Logistics Innovation Through Outsourcing

Tatsuya Kimura

Japanese Economy, 2005, vol. 33, issue 3, 91-118

Abstract: This article explores the effects of regulatory reforms on logistics and analyzes logistics outsourcing (LO) as one form of logistics innovation. The analysis of the effects of regulatory reforms focuses on the trucking industry, which has the highest share of domestic freight transport in Japan. The results show that, compared with other transport industries and the industry as a whole, total factor productivity (TFP) for the trucking industry increased noticeably following regulatory reforms. The results of the analysis of LO reveal that outsourcing success depends on the outsourcee's management involvement in LO, the establishment of information-sharing relationships, and the retention of core logistics-related operational capabilities (logistics competence). Further, efficient LO has a positive direct impact on cost competitiveness, while indirect LO contributions, which work through changes in the company's internal business structure, have a positive impact on inventory reductions. Future research might show even stronger indirect contributions of LO to corporate operations by means of efficient information sharing and collaborative improvement of business structures.

Date: 2005
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DOI: 10.2753/JES1097-203X320305

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