Analysis of Logistics Strategies from 1990 to 2008
Do supply chain strategies evolve over time? Are there the same strategic options nowadays compared to 20 years ago?
Since at least the meaning of the term logistics has evolved during the last 20 years, especially due to the emergence of supply chain management, logistics and supply chain management are used interchangeable in this article.
In 1987 Bowersox and Daugherty created a logistics strategy framework, concluding that there are basically three SC strategies:
- Process Strategy
management of the traditional logistics activities with a primary goal of controlling costs
- Market Strategy
management of selected traditional logistics activities across business units with the goal of reducing complexity faced by customers
- Information Strategy
management as a system, with the goal of achieving inter-organizational coordination and collaboration through the channel.
Building on this framework McGinnis, Kohn, Spillan (2010) executed and analyzed four surveys from the years 1990, 1994, 1999, 2008 with the above mentioned research questions in mind. The following hypothesis were designed:
- Importance of Bowersox framework remained constant
- Dependent variables (statistical data on the survey participants like: logistics coordination effectiveness, customer service commitment and competitiveness) remained constant
- Within a logistics strategy, process strategy, market strategy, and information strategy will be of equal importance.
First, the results show, that the dependent variables and the perception of the strategies did not change too much to make a comparison between the studies impossible.
To analyze the results further the authors clustered the respondents into three strategy clusters (intense, intermediate and passive cluster), depending on their propensity for the mentioned strategies. Here is what they found:
- Intense Logistics Strategy increased
That means that either the importance of logistics strategy in U.S. manufacturing firms increased in importance or the firms were more intensely managed overall, including logistics
- Relative Importance
Process strategy (cost control) is generally more important than market strategy (reducing complexity faced by customers), and that both are more important than information strategy (inter-organizational cooperation and collaboration).
The authors conclude that the Bowersox and Daugherty (1987) typology still provides an excellent framework and that strategy is more stable over time than expected. The primary focus of an intense supply chain strategy is cost efficiency and complexity reduction; furthermore it appears that cost efficiency and reduced customer complexity are facilitated by the information strategy in the intense logistics cluster.
I think this kind of historical analysis is much to seldom in current research. In the popular reporting very often the hypothesis is made: This topic has experienced growing attention / relevance / … But has the world really become eg. more dangerous haven’t there always been violent attacks on people and property? I think McGinnis et al. provide a great basis for this kind of discussion. The answer is: Yes, there have been to the logistics strategies used by companies in the last 20 years, but not so much though. Of course this does not make a great headline like…
McGinnis, M.A, Kohn, J.W., & Spillan, J.E. (2010). A Longitudinal Study of Logistics Strategy: 1990-2008 Journal of Business Logistics, 31 (1), 217-235
Bowersox, D.J., & Daugherty, P.J. (1987). Emerging Patterns of Logistical Organization Journal of Business Logistics, 8 (1), 46-60