Bahan 3

Journal of Modelling in Management
Logistics service quality and its effects on customer satisfaction in the manufacturing
companies’ supply chains: Empirical evidence from Greece
Yannis Politis Apostolos Giovanis Spyridon Binioris
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Yannis Politis Apostolos Giovanis Spyridon Binioris , (2014),"Logistics service quality and its effects on
customer satisfaction in the manufacturing companies’ supply chains", Journal of Modelling in Management,
Vol. 9 Iss 2 pp. 215 - 237
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Logistics service quality and its Logistics service

quality
effects on customer satisfaction
in the manufacturing companies’
supply chains 215
Empirical evidence from Greece Received 15 June 2012
Revised 9 April 2013
Yannis Politis, Apostolos Giovanis and Spyridon Binioris 7 July 2013
Department of Business Administration, Technological Educational Accepted 16 July 2013
Institute of Athens, Athens, Greece
Abstract
Purpose – The purpose of this paper is to implement a multi-criteria preference disaggregation
approach to measure logistics service quality (LSQ) of manufacturing companies’ supply chains.
Design/methodology/approach – A total 216 Greek manufacturing companies took part in a
survey with the use of a dedicated questionnaire. They were asked to assess the LSQ of their primary
supplier regarding a predefined set of criteria and sub-criteria. The data were analysed with the
multi-criteria satisfaction analysis method, which represents an ordinal regression based approach
used for customer satisfaction measurement.
Findings – Weak points of the suppliers as well as dimensions that drive satisfaction were identified.
Furthermore, the competitive advantages of the suppliers as well as their priorities for improvement
were spotted.
Research limitations/implications – The sampling framework, including only the manufacturing
companies operating in a specific area of Greece, does not ensure the full generalisation of the results. A
larger sample of manufacturing companies from all over Greece would be useful to obtain more reliable
results and would enable the comparison of LSQ for different manufacturing sectors.
Practical implications – The method used to assess LSQ of manufacturing companies can be
installed as a permanent customer satisfaction barometer to measure, control and improve the LSQ
provided to manufacturing companies as well as to other business sectors.
Originality/value – This paper proposes a method to explore the relationships between LSQ and
industrial customers’ satisfaction to prioritise strategic plans of companies in the supply chains.
Keywords Greece, Supply chains, Industrial customer satisfaction, Logistics service quality,
Manufacturing supply chains, MUSA method
Paper type Research paper
1. Introduction
Over the last half century, the role of logistics in business has increased in both scope
and strategic importance. Both corporations and researchers have become increasingly
aware of the strategic role of logistics services in a firm’s overall success (Bienstock et al.,
1997; Bowersox et al., 1995; Brensinger and Lambert, 1990; Mentzer et al., 1989). They Journal of Modelling in Management
Vol. 9 No. 2, 2014
have recognised the role of supply chain management in creating and maintaining a pp. 215-237
strategic competitive advantage through increased customer value and satisfaction and © Emerald Group Publishing Limited
1746-5664
the attendant business profitability (Mentzer, 2001; Stank et al., 2001b). DOI 10.1108/JM2-05-2012-0016
JM2 Logistics service capabilities can be leveraged to create customer and supplier value
through service performance (Novack et al., 1994), increase market share (Daugheny
9,2 et al., 1998), enable mass customisation (Gooley, 1998), create effective customer
response-based systems (Closs et al., 1998), positively affect customer satisfaction and,
in turn, corporate performance (Dresner and Xu, 1995), provide a differentiating
competitive advantage (Bowersox et al., 1995; Kyj and Kyj, 1994) and segment
216 customers (Gilmour et al., 1994). Service quality’s conceptual and empirical link to
customer satisfaction has turned it into a core marketing instrument (Venetis and
Ghauri, 2004), as it is widely accepted that there is a strong, positive relationship
between service quality and improved supply chain performance (Mentzer et al., 1999,
2001; Perry and Sohal, 1999).
Customer service is increasingly seen as fundamental for industries, constituting the
main output of logistics systems in supplier companies (Ellram et al., 1999). Customer
satisfaction is one of the most important issues concerning business organisations of all
types, and its measurement may be considered as the most reliable feedback system.
Furthermore, service quality can be seen as one of the main determinants of customer
satisfaction, which in turn influences purchase decision (De Ruyter et al., 1997; Spreng
and Mckoy, 1996). Therefore, understanding companies’ perception of logistics service
quality (LSQ) and behavioural intention to change supplier is a critical issue that will
provide valuable information for suppliers to understand and retain their existing
consumer base.
The service quality/satisfaction association has been investigated in many studies in
the logistics environment, but regardless of the universal recognition for realising the
importance of service quality in supply chains, it is still little researched (Nix, 2001).
There is no valid and reliable instrument for measuring industrial customers’
perceptions of logistics service, which would enhance the understanding of how
purchasing managers perceive provided logistics services and facilitate the
development of strategies for influencing industrial purchasing decisions (Bienstock
et al., 1997).
Furthermore, although studies have revealed that LSQ attributes vary in importance
across customer segments (Mentzer et al., 2001), and that future research should explore
the relative importance of logistics dimensions across different industries and how this
relative importance influences purchase decisions (Bienstock et al., 1997), more research
in logistics still needs to be done in this area (Garver et al., 2008). Logistics researchers
often use stated importance ratings to measure attribute importance (Lambert and
Sharma, 1990). The limitation of this method seem to be lack of discrimination power, as
respondents tend to indicate that “everything” is important. Other researchers and
practitioners use statistically inferred importance ratings, like structural equation
modelling, to infer the importance of LSQ attributes. These models do not consider the
qualitative form of customers’ judgements, although this information is the basic
satisfaction input data.
The implementation of a multi-criteria preference disaggregation method, like the
multi-criteria satisfaction analysis (MUSA) method, would help overcome these
disadvantages. The method could enhance the outcomes of research in the LSQ field and
could be used to identify the linkage between industrial customer satisfaction and
logistics service dimensions. The main advantage of the implemented multi-criteria
methodology is that it fully considers the qualitative form of customers’ judgements and
preferences. It constitutes an easy-to-use tool which produces a set of quantitative Logistics service
indices and perceptual maps that makes possible the provision of an effective support
for decision-making. It makes possible the evaluation of the industrial customers’
quality
satisfaction level, both globally and partially for each of the characteristics of the
provided service and supplies a complete set of results that analyse in depth customers’
preferences and expectations and explain their satisfaction level. The introduction of a
permanent customer satisfaction barometer could be established to measure, control 217
and improve the LSQ provided to different business sectors and to identify their special
needs.
The objective of this paper is the implementation of the MUSA methodology, which
is used for customer satisfaction measurement to analyse the perceptions of companies
about the quality of the logistics services offered from their suppliers. The sample used
concerns manufacturing companies in the area of Attica – Greece. The implementation
of logistics services from local companies is still particularly low, compared to other
markets in Europe, which has a negative effect in their logistics costs. High-quality
logistics services can become a competitive advantage of Greek economy contributing
to its global growth, especially in periods of economical depression as the one that
Greece faces.
The results of the implemented methodology concern the identification of the weak
points of the suppliers as well as of the dimensions that drive customer satisfaction.
Furthermore, the competitive advantages of the suppliers as well as their priorities for
improvement are also traced.
This paper is organised into five sections. Section 2 discusses literature in the LSQ
and its link to customer satisfaction. Section 3 presents briefly the basic principles of
the implemented methodology as well as the basic results that the method provides. The
results of the implemented methodology are described in Section 4, whereas some
concluding remarks as well as future research in the concept of LSQ measurement are
summarised in the final section.
2. Literature review and proposed model

