Logistics and continuous improvement : their influence on developing organizational competencies and competitive advantage

In times of increasing national and international competition the logistics function within organizations has been increasingly identified as an essential area in which firms must excel, but one that has until recently been neglected as an area in which to develop a firm’s competitive advantage. Traditionally the logistics functions of organizations have been poorly measured, if not excluded entirely from measures of organizational performance. Recent studies (eg Gilmour et al 2005, Mollenkopf and Daipiran 2005, Rothnie 2005) have found that the level of development and measurement of logistics competencies is very variable between industries, and have identified the need for further research to identify critical logistics competencies, the need for recommendations for how these may be measured, and determination of their effect on organizational performance. This paper examines the contribution of Logistics Departments to Organizational Continuous Improvement (CI) and contrasts this involvement with the influence of other departments within these organizations; determines if the involvement of Logistics professionals has had any impact on the tools used and support for CI; and further examines the contribution of CI in Logistics to increases in business performance. The paper concludes that while offering considerable scope to improve organizational performance, logistics departments and the logistics operation are yet to be involved by most organizations in their CI operations. The questions raised by this paper are why is an area that has been identified by many commentators as crucial to the success of organizations still not involved in CI efforts by many organizations; and why do those companies that undertake CI activities in their Logistics operations not report improved business performance? Further research is needed into the decision making process in organizations that generates this situation