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Logistics strategic planning: Current status and future prospects in Greek

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Article  in  International Journal of Risk Assessment and Management · January 2007

DOI: 10.1504/IJRAM.2007.011409

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 44 Int. J. Risk Assessment and Management, Vol. 7, No. 1, 2007

111
2 Logistics strategic planning: current status and
3 future prospects in Greek companies
4
5
6
7 Maria Kotsifaki
8 CITY Liberal Studies,
9 Affiliated Institution of the University of Sheffield,
1011 13 Tsimiski Street, Thessaloniki, 546 24, Greece
1 and
2
Mellon Collection Services S.A., 66 M. Botsari Street,
3
Thessaloniki, 546 40, Greece
4
Fax: +30 2310 899296 E-mail: m.kotsifaki@mellon.com.gr
5
6
7 Nikos Dimitriadis*
8 CITY Liberal Studies,
9 Affiliated Institution of the University of Sheffield,
2011 13 Tsimiski Street, Thessaloniki, 546 24, Greece
1
2 and
3 Vanity Creations, 12 Egnatias Street, Thessaloniki, 546 36, Greece
4 E-mail: ndimitriadis@city.academic.gr
5 *Corresponding author
6
7 Panayiotis H. Ketikidis and Fotis Missopoulos
8
9 CITY Liberal Studies,
30 Affiliated Institution of the University of Sheffield,
1 13 Tsimiski Street, Thessaloniki, 546 24, Greece
2 Fax: +30 2310 287.564 E-mail: ketikidis@city.academic.gr
3 E-mail: f.misopoulos@city.academic.gr
4 Abstract: This paper’s aim is to investigate logistics strategic planning in Greek
5 companies. Although its importance seems evident, not all companies approach
6 logistics strategic planning with the same sensitivity. As a number of studies
7 around the world have shown important variations in the degree of the adoption
8 of logistics strategic planning, this study intends to examine this adoption in
Greek companies. In accordance, the objectives of the paper are to: identify major
9 logistics practices, examine the extent to which these companies use logistics as
40 a strategic tool, and develop recommendations for the future of logistics strategic
1 planning. It is a quantitative study. A structured questionnaire was addressed to
2 important Greek companies with significant logistics activities. Major findings
3 suggest that the majority of the companies use logistics as a strategic tool in a
higher or an intermediary level. Implications regard planning itself, the use of
4 information technology, outsourcing and the formation of alliances.
5
6 Keywords: 3PL; alliances and supply chain management; Greece; information
711 technology; logistics; logistics strategic planning; outsourcing.
8

Copyright © 2007 Inderscience Enterprises Ltd.

Logistics strategic planning in Greece 45

Reference to this paper should be made as follows: Kotsifaki, M., Dimitriadis, N.,
Ketikidis, P.H. and Missopoulos, F. (2007) ‘Logistics strategic planning: current
status and future prospects in Greek companies’, Int. J. Risk Assessment and
Management, Vol. 7, No. 1, pp.44–58.

Biographical notes: Maria Kotsifaki received her bachelor in Business

Administration in the University of Macedonia, Thessaloniki, Greece in 1999
and started working the same year for Mellon S.A. Energised by the growth of
Logistics in Greece as well as in the entire South-Eastern Europe region, she
decided to take a postgraduate degree in this field. She studied Logistics
Management in CITY Liberal Studies, Affiliated Institution of the University of
Sheffield, Thessaloniki, Greece, and finished the course with distinction in
2003. Nowadays, she is still working for Mellon S.A. as a coordinator of the
Thessaloniki branch. She has experience in research in the fields of Logistics,
Supply Chain Management and 3PLs in North Greece.

Dr Nikos I. Dimitriadis has been teaching and researching in Marketing and

Logistics for the last eight years. He was a Lecturer in Marketing at Sheffield
University Management School, he had taught at various undergraduate and
postgraduate modules at CITY Liberal Studies, Affiliated Institution of the
University of Sheffield, in Thessaloniki (Greece) and he was an instructor at
training programmes for entrepreneurs organised by the Centre for Development
of Greek Trade. He received his bachelor degree in Business Administration
(Marketing) from CITY Liberal Studies, winning the Best Annual Achievement
Award for two continuous years, and his MBA (Marketing) from the University of
Sheffield. He received his PhD in 2006 from the University of Sheffield. His
papers have been presented at several national and international conferences and
published in various academic journals, business magazines, and newspapers.
Nikos Dimitriadis was a member of the organising committee for the international
conference SCMIS in 2005 and 2006, the Vice President (Finance) of the
Thessaloniki Chapter of SOLE – The International Society of Logistics, and the
Co-chairperson for Marketing at the 19th International Logistics Conference.
Currently, he is the Managing Director of Vanity Creations, a fashion-related
company in South East Europe, and he is teaching marketing at the Executive
MBA of CITY Liberal Studies.