There are a number of commonly accepted definitions of logistics. The well-known
“Seven R’s of logistics” defines logistics as ensuring the availability of the right product,
in the right quantity and the right condition, at the right place, at the right time, with the
right information and at the right price (Coyle et al., 1992; Shapiro and Heskett, 1985;
Stock and Lambert, 1987). The Council of Logistics Management (1998) states that
logistics is that part of the supply chain process that plans, implements and controls the
efficient, effective flow and storage of goods, services and related information from the
point of origin to the point of consumption to meet customers’ requirements. Finally, in
a much simpler definition of logistics, Delaney (1996) states that logistics is the
management of inventory in motion and at rest and that the goal of the logistics
manager is to achieve the lowest level of investment in inventory consistent with
ensuring customer service and maintaining efficient production.
The importance of effective supply chain management has become increasingly
apparent for the total success of a business, and therefore curiosity over service quality
measurement is high (Bienstock et al., 2008). Researchers have devoted a great deal of
attention to service quality research (Abdullah, 2006). Origins of LSQ research can be
found in Perreault and Russ (1974, 1976). They suggested that logistics activities create
JM2 time, place and form utility, thereby enhancing product value and therefore that the
quality of the logistics services plays a pivotal role in industrial purchasing decisions.
9,2 Similarly, Gilmour et al. (1977) were leaders in establishing the importance of customer
service as related to distribution and logistics. Their research highlighted availability,
timeliness and delivery quality as noteworthy features of logistics service. Mentzer et al.
(1989), in an effort to specify the domain of physical distribution service quality (PDSQ)
218 and begin generating a set of items that might serve as indicators of PDSQ dimensions,
accepted availability, timeliness and efficient delivery as playing key roles in the
logistics function, but added price, product quality, sales support and warranty as extra
PDSQ features. Emerson and Grimm (1996) revised the framework established by
Mentzer et al. (1989) to include communication as an additional logistics dimension.
Innis and La Londe (1994) investigated the impact of physical distribution performance
on customer satisfaction, attitudes and purchase intensions. They identified 32
attributes of service quality and confirmed their impact through affect on purchase/
repurchase intentions. Bienstock et al. (1997) insisted on alternatives to the SERVQUAL
instrument, known for service quality measurement and introduced a multidimensional
scale for estimating industrial customers’ perceptions of the PDSQ received from their
suppliers. Three groups of items are considered on the 15-item (PDSQ) scale developed:
timeliness, availability and condition. In an effort to increase the understanding of how
logistics service customers form their perceptions of LSQ and satisfaction with logistics
services, Mentzer et al. (1999) and Mentzer et al. (2001) tried to broaden the LSQ concept.
Their nine-dimensional scale captures previously supported aspects of PDSQ – namely
availability (in terms of order release quantities), timeliness, and condition – but also
captures other aspects of logistics services, such as personnel contact quality,
information quality, ordering procedures, order accuracy, order quality and order
discrepancy handling. Franceschini and Rafele (2000) discussed eight indicators of LSQ
and showed their correspondence with the SERVQUAL instrument. Rafele (2004) later
condensed these indicators to three logistics quality dimensions: tangible components,
ways of fulfilment and information actions. Bienstock et al. (2008) extended Mentzer
et al.’s (2001) model by separating process and outcome service quality dimensions in a
comprehensive model, as an effort to advance the sophistication of understanding of
how customer perceptions of service quality are formed. Furthermore, Bienstock and
Royne (2010) adapted the LSQ dimensions from Bienstock et al. (1997) and Mentzer et al.
(1999, 2001) to investigate the relationships between the use of information technology
and satisfaction with logistics services among industrial customers. Their findings
indicated that both LSQ perceptions and satisfaction levels are significantly related to
future purchase intentions. However, industrial customers’ satisfaction with logistics
service is driven primarily by the quality of these services, rather than their perceptions
of information technology tools. Leuschner et al. (2012) introduced the dimensions of the
LSQ scale in the place category of the marketing mix to compare the influence of
logistics and marketing attributes in achieving customer satisfaction and share of
business between primary and secondary suppliers. They concluded that performance
on place attributes has a positive impact on customer satisfaction and that the
performance of primary suppliers is higher than the performance of secondary suppliers
in almost every LSQ dimension. Kersten and Koch (2010) used structural equation
modelling to investigate the relationships between LSQ, quality management and
business success in German logistics companies. They found a positive effect of almost
all the logistics dimensions used on business success. Many other researchers (Gil et al., Logistics service
2008; Gil and Ruiz, 2010; Gil et al., 2010; Shpëtim, 2012; Giovanis and Tsoukatos, 2013)
used structural models to investigate the antecedents and consequences of LSQ. They
quality
all found positive and significant influence of LSQ dimensions on customer satisfaction
and an indirect or direct positive effect on loyalty. Similar were the results of the
meta-analysis applied by Leuschner et al. (2013). Their research provided evidence that
logistics customer service has a significant positive relationship with firm performance 219
and that LSQ can indeed be a source of competitive advantage.
Nevertheless, despite the fact that much research exists in marketing and service
management on the concepts of service quality and satisfaction, researchers have faced
many problems in their effort to capture and determine logistics attribute importance to
improve decision-making and to identify meaningful differences in the preferences of
different business sectors. Logistics researchers often use stated importance ratings to
measure attribute importance (Lambert and Sharma, 1990). Many logistics research
studies have taken this approach (Crosby and LeMay, 1998; Murphy and Poist, 2000,
2007; Lu and Dinwoodie, 2002; Gibson et al., 2002). Although common in practice, this
method has major research limitations, as respondents tend to indicate every dimension
as important. To overcome the problems of stated importance analysis, many
researchers and practitioners use statistically inferred importance ratings. For example,
Mentzer et al. (2001) used structural equation modeling to infer the importance of LSQ
attributes. Wanke and Zinn (2004) used the correlation and logistic regression analyses
to infer the importance of influences on strategic decision-making. Stank et al. (2001a)
studied logistics integration and its importance on performance, using the correlation
analysis and multiple regression analyses. These models also have drawbacks, as they
do not consider the qualitative form of customers’ judgements, and although they
succeed to identify the important dimensions, they fail to specify their relative
importance compared to each other.
Other approaches including multi-criteria analysis (e.g. data envelopment analysis,
DEA, analytical hierarchy process, AHP) or the balanced scorecard (BSC) method have
also been applied in different attempts to measure the performance of suppliers. BSC has
been reported as the most popular performance measurement system for maintenance
organisation and supply chains till date and has been used as a tool to measure
performance of supply chains in many cases (Chia et al., 2009; Bigliardi and Bottani,
2010; Garg and Deshmukh, 2012). One of the most common criticisms against BSC is
that it is static in nature and that there is absence of cause-and-effect relationships
between performance objectives and measures spread over all its perspectives, creating
difficulties in developing an action plan of the strategy (Garg and Deshmukh, 2012). The
multi-criteria DEA method has been used by Zhou et al., 2008 in an effort to compare
third-party logistics providers of China. Similarly, Bhatti et al. (2009) used an integrated
DEAHP model for the selection of third-party logistics providers under lead logistics
provider scenarios. However, DEA is a non-parametric approach used to compute
multiple-input, multiple-output productivities; therefore, DEA is appropriate when
operation efficiencies of multiple maintenance organisation are to be compared
quantitatively. Many other authors have suggested the application of the AHP method
for vendor selection problems (Wang and Chin, 2009a; Wang et al., 2009b; Bhatti et al.,
2010) and for measuring LSQ (Ramanathan and Karpuzcu, 2010; Kumar and Singh,
2012). This method requires pair-wise comparison for all the criteria used for the
JM2 evaluation of logistics service providers to decide their relative importance. This is
rather a complex task, and many times experts feel uncomfortable to assign a fixed and
9,2 crisp value for dominance of one criterion over the other. This method has often been
criticised in the literature from many other perspectives, and it is considered to have
serious fundamental weaknesses, which makes the use of AHP as a decision support
tool very problematic (Bana e Costa and Vansnick, 2008).
220 The MUSA methodology proposed in this paper to analyse the perceptions of
companies about the quality of the logistics services offered from their suppliers
overcomes the disadvantages of the aforementioned methods. It constitutes a
multi-criteria preference disaggregation approach, which provides quantitative
measures of customer satisfaction considering the qualitative form of customers’
judgements. Like other disaggregation methods, it analyses (disaggregates) the global
preferences (satisfaction) of the decision-makers (industrial customers) to identify the
criteria aggregation model that underlies the preference result. Therefore, it infers the
preference model from given global preferences rather than taking a priori the criteria
aggregation model. It is an easy-to-use tool which can be implemented periodically to
analyse LSQ level as well as the importance of different logistics services dimensions
according to the perceptions of different industrial customers. In this way, action plans
for specific industrial segments and periods of time can be developed and the success of
the implemented plans can be monitored. It provides a set of valuable information for
suppliers to understand and retain their existing customer base and facilitates the
development of strategies for influencing industrial purchasing decisions. The method
has been implemented successfully in many different cases in the banking sector
(Mihelis et al., 2001; Grigoroudis et al., 2002), in the shipping sector (Siskos et al., 2001),
in the education sector (Politis and Siskos, 2004), for assessing the quality of Web
providers (Grigoroudis et al., 2008), for estimating the preferences of e-customers
(Grigoroudis et al., 2007), etc.
3. Research methodology
3.1 Model formulation and survey instrument
The assessment of a consistent family of criteria representing customers’ satisfaction
dimensions is one of the most important stages of the implemented methodology. These
satisfaction dimensions should assure a consistent family of criteria, with the following
properties:
• monotonicity;
• exhaustiveness; and
• non-redundancy (Roy, 1985; Roy and Bouyssou, 1993).
Keeney and Raiffa (1976) proposed also that the set of criteria and the formulated value
hierarchy should be operational, decomposable and minimal.
In the current survey, the items used to assess logistics quality were adopted from the
items investigated and validated in Bienstock et al. (1997, 2008) and Mentzer et al. (1999,
2001). These items conform to the consistency requirements described above, and the
literature review showed that the measurement scale developed by Mentzer et al. (2001)
has been used repeatedly and can still be used as a thorough set of dimensions for the
assessment of LSQ. As in Bienstock et al. (2008), the process dimension of order release
quantities in the Mentzer et al. (2001) measurement scale has been omitted, as it is
concerned that there is an overlap between this dimension and the logistics outcome Logistics service
dimension of availability. Similarly, the outcome quality dimension of order quality
found in Mentzer et al. (2001) model has been omitted, as it is considered to have the same
quality
meaning with order accuracy. Other dimensions, such us the overall behaviour of the
contact persons and the accuracy of the information provided regarding orders have
been introduced to include dimensions that might influence industrial customers’
satisfaction. The hierarchical structure of customers’ satisfaction dimensions is 221
presented in Figure 1, and it indicates the set of criteria and sub-criteria used in this
survey.
Finally, the main satisfaction criteria consist of:
• Procedures: it refers to the effectiveness and the easiness of use of the product
ordering procedures as well as to the flexibility of the procedures in case of order
changes.
• Contact: it is related to the knowledge sufficiency of the contact employees and
their ability to resolve product/service problems. It also examines the efforts that
contact employees make to understand business particular situations and their
overall behaviour.
• Information: it reflects the accuracy, the availability and the completeness of the
order information provided by the supplier.
• Discrepancies: it examines how satisfactory is the correction and response to order
discrepancies as well as the adequacy of the process of reporting them.
• Availability: it concerns the availability of the products when ordered or when
possible increases in upcoming orders occur and the restrictions the supplier
imposes regarding the quantity and the variety of the products.
Figure 1.
Hierarchical structure of
customers’ satisfaction
dimensions
JM2 • Accuracy: it examines if the products ordered conform to specifications and meet
technical requirements and the frequency of the orders delivered with wrong items
9,2 or incorrect quantities.
• Timeliness: it refers to the time needed between requesting an order and receiving
it and the frequency of delayed orders.
• Condition: it is related to the frequency of the damaged orders delivered due to the
222 transport mode, the carrier handling or other reasons.
3.2 Data collection

