The Impact of Globalisation on Logistic Service Providers

Topics: Logistics, Supply chain, Management Pages: 2 (432 words) Published: May 24, 2012
The impact of globalisation on logistic service providers (LSP's) located in Belgium. In the light of the logistics industry we will start with a definition of globalisation and a description of the driving forces behind the ongoing internationalisation process. Secondly we will define the behaviour of the logistic providers in terms of their strategic decisions, performance, services and international presence following this globalisation wave.

An increasing amount of supply chain activities are transferred to the LSP's. In this globalised world companies need to orient their business outside the borders of their home country to survive the fierce competition. Their strategic decision-making is based on the analysis of country and firm specific advantages. Otherwise known as locational advantages and ownership advantages (Dunning's eclectic paradigm). By consequence the organisation of their value chain moved from a vertical to a horizontal structure, crossing company and country borders. Companies need to control their costs and focus on their core business. Therefore off-shoring parts of the value chain to low-cost countries and outsourcing parts of their value chain - in particular tasks that are catalogued as secondary activities such as logistics - are general adopted ways of organising business today. On the contrary, efficient logistics is key to international success and considered as a strategic priority to compete in a globalised economy.

The broader the international dimension of companies the longer their supply chain (distance between source and consumer) and the more complex its logistics management becomes. Logistics needs to operate “cross-border” in order to be efficient. It is crossing the activities within the value chain (ex.: production, marketing, finance) and the company borders with all the agents of the supply chain. Monitoring the supply chain from source to consumer is a constant quest for optimisation. International success is...
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