University of Texas at Arlington Department of Information Systems and Operations Management, College of Business Administration Office: Room 630 Business Building Box 19437 701 S West St. Arlington, Texas 76019-0437 Voice: 817.272.3528 Email: email@example.com
ABSTRACT This paper analyzes the impact of information technologies (IT) on logistics by conducting a survey of literatures on academic logistics journals and practitioner journals. The literature survey and practice find that third party logistic providers have better opportunity to leverage IT since they need to have interoperable IT systems with their customers. The business philosophy of Just-In-Time (JIT) has also contributed to the impact of IT in logistics. Further, information technologies are identified that has benefited the logistics. Future directions of logistics are discussed. INTRODUCTION The proliferation of information technologies (IT) and the internet technologies have provided impetus and challenges to the logistics. New technologies present new means to manage the flow of information. IT as a productivity tool can be utilized to both increase the capability and decrease the cost at the same time (Closs et al., 1997). It has been widely accepted that firms can achieve competitive advantage by cost reduction or differentiation with the proper implementation of IT (Porter & Millar, 1985). Enabled by IT the logistics has become a source of competitive advantage for many firms. Two streams of research are identified that highlights the role of IT in logistics. First stream relates to just-in-time logistics information system (Anderson & Quinn, 1986; Bookbinder & Dilts, 1989; Das & Handfield, 1997; Gomes & Mentzer, 1988; Perry, 1988; Schwarz & Weng, 2000; Spencer, M. S. et al., 1994; Spencer, M. S. et al., 1996; Takahashi & Nakamura, 2000; Titone, 1996; Wafa & Yasin, 1996). The other stream is the third party logistics (Lewis & Talalayevsky, 2000; Peters et al., 1998; Sauvage, 2003; Sink & Langley, 1997; Vaidyanathan, 2005). Importance of IT in logistics has grown to some extent by business philosophy of Just-InTime (JIT) by firms. With the emphasis of firms on JIT, the impact of logistics has grown as it is increasingly recognized as a source of consistent, low lead time, damage free deliveries (Bardi et al., 1994). In pursuit of competitive advantages, firms outsource their functions which are noncore competencies so that they can focus on their core competencies. A recent survey found that 83 percent of the surveyed Fortune 500 companies reported having at least one contract with a third-party logistics provider (Lieb & Bentz, 2004). Over the years, the use of third-party logistics has been increasing. Similar survey of Fortune 500 companies taken in 1991 had only 38 percent of the respondents reporting the use of third-party logistics provider (Lieb, 1992). The
third party logistic operators attempt to harness the capability of information technology to provide superior services to their customers. The objective of this paper is to study how IT has impacted logistics. To this end, literature review of both leading academic and practitioner logistic journals is conducted. The next section will report the framework of logistics. The following section will analyze the IT enablers in logistics. Then, the implications of ecommerce are discussed followed by a section on future directions for logistics. REVIEW OF THE LITERATURE A classification scheme logistics functions provides a meaningful way to study how IT has impacted the various functions of logistics. Previous research in logistics have categorized the use of information systems in logistics in different ways. A system of logistics functions can be divided into following five broad areas (Bowersox, 1974): facility location, transportation, inventory, communication and material movement. Based on the problem...