Internal service quality: Determinants of distribution center performance

This work seeks to examine how front‐line employee performance and interdepartmental customer orientation affect the service, supply chain, and financial performance of US distribution centers.

The authors approached this subject by utilizing works from the supply chain management, services marketing, total quality management, and logistics personnel literature. Surveys were administered in 18 distribution centers across the USA and canonical correlation was employed to test the propositions that front‐line employee performance and interdepartmental customer orientation have a positive effect on distribution center service, supply chain, and financial performance.

Findings indicate that high levels of front‐line employee performance and interdepartmental customer orientation a positive effect on distribution center service and supply chain performance. The relationship of the two independent variables to distribution center financial performance was only partially supported.

The research did not explore how higher levels of front‐line employee performance may be obtained and may not be generalizable beyond a distribution center setting. For researchers, the results may be utilized in studies of logistics best practice. Moreover, studies investigating market orientation may find the results useful, as previous contributions have shown interdepartmental customer orientation to be positively related to the market orientation of the firm.

The results provide managers with evidence supporting the value of front‐line employees and the importance of encouraging departments to service other departments in a customer‐oriented manner.

This is the first study to detail the relationship between interdepartmental customer orientation and firm performance in a logistical setting, and adds further credence to the importance of front‐line distribution personnel in the delivery of quality output.