INNOVATION ACTIVITIES IN LOGISTICS SERVICE PROVIDER COMPANIES

Abstract: The concepts of innovation and innovation management have been researched for a long time; however, innovation is generally perceived with regard to technological progress. It is likely to come across numerous research projects about product and process innovation - mostly in manufacturing organizations. However, these concepts are underestimated in some inter-disciplinary subjects such as logistics. Briefly, there is an exiguity of knowledge about the innovation activities of third party logistics service provider companies. Third party logistics service providers are organizations which perform certain logistics activities on behalf of other organizations. This study uses the concepts of ‘third party logistics’ and ‘logistics service provider’ (3PLs which can be defined as companies who performs logistics activities on behalf of others) interchangeably and aims to expand the limits of knowledge on logistics innovation in logistics service provider companies and logistics innovation. In order to fulfill objectives of the thesis, a comprehensive literature review was conducted and possible knowledge gaps were identified. This thesis is based on multiple case studies conducted with three case companies. Case companies were selected in order to find out answers to the research questions of what logistics innovation is, how logistics innovation is applied, which risks exist in logistics innovation and how innovation capability is related to logistics. The revealed findings were discussed in relation to the existing theories on the concept of logistics innovation. The study concludes that, competition in logistics industry forces companies to become more aware of customer insights and to meet customer needs. In this way, logistics service provider companies maintain their customers and increase their competitiveness. The study demonstrates and recommends some key elements in implementing innovations aimed at logistics activities. Logistics service provider companies are affected by some elements such as knowledge, management, customers, competitors, technology, finance and organizations’ innovative attitudes. Furthermore, it was revealed that logistics service providers use different logistics innovation management types: planned and ad-hoc. The case companies have used the ad-hoc logistics management type and the innovation agent concept is highly significant in the determination of improvements and innovations. Finally, some risks in implementing novelties are revealed and points that managers should consider in creating logistics innovation are indicated.