The presented satisfaction survey was conducted during November 2011 – February
2012. It concerned satisfaction of manufacturing companies in the area of Attica, Greece,
from the quality of the logistics services offered from their suppliers. The
manufacturing companies were selected from the data base of the ICAP Group
Company, which is the largest business services group in Greece, providing commercial
and financial information as well as credit risk and payment history data for companies
in Greece and abroad. The manufacturing companies were asked to assess the logistics
services quality of their most important supplier (primary supplier of their most often
purchased product) regarding a predefined set of criteria and sub-criteria, which
represent logistics quality dimensions. Respondents were asked to evaluate their
satisfaction level on each one of these criteria as well as to express their overall
judgement using a 5-point qualitative scale of the form: very satisfied, satisfied,
moderately satisfied, dissatisfied and very dissatisfied. Data collection was completed
through personal interviews of logistics managers (purchase managers and quality
control managers were reviewed as well in some cases). Final input data consist of 216
questionnaires out of 1,006 manufacturing companies, which constitute a quite
satisfactory response rate of 21.47 per cent. Table I presents the proportion of the
different manufacturing categories participating in the final sample, which reveals a
satisfactory sample set, regarding the amount of manufacturing companies in the area
under consideration. The classification of the companies was based on the European
NACE codes.
3.3 Data analysis methodology

