Lean and Agile Supply Strategies in Distribution Centres to Deliver Value-Added Services (VAS)

Abstract

Background: This paper examines how logistics mangers increase performance by incorporating VAS in their distribution centres in the context of different natures of customer demand. The study is underpinned by the principles of lean and agile strategies as two key concepts that can be applied to respond to different customer expectations. Methods: Based on the phenomenological interpretivist paradigm, an empirical multiple-case study was conducted in German distribution centres operated by six companies. The empirical data were collected through semi-structured interviews, built on the triangulation of sources. Open, axial, and selective coding were employed to analyse data collected through eighteen in-depth interviews with managers from the distribution centres. Results: The findings indicated that the construct of customer demand forms different benefits that the logistics service providers can achieve through VAS. Simultaneously, various customer demands on VAS requires the distribution centres to focus on developing different operational capabilities to gain superior performance. Conclusions: Based on the research findings, a conceptual model was created. This model can support logistics service providers in improving company performance through effectively managing VAS in their distribution centres. The high dynamic VAS customer demand can bring more financial and non-financial benefits but needs higher flexibility in the warehouse operation system. Stable and predictable VAS, in turn, require a higher degree of standardisation.