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Part I
Business supplies and logistics
Theories and methodologies
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1 The art of winning in supply chain logistics
Key items:
• Industry logistics versus the logistics industry
• Supply chain logistics and supply chain management: What’s the difference?
• Sun Zi’s winning-before-doing (WBD) philosophy
• Two elements of WBD: win-with-speed and win-by-singularity
Firm-focal supply chain logistics: advancements and trends
Firm-focal versus port-focal logistics and supply chain management
Until the beginning of the twenty-first century, the theory and methodology of supply chain management (SCM) was centered on manufacturing, whereas logistics was centered on firm-focused shipping and transport. With increasing economic globalization, port-focal production systems have drawn increasing attention from academic research, industrial practices, and government policy agendas. Emerging evidence indicates a global trend suggesting that SCM has become increasingly service based (e.g., logistics and trade services), as opposed to manufacturing based. Consequently, port-focal logistics, as opposed to typical firm-focal logistics, play an increasingly important role in the global economy and have generated increasing interest in the study of trade-based supply chain logistics with a special focus on transport and maritime services, from both theoretical and empirical perspectives.
There are key differences between port-focal and firm-focal production, which can be summarized as follows:
• Port production technology is typically nonmanufacturing based, whereas firm production technology is mostly suited to manufacturing.
• In terms of organizational structure, port production is engaged in a single-seller (port) multibuyer (carriers) service system, whereas firm production can be characterized as a single-buyer (firm) multisupplier manufacturing system.
• In terms of market and risk structure, port production faces idiosyncratic demands from the oligopolistic shipping market, whereas firm production is assumed to face systemic demands from a competitive market. It should be noted that due to the high entrance barrier in international shipping markets, the number of international carriers is quite limited compared with the number of manufacturers worldwide.
• Compared with firm-focal logistics, which is underpinned by a framework that consists of an inbound-factory-outbound logistics chain, port-focal logistics integrates all modes of supply chain and transport logistics, including navigation, aviation, and transportation.
Parts I and II of this textbook are devoted to firm-focal logistics, and Part III provides unique coverage of port-focal logistics and SCM.
Logistics versus supply chain management
Logistics refers to the provision of supplies, which includes not only the shipping and transportation of supplies (e.g., 物流, the Chinese translation of logistics), but also the related services and support systems (e.g., 后勤, such as maintenance and insurance, etc.). In terms of professional content and academic terminology, shipping encompasses all modes of navigation, aviation, and transportation, whereas logistics services cover all aspects, including finance, insurance, technology, and infrastructure. Supply chain management (SCM), a separate but related discipline, is generally referred to by both researchers and practitioners as the management of supply chains within business organizations. Most existing textbooks suggest that SCM has so far been production based, typically in terms of manufacturing and service operations management. Logistics activities that are associated with a production-based supply chain, such as the shipping and transportation of supplies, are enterprise focused. For example, in a manufacturing-based supply chain, inbound and outbound logistics are centered on the firm as a production function. Production-based SCM and its associated enterprise-focused logistics represent the primary focus of this book. In addition, in Part III we will examine trade-based SCM and the associated port-focused logistics, as outlined in the following paragraphs.
As globalization becomes a reality rather than a prediction, global supply chains are evolving from production based to trade based, and the associated logistics from enterprise focused to port/airport focused (simply referred to as port based).
The interrelationship between enterprise-focused logistics and production-based SCM has been striking and intriguing. On the one hand, if a supply chain is regarded as a busine...
