China-3pl

The current issue and full text archive of this journal is available at www.emeraldinsight.com/0960-0035.htm

IJPDLM 38,4

262

Received December 2006 Revised January 2008 Accepted February 2008

Evaluating the comparative efficiency of Chinese third-party logistics providers using data envelopment analysis

Gengui Zhou

College of Business Administration, Zhejiang University of Technology, Hangzhou, People’s Republic of China

Hokey Min

Department of Management, College of Business Administration, Bowling Green State University, Bowling Green, Ohio, USA, and

Chao Xu and Zhenyu Cao

College of Business Administration, Zhejiang University of Technology, Hangzhou, People’s Republic of China

Abstract

Purpose – The purpose of this paper is to develop a benchmark of performance standards for Chinese third-party logistics providers (3PLs) in the emerging market. It also intends to identify various factors that significantly affect the operational efficiency of the Chinese 3PLs and propose ways to improve the competitiveness of 3PLs. Design/methodology/approach – This paper proposes data envelopment analysis (DEA) to measure the operational efficiency of ten leading 3PLs in China, relative to prior periods and their key competitors. In particular, this paper develops both the Charnes, Cooper and Rhodes model and the Banker, Charnes and Cooper model that are designed to derive weights without being fixed in advance. It also uses step-wise regression analysis to identify factors influencing the performances of Chinese 3PLs. Findings – First, the declining efficiency within some Chinese 3PLs coincides with a steep decline in domestic transportation activities due to the SARS outbreak and the slow adaptation of state-owned enterprise into a more market-based economy. Second, the sales opportunity and the level of technical expertise are directly correlated with the operational efficiency of 3PLs, whereas the size of 3PLs has no direct bearing on the 3PL’s performance....