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Quality of
A conceptual model for quality of service in the
service in the supply chain supply chain
Nitin Seth
Institute of Engineering and Technology, Indore, India 547
S.G. Deshmukh
Indian Institute of Technology Delhi, New Delhi, India, and
Prem Vrat
Indian Institute of Technology Roorkee, India

Abstract
Purpose – The objective of this paper is to propose a model for assessing the quality of service at
various interfaces of supply chain using third party logistics.
Design/methodology/approach – Based on a rich combination of extensive literature review and
insights gained through exploratory interviews, gap analysis methodology is used in developing the
model. This was followed by an in-depth analysis of gaps at various interfaces in supply chain.
Further, both qualitative and quantitative techniques are suggested for data collection and analysis.
Findings – The key gaps in both the directions (forward and reverse) that are likely to affect the
service quality at different levels are extensively defined. These gaps may exist between a 3PL service
provider and the manufacturer, the marketing function and the 3PL service provider, etc. The paper
also proposes frameworks such as data envelopment analysis for measurement of these gaps. A set of
possible performance indicators is also proposed at various interfaces in supply chain.
Practical implications – This proposed model is an attempt to explore the relatively less explored
area. It is expected that this research will further motivate researchers to work in this area. This
supply chain service quality tool will be beneficial to practising managers in identification of
opportunities for improvements in service quality.
Originality/value – This paper explores some critical issues in the less explored area and offers
practical help to researchers and practitioners in providing a direction for supply chain service quality
improvement.
Keywords Customer services quality, Supply chain management, Gap analysis, Performance measures,
Trust
Paper type Research paper

Introduction
In today’s global marketplace, individual firms no longer compete as independent
entities, but rather as an integral part of supply chain links. The ultimate success of a
firm will depend on its managerial ability to integrate and coordinate the intricate
network of business relationships among supply chain members (Drucker, 1998;
Lambert and Cooper, 2000). In this era of intense competition, the key to sustainable
competitive advantage lies in delivering high quality service that will in turn result in
satisfy customers (Shemwell et al., 1998). International Journal of Physical
Distribution & Logistics Management
Vol. 36 No. 7, 2006
The authors are grateful to the anonymous referees for their constructive and helpful comments pp. 547-575
q Emerald Group Publishing Limited
on the earlier version of the manuscript that helped to improve the presentation of the paper 0960-0035
considerably. DOI 10.1108/09600030610684971
IJPDLM Logistics is recognized as a critical factor in gaining competitive advantage
36,7 (Christopher, 1992). Globalization and the shift towards outsourcing further added to
the need for strong relationship between third party logistics (3PL) and supply chain.
Aligning with a third party may not only results in getting cost reduction alone, but
also helps in a combination of service improvement and efficient operation. There has
been a general acceptance of relations of service quality with improved supply chain
548 performance (Mentzer et al., 1999, 2001; Pery and Sohal, 1999; Stanley and Wisner,
2002; Kearney, 1994; Chow et al., 1994). The proven relationship of service quality with
business performance, lower costs, customer satisfaction and profitability (Cronin and
Taylor, 1992; Rust et al., 1995; Lee et al., 2000; Sureshchander et al., 2002) has further
motivated both researchers and practitioners to explore this area. Primarily, majority
of these studies have focused on service industries or parts of supply chain, with a less
or marginal orientation given to supply chain as a whole.
It is evident in the context of supply chain that service quality has impact not only
on supplier/distributor, employees, customer but also it affects the over all business
and growth of the organization.
In this paper an attempt is made to study quality of service in supply chain with a
reference to 3PL. The organization of the paper is as follows: after presenting a brief
literature review, a conceptual model is proposed based on gap analysis. Some issues
related to measurement are also spelt out. Finally, some research directions are also
identified.

Need for present study

Strong commitment and close relationship among trading partners is needed in order
to attain lowest cost and maximizing service (Stank et al., 2001). Bowersox et al. (1999)
also highlighted the importance of achieving integration not only across internal
operations but also with customers, material and service suppliers. In spite of general
acceptance for realizing the importance of service quality in supply chain, it is very less
researched (Nix, 2001).
The concept of service quality is so far regarded mainly as a unidirectional construct in
its measurement and evaluation (Parasuraman et al., 1988; Dabholkar, 1996; Beinstock
et al., 1997). Even so it is frequently emphasized that service quality is the outcome of the
interactive process in a specific service encounter. The service provider’s perception in the
service encounter is often neglected or seldom acknowledged in literature. Seth et al. (2005,
2006) also pointed that there is a need to study service quality with a wider domain
considering all the processes and operations associated in delivery of product or service.
A majority of studies on service quality have focused on service industries, not
supply chain as a whole. There are still white spots to be explored, since there are
certain service quality domains that have not been investigated sufficiently. It appears
that measurement of quality of service in the context of supply chain management
presents a challenge for researchers since:
.
effective management of supply chain involves delivery of products as well as
services;
.
quality of service has both the dimensions: quantitative and qualitative; and
.
quality of service involves interplay of a variety of factors spanning suppliers,
manufacturers, distributors, retailers and customers.
Literature review Quality of
Supply chain and third party logistics service in the
The development of the subject of supply chain has undergone major changes
starting from a narrowing purchase/logistics and transportation point of view to a supply chain
much broader holistic systems approach focusing on customer service. Logistics
has a tremendous potential to play a strategic role in a supply chain it can be
defined as a process of operation that includes the purchasing, storing, 549
transporting, and distributing of physical goods. In this scenario of intense
competition an globalization the relation between supply chain and third party
(3PL) becomes extremely important, as 3PL involves the use of external companies
to perform logistics functions that have traditionally been performed within an
organization (Lieb et al., 1993). Bagchi and Virum (1996) view logistics alliance
as a close and long-term relationship between a customer and a provider
encompassing the delivery of a wide array of logistics needs. Larsen (2000) views
3PL as logistics service relationships that include partnerships, third party
agreements and integrated service agreements. 3PL helps an organization to
concentrate on its core activities and thus may result in lower costs and better
customer service. However, to achieve this, one must have proper mechanisms to
measure, monitor and control quality of service.