The MUSA method was used for the analysis of the data. The MUSA method is a
multi-criteria preference disaggregation approach which provides quantitative
measures of customer satisfaction considering the qualitative form of customers’
judgements (Siskos et al., 1998; Grigoroudis and Siskos, 2002). The main objective of the
MUSA method is the aggregation of individual judgements into a collective value
function, assuming that clients’ global satisfaction depends on a set of n criteria or
variables representing service characteristic dimensions. The required information is
collected via a simple questionnaire in which the customers evaluate provided service,
i.e. they are asked to express their judgements, namely, their global satisfaction and
their satisfaction with regards to the set of discrete criteria. A predefined ordinal
satisfaction scale is used for these customers’ judgements.
The MUSA method assesses global and partial satisfaction functions Y* and Xi*,
respectively, given customers’ ordinal judgements Y and Xi (for the ith criterion). It
should be noted that the method follows the principals of ordinal regression analysis
Number of Proportion in the
Logistics service
respondents sample (%) Manufacturing business segments quality
25 11.6 Manufacture of food products and beverages
1 0.5 Manufacture of tobacco products
29 13.4 Manufacture of textiles
13 6.0 Manufacture of wearing apparel; dressing and dyeing
of fur
223
2 0.9 Tanning and dressing of leather; manufacture of
luggage, handbags, saddlery, harness and footwear
4 1.9 Manufacture of wood and of products of wood and
cork, except furniture; manufacture of articles of
straw and plaiting materials
36 16.7 Publishing, printing and reproduction of recorded
media
5 2.3 Manufacture of coke, refined petroleum products and
nuclear fuel
21 9.7 Manufacture of chemicals and chemical products
7 3.2 Manufacture of rubber and plastic products
15 6.9 Manufacture of other non-metallic mineral products
12 5.6 Manufacture of fabricated metal products, except
machinery and equipment
5 2.3 Manufacture of machinery and equipment not
elsewhere classified
1 0.5 Manufacture of electrical and optical equipment
15 6.9 Manufacture of electrical machinery and apparatus
not elsewhere classified
3 1.4 Manufacture of radio, television and communication
equipment and apparatus
2 0.9 Manufacture of medical, precision and optical
instruments, watches and clocks
20 9.3 Manufacture of furniture; manufacturing not Table I.
elsewhere classified Sample analysis
under constraints using linear programming techniques (Jacquet-Lagrèze and Siskos,

