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Publisher : Elsevier - Science Direct (الزویر - ساینس دایرکت)
Journal : International Journal of Production Economics, Volume 139, Issue 2, October 2012, Pages 496–509
Global supply chain managers are faced with operational challenges due to emerging factors such as the lengthening of supply chains, worldwide sourcing, and the necessity for mass-customized manufacturing, which have led to commoditization of many products and services. As a result, many firms struggle to compete based on product/service or price attributes, but are able to differentiate versus their rivals based on logistics service and the knowledge management practices that support it. The prevailing logistics knowledge management models fail to account for the extent to which firms maintain a global production presence in local markets – designated here as global manufacturing reach – which is posited to increase logistics-based differentiation due to geographic concentration of logistics-focused assets and processes. The purpose of this research is to examine the combined impact of global manufacturing reach and logistics knowledge management on firms' ability to differentiate based on logistics.
Demanding customers, heterogeneity and variability in customer demand patterns, short product life-cycles, product proliferation and customization, rapid innovation, and increasing geographical dispersion of buyers and suppliers are now daily discussion points – and often headaches – for contemporary supply chain managers (Bozarth et al., 2009 and Kouvelis et al., 2006). The confluence of these forces yields hypercompetitive markets served by global industries: circumstances where worldwide sourcing, mass-customized manufacturing, and the related commoditization of offerings often leads to little differentiation among competing firms along traditional marketing dimensions such as product and price (Anderson and Parker, 2010 and Cheung et al., 2010). Under such conditions, staying competitive often means firms must become better at executing distribution strategies than rivals (Cheung et al., 2010), and logistics service has become a key function of effective supply chain management. Organizations that can accomplish on-time delivery of complete shipments, in perfect condition, at the optimal time and to any worldwide customer location, can use this capability as a means of differentiating themselves from the competition, sometimes with overwhelming results. For example, Dell Computer radically altered the global PC industry with its ability to offer consumers an affordably priced customized computer that is shipped to their door in a matter of days. The computer itself was not necessarily innovative; Dell's comparative advantage was tied to rapid customization, customer service, and speed and accuracy of delivery, all key elements of logistics-based market differentiation. In concurrence with strengthening global competition and the changing structure of global markets which impact multinational firms' operations (Altomonte and Pennings, 2009), some contingencies have arisen that can inhibit logistics-based differentiation. The globalization of supply and demand markets is problematic for firms' logistics operations, for many reasons (de Koster and Balk, 2008). For instance, previous research reveals that a large number of companies underestimate true logistics costs associated with global sourcing and order fulfillment because increasing global product flow drives higher finished goods inventory and associated increases in carrying costs for manufacturers (Han et al., 2008). Additionally, increased physical distance between buyers and suppliers leads to higher transportation costs; opportunities for disruption in logistics flows increase as supply chains lengthen in both geography and scope (Craighead et al., 2007); and, infrastructural deficiencies, cultural protectionism, and complex customs processes in foreign locales may hinder firms' ability to consummate global trade relationships. In short, globalization of commerce has significantly neutralized traditional product and price-based competition, while introducing new complexities that challenge many firms seeking to differentiate from the competition based on logistics (Zhao et al., 2007). Many firms are countering these logistical complexities by enhancing knowledge-based assets in the supply chain (Autry and Griffis, 2008, Birou et al., 2011, Delen et al., 2007 and Fugate et al., 2009). Given the lack of conclusive research on the relationship between knowledge management and firm performance (Fugate et al., 2009), in this paper we examine the role that logistics-related knowledge management processes play in facilitating market differentiation in global settings. Herein, we define logistics knowledge management (LKM) as a process of integrated, rapid development and exploitation of knowledge of the business environment by logistics operations personnel. We extend and improve upon recent research which suggests that the ability of a global firm to compete based on logistical capabilities can be predicted by its ability to manage knowledge development processes, i.e., the broader findings of Fugate et al. (2009). These researchers propose a model that describes a linkage between LKM and overall logistical performance, and we adapt their model as the underpinning for our current discussion. However, Fugate et al. (2009) study is deficient with respect to two facets important to global supply chain managers. First, Fugate et al.'s expansive operationalization of logistics performance cloaks the relative effect of LKM on logistics-based differentiation; we are unable to ascertain to what extent sound LKM processes link to a firm's ability to differentiate based on logistics operations, because in their model, differentiation is but one hidden factor in a multidimensional performance scale. Given the current focus on logistics-based differentiation by global manufacturing firms, this omission seems highly problematic—global supply chain managers should want to know how best to manage logistics-related knowledge in order to gain added market advantages (Cao et al., 2010). Second, and perhaps more importantly, the Fugate et al. (2009) study opted not to account for the globalized supply chain management environment of recent years. Many modern firms are employing low-cost offshore manufacturing locations in order to defray labor costs (Byoungho, 2004, Galbreth and Blackburn, 2010 and Gray et al., 2009b) as well as other costs of raw materials and production (Han et al., 2008). Unfortunately, the Fugate et al. (2009) model fails to account for a firm's global manufacturing reach (GMR) – the extent of its presence in worldwide manufacturing – when determining whether LKM processes effectively lead to global logistics differentiation (Braziotis and