Performance management in logistics outsourcing: a study on sugar-energy industry

Abstract

PurposeThis paper analyzes managerial practices currently used for outsourced logistics activities in mechanized cutting, loading and transportation (CLT) of sugarcane in a Brazilian company using performance-based logistics contracts (PBL) as reference.Design/methodology/approachThe methodology draws on literature review, design of an analysis model, small group meetings with academics/industry professionals and practical application through a case study. The model is based on PBL and its construction involved choosing the analysis axes, defining evaluation items and respective measurement scale and the means and sources of data collection.FindingsWhen comparing the evaluation results with PBL recommendations, it is possible to see that there are still many improvement opportunities. In contracting axis, decision-making process was poor-rated due to the absence of strategic considerations to support outsourcing decision. Procurement, contract and implementation are in intermediate level. Performance management is the most mature axis. However, quality analysis showed intermediate level. In relationship axis, the most relevant gap is the lack of expectations alignment. Remaining items showed intermediate levels of compliance but still need focusing on communication, establishing a structured relationship management development.Originality/valueThis study contributes first to develop an analysis model based on PBL to evaluate the level of relationship integration between company and logistics service provider, and second, to apply the model to an empirical case in a CLT company operation. As a result, the analysis model presents guidelines for the company, not to just contract/rent equipment and manpower but hire results.