Information management in the logistics service industry: A strategic response to the re-integration of logistical activities

Abstract

The logistics services market has evolved over the last 30 years and the LSPs has been expanding their role in the logistics chains, but shippers benefit from considerable negotiating power and constantly evaluate the relative advantages of subcontracting or performing the work themselves in-house. The threat that shippers may reintegrate logistics activities, which has always existed, has become more acute in Europe over the past two years. The management of information, expertise and knowledge is according to us a major strategical factor for LSPs to avert a major swing back to in-house operation. Information management is vital as shippersneed to exert tight control over their logistical operations and to maintain their expertise in this area. Skills management is important for LSPs either to differentiate their services and/or to develop complex or innovative logistics services. The management of LSPs, like that of all businesses, depends on three inter-related dimensions of competence : action, expertise and knowledge; and the need for effective collection, communication and processing of information exists on each dimension. In managing information, LSPs must establish congruence with the shippers’ systems that can be achieved on one or more of the dimensions. This highlights the importance of the design of LICS and the supporting information and communication technologies to the furure competitiveness of LSPs. Close integration of the information systems of LSPs and shippers will be essential to maintain the mutual trust necessary for long term relationship and to maintain their ability to adapt to the changing business environment.