An International Analysis of Differences in Logistics Performance

Dimitrov, P. & Wandel, S. (1988). An International Analysis of Differences in Logistics Performance. IIASA Working Paper. IIASA, Laxenburg, Austria: WP-88-031

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Abstract

The ratio Value Added to Inventory Value is used as a proxy for logistic performance. Large differences -- up to 8 times -- have been observed among the 14 nations in the study. The rank among the nations has been rather stable for the last 20 years but the ratio has improved considerably in most countries since 1980.

Several hypotheses concerning the factors which explain the differences in inventory levels are formulated based on theories and case studies in the areas of production, trade, transport, communication, geography and social-economy. Proxies for some of these factors available in international statistics are used as independent variables in multiple regression analyses. The preliminary result indicates that as much as 80% of the differences could be explained by differences in import share, rail share, wholesale structure and telephone intensity. Hence, the hypothesis that differences in national inventory levels are only due to managerial factors or level of economic development could be rejected.

Even if the logistic performance of individual companies can be improved considerably by adopting new management principles -- as many case studies show -- the total logistic performance of a nation seems to have significantly benefited from investments in transportation, production and communication infrastructures. However, it has still to be shown that these historical correlations are also causal relations that hold true for the future.

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