1982; Siskos, 1985; Siskos and Yannacopoulos, 1985).
The assumption of an additive utility model is the main principal of the method, and
it is represented by the following ordinal regression analysis equation:
兵
n
˜
Y* ⫽ 兺b X
i⫽1
i i
*
⫺ ␴⫹ ⫹ ␴⫺
n (1)
兺b
i⫽1
i ⫽1
˜
where Y* is the estimation of the global value function Y*; n is the number of criteria, bi
is a positive weight of the ith criterion, ␴ ⫹ and ␴ ⫺ are the overestimation and the
underestimation errors, respectively, and the value functions Y* and Xi* are normalised
in the interval [0,100].
JM2 The main results of the method are focused on global and partial explanatory
analysis. Global explanatory analysis lays emphasis on customers’ global satisfaction
9,2 and its primary dimensions, while partial explanatory analysis focuses on each criterion
and its relevant parameters separately.
Satisfaction analysis results, in more detail, consist of:
• Value functions: they show the real value (in a normalised interval 0-100) that
224 customers give for each level of the global or partial ordinal satisfaction scale; the
global and partial value functions are mentioned as additive and marginal value or
utility functions, and their properties are determined in the context of
multi-criteria analysis; they are monotonic, non-decreasing, discrete (piecewise
linear) functions, while their form indicates if customers are demanding.
• Criteria weights: they represent the relative importance of the assessed satisfaction
dimensions; the decision whether a satisfaction dimension is considered important

by the customers is also based on the number of assessed criteria; their properties
are also determined in the context of multi-criteria analysis (e.g. the weights are
value trade-offs among the criteria).
• Average satisfaction indices: they show in a range of 0-100 per cent the level of
customers’ satisfaction, and they can be considered as the basic performance
norms; the average satisfaction indices are basically the mean value of the global
and partial value functions.
• Average demanding indices: these indices are normalised in the interval [⫺1, 1]
and calculated based on the set of estimated added value curves; these indices
show customers’ demanding level (globally and per criteria) and may be
considered as an indicator for the extent of company’s improvement efforts. These
indices are used in customer behaviour analysis, but they may also indicate the
extent of company’s improvement efforts: the higher the value of the demanding
index, the more the satisfaction level should be improved to fulfil customers’
expectations.
• Average improvement indices: they represent the improvement efforts, and they
depend on the importance of satisfaction criteria and their contribution to
dissatisfaction as well; these indices are normalised in the interval [0, 1], and they
can show the improvement margins on a specific criterion.
Moreover, in the context of the MUSA methodology, a series of additional diagrams may
be developed, based on the aforementioned results.
(1) Action diagrams: combining weights and satisfaction indices, a series of
“Perform/Importance” diagrams can be developed (Figure 2). These diagrams
are also mentioned as action, decision and strategic or perceptual maps
(Customers Satisfaction Council, 1995; Dutka, 1994; Naumann and Giel, 1995),
and they are similar to SWOT analysis. Each of these maps is divided into
quadrants according to performance (high/low) and importance (high/low) that
may be used to classify actions:
• Leverage opportunity (high performance/high importance): these satisfaction
criteria can be used as an advantage against competition. They are the strong
points of the company.
Logistics service
quality
225
Figure 2.
Performance/importance
diagram
• Action opportunity (low performance/high importance): these are the criteria/