Service quality definitions, models and measurement

The concept and definition of service quality has been greatly influenced by the works
of Parasuraman et al. (1985, 1988, and 1991). They conceptualize service quality as the
relative perceptual distance between customers’ expectations and evaluations of
service experiences and operationalize service quality using gap model and a
multi-item scale called SERVQUAL (Parasuraman et al., 1988, 1991). SERVQUAL is
a 22 item instrument that includes the five dimensions (tangibles, reliability,
responsiveness, assurance and empathy), SERVQUAL was developed based on the
data gathered from service industries including credit cards, telephone service,
retail banking, security broker, appliance repair and maintenance. Numerous
authors developed and tested service quality models for different applications (for
example Frost and Kumar (2000) – for internal service quality measurement, Zhu et al.,
2002 – it based service delivery, Santos (2003) – E – service quality model). Also, there
seem to be no agreement on the measurement side (attributes) of service quality;
researchers propose different attributes for different applications. Some of the
attributes of service quality proposed by various researchers are given in Table I.
Seth et al. (2005) in a comprehensive review on service quality models presented that
majority of the studies in the field of service quality till date are dominated with the
work of Parasuraman et al.(1985, 1988).

Gap analysis
The measurement of service quality using the gap model and SERVQUAL as a tool has
been tested and used by several researchers (Frost and Kumar, 2000; Rosen and
Karwan, 1994) gap analysis is the comparison of an entity’s ultimate objective with the
sum of projection and already planned projects, identifying how the consequent gap
might be filled. Gap analysis as a tool is also appreciated and used by researchers in
different application areas. Gunasekaran et al. (2002) used this tool to study the gap
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550

Table I.
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quality attributes
A select list of service
Researchers

Grönroos (1984) Gronroos (1988) Parasuraman Parasuraman Haywood-Farmer (1988) Lehtinen and Lehtinen
et al. (1985) et al. (1988) (1991)
Technical quality Recovery Credibility Assurance Behavioral aspects Physical quality (Physical
Timeliness, speed, products þ Physical
Communication (verbal, environment)
non-verbal), courtesy,
warmth, friendliness,
tact, attitude, tone of
voice, Dress, neatness,
politeness,
Attentiveness,
anticipation, Handling
complaints, solving
problems
Functional quality Attitudes and Access Responsiveness Professional judgement Interactive quality
behavior Diagnosis, Advice, skill, (Interaction with persons
guidance, innovation, and equipment’s)
Honesty, confidentiality,
Flexibility, discretion,
Knowledge
Corporate image Accessibility and Reliability Tangibles Physical facilities and Corporate quality
flexibility processes
Location, layout, décor,
Size, Facility reliability,
Process flow, capacity
Balance, Control of flow,
Process flexibility,
Timeliness, speed,
Ranges of services
offered, Communication
Reputation and Communication Reliability Process quality
Credibility
(continued)
 Researchers

Professionalism Understanding Empathy Output quality

and skills the customer
Reliability and Courtesy
trustworthiness
Competence
Responsiveness
Tangibles
Security
Mersha and Adlakha Ennew et al. Ghobadian Rosen and Dabholkar
(1992) (1993) (1994) Karwan (1994) Johnston (1995) Philip and Hazlett (1997) et al. (2000)
Knowledge of service Knows business Competence Reliability Responsiveness Pivotal attributes: Reliability
Acquired information
Thoroughness/accuracy Knows industry Access Responsiveness Care Core attributes: Comfort
of the service Reliability, Responsiveness
Assurance, and Empathy
Consistency/Reliability Knows market Reliability Tangibles Availability Peripheral attributes: Features
Access, Tangibles
Willingness to correct Gives helpful Responsiveness Access Reliability Personal
errors advice attention
Reasonable cost Wide range of Credibility Knowing the Integrity
services customer
Timely/prompt service Competitive Understanding Assurance Friendliness
interest rates the customer
(continued)
supply chain
service in the

551

Table I.
Quality of
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552

Table I.
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Researchers

Courtesy Competitive Courtesy Courtesy

charges
Enthusiasm/Helpfulness Speed of decision Communication Communication
Friendliness Customized Tangibles Competence
finance
Observance of Deals with one Security Functionality
announced business person
hours
Follow up after initial Easy access to Customization Commitment
service sanctioning
officer
Pleasant environment Access
Flexibility
Aesthetics
Cleanliness/tidiness
Comfort
Security
between production and marketing functions. Rho et al. (2001) used gap analysis to Quality of
study the gap between manufacturing strategy and implementation practices and its service in the
impact on business performance. Kontzalis (1992) used gap analysis to identify
different attributes physicians consider important in selecting products for treatment supply chain
of certain condition. Several other researchers (Leminen, 2001; Guo, 2002; LaBay and
Comm, 2003; Hatch and Schultz, 2003; Hwang et al., 2003) used this tool for different
purposes (understanding the dynamics of gaps in buyer-seller relationships to 553
assessing the expectation and perception gap in quality of services for patient meal
services). Although there are some questions in the literature about the dimensionality
and measurement of service quality using the gap model (Cronin and Taylor, 1992),
still it is commonly used for the measurement of service quality. Since, it is well
documented and its strengths have been extensively explored in many studies
including service industries.

