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Papers from the 2006 Supply Chain Management & Industrial Distribution Symposium
Edited by R. Glenn Richey Jr
Introduction
Today's competitive global business environment means effective use of firm resources is vital. One major consideration is the use of information technology resources for logistics activities. logistics information technology (LIT) is a major component of the firm's information technology investment and includes hardware and software expenditures associated with logistics activities, such as order, warehousing, inventory, and transportation management. The concept of LIT is quite broad, given that it includes special software which can help with yard management or transportation management or even sophisticated software like enterprise resource planning (ERP) packages. However, much of the idea of LIT is driven by why these tools are used and how investment in LIT can enhance the firm's data infrastructure as well as improve internal and external decision-making. A simple Excel spreadsheet can be considered a critical LIT tool since it allows item tracking and accounting which can facilitate product movement and as a result, increase customer satisfaction, and improve responsiveness to key customers. While spreadsheets can facilitate many LIT decisions, there are also other tools needed to improve operations and these tools are not inexpensive. Owing to the substantial investment and the number of alternatives, many CEOs now require IT managers to justify LIT expenditures and strategically focus their LIT investments. One option to justify LIT investment is to demonstrate that firm performance is enhanced through LIT applications.
A number of researchers have suggested that improved information exchange can have a substantial impact on overall firm performance and efficiency ([6] Bowersox and Closs, 1996; [8] Closs and Savitskie, 2003; [11] Daugherty et al. , 1995; [18] Gustin et al. , 1994). For example, [8] Closs and Savitskie (2003) were able to identify the LIT integration impact on customer integration and on customer service performance in their study. However, little empirical evidence exists especially in an international setting to justify LIT investment or to demonstrate the benefits of LIT. Therefore, this research applies regression analysis to demonstrate the relationship between LIT and selected firm performance capabilities. Establishing a link between LIT capabilities and specific performance capabilities helps management determine opportunities for improvement using LIT.
The following section reviews the literature with...