Embracing Sustainability Information Technology and the Strategic Leveraging of Operations in Third Party Logistics

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Literature Review
2013
Rebecca Milliner
Student Number: 125 461 74
29/03/2013

Embracing Sustainability Information Technology and the Strategic leveraging of operations in third party logistics (“Operations-as-Marketing”) Review of the Article
The aim of this article was to establish a strong foundation for the use of information technology and strategic leveraging of operations in business, with a focus on third party logistics. A great deal of background research on key concepts was provided showing that there is a strong correlation between the success of corporate sustainability and information technology. The article starts off by introducing the latest concept for competitiveness which is sustainability. Business exists because of the demand by consumers for their products or services which is why competitive resources are needed. Previously the consumer has been over looked with a focus being on cost reductions in the value chain. However it has now been realised that increased firm performance can be linked to the consumer and sustainability processes. The paper puts forward the concept of “Operations-as-Marketing” and constructs to mediate strategic IT investments. Firms will gain a greater competitive advantage by internalising an in depth knowledge of its consumers. The paper takes a perspective from Third Party Logistics (3PL) as it is already a very consumer focused industry and strategic outsourcing is a result of increased use of IT systems. In this era 3PL offer clients with competitive advantage beyond the normal transportation and warehouse services to; freight forwarding, information-based (supply chain management) support such as network management and enterprise resource planning interface, and financial based services such as freight billing and auditing. The paper than goes onto discuss the theoretical background behind; corporate sustainability and lean production, The “Operations-as-Marketing” concept, and the role of IT resources. The first of the three sections about corporate sustainability and lean production discuss the change from previous business models that failed to recognise the importance of the earth’s feebleness and the finiteness of resources. This can be attributed to increased awareness and great concern for global warming, political conflict, pollution, and the looming scarcities of vital resources. This has lead businesses to developing a strong positive relationship between sustainability and financial performance that previously was nonexistent. They now co-exists in modern businesses and for some even yield new sources of prosperity. It then talks about ‘Lean Production’ as the key principle for sustainability throughout the supply chain. The two key factors outlined in the research suggest that ‘Lean production’ is successful if; One- the end consumer determines value of product as manifest in the market-determined price paid and two- every activity along the supply chain ensure that goods and services delivered are closets possible match to consumer signalled needs. This is where an information intense environment comes into play to ensure tightly coordinated logistics support. This leads on to the next main point which is that markets are now defined by customer activity rather than products and services. Businesses no longer aim to achieve standardized products & services of high quality, as the consumers now wants uniqueness and functionality. Business there for are now pushed to provide the consumer with solutions instead of products and services. This has created a customer-centric model in business strategy with a greater outward orientation toward the consumer. The paper suggest that for this reason businesses need to eliminate internal distinctions among the functional processes comprising the firm’s value chain, bringing to bear the strength of all its primary activities in particular, operations and marketing. Porter suggests that...
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