Tannock, 2011). To illustrate this point, as Dell “commoditized” personal computers and changed the nature of competition in the PC industry, the company expanded its manufacturing operations to achieve increased local presence on a global scale. The benefits were dual: perceptual gains in consumer confidence due to the appearance of localized presence, and increased control over operational aspects in multiple world regions resulting from expanded logistics networks. Though the company still relies on creating a reliable product at a reasonable price with consistent service, these have become necessary but insufficient conditions for success versus rivals in the global marketplace—Dell's global logistics capabilities define its ability to create differential advantage. We postulate here that as firms develop a local manufacturing presence across increasing numbers of world markets, we should expect that the influence of LKM processes will be heightened (Rollins et al., 2011), such that firms are enabled to provide customers with differentiated logistics service due to localization of business processes, yet this proposition has never been empirically evaluated. We remediate these omissions in the literature by considering the combined effect of LKM (as per Fugate et al., 2009) and GMR, on both logistics differentiation and organizational performance. Our summarized findings are compelling for both supply chain managers and academics alike—GMR is found to enhance the predicted positive relationships between LKM and both logistics differentiation and overall organizational performance. As firms develop a more globalized manufacturing presence (da Silveira and Sousa, 2010), they are better able to execute the logistics processes that win customers versus rivals, and enjoy associated financial advantages as well. Accordingly, we contribute to the knowledge management and logistics operations literatures in numerous ways. First, we find further support for the Fugate et al. (2009) linkage between LKM and logistics performance, but in a more constrained scenario wherein logistics-based market differentiation is the specific goal (versus their focus on overall logistics performance). Second, we apply institutional theory to uncover the moderating influence of GMR on the linkage between LKM and logistics-based differentiation. Third, we detect an influence of the same moderating effect when assessing the relationship between LKM and organizational performance—an additional finding that is quite interesting in that there is no observed direct linkage between GMR and organizational outcomes, and the Fugate et al. (2009) study detected no direct linkage between LKM and performance. Thus, we posit and uncover a unique situation whereby both conditions are necessary but neither alone is sufficient for organizational performance advantage. The following sections review the existing literature, describe the method, and explicate our findings related to the current research process.
نتیجه گیری انگلیسی
With increasing product commoditization, undifferentiated suppliers, and increasing global competition, “standing out in the crowd” based on logistics capabilities may represent a new Holy Grail for firms competing in the global supply chain landscape. Perhaps more than ever before, market differentiation based on logistics service is being recognized as a key ingredient for creating customer value through customer satisfaction and repurchase behavior (Davis-Sramek et al., 2008). The results of our research suggest that integrated, rapid knowledge development, and its exploitation by logistics personnel provides a path for logistics-based market differentiation and organizational performance. Furthermore, the empirical results indicate that for our sample, having a global manufacturing presence in local markets (GMR) strengthens a firm's ability to utilize the knowledge management process to enable logistics-based differentiation in the marketplace, and financial performance for the firm. Our findings impart significant implications for logistics and knowledge management theory and practice. 6.1. Implications for theory and future research This research makes several contributions toward advancing scholarly understanding of the process of knowledge-based behaviors by logistics operations personnel and its joint impact with global manufacturing reach on logistics differentiation and organizational performance. We extend the Fugate et al. (2009) study by teasing out the impact that the knowledge management process has on logistics-based market differentiation. Little empirical testing of the KBV has focused on the differentiation elements of operational performance; studies are limited to linkages between knowledge assets/asset configuration and hard outcomes such as profitability or return on assets alone. By testing the KBV at the operational level of analysis, and basing it on logistics rather than marketing, innovation, or other knowledge stores that are typically held internal to the firm, we advance the KBV's power as an explanatory mechanism. The broader theoretical implication of this study is our findings related to the linkage between knowledge management and logistics differentiation as firms make the strategic decision to locate manufacturing activities in foreign countries, thereby globalizing their supply chain networks. Via institutional theory, we demonstrate that GMR has a moderating impact in the relationship between logistics knowledge responsiveness and both logistics differentiation and organizational performance. This is a theoretically interesting finding, and it adds to the litany of studies in the IB literature that have led to mixed results in linking global reach to performance (Hutzschenreuter and Voll, 2008). Indeed, we find that GMR was not directly related to either performance variable, but serves to heighten the effects of LKM on both the logistics-based differentiation and overall performance measures. We can speculate that the non-significant direct results imply that simply “going global” does not inherently lead to performance gains. Rather, our institutional analysis suggests a more complex dynamic, whereby generating, disseminating, interpreting, and responding to knowledge must create a capability that allows firms to shrink the “distance” between countries. In doing so, firms can capitalize on first-mover, cost, and service advantages that allow them to harness the power in their supply chains which lends itself to differentiation in customer markets, and financial gains overall. Simply put, our study demonstrates that logistics and operations managers who are availed of globally located manufacturing assets can use them to deploy best-in-class logistics systems where many others cannot. Furthermore, managers availed of GMR can leverage it to create differentiation versus competitors having offerings with similar characteristics. Further research should explore other areas of the supply chain performance that may be enhanced through the exacerbated reach of the global supply chain environment. 