Performance-based logistics – an illusive panacea or a concept for the future?

Abstract

Purpose

The purpose of this paper is to summarize previously reported benefits, drawbacks and important aspects for implementation of performance-based logistics (PBL), and to identify knowledge gaps.

Design/methodology/approach

This is a literature review based on 101 articles. The reviewed articles are relevant to PBL in particular, but also to performance contracting, product-service systems (PSS) and servitization in general. The research method involved database searches, filtering results and reviewing publications.

Findings

PBL is a business concept that aims to reduce the customer's total costs for capital-intensive products and increase the supplier's profit. The design of the contract, performance measurements and payment models are important aspects for successful implementation. However, the authors find a reason for concern to be the lack of empirical evidence of the profitability of PBL for the customer and the supplier.

Originality/value

This literature review of PBL also includes publications from the related research areas: performance contracting, PSS and servitization. Developing PBL can benefit from results in these research areas.

Citation

Holmbom, M., Bergquist, B. and Vanhatalo, E. (2014), "Performance-based logistics – an illusive panacea or a concept for the future?", Journal of Manufacturing Technology Management, Vol. 25 No. 7, pp. 958-979. https://doi.org/10.1108/JMTM-06-2012-0068