Dr Panayiotis Ketikidis is the Vice Principal of CITY Liberal Studies, Affiliated

Institution of the University of Sheffield, Thessaloniki, Greece, and the
Chairman of the South-East European Research Centre. Dr Panayiotis Ketikidis’
early work was in the development of database systems for patient management
in the Operating Rooms at the Hospital of the University of Pennsylvania
(USA). He was also, as a project leader at Sterling Drug Inc., responsible for all
the phases of the software development life cycle to support discovery research.
Dr. Ketikidis recent publications include articles in the IEEE-SCAMC,
MEDINFO and in various conference proceedings. He was also for many years
an Expert (reviewer) of DG XIII (Telecommunications, Information Industries
and Innovation) of the Commission of the European Community. He is currently
the Chairman of the International Society of Logistics (Chapter Thessaloniki)
and a Scientific Advisor of the IT Industries of Northern Greece.

Fotis Missopoulos is a full time member of the academic staff at CITY Liberal
Studies- Affiliated Institution of the University of Sheffield, Thessaloniki, Greece.
He is a Lecturer in Information Technology at the Business and Economics
Department. Mr Missopoulos has an extensive teaching and consulting experience.
He has taught information technology courses at Ball State University, as well as
in various Greek institutions. He worked as an information technology consultant
for several enterprises in Indianapolis, USA and in Thessaloniki, Greece, while
46 M. Kotsifaki, N. Dimitriadis, P.H. Ketikidis and F. Missopoulos

he participated in a number of research and consultancy projects (SEPVE,

ICAP, etc.).He is a member of Hellenic Informatics Society and of the
International Society of Logistics. His research interests are in the areas of
Logistics, Software Economics, Project Management and e-commerce.

1 Introduction

The role of logistics has been increasingly highlighted as central to any contemporary
business activity. Logistics lie at the core of both operational and marketing processes.
It is actually logistics that provides companies with the ability to effectively and
efficiently meet their customers’ requirements. Without appropriate configuration and
implementation of the whole logistics function, companies are risking being rigid,
disorientated and ultimately being driven out of the market. However, such appropriate
configuration and implementation of logistics have little chance of success without careful
and detailed strategic planning. Activities such as procurement, inventory management,
warehousing, materials management, distribution and customer service, which are
included in logistics, should be well-thought out in advance, well-coordinated and above
all, should be facilitating the achievement of the overall goals of the company.
Although the importance of logistics strategic planning seems evident, not all
companies in all countries approach this issue with the same sensitivity. This study intends
to investigate the adoption of logistics strategic planning in Greek companies.
Accordingly, the objectives of the paper are to: identify major logistics practices in Greek
companies, examine the extent to which these companies use logistics as a strategic tool,
and develop recommendations for the future of logistics strategic planning in Greece. For
the purpose of this study a partially standardised, structured, and self-administered
questionnaire was addressed to companies chosen mainly on the basis of the existence of
significant logistics operations, as well as on sales, number of employees and years of
operation. A total of 30 valid questionnaires from important companies in Greece were
used in the analysis, which included the investigation of the logistics activities as
mentioned earlier and issues such as outsourcing, the use of information technologies and
systems, partnerships in the supply chain and global competition.
Greece is an interesting and useful case for evaluating the use of logistics strategic
planning. This is due to the fact that the relationship between Greece and logistics is of
particular importance. This relationship dates back centuries to the campaigns of
Alexander the Great which are often highlighted in business literature as huge logistical
efforts. Greece organised the 2004 Olympic games which required detailed logistics
strategic planning, and lastly Greece itself is positioned in Southeast Europe at the lower
part of the Balkans peninsula on the crossroads between advanced Western Europe and the
advancing Eastern area of the Mediterranean sea. Thus, logistics have, potentially, a
considerable contribution to make to both the country’s and the region’s economic
development.
 Logistics strategic planning in Greece 47