Service quality in supply chain

It is seen that most of the service quality research has focused on the consumer with
limited investigation on the applicability of service quality in supply chain context
(Nix, 2001). Some of the studies in the field of service quality in supply chain are
compiled in Table II.
It seems that the studies in the context of quality of service in supply chain have
either focused on purchase or distribution activity and further these studies
have considered only one directional view (keeping in view of basic firm only).
A bi-directional study (i.e. impact of service quality on both supplier/distributor and
the organization) can provide win-win situation and may help to fulfill the basic
objective of supply chain.
Based on the review of literature, the following observations are in order:
.
It seems that there is general agreement on the importance of third party service
provider and service quality in supply chain.
. There seem to be a general agreement over the acceptability of gap model for
variety of applications including service quality.
.
Although a lot of work has been reported on service quality models and
applications, but there seems to be a major gap in the application of quality of
services models in supply chain.

It appears that modeling for quality of service with in the context of supply chain is a
challenging area for research.

Exploratory investigation
The literature on service quality provided a sound conceptual foundation for
understanding service quality in service industries, but the less support is available
for studies for supply chain as a whole. An exploratory qualitative study is undertaken
to investigate the concept of service quality in supply chain. The methodology
adopted for this study is based on Parasuraman et al. (1985) and Zeithml (1988).
Specifically 15 in-depth open-ended interviews with academicians (4), consultants (3)
and practitioners from different organizations at different levels (8) were conducted.
The interviews were conducted to gain the following insights:
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Table II.
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Select studies on quality

of service in supply chain
S. No. Author (Year) Focus Brief description

1 Beinstock et al.(1997) Distribution Conceptualizes physical distribution service quality (PDSQ) comprising of three factors
namely timeliness, availability and condition
2 Sinha and Babu (1998) Distribution The study was oriented towards measurement and improvement of service quality from
factory to distribution network. They developed DSI (Depot Service Index)
3 Mentzer et al. (1999, 2001) Logistics Identified nine potential components of logistics service quality (LSQ) (personnel contact
quality, order release quantities, information quality, ordering procedures, order
accuracy, order condition, order quantity, order discrepancy handling and timeliness
4 Pery et al. (1999) Quick response Studied quick response performance of Australian industries and identified “delivery
time” as the most important factor for competitiveness
5 Stanley and Wisner (2002) Purchasing Attempted the issue of identifying the dimensions of service quality for purchasing and
internal transactions based on empirical study of purchasing executives of different
manufacturing and service organizations
 .
understand the importance of quality of service in supply chain; Quality of
. identify different factors that affect quality of service in supply chain; service in the
.
derive a methodology for identification and measurement of quality of service supply chain
levels at various interface levels and further with in various interfaces of supply
chain, so that a suitable improvement program can be launched.

Insights from exploratory investigation 555

Remarkably consistent patterns emerged from the in-depth interviews and the subject
was clearly highlighted by all academicians, consultants and practitioners owing to its
positive proven relationship with customer satisfaction and profitability. Some of the
key outcomes of the interviews are presented below:
.
It is visualized that service quality in supply chain can also be modeled through
gap analysis similar to Parasuraman et al. (1985) model.
.
The model should consider gaps in both the directions (forward and reverse)
simultaneously as the gaps may have different implications in supply chain context.
.
Unlike other services, service quality in supply chain has both the aspects
quantitative and qualitative, thus there is a need to develop a method which not
only collects both types of data but helps in further analysis.

Research methodology
Based on the literature review, and discussions with academicians/industry
professionals at various levels, a framework is visualized as shown in Figure 1,
which will enhance the quality of services in the supply chain.

Proposed model
A conceptual model is proposed for the quality of service in the context of the supply
chain of comprising of the following: supplier – third party logistic provider – focal
firm – third party logistic provider – distributor – third party logistic provider –
customer. This model is based on the concept of quality of service as proposed by
Parasuraman et al. (1985). This model uses the framework of Gunasekaran and Ngai
(2003) and accordingly, has categorized the logistics into two categories:
(1) Logistics Users (LU), i.e. suppliers, manufacturers and distributors; and
(2) Logistics Service Providers (LSP), i.e. third-party logistics service providers
such as logistic companies, couriers, transporters, etc. For convenience, these
are labeled as TPL1 (i.e. third party logistic service provider between Supplier
and the Focal Firm), TPL2 (i.e. third party logistic service provider between the
Focal Firm and the Distributor), and TPL3 (i.e. third party logistic service
provider between Distributor and the Customer).

Using this categorization, the transactions between suppliers to the focal firm is treated
as the transaction between LU and LSP and similarly the transaction between Focal
Firm and the Distributor is treated as the transaction between LU and LSP. The basic
objective of the model is to assess the quality of service provided and perceived by
various LU and LSP.
The Conceptualization of the model is done using gap analysis as a tool. The gaps in
this model are divided into of two types:
IJPDLM
Discussions with practicing
36,7 Literature Review
managers and Academicians

556 Development of Model based

on Gap Analysis

Data Expert Interviews

Surveys Collection
Field Observations

Data Envelopment
Data
Analysis Statistical Analysis
Analysis

Improvement Indicators

Implementation of
Improvements measures

Figure 1. Improvement in Supply Chain

Proposed framework efficiency and effectiveness

(1) Forward gap. This gap is defined in the context of basic supply chain direction
(direction of movement of product). That is from supplier to focal firm, focal
firm to distributor and from distributor to customer.
(2) Reverse gap. The reverse gap in this study is considered as the reverse direction
of the basic supply chain process (reverse to the physical movement of the
product), i.e. from focal firm to supplier, distributor to focal firm and from
customer to distributor.

