A Survey-Based Study on ICT Adoption in the Third-Party Logistics Industry

A Survey-Based Study on ICT Adoption in the Third-Party Logistics Industry

Kwok Hung Lau (Business College, School of Business Information Technology and Logistics, Royal Melbourne Institute of Technology University, Melbourne, VIC, Australia) and Haibo Huang (Royal Melbourne Institute of Technology University, Melbourne, VIC, Australia)
DOI: 10.4018/jisscm.2012100104
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Information and communication technology (ICT) is an important tool to enhance efficiency and responsiveness in modern-day supply chains. Owing to fierce market competition and rapidly changing business environment, organizations are forced to focus on their core competency and outsource their logistics function to third-party logistics (3PL) firms. In order to work hand-in-hand with customers to meet their day-to-day logistics needs, 3PL companies have to make use of ICT for efficient communication with clients and coordination of activities. Through analyzing the survey results of the Annual Third-Party Logistics Studies from 2007 to 2009, this study looks into ICT utilization in the 3PL industry from a global perspective. To supplement the findings, a questionnaire survey was conducted to investigate the current status of ICT adoption by 3PL firms in China. As a global manufacturing base, China has a burgeoning 3PL industry serving a large number of domestic firms as well as multinational corporations, and is considered a representative developing country for investigation in the subject area.
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Efficiency and responsiveness can be regarded as the primary goals in supply chain management (Chopra & Meindl, 2010). To achieve these two objectives, effective communication and real-time information sharing are the keys. Information and communication technology (ICT) therefore plays a vital role in managing modern-day complex supply chains. It permits effective coordination of day-to-day replenishment and distribution activities hence minimizes delay and waste. It also provides visibility to enable tracing and tracking of inventory thereby allows better control and greater flexibility in matching supply and demand. In addition, the technology enables internal as well as external integration. It helps promote collaboration among business partners through collective decision making using real-time data and information stored and shared on a common platform. Together with automation employing data capture technologies such as barcode, global positioning, and radio frequency identification, ICT can significantly reduce labor, errors, and response time across the entire supply chain. This will not only lower total supply chain costs (i.e., higher efficiency) but also enhance overall customer service (i.e., improved responsiveness). In fact, significance and benefits of ICT in the logistics industry has long been recognized in many studies such as Bowersox and Daugherty (1995), Bowersox et al. (1989, 1999), Edwards et al. (2001), and Kathuria et al. (1999). Benefits of ICT adoption in other industries such as the healthcare industry have also been explored and acknowledged (Topacan et al., 2010).

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