Generic balanced scorecard framework for third party logistics service provider R. Rajesh a , S. Pugazhendhi b , K. Ganesh c,n , Yves Ducq d , S.C. Lenny Koh e a Department of Mechanical Engineering, Noorul Islam University, Kumarakoil, 629 180, Tamilnadu, India b Department of Manufacturing Engineering, Annamalai University, Chidambaram, 608 002, Tamilnadu, India c Supply Chain Management – Center of Competence, McKinsey Knowledge Center India Private Limited, McKinsey & Company, DLF Plaza Tower, DLF City Phase I, Gurgaon – 122002, Haryana, India d University of Bordeaux, IMS-LAPS-GRAI-UMR 5218 CNRS, 351 cours de la Libe´ration, 33405 Talence cedex, France e Logistics and Supply Chain Management (LSCM) Research Centre, Management School, The University of Sheffield, 9 Mappin Street, Sheffield S1 4DT, UK article info Article history: Received 28 August 2010 Accepted 30 January 2012 Available online 15 February 2012 Keywords: Balanced scorecard Strategies framework Third party logistics service provider 3PL Q-sort method Delphi method abstract To provide valuable support for successful decision-making, managers needs a balanced set of financial and non-financial measures that represent different requirements, strategic goals, strategies, resources, and capabilities and the causal relationships between these domains. The balanced scorecard (BSC) is such a measurement system. Although much discussion has taken place in industries and academia circles for the development of BSC for third party logistics (3PL) service provider, little research exists which studies and develops BSC strategies for 3PL service providers. This study proposed a set of strategies for BSC of 3PL service providers. We devised a strategies framework for all the four BSC perspectives of the various functions of 3PL service providers and the weightages for the different strategies are evaluated using Delphi analysis. The implementation of the proposed framework in a 3PL company is also discussed. & 2012 Elsevier B.V. All rights reserved. 1. Introduction In this intensive and competitive environment that we live in, many firms are considering the logistics outsourcing option, in order to streamline their value chains. Third party logistics (3PL) service providers are typically addressed in the context of long term outsourcing of logistics activities by a manufacturer (Sink et al., 1996; Razzaque and Sheng, 1998). We define 3PL service providers as companies, which perform the various logistics activities of a customer either completely or only in part (Delfmann et al., 2002; Lai et al., 2004). These functions can include traditional activities such as transporting, warehousing, packaging, etc. but could also include some conventional activ- ities such as customs clearance, billing as well as tracking and tracing. In the last decade, the development of 3PL service providers has gained importance. The increasing importance of efficiency and a focus on core competencies opened up many business opportunities for 3PL service providers (Christopher, 1998a, b). The expectation of customers on shorter delivery times and more accurate services has increased considerably. As a result, the control complexity of logistics service providers has also increased significantly. Performance indicators can support the management of com- plex systems. It is to be observed that no single performance indicator can give a full picture regarding performance. Each indicator presents a partial view from a specific viewpoint and is therefore not enough to serve as a basis for management decisions. Historically, companies concentrated on financial indi- cators. Nowadays, it is widely recognized that non-financial and even intangible indicators can give valuable information as well (Brewer and Speh, 2000). But, such indicators are more difficult to measure and compare (Kleijnen and Smits, 2003). In recent years, both practitioners and researchers have emphasized the need to move beyond the financial measures of an operation and to incorporate a much wider variety of non-financial metrics in an organization’s performance reporting and reward systems (Kaplan, 1998). A popular performance measurement scheme suggested by Kaplan and Norton (1992) is the balanced scorecard (BSC) that employs performance metrics from financial, customer, internal processes and growth perspectives. By combining these different perspectives, BSC helps managers to understand the inter-relationships and tradeoffs between alternative perfor- mance dimensions, thus leading to improved decision making and problem solving. Contents lists available at SciVerse ScienceDirect journal homepage: www.elsevier.com/locate/ijpe Int. J. Production Economics 0925-5273/$ - see front matter & 2012 Elsevier B.V. All rights reserved. doi:10.1016/j.ijpe.2012.01.040 n Corresponding author. E-mail addresses: rajesh1576@yahoo.co.in (R. Rajesh), pugazhs12@yahoo.co.in (S. Pugazhendhi), koganesh@gmail.com, koganesh@yahoo.com (K. Ganesh), yves.ducq@laps.ims-bordeaux.fr, yves.ducq@ims-bordeaux.fr (Y. Ducq), s.c.l.koh@sheffield.ac.uk (S.C. Lenny Koh). Int. J. Production Economics 140 (2012) 269–282