Successful manufacturing firms develop competitive capabilities which enable them to satisfy customers and enhance performance. Academicians and practitioners contend that logistics processes significantly influence the attainment of these objectives. However, little empirical research addresses the impact that logistics has on an organization's competitive position and performance, nor has it revealed which logistics activities are most consequential.; This study investigates the relationship between a manufacturing organization's logistics processes, production flexibility, capacity to satisfy customers, and performance. It develops valid and reliable instruments to measure physical supply, physical distribution, logistics spanning processes, manufacturing flexibility, capacity to satisfy customers, and performance. This permitted the examination of causal relationships among these constructs.; An extensive literature review facilitated theory development. Interviews with practitioners, consultants, and academics helped to refine the questionnaire and ensured that the domain of each construct was addressed. A pilot study was executed with fifty respondents drawn from the targeted group of manufacturing managers from several industries including: furniture & fixtures, fabricated metal products, industrial & commercial machinery, and electronic & other electrical equipment. Firms with from 50 to 1,000 employees from across the United States are represented.; A large-scale mailing yielded 474 acceptable responses (a 14.5% response rate) that were used to test the generalizability of the results. The statistical methods employed include exploratory factor analysis in the instrument development phase, and LISREL to test hypothesized relationships.; This research confirms that the quality of a firm's logistics system has ramifications concerning the price it may offer, the quality of its products, the breadth of its product lines, and its delivery capabilities. The most influential area is logistics spanning processes. The utility of the logistics information systems, the degree to which logisticians participate in strategic decisions, and the proficiency of the purchasing function impact the firm's ability to satisfy customers.; It also establishes that manufacturers who do not insure their logistics processes are executed in a manner conducive to satisfying clients will experience a deterioration in performance. It was also found that the relationship between logistics processes and the organization's capacity to satisfy customers is influenced by the firm's level of manufacturing flexibility.
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