Assessing a cross-border logistics policy using a performance measurement system framework: the case of Hong Kong and the Pearl River Delta region

Abstract

For the most rapidly growing economic entity in the world, China, a new logistics operation called the indirect cross-border supply chain model has recently emerged. The primary idea of this model is to reduce logistics costs by storing goods at a bonded warehouse with low storage cost in certain Chinese regions, such as the Pearl River Delta (PRD). This research proposes a performance measurement system (PMS) framework to assess the direct and indirect cross-border supply chain models. The PMS covers four categories including cost, time, quality and flexibility in the assessment of the performance of direct and indirect models. Furthermore, a survey was conducted to investigate the logistics performance of third party logistics (3PLs) at the PRD regions, including Guangzhou, Shenzhen and Hong Kong. The significance of the proposed PMS framework allows 3PLs accurately pinpoint the weakness and strengths of it current operations policy at four major performance measurement categories. Hence, this helps 3PLs further enhance the competitiveness and operations efficiency through better resources allocation at the area of warehousing and transportation.

Keywords:

• cross-border supply chain
• logistics operations policy
• third party logistics
• performance measurement system
• case study

Acknowledgements

The authors gratefully acknowledge the support of the Department of Industrial and Systems Engineering, The Hong Kong Polytechnic University, Hong Kong, and Sino Faour Holdings Limited, which is the mother company of the case study company, and finally the Faculty of Management and Administration of The Macau University of Science and Technology in providing relevant data source for this project.

Additional information

Notes on contributors

David W.C. Wong

David W.C. Wong is currently a full-time student who is pursuing his Engineering Doctorate degree at the Hong Kong Polytechnic University. His current research areas cover sustainable transportation system, green logistics and vehicle engine formulation.

K.L. Choy

K.L. Choy is an Associate Professor in the Department of Industrial and Systems Engineering at the Hong Kong Polytechnic University. He received an MSc in Manufacturing Systems Engineering, Management Science and an MPhil in Engineering at the University of Warwick, UK in the 1990s and his Doctorate at the Hong Kong Polytechnic University in 2003. He has published more than 80 international journal papers in the areas of logistics information, data systems, supply chain management, technology management as well as applying expert systems in industry.

Harry K.H. Chow

Harry K.H. Chow is an Assistant Professor in the Faculty of Management and Administration, Macau University of Science and Technology. He received a Bachelor’s degree and his Doctorate in Industrial and Systems Engineering from the Hong Kong Polytechnic University in 2004 and 2008, respectively. His research areas encompass integrative logistics information and decision support system using artificial intelligent approach. He has published more than 20 international journal papers in the areas of warehouse operations, logistics information, supply chain management and RFID technology in industry.

Canhong Lin

Canhong Lin is currently an MPhil. student in the Hong Kong Polytechnic University. His current research interests include combinatorial optimization and artificial intelligence methods applied in transportation network design.