sub-criteria that need attention. They represent critical satisfaction
dimensions that should be improved.
• Transfer resources (high performance/low importance): company’s resources
may be better used elsewhere.
• Status quo (low performance and low importance): generally, no action is
required. However, the company should monitor potential changes in
customer behaviour, given the low performance on these characteristics.
This grid can be used to identify priorities for improvement. The bottom right quadrant
is obviously the first priority, for the attributes are important to customers, but
company’s performance is rated moderately low. The second priority may be given to
the satisfaction criteria/sub-criteria in the top right quadrant, especially if there is room
for improvement. The third priority issues are indicated in the bottom left quadrant;
although these issues are not terribly pertinent at the time of the analysis, they may be
more important in the future, and company’s performance is certainly not good. Finally,
the last priority for improvement can be given to the criteria/sub-criteria in the top left
quadrant because this category is the least important and company’s performance is
relatively good. Apparently, priorities for improvement can vary among different
companies, depending on the potential capabilities of improving the particular category.
• Improvement diagrams: the action diagrams can indicate which satisfaction
dimensions should be improved, but they cannot determine the output or the
extent of improvement efforts. For this reason, combining the average
improvement and demanding indices, a series of improvement diagrams can be
developed.
As shown in Figure 3, each of these maps is divided into quadrants according to

demanding (high/low) and effectiveness (high/low) that may be used to rank
JM2
9,2
226
Figure 3.
Improvement diagram
improvement priorities. The first priority should be given to satisfaction criteria having
large improvement margins and need small effort. On the other hand, the last priority
should be given to satisfaction dimensions with low dissatisfaction level that need
substantial effort to improve. Finally, the second priority quadrant includes satisfaction
dimensions that have either a low demanding index or a high improvement index.
Following the above rationale, the priorities for improvement are:
• First priority: this area indicates direct improvement actions because these
dimensions are highly effective and customers are not demanding.
• Second priority: it includes satisfaction dimensions that have either a low
demanding index or a high improvement index.
• Third priority: it refers to satisfaction dimensions that have small improvement
margin and need substantial effort.
It should be noted that these diagrams are rather dynamic because they are able to
illustrate only the current situation of customer behaviour. Changes in the market
conditions may strongly affect customer preferences and expectations and modify the
determination and prioritisation of critical satisfaction dimensions.
4. Results
4.1 Global satisfaction analysis
Manufacturing customers of Attica seem to be quite satisfied from the logistics services
provided from their favourite supplier, given that the average global satisfaction index
has a quite high value (85.6 per cent). Moreover, criteria satisfaction analysis shows that
customers are quite satisfied according to the criteria of Information and Procedures,
while lower satisfaction indices appear for the criteria of Availability, Timeliness and
Contact (73-78 per cent), as Figure 4 displays.
The most important criterion, with a significant importance level, seems to be
Procedures, with the rest of the criteria contributing almost equally in the formation of
Global Satisfaction Index Logistics service
85.6% quality
92.9% 94.7%
100%
78.6% 81.7% 73.8% 86.5% 77.9% 80.5%
80%
60% 227
40%
20%
0%
Availability
Accuracy
Discrepancies
Timeliness
Contact
Information
Condition
Procedures
Figure 4.
Average satisfaction
indices
the global satisfaction index (Figure 5). This can justify the quite high value of the global
satisfaction index, as manufacturing customers seem to be more satisfied according to
the most important criterion and less satisfied on the dimensions that play a less
important role to their preferences.
It is interesting to mention that the relatively low weight of some dimensions, like the
Timeliness criterion, does not contradict to other surveys that have identified Timeliness
as the most important criterion (La Londe and Zinszer, 1991; Perreault and Russ, 1974;
Novack et al., 1994; Bienstock et al., 1997; Mentzer et al., 2001; Rahman, 2006), nor it
means that the companies should not care about the rest of the criteria. It must be
understood that in methods using regression techniques like MUSA, importance implies
the magnitude of impact on an outcome variable, such as overall satisfaction. Therefore,
considering the fact that the responses of the manufacturing companies concern their
favourite supplier, where high performance in dimensions, such as Timeliness,
Condition, Accuracy, etc., is considered to be expected; the low importance of these
dimensions means that as long as suppliers are able to maintain their standard on these
dimensions, manufacturing companies will continue to enjoy good working relation
with its retailers or supply chain partners. Therefore, the procedures used to make
Figure 5.
Weights of the criteria
JM2 orders play an important role in the decision of supplier choice in case the rest of the
dimensions have an accepted performance level. Furthermore, the outcome of this
9,2 survey supplements the outcome of Mentzer et al. (2001), who identified that different
customer segments may place different weights on the satisfaction dimensions (i.e. for
the construction and textiles segments, only ordering procedures seem to drive
satisfaction).
228 The added value curve for the global set of manufacturing customers is presented in
Figure 6. It shows that, generally, manufacturing companies are not demanding
according to their preferences. The average demanding level of customers is ⫺46.6 per
cent, which means that a slight decrease of the quality of logistics services provided by
the suppliers would not have much impact in the overall satisfaction of companies.
Companies need to be at least satisfied from the provided services to reach a satisfaction
level of ⬎ 72 per cent. Analytically, as it is presented in Table II, the demanding level of
manufacturing customers seem to vary from “neutral” (average demanding index close
to 0) to “non demanding” (average demanding index close to ⫺1) for all the set of criteria
and sub-criteria.
The detailed results about sub-criteria (see Table II) allow for the identification of the
criteria characteristics that constitute the strong and the weak points of the suppliers.
According to this table, manufacturing companies seem to be quite satisfied from
almost all the sub-criteria. Lower satisfaction levels appear only for distance from
facilities, availability of the products ordered and total time spent between request and
delivery. It is interesting to mention that for almost all the criteria one dimension seem to
be significantly more important compared to the rest that constitute the criterion. This
is very interesting information when making strategic plans, considering that suppliers
could focus their efforts on a limited number of specific dimensions.
4.2 Managerial implications

