Analyzing the Use of Information Systems in Logistics Industry

Analyzing the Use of Information Systems in Logistics Industry

Shaligram Pokharel (Nanyang Technological University, Singapore)
DOI: 10.4018/978-1-60566-040-0.ch013
OnDemand PDF Download:


Information and communication technology (ICT) refer to a family of technologies that facilitate information capturing, storing, processing, disseminating, and providing a supportive role for human activities to enhance organizational efficiency and effectiveness. With the use of ICT, organizations are expected to have better decision-making capabilities and faster execution of activities. Logistics activities in a company consist of a wide scope of processes ranging from planning and implementing material flow and storage, services, and information from the point of origin to the point of consumption. If ICT could be used to support these activities, logistics cost would decrease over the long term and the efficiency of logistics activities would increase substantially. In this chapter, we explain a method for studying the impact of ICT in logistics companies. This type of study is useful to devise a long term business process improvement policy in a country or a region. We suggest methods for collecting data and presenting them through descriptive and statistical analysis. We suggest the use of t-statistic method to test relationships between various variables and ICT implementation. We have provided a hypothetical case study to show the steps in the analysis. We believe that the chapter will be useful to researchers in conducting studies on the impact and suitability of ICT in logistics and other service providing sectors. The results obtained from this type of study can help the decision makers to understand the opportunities and hurdles in achieving greater efficiency in the organizational processes through the use of modern information technology.
Chapter Preview


Business process efficiency can be enhanced by cutting down or shifting some nonvalue adding processes to automated processing. The pace of development in computer hardware and software and other technologies have enabled many companies to reorganize their business related processes, such as in finance or manufacturing. The use of information and communication technologies (ICT) or information technology (IT) helps to capture, store, process, and disseminate information to provide a supportive role for human activities in order to enhance organizational efficiency and effectiveness (Cohen, Salomon, & Nijkamp, 2002). The decision on the use of ICT is strategic (Huber, 1990) as ICT capabilities significantly influence overall logistics competence (Closs, Goldsby, & Clinton, 1997). ICT can improve an organization’s ability to respond and change to a dynamic environment (Monteiro & Macdonald, 1996).

In the remainder of the chapter, we discuss the type of logistics services and their relation with ICT, development of a research framework, development of questionnaires, and finally the collection and analysis of data. The emphasis in this chapter is on the illustration of the method to analyze the use of ICT both in terms descriptive analysis and statistical analysis and then on helping readers draw conclusions based on the analysis. The chapter ends with conclusions and some remarks on possible extension of research work in the area of ICT and logistics.

Logistics Services

Logistics services are generally categorized into four groups: warehousing, freight forwarding, transportation, and depot operations (Andersen Consulting, 1998). Warehousing refers to receiving of goods, keeping their records, storing them in order for easy retrieval, receiving orders for withdrawal, withdrawal of goods from the store, packaging, and finally preparing documentation for dispatch.

Freight forwarding refers to the coordination of freight movement, carrier selection, cargo clearance and tracking, and documentation of container cargoes. A freight forwarding agency obtains, prepares, and checks customs and insurance documentation to comply with various regulations of different countries. It may also develop appropriate routes for shipment and arrange payments for subsequent services on behalf of the clients.

Transportation refers to material transport from the shipper to the consignee carried out by sea (or river), air, and land. Transportation is an important part of logistics in terms of total logistics costs. Swenseth and Godfrey (2002) mention that the cost of transportation can be as high as 50% of overall logistics costs.

Depot operations refer to obtaining containers, doing major and minor maintenance, container modification, container inspections (to adhere to the standards as per the Institute of International Container Lessors), storing, releasing, and tracking of container movements. Therefore, proper documentation is necessary to manage containers properly.

Logistics and ICT

One study has shown that in the United States, logistics costs amounts to 6-11% of total sales and about 8-9% of a country’s GDP can come from logistics activities alone (Langley, Allen, & Colombo, 2003). It is also shown that with the use of ICT, logistics costs could be reduced by as much as 50% (Gattorna & Berger, 2001). The use of ICT can enhance internal communication capabilities, speed and information accuracy (Huber, 1990). However, the adoption of ICT in different companies may be hindered by the size of the company. While large companies may be motivated to invest in ICT because of their long term business focus, smaller companies may not be motivated to adopt a full fledged ICT system due to smaller business volume and higher investment requirements (Pokharel, 2005). Therefore, larger companies might spend more on ICT than the smaller companies (Mitra & Chaya, 1996). Dawe (1994) mentions that companies that shy away from ICT investments generally cite examples such as obsolescence and irrelevance of applications to a firm’s particular information needs.