Figure 2 depicts two entities “A” and “B” representing various functions in the supply
chain under consideration. A forward gap from entity “A” to entity “B” may result
from poor processes, inadequate infrastructure facilities, etc. of entity “A” and will
Reverse Gap

Entity A Entity B
Figure 2.
Entity gap relation
Forward Gap
have an impact on entity “B”. Similarly reverse gap from entity “B” to entity “A” is Quality of
resulting owing to inefficiencies of processes at entity “B” and will have an impact on service in the
entity “A”.
In the proposed model, the basic supply chain is considered from the first supplier to supply chain
the first customer. It comprises of the following entities:
. Supplier is one who supplies goods and service to the focal firm.
.
A third party is the external agency, which is responsible for handling different
557
transactions between Logistics user and Logistics service provider.
.
Focal firm is the firm whose product/services are considered for study.
.
Distributor is the one who distributes the products of the focal firm to the
customers as per the requirements. He also owns the responsibility of inventory.
.
Customer is the one who finally receives the products/services of the focal
firm from the distributor.

Satisfactory level of service quality is the level of services delivered, when the
difference between perception and expectation by a customer towards
product/process/service/organization is zero or positive. Customer satisfaction is the
result of customers’ perception of the value received in a transaction or relationship.
These forward and reverse gaps are identified at various interfaces, i.e. supplier –
TPL1; TPL1 – focal firm, focal firm –TPL2, etc. Various sources affecting each
interface gap are identified and termed as service quality gaps. The interface gaps
cover at a broader level the performance objective at each level and the service quality
gap would present the sources with in each level.

Main model based on gap analysis

This model analyzes the various interface gaps between the, logistics user, logistics
service provider and customer, i.e. supplier, TPL1, focal firm, TPL2, distributor, TPL3
and customer. The interaction between various activities is shown in Figure 3.
The model identifies the linkages between the key activities, which are essential to the
delivery of a satisfactory level of service quality to the customer. The various interface
gaps in the main model are summarized as given below.

Interface gap 1.1F: (forward): logistics user (S) – logistics service provider (TPL1):
(supplier – TPL1)
This gap covers the transactions of supplier as well as the transaction between
supplier and the TPL1.The main reasons for this gap may be attributed to improper
communication, incomplete technical specifications, poor co-ordination between
supplier and TPL1, improper tools/equipment’s, inadequate procedures, etc. at the
supplier’s end.

Interface gap 1.1R: (reverse): logistics service provider (TPL1) – logistics user (S):
(TPL1 – supplier)
This gap covers the transactions between TPL1 and supplier. This gap may result on
account of poor transaction mechanisms at TPL1, communication problems, improper
delivery terms, and delays in response to supplier, etc.
IJPDLM Supplier 1 Supplier 2 Supplier 3 Supplier .n
36,7 Interface Gap 1.1

Third Party Logistic Service Provider 1(TPL1)

Interface Gap 1.2
558

Function 1
Focal
Firm

Function .n Function 2
Interface Gap 1.3

Function 3

Third Party Logistic Service Provider 2 (TPL2)

Interface Gap 1.4

Distributor 1 Distributor 2 Distributor 3 Distributor n

Interface Gap 1.5

Third Party Logistic Service Provider 3 (TPL3)

Interface Gap 1.6

Customer
Figure 3.
Gap analysis model:
main module Forward Gap: In the Direction of Material Flow
Reverse Gap: Opposite to the direction of Material Flow

In either of the cases existence of this gap violates the supplier – partner objective of
efficient and effective supply chain resulting in poor quality of service.

Interface gap 1.2 F: (forward): logistics service provider (TPL1) – logistics user (F):
(TPL1 –focal firm)
This gap covers the processes of TPL1 as well as the transactions between focal firm and
TPL1.This gap exists due to lack of co ordination between various functions of the TPL1,
lack of organizational shared vision, poor management procedures and policies, improper Quality of
communication between functions, poor planning, lack of facilities, etc. at the TPL1. service in the
Interface gap 1.2R: (reverse): logistics user (F) – logistics service provider (TPL1) (focal supply chain
firm – TPL1)
This gap covers the transaction between the focal firm and TPL1 and also reverse
transactions between various departments with in focal firm. Some of the reasons of 559
this gap may be attributed to rigid hierarchical system, poor communication
mechanism, poor work culture, inadequate wage structure, etc. at the focal firm and
thus affect the relation/deal/contract with TPL.
In the similar manner the other interface gaps of main model can be defined and
their impact on the overall supply chain can be visualized. An attempt is made to
analyze various interface gaps highlighting their impact on supply chain and their
select indicators, this is presented in Table III. In either of the interface gap 1.1F to
1.6R, this results in the loss/distrust/dissatisfaction of the customer, thereby incurring
a loss to the efficiency of supply chain. Thus, they need to be monitored on real time
basis so that a suitable and timely action can be taken.

Interface gap 1.1 analysis module: logistics user (S) – third party service provider
(TPL1)
This module will analyze the Interface gap 1.1, between the logistics user (S), i.e. supplier
and the TPL1 and thus highlights the various sources of interface gap 1.1. The various
service quality gaps at interface 1.1 are shown in Figure 4. Table IV describes the various
service quality gaps along with their select measures and impact on supply chain.