Combining criteria weights and satisfaction indices, a set of action diagrams can be
formulated. The action diagram of Figure 7 shows that Procedures is considered to be
the competitive advantage of the most favourite suppliers of manufacturing companies.
On the other hand, even if no criterion belongs to the lower right quadrant, the
Discrepancies criterion can be considered to be a possible critical satisfaction dimension,
as it is very close to the action opportunity quadrant, and small changes in the
preferences of manufacturing companies could increase its weight. Similarly,
Figure 6.
Global satisfaction
function (added value
curve)
Satisfaction Demanding
Logistics service
Weights indices indices quality
Sub-criteria (%) (%) (%)
Procedures
Effectiveness 82.64 98.07 ⫺90.32
Easiness 9.02 81.26 ⫺11.31
Flexibility 8.34 76.63 ⫺4.08
229
Contact
Knowledge sufficiency 56.93 96.66 ⫺85.77
Ability to resolve problems 9.38 78.21 ⫺14.71
Efforts to understand business 8.69 75.56 ⫺7.94
Overall behaviour 25.00 93.99 ⫺67.39
Information
Accuracy 9.02 83.06 ⫺11.31

Availability 57.65 96.29 ⫺86.12
Completeness 33.33 94.98 ⫺76.00
Discrepancies
Correction of order discrepancies 8.47 71.73 ⫺5.51
Process of reporting order discrepancies 82.60 97.32 ⫺90.31
Response to order discrepancies 8.93 77.87 ⫺10.45
Availability
Distance from facilities 8.17 61.19 ⫺2.10
Response to increases of demand 68.45 94.03 ⫺88.31
Availability of the products ordered 8.56 66.46 ⫺6.52
Quantity and variety order constraints 14.82 86.65 ⫺46.20
Accuracy
Conformation to specifications 58.47 97.89 ⫺86.32
Meet of technical requirements 25.00 95.22 ⫺68.00
Frequency of wrong items delivered 8.31 77.44 ⫺3.79
Frequency of incorrect quantities 8.21 76.13 ⫺2.56
Timeliness
Total time between request and delivery 8.24 69.09 ⫺2.91
Consistency of the delivery time 82.56 96.20 ⫺90.31
Frequency of delayed orders 9.20 76.81 ⫺13.04
Condition
Frequency of damaged orders delivered 8.23 75.95 ⫺2.75 Table II.
Damaged orders due to transport mode 8.45 77.91 ⫺5.36 Analytical weights and
Damaged orders due to carrier handling 83.32 96.91 ⫺90.40 indices of sub-criteria
combining the average demanding and improvement indices, a series of improvement

diagrams can be developed. The improvement diagram of Figure 7 shows that
Availability of the products, Timeliness and Discrepancies can be considered to be criteria
of first priorities for improvement. For these criteria, there is a significant margin for
improvement, whereas manufacturing companies seem to be not demanding.
The development of action and improvement diagrams for the set of sub-criteria may
also determine detailed improvement actions, similar to the ones presented for the basic
criteria. Particularly, the action diagram presented in Figure 8 shows that the strong
points of the manufacturing companies’ suppliers include effectiveness of order
procedures, knowledge sufficiency of contact employees, availability of provided
JM2 information, process of reporting order discrepancies, response to increases of demand,
conformation to specification, consistency of the delivery time and damaged orders due to
9,2 carrier handling.
Moreover, taking into account the demanding level of manufacturing customers,
improvement actions could be prioritised according to the effort needed to improve
specific dimensions. Therefore, as Figure 9 presents, the first priority improvements
230 include flexibility of order procedures, knowledge sufficiency, ability to resolve problems
and efforts to understand business particular needs, availability of provided information,
correction and process of reporting order discrepancies, distance from facilities, response
to increase of demand, frequency of wrong items delivered and of incorrect quantities,
consistency of the delivery time and damaged orders due to carrier handling.
The above analysis can help suppliers make strategic decisions by improving
specific dimensions. For example, special attention could be given to knowledge
sufficiency, availability of provided information, process of reporting order discrepancies,