2 Literature review
2.1 Logistics and value
The Council of Logistics Management (CLM) has given one of the most popular
definitions of logistics, which suggests that the term includes the process of planning,
implementing and controlling the efficient, effective flow and storage of goods, services
and related information. These processes take place from the point of origin to the point
of consumption and its ultimate purpose is the conformation to customer requirements
(Lambert et al., 1998). Central to logistics is the notion of value. According to Ballou
(1999) logistics is about creating value; value for customers and suppliers of the firm, and
value for the firm’s stakeholders. Value in logistics is expressed in terms of time and
place. Products and services have no value unless they are in the hands of the customer
when (time) and where (place) they wish to consume them. Good logistics management
views each activity in the supply chain as contributing to the process of adding value. So,
to many firms in many countries logistics has become an increasingly important
value-adding process for a number of reasons (Ballou, 1999; Lambert et al., 1998):

Costs are significant. Logistics costs are ranked second only to the cost of goods
sold. Minimising these costs and passing the benefit on to the consumers and firm’s
shareholders can be seen as value addition.

Supply and distribution lines are lengthening. The trend is towards an integrated
world economy which suggests that firms will or have developed global strategies
where either their products are designed for a world market or they are produced
locally and sold internationally. For both options, logistics is an integral component
of the supply chain.

Logistics is important to strategy. And vice versa, strategy is important to logistics.

Logistics adds significant customer value, as explained above.

Customers increasingly want a quick customised response. Consumers expect
products and services to be made available in increasingly shorter times. In addition,
information systems and flexible manufacturing processes lead the marketplace
towards mass customisation. Companies too have been applying the concept of quick
response in their operations in order to meet customers’ demands within their
logistics function.
Cooper et al. (1994) have argued that it is the need for logistics optimisation that led to the
development of techniques that many firms consider crucial for achieving competitive
advantage, such as Just-in-Time (JIT), Quality Management, Materials Requirements
Planning (MRP), and Computer-Integrated Manufacturing (CIM). But logistics cannot be
considered simply as an outcome or a sum of technological developments. Logistics is a
crucial strategic function that might be implemented through specific tools but is by no
means bounded by them.

2.2 Strategy and logistics

When discussing strategy, direction is a central keyword. A number of definitions of
strategy emphasise this word in order to explain a strategy’s function (Johnson and
Scholes, 2002). Where we are now, where we want to go, how we will get there and how
48 M. Kotsifaki, N. Dimitriadis, P.H. Ketikidis and F. Missopoulos

we know if we have done it, are the four central questions that can be derived from this
emphasis on strategy for the overall direction of a company. So, strategy involves
decisions regarding the long-term orientation of an organisation, and the configuration of
already existing or new skills and resources in order for this direction to be realised.
Strategy, though, has to be managed, which leads us to strategic management and the
subsequent strategic management process. Strategic management is quite often defined as
the process of forming visions and missions, setting specific objectives, choosing between
different strategies, implementing them and finally evaluating their success and engaging
in corrective actions (Thomson and Strickland, 2003). This strategic management process
actually includes more than one process. Mockler (1995) for example has identified three
types of strategic processes: general strategic management, strategy-formulation and
strategy-implementation. Strategic business planning seems to be the obvious outcome of
strategic management. Mintzberg et al. (2003) showed that strategy is usually perceived,
even equated, with a specific plan. But is a strategy a plan? The answer might be that the
opposite of this statement is more appropriate than the statement itself. A strategy is more
than a plan but a plan is a strategy. For example, a decision to diversify is a strategic one
but not of a strategic business planning nature (Reading, 2004). Put simply, you can have
a strategy without a plan but you cannot have a plan without a strategy.
Regardless of the existence, or not, of a specific plan, strategy is essential in logistics
as it is in any business function, but especially with logistics, since logistics is so closely
related to a company’s ability to compete in a demanding, global and volatile business
environment. Olavarrieta and Ellinger (1997) found that a variety of firms use logistics
strategic planning in order to increase profitability and growth and gain a sustainable
competitive advantage at an international level. As with other functions, logistics strategy
should work in the direction of achieving organisational goals in a corporate or business
unit level (Saunders, 1997). Key elements in the formulation of logistics strategy are
facilities, transportation, inventory and information systems (Gattorna and Walters, 1996).
Therefore, logisticians need to portray how these elements will be developed, integrated
and managed in order to support the overall business strategy. However, the relationship
between logistics and business strategy is not one-way. There is an interplay which occurs
both vertically, between top management and functions, and horizontally, between
different functions. This interplay leads to the need of an integrated strategy, which
requires the existence of the principles of speed, learning, renewal, leadership, ownership,
core capabilities and business modelling in order to be implemented successfully
(Copacino, 1999). Information technology easily stands out in the discussion of logistics
strategy due to its importance in the overall outcome. Information technology is integral
to logistics planning and implementation since it enables companies to achieve desirable
results. Electronic Data Interchange (EDI), bar-coding and scanning, data warehousing,
decision support systems (DSS), electronic commerce enabling systems and various
internet applications are considered as some of the most important technological
developments that affect logistics strategic planning (Handfield and Nichols, 1999;
Stock and Lambert, 2001). The point that emerges from the literature review is that on one
hand, technologies contribute considerably to strategy implementation, but at the same
time they also contribute to the formation of strategy itself since, through their capabilities,
they can proactively alter or enhance future plans.
Of equal importance in logistics strategy is the issue of strategic alliances and
networking (Sandelands, 1997). On one hand, the focus on core competences and the
 Logistics strategic planning in Greece 49

