attributes in in decreasing order, providing the decision maker with a possibility to identify the attribute with the biggest gap score and highest relative importance. This gap, in accordance with the research, has to be eliminated first, negatively impacting on customers’ satisfaction level.
The list of advantages of developed method, which form theoretical contribution of current research, include:
- Possibility to use continuous Likert scale during the stage of data collection, increasing the variance of possible answers from clients’ side;
- Simultaneous taking into account the relative significance (weights) of LSQ criteria and respondents’ answers;
- Opportunity to proceed non-numeric, inexact and incomplete information regarding weight coefficients in comparative statements form;
- Simplified process of calculations, performed with the use of DSS APIS.
The proposed method also has a potential for application in real-life business cases due to the simplicity of performed calculations and possibility to adjust the list of assessed quality attributes to the necessity and strategic focus of a particular organization. In addition, the prioritization of clients’ responses will allow to receive more accurate results, which, in turn, will justify the decision on budget and time allocation for service quality gaps elimination.
However, the majority of methods, used for LSQ evaluation nowadays, only determine the significance of «Expected - Perceived service quality level» gaps, but do not take into account the importance of each evaluated attribute from customers’ side. The necessity of considering relative weights of quality attributes, on the other hand, is supported by the existence of both budget and time constraints, which do not allow a decision maker - company’s responsible manager, to improve all imperfect quality factors simultaneously.
The goal of current research was formulated as the development of logistics service quality evaluation method, which addresses the idea of relative weights considering. The goal was achieved by the implementation of APIS approach for service quality evaluation method basing on fundamental SERVQUAL model, and further approbation of the developed method on RZD Logistics case company.
The proposed improvements of SERVQUAL model application for logistics service quality evaluation included the analysis of collected data via DSS APIS, treating logistics service quality criteria as attributes and clients - respondents of the survey, as alternatives in terms of chosen decision supporting system. The application of developed method included three sequential rounds of calculations. The first round aimed to determine 22 attributes’ weight-coefficients estimations, which are developed as a result of aggregation of their «Expected - Performed quality» gap and their relative importance. The second round’s objective was to distinguish the five weight-coefficients estimations for each logistics service quality dimension. The final stage - pair multiplication of calculated weight coefficients, allowed to arrange all analyzed quality attributes in in decreasing order, providing the decision maker with a possibility to identify the attribute with the biggest gap score and highest relative importance. This gap, in accordance with the research, has to be eliminated first, negatively impacting on customers’ satisfaction level.
The list of advantages of developed method, which form theoretical contribution of current research, include:
- Possibility to use continuous Likert scale during the stage of data collection, increasing the variance of possible answers from clients’ side;
- Simultaneous taking into account the relative significance (weights) of LSQ criteria and respondents’ answers;
- Opportunity to proceed non-numeric, inexact and incomplete information regarding weight coefficients in comparative statements form;
- Simplified process of calculations, performed with the use of DSS APIS.
The proposed method also has a potential for application in real-life business cases due to the simplicity of performed calculations and possibility to adjust the list of assessed quality attributes to the necessity and strategic focus of a particular organization. In addition, the prioritization of clients’ responses will allow to receive more accurate results, which, in turn, will justify the decision on budget and time allocation for service quality gaps elimination.