Factors influencing logistics cost and service quality: a survey within the Indian steel sector

Abstract

Purpose – The purpose of this paper is to understand the role of economic and social factors influencing the logistics cost for the Indian steel sector and its relationship with the service quality. Design/methodology/approach – A structured questionnaire survey is used for the data collection in this research. The questionnaire included different elements of logistics cost on inbound and outbound logistics, and service quality. Findings – This research identified various significant elements of logistics cost for Indian steel sector and observed its relationship with transportation cost, warehousing cost and administrative cost. The findings of this study showed positive relationship between logistics cost and service quality. Research limitations/implications – The data for this study is cross-sectional; it is recommended that future studies can gather it longitudinally. This will help in gaining deeper understanding of the cause and effect relationship among the variables. The findings of this study are very useful in identifying the suitable training directions. Practical implications – Logistics is very critical factor in deciding the competitiveness of steel sector globally. Particularly for steel manufacturing the inbound logistics is more critical as compared to outbound logistics both in terms of volumes and costs. Social implications – For the Indian steel manufacturing companies, the logistics cost is very high as compared to other developed countries. Total logistics cost on inbound movements taken into consideration is around 16-18 per cent of material turn-over whereas; the world average is around 7-8 per cent. Originality/value – To the best knowledge of the authors, this study is the first attempt to study the relationship of logistics cost elements on the service quality in the context of Indian steel manufacturing sector. The logistics cost in steel industry is considered as one of the top performance measurement of the entrepreneur in this research.