The Logistics Service Providers

1) Describe the various services provided by logistics service providers. What is the role of these services in focal firms' value-chain activities?

Logistics service providers move raw materials, finished goods, packages, and documents across the globe. They address the needs of MNEs and other internationalizing firms requiring speed and efficiency in moving goods through supply chains around the world by organizing, coordinating and controlling supply chains through a global presence and skillful use of leading-edge technologies. They also increasingly provide traditional distributor functions such as warehousing, inventory management and order tracking.

These firms play the role of "facilitators" (one of the four participants of international business) and participate in "Sourcing" and "Distribution" aspects of the focal firm's value-chain activities.

2) Supply-chain management has evolved over time, largely due to globalization and technological advances. What does the future hold? Can you anticipate changes to the supply chain that would further alter the express and logistics industry?

The future of logistics industry will see a greater demand for a "responsive" supply chain management system which dynamically responds to the changing needs of the focal firms. With the base of the focal firms shifting to emerging markets so will the fortunes and revenues of the facilitators which include the express and logistics industry. The pressures on fuel (petroleum, diesel) might force these industries to become more efficient and concentrate on reducing these expenses by a combination of hedging, fuel efficient transportation techniques and using complex IT solutions in supply chain management.

3) What factors do focal firms consider when choosing one logistics service provider over another? In what ways do the global logistical and transportation needs of focal firms vary from one industry to another? Give some examples

Focal firms consider the global outreach, security of their cargo, speed and efficiency and costs in choosing one logistics service provider over another. Some focal firms might look for specialized functions like warehousing, inventory management and expertise in shipping requirements such as packaging, containerization and labeling.

Needs of focal firms do vary from one industry to another, for example security is of paramount importance to multinational banking/finance industry in delivering important documents, global presence might be of paramount importance to retailers like Nike which have worldwide markets whereas speed and efficiency might be important to other retailers to be one step ahead of their competition. Focal firms that are SMEs might prefer cost as their most important criteria due to their resource crunch.

4) Given the importance of the