Integrating internal operations for effective operations : case studies in the supply chain

Logistics management is an important source of competitive advantage in commerce (Achrol, 1991; Day, 1994; Porter, 1985; Stalk et al., 1992; Webster, 1992). As organisations globalise to access new markets and achieve higher production and sourcing efficiencies, logistics play an important role in moving materials, products, and services through supply chains. Logistics management represents a growing segment of the economy, and plays a critical role in international trade. In recent years, most industries have recognised that substantial savings are available to companies that are able to coordinate and innovate within their logistics operations. Organisations today face great challenges because the successful provision of many goods and services requires the effective integration of logistics activities across a lengthening supply chain and an increasing geographical separation. The key objective of this study was to investigate how logistics firms integrate their operations for effective operations in the supply chain. The research questions in particular were: What initiatives were taken to integrate operations in the firms studied? What is the nature and outcome of the initiatives? Did they promote innovation as a result? The study was exploratory in nature and adopted a qualitative approach. Ten case studies were conducted (five in Singapore and five in Australia) based on interviews with twenty-three managers at Distribution Centres. This study provides important lessons for managers in logistics organisation in Australia and Singapore. It illustrates how firms that integrate their activities and operations together in a system can simultaneously minimise total distribution costs and maintain customer satisfaction.