Taxonomy in Logistics Management: A Resource-Based Perspective

Abstract

A survey of 1,200 manufacturing firms in Taiwan was undertaken in order to examine taxonomy in logistics management, using the resource-based perspective and cluster analysis approach. Results showed that intensive logistics competency cluster, which had excellent logistic competencies in all four logistics competencies, had better logistics, market, and financial performance. The results demonstrated that logistics competencies should not exist in a vacuum, but should leverage each other to create sustained competitive advantage. 1. Introduction Empirical taxonomic approaches, which can reduce complexity or achieve parsimony by breaking the organisation into distinct and internally consistent categories without losing the main information or characteristics that exist within the taxa (Bailey, 1994; Rich, 1992; Ketchen, et al., 1993), have become prominent in research on strategic management (e.g. Miller, 1996), marketing management (e.g. Vorhies and Harker, 2000; Gordon and Milne, 1999), and operation management (e.g. Frolich and Dixon, 2001; Miller and Roth, 1994; Kathuria, 2000; Boyer et al., 1996). but very few published empirical studies have focused on logistics and supply chain management (SCM). Further, even if researchers have employed the taxonomic approach to logistics or SCM, they have used narrow criteria or a few variables to classify firms in taxonomy such as logistics strategy (Kohn et al., 1990; McGinnis and Kohn, 1990), logistics strategic orientation (McGinnis and Kohn, 1993) or logistics technology adoption (Germain et al., 1994; Germain, 1996). Miller (1996) warned that a too narrowly focus on a tew key elements was dangerous because an organisation would lose its resilience and relevance. Another critical problem on taxonomic study is clustering dimensions disconnected form theory which may result in the taxa viewed as data dredging and not reflecting actual organisational real conditions (Miller, 1996; Ketchen and Shook, 1996; Bozarth and McDermott, 1998). Thus, the resource-based view (RBV) of the firm (Wernerfelt, 1984; Barney, 1991; Barney et al., 2001), which contends that the nonimitable resources and capabilities of firms are the key sources of sustained competitive advantage (Hoskisson et al, 1999; Oliver, 1997; Prahalad and Hamel, 1990), is one of the most influential theories in taxonomic studies (Miller, 1996; Vorhies and Harker, 2000) and strongly recommended by logistics/SCM researchers (Lynch et al., 2000; Skjoctt-Larsen, 1999; Olavarrieta and Ellinger, 1997). In addition, most logistics and SCM empirical studies have concentrated on Western developed countries (Luo et al., 2001), displaying a particular bias towards the USA. Non-Western developed countries, such as Taiwan, have been the focus of very few logistics and SCM studies, even though 60% of the world's desktop PCs or PC's motherboards are made in Taiwan or by Taiwanese company (Ernst, 2000). In summary, the empirical taxonomic approach and the resource-based view of the firm have become two important theories in other disciplines, but not in the logistics and SCM fields. The present study will combine them, utilising logistics competency factors to classify organisations in the manufacturing industry of Taiwan. 2. Literature Review 2.1 Logistics competency approaches: a resource-based explanation The strategic role of logistics has not received attention because logistics is still largely viewed as a separate entity or its activities as operational or tactical functions. However, the logistics competency approach can be regarded as a key strategic resource for acquiring sustained competitive advantage when resources or competencies are valuable, scarce and difficult to imitate (Olavarrieta and Ellingcr, 1997). A resource is valuable because it can exploit opportunities and threats in a firm's environment and thereby enhance efficiency and effectiveness (Barney, 1991). …

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