The impact of logistics performance on firm's financial performance: evidence from textile industry of Pakistan

Abstract

In existing postmodern business arena, proper un d erstand•m g and I• mplementati•O n of supply chain management practices has become an •I imperative for the success of a firm. Parti• cularly, firms must strive to optimize the key aspects of different Supply Chain Management aspects. Some of the most important aspects of Supply Chain Management that organizations ought to give consideration to are logistics efficiency, logistics effectiveness, differentiation, and distribution intensity. The central argument of this thesis is that an optimal design of the said aspect of logistics perfonnance may lead to gain the competitive advantage over other firms in the marketplace. Thus, the center of attention of this inquiry is to empirically verify a) whether or not the logistics performance at a firm level impacts the bottom line, and b) to comprehend the role of differentiation and distribution intensity to gain an edge over the competitors. In view of the equivalent, the present study empirically detennined the impact of logistics performance on the firm 's financial performance in the context of textile industry of Pakistan. Primary data was collected with the help of a questionnaires from 200 organizations nested within listed textile industry of Pakistan. The purpose was to further strengthen the significance of logistics function and the importance of distribution intensity to predict the impact on the bottom line of the firms. The collected data was analyzed by using the latest version of SPSS. The main findings revealed a positive impact of logistics performance on the firm 's financial Performance consistent with the theory of Resource Based View (RBV) and the other related arguments. In general, the main findings of the present study remained consistent with the related research conducted earlier by different authors. However, in order to further improve the existing field of inquiry, the limitations of the present study are acknowledged. The recommendations for practitioners and industry analysts are also discussed momentarily alongside the possible avenues for future researchers. The current research is quantitative in nature. A questionnaire was floated in the organizations to assess the impact of logistics performance on financial performance. Linear regression was applied to test the impact of logistics performance on firm's financial performance. The results indicated that there exist a positive relationship between firm's logistics performance and financial performance. Finally, the present study highlights the future implications by pointing towards the need for more studies on the subject matter at hand to either verify or refute the findings in context of different industrial classifications. It is highlighted that the context of other industrial classifications may suggest the different levels of distribution m• t e ns1• ty and t h e ways t o ach ieve differentiation to directly impact the bottom line. A d . 1 h ffi rts need to be focused specifically to explore the optimal ccor mg y, more research e o viii level of distribution intensity and the ways of differentiation in different industrial classifications.