| Summary: | Managing a sustainable service business rests on two critical customer perceptions: Firstly, the perceived sufficiency of the value of the service, and secondly the level of value differentiation between the current service provider other service providers in the market. (DeSarbo, Ebbs, Fong & Snow, 2010; Parasuraman & Grewal, 2000) The direction for this study was prompted by the limited research available around service quality for Supply Logistics within the global automotive industry. The study identified the key factors that logistics service providers need to focus on when aligning their perceptions of service quality to that of their customers. The service gaps between customer and service provider perceptions are uncovered. Particular focus was given to: The definition gaps in service quality, The perceived level of service quality, and The size of service quality differentiation between service providers. The key finding of the study is that service differentiation is influenced by the ability of the Logistics Service Provider (LSP) to deliver a quality of service in line with the level of importance the various elements hold to the customer. The causal relationships offered a step wise understanding of improving the perceptions of customers. This perception forming process is outlined as follows: Firstly, create a common understanding of the definition of service quality and establish the comparative importance of the various elements. Having an understanding of how customers’ value service quality is a critical first step in delivering superior service. A proposed Service Quality Framework for multi-national Supply Logistics providers in the South African automotive industry Secondly, align efforts to achieve in accordance to the level of importance of the service elements. If this is achieved, LSP’s will retain positive differentiation to its competitors irrespective of the actions of those competitors. Lastly, LSP’s need to regularly review if their own perception of the service level (per element) is in line with that of the customer. The study created a service quality framework of 22 different service elements grouped in four service factors. The relative importance of these elements were uncovered. This offered insight for organizing the business around key service elements. Within Supply Logistics the operational-management-tools, engineering-skills, processes-stability and management-structure are typical elements around which customers form their perceptions. The quality of the direct staff holds the key to sustained customer satisfaction, much more so than the commercial arrangements, industry innovations and the prestige of the brand behind the service. This study laid a foundation from which future research can deeper explore the unique slant that geographical, organisational designation or customer brand lines hold on the service quality perception.
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