subsequent use of outsourcing regarding all business functions, and on the other, the
extensive use of third party logistics companies (3PL), has led to a compelling need for
the incorporation of logistics issues in the strategic design of national and global networks
(Fawcett, 1992). Logistics itself, is considered nothing more than the management of
networks of actors and activities (Ballou, 1999). Relationships in the supply chain are
becoming complex, but if any positive outcome is to be achieved at the consumer-end of
the chain then all participating companies need to cooperate by developing partnering
mentalities and processes (Fernie, 1998).
However, approaches to strategic logistics management are not the same around the
world. A study by Stainer (1997) has shown that there are considerable differences
between managing logistics in Japan and in the West. As can be seen in Table 1, the
Japanese approach involves a more strategic attitude towards logistics than that in the
West, since it has a top management commitment and involvement, a long-term
orientation and a clear link to future growth.

Table 1 Different approaches to logistics management

Features Japan The West

Focus Culturally inherent quality and Performance related to profit

customer satisfaction
Target setting Top management orientated Specialist-orientated
Technology Long-term investment Reactive
Emphasis Continuous improvement linked to Precision and measurement
growth factors

Source: Adapted from Steiner

A closer look at Table 1 reveals that there are two ends to the logistics strategy. One
has to do with internal operations and the second with external customer satisfaction.
Accordingly, Morash and Droge (1996) suggested that the two emerging ‘value
disciplines’ or strategic emphases, concepts for supporting different logistics capabilities,
are customer closeness or intimacy and operational excellence. The discipline of customer
closeness emphasises external customers and external goals and objectives. It includes
product or service differentiation from logistics capabilities and is often referred to as
‘demand orientated capability’. For that matter, Christopher (1998) protests that effective
logistics management can supply firms with a competitive edge, provided that the logistics
system is designed around the needs of the customer. Most of the time this specific
discipline applies to the strategic level. Such demand orientated capabilities can be
customer service, delivery speed, delivery reliability and responsiveness to target markets.
On the other hand, the second value discipline is related to an organisation’s operational
capabilities. It stresses the internal customers of a company and is often referred to as a
supply orientated capability, where emphasis is on distribution networks for market value
and for competitive advantage. Such supply orientated capabilities can be distribution
coverage and low total cost distribution.
50 M. Kotsifaki, N. Dimitriadis, P.H. Ketikidis and F. Missopoulos

3 Methodology

The aim of this study was to identify the use of strategic business planning in Greece. For
that purpose a specific framework was used, originally developed by Bowersox et al.
(1994) for classifying companies according to the extent to which logistics is used as a
strategic weapon. The specific framework was chosen due its relevance to the aim and
objectives of this study. Bowersox’s et al. (1994) original framework was modified later
on by Sum et al. (2001), who produced a strategic index (SI) adding an extra fifth variable
in the SI not existing in the original framework. The revised model suggests that
companies achieving a high SI score are those that manage logistics at a strategic level.
On the other hand, companies with lower scores tend to treat logistics as a reactive tool or
tend not to get involved in logistics strategic management at all. The five variables of the
SI framework used in this study are the following:

