Logistics Capabilities: the Path to Competitive Advantage

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Table of Contents

Abstract2
1.0Introduction2
2.0SCM Capabilities3
3.0Impact Analysis of Current Global Uncertainty10
4.0Conclusion11
6.0Bibliography12
7.0Reference List13

Logistics Capabilities: the path to competitive advantage

Abstract

A comparative analysis on the logistics capabilities of the major suppliers collaborating with Company A, the Australian subsidiary of a leading global company, and Company B, a smaller Australian owned business. The analysis will focus on capabilities based on the findings from Esper, Fugate and Davis-Sramek (2007). The subsequent discussion explores how current global uncertainties impact Company A and Company B, and how effectively the organisatons are positioned to respond to these potential threats to the supply chain.

1.0Introduction

The first decade of the new millenium has seen much change in the way Supply Chain Management (SCM) is viewed. As such, the multiple logistic flows within any supply chain, and essentially their capabilities is receiving extensive consideration. It has been suggested that, “logistics has become more prominent and is recognised as a critical factor of competitive advantage”(Bowersox and Closs, 1996).

The global climate demands that organisational capabilities must be sustainable for continued ability to leverage competitive advantage. The capabilities must be robust enough to withstand the rapid changes that a global economy presents. Whilst there are clear supply chain advantages to operating in a global economy, this new freedom exposes supply chains to increased potential risks that have traditionally been isolated by regional trading.

This paper is divided into two sections, the first analyses four identifiable logistic capabilities, with respect to major suppliers of both Company A and Company B. The second section will discuss how current global uncertainties impact Company A and Company B, and how effectively the organisations logistics learning capabilities are positioned to respond to these potential threats to the supply chain. Research is based upon data collected from answer/question emails and phone conferences with management from Company A and B and their corresonding Third Party Logistic (3PL) partners, Global Co and Transport Co.

2.0SCM Capabilities

Capabilities have been defined as, “those attributes, abilities, organisation processes, knowledge and skills that allow a firm to achieve superior performance and sustained competitive advantage” (Morash, Droge and Vickery, 1996). In recent years, organisations have looked to both internal and external logistic capabilities to leverage competitive advantage. Leveraging competitive advantage from the logistics capability can only be sustained if there is an organisational learning capability present.

“As the global economy continues to rapidly change the marketplace, relationships within the supply chain have required constant assessment and analysis, as competitive advantage becomes harder to achieve” (Christopher, 2003). With products and services being copied by competitors at an increasing rate, the distinctive capabilities and unique resources offered have become the sources of an organisations competitive advantage. Business success relies heavily on the learning capabilities of the organisation itself and the ability to leverage from logistic capabilities.

Esper, Fugate and Davis-Sramek (2007) identifed five dimensions of logistic capabilities in todays marketplace. These logistic capabilities include customer focus capability, supply management capability, integration capability, measurement capability and information exchange capability. The customer focus, supply management, integration and measurement capabilities will be further investigated.

2.1Customer Focus Capabilities of Organisations Suppliers

“In the logistics field, increased attention has been given to the relationships among customer-focused...
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