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In this globalization era, where the boundaries between countries become less, the concept of global supply chain is commonly adopted by manufacturing company. In this concept, logistics have an important role to conduct a reliable global supply chain. To produce a product the raw material might be imported from several supplier from different country and then the final product will be exported to another market countries. This condition shows the importance for a country to improve their logistics performance to facilitate the global supply chain that applied in company level.

The performance of a country’s logistics, is critical to its competitiveness (Arvis, et al.

2010). Therefore it is of utmost importance to measure and track the performance upon which identification of the challenges that are to be faced by a country. Logistics Performance Index (LPI) is an index developed by the World Bank to measure a country’s logistics performance worldwide. Because LPI is a subjective index based on surveys and assessment from experts it is hard to measure the effect of improvement of LPI indicators in term to increase their LPI score.

To overcome the challenges, this study adopt the framework from LPI report (2010) where it is measured by six components that are classified into two main categories called the input and the outcomes. The input components are customs, infrastructure and logistics competence while the outcomes component are international shipment, timeliness, tracking and tracing. Seemingly unrelated Regression method applied to conduct a countries logistics quality measurement using surrogate model to measure quality of logistics using objective indicators as the predictors thereby enhancing the relation between LPI components and the indicator from the influencing factors will be analyze.

This study will also discuss about Indonesia’s logistics performance as a study case in terms of the LPI and the key indicators affecting its LPI. Logistics become vital aspect for Indonesia in connecting either domestic or international trading. As a country with huge amount of export and import trading value, there is the need for it to be supported with a good performance logistics sector otherwise will become an obstacle for economic growth. Even though Indonesia knows Logistics Performance Index (LPI) from the World Bank publication, yet still has not measured its logistics performance both in terms of logistics costs and other logistics indicators. At macro level there is the necessity to evaluate the national logistics performance, the effectiveness and efficiency of the implementation of the blueprint of National Logistics System.

This paper constitutes of five sections which includes the following. Section one entails of brief Introductory, research background, objective, contribution and position compare to previous study. The second section describe the literature review about logistics, LPI and the methodology that applied in this research as well. As for section three talks about research methodology and data collection. The fourth section discusses about the estimation results and data analysis. Finally, the fifth is about the discussion, conclusion of the summary of the findings, contribution of the paper, implications and suggestions for further studies.

1.1. Research Objective

One of the goals of this study is to develop another scheme to measure the quality of a country’s logistics based on social, economic and infrastructure factors so that the performance of logistics can be tracked and compared more easily and also to overcome the challenges as mentioned before. After the completion of conducting the measurement model, a suggestion will be given as how to improve the countries logistics performance based on the findings.

1.2. Research Position

Before this research there have been many research that study about the relation of logistics and other factors like economic, infrastructure also social but there is still no research that apply the SUR approach to determine the relationship between logistics performance and factors affecting it. Gunner, et al. (2012) apply correlation analysis to determine the relation of country logistics performance and some factors that affecting it. Puertas, et al (2013) try to analyze the importance of logistics performance in regards to country export – import in European Union countries. The measurement of countries logistics performance based on survey and expert assessment were conducted by Arvis, et al (2007). While this research is trying to evaluate countries logistics quality by using objective indicators that related to logistics performance and the indicator.

The comparison between this study and the previous studies is shown in table 1 which segmented by research objective, parameter specification, and methodology

Table 1 literature related to country logistics performance

Author Objective Parameter Methodology

Guner, et al based on other factors that have influence it.

As the expected benefits from this study, the output of this study will contribute in practical and academic issues, there are:

1. Practical: The expected result of this research is the output can be used as a reference in evaluating and improving countries logistics performance quality, particularly Indonesia as a study case country.

2. Academic: In academic terminology, the output of this study will provide knowledge in the field of country logistics performance measurement using the objective dataset as the input.

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