Complete Chapter List

Search this Book:
Table of Contents
Richard Baskerville
Aileen Cater-Steel, Latif Al-Hakim
Chapter 1
Panagiotis Kanellis, Thanos Papadopoulos
This chapter offers a journey through the spectrum of epistemological and ontological perspectives in IS (IS), offering the necessary background to... Sample PDF
Conducting Research in Information Systems: An Epistemological Journey
Chapter 2
Francis Chia Cua, Tony C. Garrett
This chapter introduces ontological and epistemological elements in information systems research. It argues that ontology, epistemology, and... Sample PDF
Understanding Ontology and Epistemology in Information Systems Research
Chapter 3
John Loonam, Joe McDonagh
Enterprise systems (ES) promise to integrate all information flowing across the organisation. They claim to lay redundant many of the integration... Sample PDF
A Grounded Theory Study of Enterprise Systems Implementation: Lessons Learned from the Irish Health Services
Chapter 4
Khalid Al-Mabrouk
This chapter reviews some of the existing Information Technology Transfer (ITT) literature and suggests that it has fallen victim to the well-known... Sample PDF
A Critical Theory Approach to Information Technology Transfer to the Developing World and a Critique of Maintained Assumptions in the Literature
Chapter 5
João Porto de Albuquerque, Edouard J. Simon, Jan-Hendrik Wahoff, Arno Rolf
Research in the Information Systems (IS) field has been characterised by the use of a variety of methods and theoretical underpinnings. This fact... Sample PDF
The Challenge of Transdisciplinarity in Information Systems Research: Towards an Integrative Platform
Chapter 6
Paul D. Witman
This chapter provides a set of guidelines to assist information systems researchers in creating, negotiating, and reviewing nondisclosure... Sample PDF
A Guide to Non-Disclosure Agreements for Researchers Using Public and Private Sector Sources
Chapter 7
Slinger Jansen
Even though information systems is a maturing research area, information systems case study reports generally lack extensive method descriptions... Sample PDF
Applied Multi-Case Research in a Mixed-Method Research Project: Customer Configuration Updating Improvement
Chapter 8
Erja Mustonen-Ollila, Jukka Heikkonen
This chapter gives important methodological, theoretical, and practical guidelines to the information system (IS) researchers to carry out a... Sample PDF
Historical Research in Information System Field: From Data Collection to Theory Creation
Chapter 9
Paivi Ovaska
Large-scale systems development is a complex activity involving number of dependencies that people working together face. Only a few studies... Sample PDF
A Multi-Methodological Approach to Study Systems Development in a Software Organization
Chapter 10
Judith Symonds
Usability Evaluation Methods (UEM) are plentiful in the literature. However, there appears to be a new interest in usability testing from the... Sample PDF
Usability Evaluation Meets Design: The Case of bisco Office™
Chapter 11
Ivan Ka-Wai Lai, Joseph M. Mula
Soft Systems Methodology (SSM) has been employed to increase the effectiveness of organizational requirement analysis in Information Systems (IS)... Sample PDF
An Analysis-Form of Soft Systems Methodology for Information Systems Maintenance
Chapter 12
Raul Valverde, Mark Toleman, Aileen Cater-Steel
Recently, many organisations have become aware of the limitations of their legacy systems to adapt to new technical requirements. Trends towards... Sample PDF
Design Science: A Case Study in Information Systems Re-Engineering
Chapter 13
Shaligram Pokharel
Information and communication technology (ICT) refer to a family of technologies that facilitate information capturing, storing, processing... Sample PDF
Analyzing the Use of Information Systems in Logistics Industry
Chapter 14
William Yeoh
Engineering asset management organisations (EAMOs) are increasingly motivated to implement business intelligence (BI) systems in response to... Sample PDF
Empirical Investigation of Critical Success Factors for Implementing Business Intelligence Systems in Multiple Engineering Asset Management Organisations
Chapter 15
Ping Li, Joseph M. Mula
A review of the literature showed that there appears to be very little research undertaken on Electronic Data Interchange (EDI) adoption by small to... Sample PDF
Electronic Data Interchange (EDI) Adoption: A Study of SMEs in Singapore
Chapter 16
Hatem F. Halaoui
Using geographical information systems (GIS) has been of great interest lately. A lot of GIS applications are being introduced to regular and... Sample PDF
Towards Google Earth: A History of Earth Geography
Chapter 17
Sergio Di Martino, Filomena Ferrucci, Carmine Gravino
Web technologies are being even more adopted for the development of public and private applications, due to the many intrinsic advantages. Due to... Sample PDF
Empirical Studies for Web Effort Estimation
Chapter 18
Mobile Marketing  (pages 328-341)
Kazuhiro Takeyasu
Recently, cellular phones capable of accessing the Internet are prevailing rapidly in Japan. First, their functions and features are examined... Sample PDF
Mobile Marketing
Chapter 19
Ross A. Malaga
Online auctions are an increasingly popular avenue for completing electronic transactions. Many online auction sites use some type of reputation... Sample PDF
The Retaliatory Feedback Problem: Evidence from eBay and a Proposed Solution
About the Contributors