How Collaborative Logistics Management Increases Supply Chain Efficiency

University essay from Högskolan i Borås/Institutionen Ingenjörshögskolan; Högskolan i Borås/Institutionen Ingenjörshögskolan

Abstract: Globalization, rapid technological change, shorter product life cycles, changing customerpreferences, and hyper competition are just some characteristics of today’s businessenvironment. As a result, organizations have become aware of the fact that working alone isalmost impossible. Therefore, they began to understand that building relationships are keys toa successful business. In fact, as the business processes become more specialized,organizations prefer to focus on their core competencies and outsourcing becomes a relevantstrategy. Consequently parts of the value adding processes are displaced outside the four wallsof the firm which in turn, need a closer partnership (collaboration) between the partners.In today’s world logistics which includes transportation, inventory, order processing,purchasing, warehousing, materials handling, packaging, and much more, must continuouslybe developed to meet those described challenges. In fact, an effective logistics system is amust in order to meet and satisfy the customer demand. These developments require aconsiderable effort and significant capital. Accordingly, outsourcing the logistics activitiesbecome common and many companies leave these tasks to those who have availableresources and are competent to perform them. However, as mentioned, outsourcing withoutcooperation is inefficient.The objective of this research project is to introduce and describe collaborative logisticsmanagement and investigate its consequence on the supply chain. This purpose necessitates aframework to support the collaboration between the entities in the chain especially in terms oflogistics activities. Besides, the potential benefits (in terms of cost and services) in logisticscollaboration are supported by a lot of literatures. Despite the identified needs and potentialbenefits, there are still barriers through which is not started or not successful enough.Therefore, while those barriers must be identified, possible enablers should be designed andimplemented to attain desired benefits. This has been done through both a theoretical reviewand also a case study.

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