Measurement of gaps
The measurements of the various interface and service quality gaps in supply chain as
proposed in the main model (Figure 3) and subsequent sub modules (sub module 1-6)
involves dealing with both qualitative and quantitative data. Some of the approaches
for qualitative and quantitative data collection and analysis are depicted in Table V.
The choice of above aspects for data collection and analysis is derived from their
rich proven base of towards measurement in the context of service quality and supply
chain management. The data collection approaches (survey, modeling and expert
interviews) have been used by numerous researchers (Parasuraman et al., 1988; Cronin
and Taylor, 1992; Teas, 1993; Mentzer et al., 1999, 2001, etc.) in service quality and
supply chain context.
Also as regards to the tools envisaged for analysis (Statistical analysis and Data
Envelopment Analysis (DEA) and) are also proven techniques in several researches in
different fields.
Statistical analysis (Parasuraman et al., 1988; Cronin and Taylor, 1992) and DEA
techniques have been used by numerous researchers (Mathiyalakan and Chung, 1996;
Madu and Kuei, 1998; Tsang, 1999; Weber et al., 2000; Harbi al, 2000) in evaluating the
performances/benchmarking of many different kinds of entities engaged in many
different activities in many different contexts in supply chain and quality. Thus, it
seems that the above tools have a proven research base in different applications
in service quality and supply chain, hence these can be adopted for measurement of
quality of service in supply chain.
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Table III.
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on supply chain
Various interface gaps
along with their impact
S.No. Model name/Gaps covered Model activity Major supply chain impact Select indicators

1 Main model (Figure 3) All interface Transaction with in basic supply Poor quality of product/services Percentage variation in market
gaps from 1.1 to 1.6 chain at all interfaces delivered share
Loss in credibility, reputation and Percentage orders unlifted by
image of the organization customers
Loss in market share
2 Sub Model 1 (Figure 4) Interface Transactions from different Dissatisfaction of the Percentage orders delayed in
gap 1.1: Logistics user(S) and suppliers to the 3 PL service TPL1/supplier towards each other transactions
Logistics service provider (TPL1) provider on account of poor Number of repeat transactions at
product/services rendered at supplier and at TPL1
respective level Overall percentage orders delayed
May reflect in producing poor by TPL1 towards supplier and vice
quality products versa
May lead to dissatisfaction of
supplier and affect loyalty towards
the focal firm
3 Sub model 2: Interface gap 1.2: Transactions from 3PL service Dissatisfaction of focal firm/TPL1, Timely delivery of material per
Logistics service provider (TPL1) provider to Focal Firm towards each other on account of supplier
and Logistics user (F) poor processes at respective level Number of repeat transactions per
May lead to termination of contract supplier
with TPL1 Over all percentage orders delayed
by TPL towards focal firm
4 Sub model 3: Interface gap 1.3: Transactions from Focal Firm to Distrust/Dissatisfaction of TPL2, Numbers of orders unlifted
Logistics user (F) and Logistics the 3 PL service provider towards the focal firm, or of the Breakage/spoilage of components
service provider (TPL2) focal firm towards TPL2 on by TPL2
accounts of poor operations at Number of orders reworked
respective levels
May lead to poor coordination of
TPL2 with focal firm and
ultimately lowers Supply chain
efficiency and effectiveness
(continued)
S.No. Model name/Gaps covered Model activity Major supply chain impact Select indicators

5 Sub model 4: Interface gap 1.4: Transactions from 3 PL service Distrust/Dissatisfaction of Percentage of orders wrongly
Logistics service provider (TPL2) provider to the different distributor, towards the TPL2 or of delivered
and Logistics user (D) distributors TPL2, towards the distributor on Percentage of orders delivered late
account of poor processes/systems Number of customers lost by
at respective level distributor on account of non
May lead to poor performance of availability of material
TPL2/distributor and ultimately
lowers Supply chain efficiency and
effectiveness
6 Sub model 5: Interface gap 1.5: Transactions from different Distrust/Dissatisfaction of TPL3, Percentage orders unlifted
Logistics user (D) and Logistics Distributors to the 3 PL service towards the distributor or of (inventory) at distributors end
service provider (TPL3) provider distributor, towards the TPL3 on Percentage of orders delayed
account of poor coordination Numbers of unsatisfied
between TPL3 and distributor customers/day
May lead to request for change of Waiting time of TPL3 for lifting
distributor by TPL3 to focal firm order
or breakage of contract of TPL3 or
results in poor performance of
distributor and ultimately lowers
supply chain efficiency and
effectiveness
(continued)
supply chain
service in the

Table III.
561
Quality of
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562

Table III.
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S.No. Model name/Gaps covered Model activity Major supply chain impact Select indicators

7 Sub model 6: Interface gap 1.6: Transactions from 3 PL service Distrust/Dissatisfaction of Number of customer complaints
Logistics service provider (TPL3) provider to Customer Customer towards the TPL3/Focal about product/services
and Customer firm on account of poor Number of orders lost/number of
processes/systems at TPL3 orders available
May result in the Number of repeat transactions/day
dissatisfaction/distrust of the Average waiting time of customer
customer towards the
good/services of Focal firm on
account of poor understanding of
the customer’s needs/requirement
by TPL3
Affects the credibility, reputation
and image of the focal firm in the
market and thus has a major
supply chain impact
 Supplier's
Quality of
Communication to Past experience of
Supplier (Purchase Perception of TPL1/ Supplier with TPL1 service in the
Focal Firm's
Order)
requirement supply chain

Past experience
563
Organization's
Commitment to deliver based on interaction
Quality/Services with employees of
TPL1
Service quality Service quality Service quality
Gap 1.1.1 Gap 1.1.3 Gap 1.1.4

Translation of Inter functional

Perceptions to Service communication
Quality specifications

Service quality
Gap 1.1.5

External Service Delivery Service quality

Communication to (Actual) Process Gap 1.1.2
Focal Firm
Service quality
Gap 1.1.6
Logistics
Perceived Service User (S):
Supplier

Interface Gap
1.1

Expected Service Third Party Logistic

service provider 1
(TPL1)
Figure 4.
Interface gap 1.1 analysis
a) Past Experience model: Logistics User (S) –
Focal firms with Supplier Logistics service provider
requirements TPL1’s Need (TPL 1) module
b) Image of Supplier

Data analysis
(1) Statistical analysis. For analyzing the data so collected by conducting
survey/expert interviews, the analysis of the data using any statistical package
(SPSS, LISREL, etc.) may be carried out. Statistical techniques have been used
by researchers since past for:
.
data reduction (factor analysis); and
.
finding out relation among different entities and for other applications
indifferent contexts.
 36,7