6.2. Implications for business practice Given that the direct impact of GMR on logistics differentiation and organizational performance was not significant, the interaction of GMR and LKM becomes particularly germane in the discussion of a firm's strategy to differentiate in the competitive global marketplace. Comparing these results with prior research findings (Fugate et al., 2009 and Hult et al., 2004), our results suggest that managers can apply knowledge management practices to improve performance in a global context in a similar manner. Firms that have developed a competency in developing and exploiting logistics-oriented knowledge have the opportunity to capitalize on this competitive prowess in the global marketplace. As firms react to stretching supply and demand bases around the world, they must not let integrated, rapid development and exploitation of knowledge of the business environment fall to the side. Firms that extensively utilize logistics-related knowledge have logistics personnel who, for instance, stay abreast of changing industry conditions, evolving customer needs, logistical best practices, or new supplier capabilities. They can then share that knowledge with personnel in their own marketing or operations functions to maintain lower levels of finished goods inventory, higher inventory turns, and may offer better customer service through on-time delivery, lower lead times and fewer back-order situations. Existing research suggests that as products become more commoditized and product differentiation becomes a more unattainable goal ( Batra et al., 2012 and Ulaga and Reinartz, 2011). Our research findings provide additional evidence, as the impact of logistics knowledge creates competitive advantage by an emphasis on the intangibles such as the ease of doing business, delivery dependability, and responsiveness to a product delivery request (Davis-Sramek et al., 2008). Existing research highlights the many challenges of globalization (Kleindorfer and Saad, 2005, Sodhi, 2005 and Souza et al., 2004) and have recommended managers to incorporate global manufacturing into their firm strategies (Fang et al., 2007, Kroes and Ghosh, 2010 and Power et al., 2010). However, for firms that are in the process of planning to or have already taken the step to expand their manufacturing globally, it is essential that they develop and exploit logistics-oriented knowledge. These firms should first recognize that getting the most out of knowledge resources is more important than incorporating global manufacturing into the organization's competitive strategy. Without LKM, it can be very difficult to assure that production and distribution plans of plants scattered through the world remain in concert (Miller and de Matta, 2003). Product quality is often hurt (Zhang and Keith, 2001) as the understanding and sophistication of quality management varies across countries (Kull and Wacker, 2010 and Zhao et al., 2004) which result in risks to the bottom line (Zhao et al., 2007). Manufacturing supplier's labor issues in developing countries have emerged as a key challenge in global supply chains, which have resulted in poor quality, low productivity, and unfilled orders in the supply chain (Jiang et al., 2009). Challenges resulting from expanding GMR can include transfer prices, tax rates, and duties. Political factors such as stability of government, law and order, and sanctions have potential negative implications for organizational structure and related non-logistics operating costs. Accordingly, while globalization of supply and demand has significantly neutralized traditional product and price-based competition, managers have an even greater opportunity to differentiate from the competition based on enhancing logistics-oriented knowledge-based in the supply chain (Autry and Griffis, 2008). Managers should recognize that in the global landscape, cultural, political, and geographic distances between globally dispersed parties increase communication challenges (e.g., Fink et al., 2005 and Furuya et al., 2009). Increasing an organization's GMR multiplies the variables and interdependencies to which managers must attend and incorporate into their decision-making (Lane et al., 2004), including the understanding that knowledge is often embedded in the intricacy of economic and sociocultural environments (Su et al., 2009). Our research also infers that when firms focus on developing the ability of operational boundary-spanners, in order to use their expertise and experience of the global landscape to develop and exploit knowledge that becomes part of the organizational decision-making processes, there is the potential to find substantial advantages that facilitate differentiated foreign market operations. 6.3. Limitations Like all social science research, this study bears a number of significant limitations. First, we restricted ourselves to U.S. based multinational manufacturing firms and their logistics operations personnel and processes. Obviously there is no reason to assume that this sampling frame is generalizable to other countries or to other functional areas, but it does represent a reasonable starting point. Second, the data used in this study are cross-sectional, which could limit the predictive validity of our results over time. Scholars should use this study as a starting point for examining the longitudinal influence of our constructs. Third, we were limited to a single respondent per organization. Thus, inter-rater-agreement cannot be calculated (Boyer and Verma, 2000), and thus, the results may be unduly influenced by respondent opinions and perspectives. To address this possibility, we invite future rigorous replication of our work in other industrial settings, and with multiple respondents per firm. Fourth, while we were able to capture secondary data for organizational performance, future research would benefit from capturing secondary data for the other perceptual, latent constructs in the model if available, and if the proxy measures for tapping our latent constructs are trustworthy. Fifth, the limitations of survey design did not allow for the capture of some potentially important control variables. This sort of step is especially important in controlling for the antecedent influence of organizational behavior, for example, since the performance of other functions certainly influence organizational performance and vice versa. Future research should explore these relationships. Additionally, our sample of responding managers is drawn from a single-country context. Examination of multiple countries and processes may extend the generalizability of the results such that our findings are more globally impactful.