Improving logistics performance through investments and policy intervention: a causal loop model

Logistics performance is an important factor that affects the competitiveness of nation as well as firms. Poor performance is a barrier to trade and foreign direct investment and thus to economic growth. The paper looks at the impact of investment by government and logistics service providers in strengthening of infrastructure, improvement in government regulation, development of skilled workforce and increase in the use of information technology on reduction in logistics cost, reduction in time, improvement in reliability, improvement in flexibility and improvement in safety for improving the logistics performance of a developing country like India. Variables are identified through thorough literature review and the mental models are converted to causal loop diagrams to understand the relationships among the variables. The paper is an attempt to fill the gap in available literature to improve the logistics services in India and it will help as an aid to the government and logistics service providers to improve the logistics performance and understand its effect on the economy and competitiveness of organisations.