What is Value?

The Oxford English Dictionary refers to value as:

That amount of some commodity, medium of exchange, etc., which is considered to be an equivalent for something else; a fair or adequate equivalent or return. Value for money (freq. attrib.).

Within the field of Logistics, “value” is more difficult to define. With the growing number of services available to firms, the quantification of value becomes more important as the service becomes less tangible. It is critical that all members of a particular supply chain believe that they are receiving “value” in return for investments being made in particular services. Providing value means that stakeholders such as customers, employees, and suppliers believe that they are receiving a fair and just exchange for their efforts and investments. It is the ability of these stakeholders to assimilate understanding of the sum of functionality created by 3PL operations, systems, people and processes. 3PL customers are not only looking at total cost when making decisions, but also customer satisfaction, return on investment, and total system cost. Most 3PLs have a long history of marketing services to buyers and, consequently, have engrained an approach of defending costs rather than articulating a true Value Statement.

Value Project Sponsors:

GENCO

Center for Logistics Management