Global Connections Through Technology

Assignment No. 2

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Executive Summary

Due to globalization and unpredictable business environments, competition

in the marketplace has become highly intensive and dynamic. To survive in such
conditions, many firms now start focusing on transportation and logistics to make
their business operations more efficient and cost-effective. It not only supports the
supply chain but also provides a competitive advantage to the organization.

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Table of Contents
1. Introduction…………………………………………………………………. 4

2. Answer Q. No 1….…………………………………………………………5-6

3. Answer Q. No 2…………………………………………………………….6-7

4. Answer Q. No 3………………………………………….............................7-8

5. Answer Q. No 4…………………………………………………………….8-9

6. Conclusion and Recommendations…………………………………………10

7. References…………………………………………………………………10-11

8. Appendices…………………………………………………………………..12

1. Introduction

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 Transportation and logistics are one of the important sources of competitive
advantage. Different organizations adopted different strategies such as the reduction in
cost, efficiency at work, use of advanced technology, etc. Many organizations develop
specific capabilities based on available resources for creating sustainable
competitiveness. There are various problems and challenges that could be faced by the
transportation and logistics industry due to the lack of the right operational technology, a
more digitalized society, customer-oriented markets, and a highly competitive
environment. Logistics is a very significant factor that can contribute to the organization's
competitiveness.

The transportation and logistics industry is seeking more innovative new ways to
optimize its operations. Different strategic technologies could help the business in
overcoming challenges, supporting the supply chain, and making them competitive in the
market. There are many disrupting factors affecting the logistics industry. The most
significant factors are demand management, value creation, measurement of logistics
performance, delivery, and cost. The study of logistics helps the organization to enhance
its efficiency and effectiveness of its operations. Therefore, logistics capability
development at the current time is very important as business operations get complicated
and more competitive.

2. Answer Q. No 1

There are various problems and challenges that are faced by the transportation and
logistics industry due to the lack of the right operational technology, more digitalized

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society (Arnett et al., 2018), customer-oriented markets, and highly competitive
environment. The transportation and logistics industry is seeking more innovative new
ways to optimize their operations. Different strategic technologies could help the business
in overcoming challenges, supporting the supply chain, and making them competitive in
the market.

The first problem and challenge that the industry might face are related to
inventory management, visibility, and tracking system. As inventory is crucial for any
business (Wagner, 2008), it also bears great importance for the transportation and
logistics industry to have critical competency regarding proper understanding and
controlling of business inventory. In the absence of the right technology, especially if the
business systems are not centrally connected, the business will fail to keep a detailed
record of the real-time available inventory at a specific place which not only hampers
sales but also creates a negative effect on customer satisfaction. It will also disrupt the
supply chain which needs a proper tracking system and management of inventory from
various places, warehouses, or stores.

The second problem and challenge that the industry might face are related to
transportation costs, as it is a major and integral part of the transportation and logistics
company budget. The consumer will have to pay more for shipping as a result of an
increase in fuel prices. To resolve this issue, businesses should implement competitive
strategies supported by advanced technology to identify transportation cost issues and to
resolve them by developing suitable solutions (Evangelista et al., 2013).

The third problem and challenge that the industry might face are related to
manpower management. As the transportation and logistics industry grows and demand
increases, there is a need for a more systematized manpower system to keep a proper log
of all incoming and outgoing products (Hoetker, 2005). The use of advanced technology
and efficient shipping strategies may resolve that issue.

The fourth problem and challenge that the industry might face are related to
offering segmented and customer services for sharing a sole information platform across
the network of departments. The performance and efficiency of the supply chain depend

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on the advancement and availability of customized and segmented technology (Busse and
Wallenburg, 2011). It not only brings transparency and maintains customer trust but also
provides an opportunity to the customer for making prudent choices about the product.

2. Answer Q. No 2

There are mainly five disrupting factors affecting the logistics industry. The most
significant factor is demand management. It is related to meeting all the requirements
completely as mentioned in the purchase order including quantity, quality, logistics
services, product type, etc. Besides that, it also includes a customer service management
system and a well-managed complaint system to resolve and respond to complaints
against logistic services (Morash et al, 1996). It also includes establishing good
relationships and communication channels between organizations, customers, or suppliers
and coordination skills with all the stakeholders of the organization (Mentzer et al, 2004).

The second most important factor that could affect the logistics industry is value
creation. This factor comprises two variables i.e. flexibility, technology, and innovation
(Priem, 2007). The term flexibility refers to the ability to store inventory and to adjust
orders by new purchase orders as per the customer's requirements. Whereas technology
and innovation involve the use of advanced machines, plants, tools, and equipment at the
workplace to improve efficiency.

The third factor that could affect the logistics industry is the measurement of
logistics performance. It comprises benchmarking for comparing the performance of the
organization with the industrial standards. Measurement of logistics performance proved
to be very important for the success of the organization as it focuses on capability
development by the organization (Fawcett and Copper, 1998).