response to increase of demand and damaged orders due to carrier handling. These
dimensions are considered to be competitive advantages of the suppliers, as they have
high satisfaction indices and are very important according to manufacturing
companies, but they also belong to the first priority quadrant of the improvement
Figure 7.
Action and improvement
diagrams for the basic
criteria
Figure 8.
Action diagram for the
sub-criteria
Logistics service
quality
231
Figure 9.
Improvement diagram for
the sub-criteria
diagram due to their very low demanding indices. On the other hand, suppliers may
choose to focus on dimension, such as flexibility, ability to resolve problems, efforts to
understand business, correction of order discrepancies, frequency of wrong items
delivered and frequency of incorrect quantities, as they belong to the first priority for
improvement quadrant and they have low satisfaction indices. The choice depends on
the business culture of each supplier.
5. Concluding remarks and future research

The original application presented in this paper illustrates the pilot implementation of
the MUSA method to assess LSQ offered to particular industrial customers. The sample
used concerns manufacturing companies from the area of Attica – Greece. The main
advantage of the applied method is that it fully considers the qualitative form of
customer judgements and preferences, as expressed in a customer satisfaction survey.
Furthermore, it facilitates estimation of the relative importance of logistics dimension to
improve decision-making and selection of strategies.
Weak points of the suppliers’ provided services as well as dimensions that drive
satisfaction were identified. The most important criterion according to the preferences
of the manufacturing companies concerns Procedures. This does not imply that
suppliers should not care about the rest of the criteria, but that procedures used to place
orders play an important role in the decision of supplier choice in case the rest of the
dimensions have an accepted performance level. Furthermore, the analysis of the results
identified different sets of dimensions for improvement according to the strategy that
best fit the suppliers’ culture.
As this was a pilot implementation of the MUSA method in the supply chain, only a
small sample of manufacturing companies from a specific area of Greece took part in the
survey. Therefore, the results cannot be generalised for all the manufacturing
companies in Greece. The benefit of this survey is that it proposes a method that can be
used to assess LSQ and estimate importance of logistics dimensions. Implementation of
the methodology to different business sectors (i.e. hotel supply chains, pharmaceutical
supply chains) of economic interest to Greece could reveal different meanings for
JM2 separate business segments, helping in the customisation of logistics services and
strategic plans by business segments.
9,2 It should be noted that customer satisfaction is a dynamic parameter of the business
organisation. Changes in the current market can affect customers’ preferences and
expectations. For example, some satisfaction dimensions may become critical in the
near future if customers give more importance to them. For this reason, the installation
232 of a permanent customer satisfaction barometer is considered necessary, given that this
particular application was basically a pilot survey.
A permanent customer satisfaction barometer can assist total quality management
and continuous improvement concepts in every business organisation (Edosomwan,
1993). Moreover, the focus on total customer satisfaction should be integrated into the
accepted management process and the enterprise’s culture.
Finally, an extension of the methodology can be introduced to examine the linkage of
different dimensions with expressions of loyalty.
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About the authors

Yannis Politis is Adjunct Professor at the Department of Business Administration at the
Technological Educational Institute of Athens, Greece. He received a diploma in Production and
Management Engineering and MSc and PhD degrees in Decision Sciences and Operations
Research from the Technical University of Crete. He acts as reviewer for scientific journals and
books he is author of many research reports and papers in scientific journals and conference
proceedings referring to the analysis of consumer behaviour, customer satisfaction and business Logistics service
excellence. His research interests include operational research, multi-criteria decision analysis,
management and control of quality and business excellence models. Yannis Politis is the quality
corresponding author and can be contacted at: politis@ergasya.tuc.gr
Apostolos N. Giovanis is currently Assistant Professor of Management at the Department of
Business Administration at the Technological Educational Institute of Athens, Greece. He
received MSc and PhD degrees in Engineering Management from Technical University of Crete,
Greece. Prior to joining TEI of Athens he had undertaken several managerial roles in the field of 237
marketing management in the service industry. His research interests are primarily in the areas
of service management/marketing, innovation management and customer relationship
management, and his academic work has been published in several international refereed
journals.
Spyridon Binioris is Professor of Business Administration at the Department of Business
Administration at the Technological Educational Institute of Athens, Greece. He received an MBA
degree from St. Jones University, USA, and a PhD degree in Logistics Management from National
& Kapodisdrian University of Athens, Greece. His research interests are in the areas of supply
chain management, total quality management and service management in the health industry. His
academic work has appeared in several refereed and professional journals.
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Logistics service quality and its Logistics service

2. Literature review and proposed model

3.2 Data collection

3.3 Data analysis methodology

under constraints using linear programming techniques (Jacquet-Lagrèze and Siskos,

dimensions; the decision whether a satisfaction dimension is considered important

• Action opportunity (low performance/high importance): these are the criteria/

As shown in Figure 3, each of these maps is divided into quadrants according to

4.2 Managerial implications

Accuracy 9.02 83.06 ⫺11.31

combining the average demanding and improvement indices, a series of improvement

sufficiency, availability of provided information, process of reporting order discrepancies,

5. Concluding remarks and future research

different dimensions with expressions of loyalty.

satisfaction using a collective preference disaggregation model”, Journal of Global

About the authors

To purchase reprints of this article please e-mail: reprints@emeraldinsight.com

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