E-commerce developments and impacts : a case of Malaysian maritime third party logistics service provider companies

This study considers the impact of e-commerce technologies/software implementation on logistics capabilities and firm’s performance, particularly in the Malaysian third party logistics sector. As well as studying the impact of e-commerce, it is also interested in gaining knowledge on the current state of ICT and e-commerce adoption in this sector, and third party logistics companies’ perceived importance of the logistics changes in their industry resulting from the e-commerce revolution. The main tenet of this thesis is that e-commerce technologies implementation and its (higher) level of use strengthens logistics capabilities and stronger logistics capabilities are positively linked to a firm’s performance. The impact of e-commerce technologies implementation on the performance of the third party logistics companies is assumed in this study to be indirect, and, logistics capabilities is assumed to take on a mediating role. Data was collected using both survey and interview methods and then analysed using two main types of analyses: univariate (descriptive) and inferential (bivariate and multivariate). In general, connectivity is good among 3PLs as almost all the companies surveyed are connected to the Internet with various types of broadband access. The use of internal computer networks is also widely deployed with moderate to strong information systems infrastructure capability. Substantial ICT investments have been made as indicated from interviews with the 3PLs. The Intranet has been widely deployed as a tool to integrate internal business processes. However, the survey results suggest that logistics service providers in Malaysia are mostly late adopters with respect to the usage of web-based software systems, such as equipment and vessel tracking and collaborative logistics management systems, which have been around in the market for quite some time now. Relative adoption of online marketing and sales activities are low with the Internet mostly used for information and communication purposes, and not in or less so in marketing and sales processes. CRM is not widely deployed in the companies surveyed. The biggest driver for the uptake of e-commerce among the 3PL companies surveyed and interviewed is to speed up business processes while the biggest barrier was that data communication was too slow. The study of e-commerce impact on logistics capabilities and the performance of a firm shows that there is a positive effect of e-commerce software systems on both. More importantly, logistics capabilities have been shown in this study to function as a mediating variable providing support to the hypothesis that e-commerce software systems has an indirect effect on firm’s performance. Empirical results also suggest that certain performance can be enhanced through strengthening of specific logistics capabilities. For example, strengthening information flow management capabilities would strengthen or enhance the company’s performance in the areas of order cycle time variability, processing accuracy, perfect order fulfilment, planning accuracy, availability of information, and systems malfunction recovery. Results from this study show that the 3PL companies did not consider the logistics changes as significant, except for those that concern information flow to the customers. In fact, most of the logistics changes proposed as important and significant in the literature (these were included in the questionnaire) were not even considered as relevant to the third party logistics industry in Malaysia