The fourth factor that can create an impact on the logistics industry is delivery.
The term delivery refers to speedy delivery, on-time delivery, reliable delivery, and
coverage. This factor can give a competitive advantage to the company (Lu and Yang,
2006).

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 The fifth factor is cost. It includes the cost of transportation, inventory, workforce,
and good distribution. It is used to measure the capability of an organization which in
turn improves its performance (Chavez et al., 2017). Most organizations focus on it to
stay competitive in the market.

3. Answer Q.No 3

The logistics industry like every other industry also goes through the
transformational phase and experiences automation and digitalization. They should strive
for digital fitness, innovation, cost controlling and profit maximization (Lai, 2004). The
use of autonomous, self-driven fleets is no more a dream. Automated technology is
introduced by Amazon by using drones for deliveries. This trend is further extended to
the shipping and cargo industry. Automation not only increases efficiency but also
increases the competition in the market. It is not only time-efficient but also cost-
efficient.

3D printing has a positive effect on the logistics industry. It brings a revolution in

the warehousing system. It gives manufacturers the option of printing on demand. This
will not only reduce the carrying cost of inventory but also reduces transportation costs
(McAfee, 2002). It also provides the utility to print complex things rather than going
through the manufacturing and assembly process in the factories. It will not only reduce
the volume of production but also decrease the production time and labor costs.

There will be highly innovative distribution centers in the future (Davis &
Luehlefing, 2004). Robots using self-scanning tools, cameras to identify missing,
mislabeled, and wrongly priced items. An example of innovative distribution is an IoT
solution that is developed by Microsoft. Smart technologies will make smart automation
(Zhu and Weyant, 2003). Due to the expansion of e-commerce, many companies started
opening small centers near big cities. Supplier of 3D robotics Attabotics developed a
storage system that reduces the requirement for warehouse space.

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 There will be completely digital, efficient, and transparent warehousing
operations in the future. Microdrones along with sensors and cameras can check the
status of inventories with complete accuracy and speed. Receiving and handling of
merchandise, video conferencing, face and voice recognition is optimized by using
wearable’s (Murphy & Poist, 2000). Digital fitness becomes essential for every logistics
company.

Emerging technologies lead to the urbanization of logistics as a result of multi-

orders from the customer’s logistics partners collecting orders and start optimizing routes
(Scupola, 2003). The presence of computer technology enables transport companies to
make efficient use of available space and make quick deliveries. By the use of tracking
logistics applications, customers can maintain tracking records and can evaluate
transporters' performance. Highly trained professionals are required to manage
automation on a daily basis in logistics. The organization should provide the current
workforce with proper training to make them suitable for technical jobs and to meet the
challenge of digital fitness by making them skillful from data analysis to automation and
platform solutions (Grant, 1996). There is a need to integrate the digital strategy of an
organization with its business strategy to get a competitive advantage.

4. Answer Q.No 4

To overcome the challenge regarding inventory management, visibility, and

tracking, there is a need for the transportation and logistics industry to switch to cloud-
based integrated technologies from their in-house software solutions. As cloud-based
technologies not only provide data in real-time, but it is easily accessible irrespective of
time and location to the entire organization. It may include transportation and warehouse
management systems (Hazen, 2012). It also helps companies in carrying out the
predictive analysis as they can make supply chain forecasts by using current and
historical algorithms datasets. Cloud-based integrated technology is already used by
Apple and the Whole Foods to get a competitive advantage.

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 The challenge regarding cutting transportation costs can be overcome by the
logistics industry by keeping a proper record of transportation routes, this can be done by
installing autonomous tracking and artificial intelligence into vehicles. This technology
will not help in keeping real-time data about routes but also provide information about
available alternative routes to reduce transportation costs. This technology will not only
bring fuel efficiency but also evaluate road conditions and drivers' handling of a vehicle,
which also helps in reducing maintenance costs of vehicles. A company like FedEx is
using this technology to optimize its operations efficiently.

Another important challenge that is faced by the transportation and logistics

industry is manpower management, it can be handled by the use of robotic and drone
technology. As in warehouses, they need a workforce that can work efficiently without
incurring additional expenses (Bromiley, 2016). The use of robots at the workplace helps
in faster sorting of incoming and outgoing packages, placing shipments accurately in
their respective containers, and avoiding defective orders before shipment. Companies
like Amazon are already using this technology to optimize their shipment time.

To meet the challenge of optimized segmented and customer service by the

transportation and logistics industry block chain technology proved to be the solution for
this as it not only helps in keeping a record of the entire product life cycle but also helps
in keeping tracking record in respect of the transfer of ownership from one place to
another place or from the manufacturer, retailer, and customer (Delfmann, 2002). This
technology also supports maintaining the supply chain by relocating the inventory
through the transferable tracking system. Many companies started using this technology
to allow the customer to observe the route of their package and to evaluate delivery time
to stay competitive in the market.