564

Table IV.
IJPDLM

level (Figure 4)
user (S) – logistics
at interface 1.1 (logistics
Analysis of various gaps

service provider (TPL 1))

S.No. Service quality gaps Major reasons for service quality gap Major supply chain impact Typical measures

1 1.1.1F: (Forward): Communication Resulting on account of the improper This gap may result in building up of Percentage of orders delivered in time
Gap (Supplier – TPL1) attention to focal firm’s job, poor dissatisfaction of TPL1 towards Percentage reworks/rejects at TPL1
vision, poor training, poor supplier and thus resulting in poor and supplier’s end
communication mechanisms, poor supply of goods/services and Information sharing assessment
order acknowledgement, etc. from the ultimately has a deteriorating effect survey at both ends
supplier to the TPL1. This gap on the quality and efficiency of Percentage delays in purchase order
incorporates the mechanism of supply chain process (Preparation, transfer,
transfer of information at the supplier receipt, and process)
end Training/education assessment
survey at each level
2 1.1.1R: (Reverse): Communication Resulting on account of the improper This gap has an impact of developing
Gap (TPL1 – Supplier) communication from TPL1 to the distrust of supplier for focal firm’s
supplier. Some of the reasons for this job
gap may be attributed as poor
understanding of requirement of
focal firm by TPL1, poor
communication mechanisms, poor
training of staff, etc. at TPL1’s end,
lack of support mechanism, poor
infrastructure facility, etc. at
supplier’s end
3 1.1.2F: (Forward): Supplier Supplier may have inaccurate This gap may result in loss to the Supplier satisfaction survey
perception – TPL expectation perceptions of what TPL1’s expects TPL1 in the form of delayed TPL1 satisfaction survey
this result in a gap. Some of the schedules and disturbed planning Information sharing assessment
reasons for this gap are lack of proper and to focal firm in the form of survey at each level
market/customer focus, improper unfulfilled or wrong orders Training imparted at each level
training, improper customer focus, Market feed back assessment survey
inadequate facility, poor at different levels
communication system, poor past Inventory status auditing
experience, etc. at supplier end
(continued)
S.No. Service quality gaps Major reasons for service quality gap Major supply chain impact Typical measures

4 1.1.2R: (Reverse): TPL expectation – The TPL may expect the things, This gap result in excessive loss to
Supplier perception which are difficult to supply, in terms TPl1 and focal firm in the form of
of delivery schedules, coordination, failure of commitments to customer,
etc. by the supplier. Some of the delayed production, increased
reasons for this gap may be inventory, etc. Thus, may affect the
attributed as enthusiastic approach, contract with TPL1
poor supplier coordination and
assessment, and poor planning and
training of the concerned person at
TPL1
5 1.1.3F: (Forward): Service quality Results on account of inability on the This gap may result in the Employee satisfaction survey for
specification gap (Top management part of the supplier’s management to dissatisfaction of the functional different functions and at supplier’s
– Function heads) translate supplier’s perception into heads towards top management end
service quality specifications. Some ultimately results in loss to the Motivation assessment survey in
of the major reasons for this gap may efficiency and quality of services different functions
be attributed as poor organizational delivered by supply chain Percentage of orders delayed owing
systems, focus on other priorities, to improper communication
lack of trained professional, lack of Information sharing assessment
planning, poor past experience, poor survey at different levels
transfer mechanisms, improper
organizational structure, etc.
6 1.1.3R: (Reverse): Service quality The functional heads may have This gap may lead to unfulfilled
specification Gap (Functional heads different perception towards objective of the top management and
– Top management) management’s objective of delivering in turn affect the business of supplier
as per the requirements of the focal and ultimately loss to efficiency and
firm, this result in a gap. Few reasons quality of services in supply chain
for this gap may be poor salary, lack
of proper incentive schemes, lack of
motivation, poor organizational
policy, poor culture, poor
organizational systems, etc. at
functional head’s end
(continued)
supply chain
service in the

565

Table IV.
Quality of
 36,7

566

Table IV.
IJPDLM

S.No. Service quality gaps Major reasons for service quality gap Major supply chain impact Typical measures

7 1.1.4 (F & R): (Forward and Reverse): This gap may result from poor This gap may also exist at different Infrastructure assessment survey
Inter functional communication gap communication and coordination levels with different functions and Percentage orders completed in time
between different functions in the may have different magnitude and Percentage payments received in
organization. This is a gap resulting nature (forward or reverse) from time
from fragmented approach of function to function and level to level. Employee motivation assessment
different functions. Some of the This gap results in complete failure survey for different functions
reasons for this gap are giving of the system and ultimately lowers Training/education assessment
priorities to the individual objectives the quality of services delivered by Information transfer mechanisms
rather than the organizational, supply chain assessment
distrust amongst the functions, No of inter functional repeat
improper resources distribution, lack transactions
of infrastructure, poor coordination,
lack of coordination, lack of
education, poor organizational vision,
etc. at supplier end
8 1.1.5F: (Forward): Service delivery Reasons of this gap include lack of This gap may result in dissatisfied Analysis of quality assurance data at
gap (Functional heads – Concerned sufficient support for the frontline employee and hence lowering the different functions
employees in different functions) staff, process-related problems, or efficiency and quality of services Employee satisfaction survey
frontline/contact staff performance delivered by supply chain Training/education assessment
variability, lack of motivation, survey
quality related problems, Infrastructure/tools assessment
management of individual Percentage orders failures at each
relationship, etc. by functional heads level
Percentage Inventory blocks up in
the departments
Percentage orders delayed at each
level
(continued)
S.No. Service quality gaps Major reasons for service quality gap Major supply chain impact Typical measures

