Title: Fuelling the global value chains: what role for logistics capabilities?

Authors: Olga Memedovic, Lauri Ojala, Jean-Paul Rodrigue, Tapio Naula

Addresses: United Nations Industrial Development Organization, Vienna International Centre, A-1440 Vienna, Austria. ' Turku School of Economics, Rehtorinpellonkatu 3, FI-20500 Turku, Finland. ' Hofstra University, Hempstead, New York, NY 11549, USA. ' Turku School of Economics, Rehtorinpellonkatu 3, FI-20500 Turku, Finland

Abstract: Intensifying competition and changing customer demands for better and cheaper goods and services, and faster delivery have made the organisational systems of Global Value Chains (GVCs) more complex and difficult to manage and coordinate. Leading enterprises in GVCs were forced to focus on their core competences while outsourcing other activities to enterprises that specialise in physical distribution and materials management, in transport and in logistics. Complex system of GVC and networks are dependent on efficient logistics. The benefits arising from GVCs| spreading could not be realised without co-developments in modern logistics services, underpinned by innovations in containerisation, intermodal transport and the application of Information Technology (IT) in physical distribution and materials management. As a result new innovative logistics providers and concepts have emerged, but the development and provision of advanced logistics services vary from country to country. Countries seeking to benefit from globalisation and from GVCs need to address key underlying factors of their logistics capabilities and how they impact on their industrial performances, productivity and competitiveness. This paper focuses on logistics capabilities and on how they can be monitored. The paper presents major changes in logistics industry since 1990s and discusses recent work to monitor logistics performances of countries with a composite index. The paper proposes constructing a new index to monitor logistics capabilities and concludes with policy recommendations for developing countries.

Keywords: logistics industry; GVCs; networks; logistics performance index; LPI; logistics capability index; LOCAI; capability drivers; logistics capabilities; industrial policy; global value chains; core competences; outsourcing; advanced logistics services; developing countries; performance monitoring.

DOI: 10.1504/IJTLID.2008.019978

International Journal of Technological Learning, Innovation and Development, 2008 Vol.1 No.3, pp.353 - 374

Published online: 19 Aug 2008 *

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