6. Conclusion and Recommendations

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 To conclude, we can say that for a business to survive in today’s ever-changing
market situations is not easy, for the survival and growth of a business focus on
transportation and logistics is unavoidable. It provides a competitive advantage by
making operations more cost-effective and efficient. The transportation and logistics
industry is seeking more innovative new ways to optimize its operations. There are
different strategies that could help the business in overcoming challenges, supporting the
supply chain, and making them competitive in the market. There are many disrupting
factors affecting the logistics industry. The most significant factors are demand
management, value creation, measurement of logistics performance, delivery, and cost.
The study of logistics helps the organization to enhance its efficiency and effectiveness of
its operations. Therefore, logistics capability development at the current time is very
important for a business to be successful.

7. References

1. Arnett,D.B.,Sandvik,I.L.andSandvik,K.
(2018),“Twopathstoorganizationaleffectiveness – product advantage and life-
cycle flexibility”, Journal of Business Research, Vol. 84 No. 3.
2. Wagner, S.M. (2008), “Innovation management in the German transportation
industry”, Journal of Business Logistics, Vol. 29 No. 2.
3. Evangelista, P., McKinnon, A. and Sweeney, E. (2013), “Technology adoption in
small and medium-sized logistics providers”, Industrial Management & Data
Systems, Vol. 113 No. 7.
4. Hoetker, G. (2005), “How much you know versus how well I know you: selecting
a supplier for a technically innovative component”, Strategic Management
Journal, Vol. 26 No. 1.
5. Busse, C. and Wallenburg, C.M. (2011), “Innovation management of logistics
service providers: foundations, review, and research agenda”, International
Journal of Physical Distribution & Logistics Management, Vol. 41 No. 2.
6. Morash, E., C. Dröge, and S. Vickery. (1996), “Strategic Logistics Capabilities
for Competitive Advantage and Firm Success,” Journal of Business Logistics,
17(1), 122.
7. Mentzer, J.T., S. Min, and L.M. Bobbitt. (2004), “Toward A Unified Theory of
Logistics,” International Journal of Physical Distribution & Logistics
Management.

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 8. Priem, R.L. (2007), “A Consumer Perspective on Value Creation,” Academy of
Management Review, 32(1).
9. Fawcett, S.E., and M.B. Cooper. (1998), “Logistics Performance Measurement
and Customer Success,” Industrial Marketing Management, 27.
10. Lu, C.S., and C.C. Yang. (2006), “Evaluating Key Logistics Capabilities in
International Distribution Center Operators in Taiwan.”
11. Chavez, R., W. Yub, M.A. Jacobs, and M. Feng. (2017), “Manufacturing
Capability and Organizational Performance: The Role of Entrepreneurial
Orientation,” International Journal of Production Economics.
12. Lai, K. H. (2004). Service capability and performance of logistics service
providers. Transportation Research Part E, 40(5), 385-399.
13. McAfee, A. (2002). The impact of enterprise information technology adoption on
operational performance: An empirical investigation. Production and Operations
Management, 11(1).
14. Davis, H. E., & Luehlfing, M. S. (2004). Radio frequency identification: The
wave of the future. Journal of Accountancy, 198(5).
15. Zhu, K., & Weyant, J. P. (2003). Strategic decisions of new technology adoption
under asymmetric information: A game-theoretic model. Decision Sciences,
34(4).
16. Murphy, P. R., & Poist, R. F. (2000). Third-party logistics: Some user versus
provider perspective. Journal of Business Logistics, 21(1), 121-131.
17. Scupola, A. (2003). The adoption of Internet commerce by SMEs in the South of
Italy: An environmental, technological and organizational perspective. Journal of
Global Information Technology Management, 6(1).
18. Grant, R. M. (1996). Prospering in dynamically-competitive environments:
Organizational capability as knowledge integration. Organization Science, 7(4).
19. Hazen, B. (2012), “Supply chain innovation diffusion: going beyond adoption”,
The International Journal of Logistics Management, Vol. 23 No. 1.
20. Delfmann, W. (2002), “The impact of electronic commerce on logistics service
providers”, International Journal of Physical Distribution & Logistics
Management, Vol. 32 No. 3, pp. 203-222.
21. Bromiley, P. (2016), “Operations management and the resource-based view:
another view”, Journal of Operations Management, Vol. 41 No. 1, pp. 95-106.

8. Appendices

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1DDPQ/7
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1DDPQ/7
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44PQ/16?accountid=30552
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223PQ/2?accountid=30552
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223PQ/6?accountid=30552
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2DPQ/2?accountid=30552
8. https://www.proquest.com/docview/2447291769/944FCF5E339347
2DPQ/3?accountid=30552
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83PQ/1?accountid=30552
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4PQ/1?accountid=30552
11. https://www.proquest.com/docview/2333459928/348C2081E1B647
24PQ/8?accountid=30552

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