9 1.1.5R: (Reverse): Service delivery Resulting on account of This gap may have an impact of
gap (Concerned employees in non-performing employees in unfulfilled commitments, lack of
different functions – Function heads) different functions of the firm. Some support from work force towards
of the reasons of this gap may be leadership, etc. thus in turn reducing
attributed as lack of motivation, lack the efficiency of the supply chain
of infrastructural facilities, lack of
support from top management, poor
salary, personal problems, non –
cooperative nature of operating
persons, etc.
10 1.1.6F: (Forward): External Customer expectations are fashioned This gap may have a significant Percentage payments collected in
communication gap (Marketing by the external communications of an impact on the TPL1 and focal firms’ time
function of supplier – TPL1 and organization. This is a gap resulting performance in the form of delays in Percentage payments processed in
Focal firm) on account of enthusiastic or delivery, excessive inventory, etc. time
neglected approach by the marketing and leading to the loss in the Number of Training/education
function of supplier to the TPL and efficiency and quality of services programs conducted
focal firm for the status of delivery delivered by supply chain Supplier motivation assessment
product or services offered. Some of survey
the key reasons for this gap may be Information assessment to the
attributed to lack of supplier
education/training of marketing Motivation assessment survey
persons, poor organizational policy, Percentage undispatched in time
lack of customer orientation, etc. Percentage order failures
11 1.1.6R: (Reverse): External Resulting in response to the This gap may have an impact of loss
communication gap (TPL1 – communication made by focal firm in the faith of supplier to TPL1/focal
Marketing function of supplier) and the marketing function of the firm’s job and thus may lead to
Supplier. This gap covers the termination of contract of TPL1 by
communication aspects of the TPL1 focal firm. This gap may finally
towards the marketing function of the lowers the efficiency and quality of
supplier. This gap covers the delivery services delivered by supply chain
requirement of the product. This gap
depends on the planning, training,
coordination, etc. of the TPL1 towards
supplier and Focal firm, etc.
supply chain
service in the

567

Table IV.
Quality of
IJPDLM (2) Data envelopment analysis (DEA): It is difficult to evaluate an organization’s
36,7 performance in the presence of multiple inputs and multiple outputs to the
system. The difficulties are exaggerated when the relationships between the
inputs and the outputs are complex and involve unknown tradeoffs. DEA (data
envelopment analysis) is a mathematical programming model applied to
observational data (that) provides a way of obtaining empirical estimates of
568 relations – such as production functions and/or efficient production possibility
surfaces – that are cornerstones of modern economics (Charnes et al., 1978).
DEA is based on linear programming models for assessing the efficiency and
productivity of decision-making units which convert multiple inputs to multiple
outputs. Over the last few years DEA has gained considerable popularity and
managerial attention for measuring performance and efficiencies of the
organizations. In the current context this technique can be used to maximize
the efficiency and effectiveness of the QoS in the supply chain under
consideration.

As an illustration, some of the measures for analyzing the various interface and service
quality gaps at different levels in the supply chain are depicted in Table VI along with
their respective category.

Envisaged benefits of the proposed model

This proposed model, along with the necessary sub modules will be highly beneficial to
the organizations in leveraging the efficiency of the supply chain. The following key
benefits are envisaged:
.
The model will help in understanding gaps related to the quality of service
existing between logistics users, logistics service provider, focal firm and
customers. It will also suggest measures to reduce them and will help in
providing direction for improvements in the quality of service in supply chain.
Based on the analysis of the gaps, the model may provide guidance on which
activities need to be outsourced.
.
The model can also be used as a diagnostic tool to understand the weaknesses in
the existing supply chain and thus help in identifying the key areas for
improvements within the organization.

S. No. Proposed tool Proposed methodology

Data collection
1 i) Survey a) Through a customer survey of both internal and external (supplier,
Focal firm and Distributor) customers
ii) Expert interviews b) Carrying out expert interviews on assessment of various parameters
of quality of service at various level in the supply chain
Table V. iii) Field modeling c) Modeling through field observations and recording the relevant
Proposed methodology facts
for data collection and Data analysis
analysis of supply chain 2 i) Statistical software a) Statistical analysis of the data collected trough above observations
gaps ii) DEA software b) Data envelopment analysis (DEA)
 .
The model can help the organizations to evaluate a suitable 3PL service provider. Quality of
It may also be used as a tool for benchmarking. The logistics service provider service in the
with minimum gaps can be benchmarked for improvements in the processes.
Similarly, the relative performance of suppliers and distributors vis-à-vis that of a supply chain
3PL can be assessed.
.
The proposed model can also be used for internal benchmarking with in the
organization between various functions. 569
The expandability of the model both upstream and downstream the supply chain
provides an opportunity for seamless integration of resources through out the supply
chain for improvement in its efficiency. The proposed model will also be helpful in
identifying the key parameters for improvement in the efficiency of supply chain at all
ends (supplier, third party logistics service provider, focal firm, third party logistics,
distributor, third party logistics and Customer) thereby leading to increased
productivity and profitability of every member in the supply chain. This may result
in increased customer satisfaction and finally improving efficiency and quality of
services delivered through supply chain.

Preferred choice of indicator

S. No. Measures Nominal Larger Smaller
p
1. Percentage of orders delivered in time at all levels in supply – –
chain p
2. Percentage reworks/rejects at all levels in supply chain – – p
3. Total supply chain cycle time (Gunasekaran et al., 2001) – – p
4. Total cash flow time (Gunasekaran et al., 2001) – – p
5. Customer query processing time –
p –
6. Inventory status reporting to links of the supply chain –
p –
7. Net profit v/s productivity ratio (Gunasekaran et al., 2001) – –
p
8. Delays in purchase order process (Preparation, transfer, – –
receipt, and process) p
9. Logistic User/service Provider satisfaction (Motivation for – –
job, satisfied with procedures, training need assessment,
technology need, price, etc.) at levels p
10. Supply chain capacity utilization (Gunasekaran et al., 2001) – –
p
11. Percentage of orders delayed by logistic service provider – –
(TPL) and logistic user (supplier, focal firm, and distributor) p
12. Percentage orders completed in time for all the members of – –
supply chain p
13. Percentage payments received in time for all the members of – –
supply chain p
14. Number of inter party repeat transactions (for different – –
queries/requirements) at different levels p
15. Percentage payments collected in time for all the members – –
of supply chain p
16. Number of orders unfulfilled by supply chain – – p
17. Percentage orders unlifted/delayed by logistic service – – Table VI.
provider and logistic user p A select list of
18. Percentage Orders still to be taken in for action by LSP and – – quantitative indicators
LU for various gaps
IJPDLM Some observations
36,7 .
The proposed model covers the transactions only in the basic supply chain (from
the first supplier to its first transaction with third party logistics service
provider), but the similar structure can be extended up and down stream for the
analysis of ultimate supply chain.
.
Different organizations may have different structures and different ways by
570 which different functions are being performed; accordingly the model needs to be
modified to suit the organization in consideration. Different types (nature and
magnitude) of gaps may exist according to the working and hierarchical
structure of the organization in consideration.
.
It is assumed that the suppliers and distributors deal only with third party
logistics service provider and the gaps are considered accordingly. Supplier or
distributor may deal with multiple organizations, accordingly for each such case
the (nature and magnitude) of gaps is to be computed, and also the procedure is
similar for multiple suppliers and distributors communicating directly to the
focal firm (in absence of TPL) in consideration. The proposed model has the
flexibility to account for this by replicating the same procedure for different
organizations under consideration.
.
It will be advantageous if the same logistic service provider performs TPL1,
TPL2 and TPL3 activities. This may instill a greater confidence and a sense of
responsibility between the logistic user and the service provider. This will
ultimately benefit the end customer.

Directions for future research

The proposed service quality model in supply chain provides a conceptual framework
for assessing the quality of service of 3PL service providers and the supply chain as a
whole. The proposed model is based on the qualitative data generated through series
of discussions with the academicians and professionals at various levels. The
conceptual model and the propositions emerging from it imply a rich agenda for future
research:
.
There is a need and an opportunity to develop standard instrument to measure
service quality of 3PL-service provider and supply chain as a whole, there by
aligning all the processes to deliver customer satisfaction and to gain customer
profitability.
.
There is a need to examine how quality of service interface influences the
behavior towards both upstream and down stream of supply chain.
.
It will be interesting to study whether the different bi-directional gaps (1.1(F &
R)-1.6(F & R)) and corresponding sub gaps vary with the products, functional
responsibilities/classification or with organization/industry. There is a need to
establish the impact of each gap on the quality of services delivered by various
agents in the supply chain.
.
Research is needed to generate various Rust et al. (1995) and Lee et al. (2000)
dimensions of service quality with 3PL-service provider and for supply chain.
There is a need to find out whether these dimensions are different at different
levels in supply chain. These dimensions should be such that with appropriate
 changes in the wordings the same instruments should cater the requirements of Quality of
variety of application areas. service in the
. Research is needed in the area to examine the gaps at various levels in the supply chain
supply chain (main model and sub models). This may help the organizations
in deciding the priorities, deciding for making a 3PL contract and this is also
essential form the customer’s point of view. There is a need to examine the
magnitude of the specific gap and its impact to the quality of services at 571
each level and to the supply chain as a whole. Also there is a need to
establish difference between the critical and the non-critical gaps in the total
sequence.

Concluding observations
A basic model is proposed on the service quality in the supply chain based on the gap
analysis. The key gaps likely to affect the service quality at different levels are
extensively spelt out. It may be noted that these gaps may be interrelated. An
acceptable quality of service can be thought, through out the supply chain as a
prerequisite for successful delivery to meet the customer’s expectations.
This model provides guidelines for the organizations to understand the factors,
which influence outsourcing decisions in a supply chain. The third party logistic role in
the supply chain is influenced by:
.
the extent to which the logistics process needs to be outsourced;
.
the perception of the service provider and receiver; and
.
relationship with the client, upstream and downstream the supply chains.

The paper highlighted some of the major consequences of service quality in supply
chain; they further need to be determined empirically along with their relative impact
on supply chain. The bi-directional gaps at different levels will have different impact
on supply chain performance.
The conceptual service quality model proposed in supply chain will be useful to
both the academicians as well as the practitioners for visualizing and measuring the
quality of services delivered by various stakeholders in the supply chain.

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About the authors

Nitin Seth is currently an Assistant Professor in the department of Mechanical Engineering in
Institute of Engineering and Technology, Devi Ahilya Vishwavidyalaya, Indore. He has more
than ten years of industry and teaching experience. His research interests are supply chain,
service quality, performance measures and coordination. E-mail: nitinseth@email.com,
nitiseth@yahoo.com
 S.G. Deshmukh is a Professor in Department of Mechanical Engineering, at Indian Institute of Quality of
Technology Delhi. He has more than 15 years of teaching and consultancy experience. His
research interests are supply chain management, quality management, information systems and service in the
systems optimization. S.G. Deshmukh is the corresponding author and can be contacted at: supply chain
deshmukh@mech.iitd.ernet.in
Prem Vrat is the Director of Indian Institute of Technology, Roorkee (India). He has vast
experience in teaching, research and consultancy spanning more than 35 years. He is on the
editorial boards of several international journals. He has many awards and prizes to his credit. 575
His areas of interest include productivity management, supply chain management, and
industrial engineering and operations research. E-mail: pvrat@iitr.ernet.in

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