existence of a centralised logistics department

existence of a formal logistics mission statement

existence of a formal logistics strategic plan

existence of participation of logistics executives in strategic planning

alignment of the logistics objectives with the overall business objectives.
The first part of the questionnaire addressed the five variables of the SI framework.
Respondents were asked to rank these variables on a seven-point Likert scale, ranging from
‘1’ for ‘Not important’, to ‘7’ for ‘Very important’. For the last variable in particular
respondents were asked to rank their business and logistics objectives separately, as Sum’s
et al. (2001) model suggests. According to their scores, companies were characterised as
strategic, supportive or neutral, in relation to management’s approach to logistics. The
validity of the SI was tested against the respondents’ answer to a single question on the
extent to which logistics is viewed as a strategic function. A correlation test between the
SI scores and the responses would yield to a p-value, depending on the statistical accuracy.
Other parts of the study included the degree of participation of logistics executives in
the formulation of the overall business strategy in comparison with other functional areas
of the firm (i.e. Engineering and R&D, Marketing and Sales, Information Systems,
Operation/production), the emphasis placed on various activities over the past two years
regarding logistics, and the level of use of specific logistics-related computer applications
and technologies (i.e. Electronic Data Interchange-EDI, bar-coding, Warehouse
Management Systems-WMS, Distribution Resource Planning-DRP, Automated
Storage/Retrieval Systems-AS/RS, freight consolidation, vehicle routing/scheduling,
Radio frequency-RF). Due to the importance of partnerships in logistics strategy, the study
also included a section on the motives behind outsourcing and on the logistics-related
functions that are usually outsourced to external partners. Finally, the study investigated
potential variables affecting the future of logistics strategy in the participating companies.
Since the study, by nature, is explanatory, a standardised, self-administered questionnaire
was constructed (Robson, 2002) based firstly on the revised Bowersox et al. (1994)
framework by Sum et al. (2001), and secondly on the rest of the research topics, as
explained above.
The sample of the study was constructed by acquiring information on major
 Logistics strategic planning in Greece 51

manufacturing companies in Greece, from the Greek Business List Catalogue. An initial
list of companies was constructed using variables such as sales, number of employees and
years of operation. The aim was to include only major Greek companies. This information
was then cross-checked and enriched by companies listed in two main Greek logistics-
related practitioners’ magazines, Logistics & Management and A&M, in order to ensure
the inclusion of companies that make use of considerable logistics operations. Thus, the
sampling approach used can be characterised primarily as theoretical or purposive
sampling, since specific characteristics deriving from the literature were used for deciding
which units to include or not (Robson, 2002). The final list consisted of 300 companies.
Questionnaires were sent via e-mail to managing directors resulting in a usable number of
30 returned questionnaires. Although the ability of this study to produce results with a high
degree of generalisation is restricted, due to the relatively low response rate, 10%, it did
produce interesting and valuable results that highlight important aspects of the current
situation and future prospects of logistics strategic planning in Greece.

4 Results, analysis and discussion

The first outcome concerned the Strategic Index (SI) categorisation of the participating
companies, as shown in Table 2.

Table 2 Distribution of companies according to Strategic Index- SI

SI group Percentage

Neutral 36.7
Supportive 33.3
Strategic 30.0
Total 100.0

The validity of the SI grouping was tested against the respondents’ answer to a single
question on the extent to which logistics is viewed as a strategic function in their
companies. A correlation test between the SI scores and the responses yielded a
Spearman’s coefficient of 0.749 and a p-value of 0.001. The scores in Sum’s et al. (2001)
study in Singapore were 0.4081 and 0.004 respectively. It is noticeable that the current
results can be considered more valid since Greek respondents seemed to be more
consistent to their responses. Thus, 36.7% of the companies are characterised as neutral,
33.3% as supportive and the remaining 30% as strategic. Strategic companies, which
represent the minority, view and manage logistics as a strategic weapon to gain or
maintain competitive advantage. Neutral companies which represent the majority, treat
logistics reactively and in a detached function. This means that they do not have a
centralised logistics department; they do not have a formal logistics mission statement or
a formal logistics strategic plan. Supportive companies lie between the two previous
groups both in terms of percentage and in terms of using logistics as a strategic tool.
However, it must be mentioned that the difference between the groups is not spectacular.
52 M. Kotsifaki, N. Dimitriadis, P.H. Ketikidis and F. Missopoulos

On the contrary, all three groups represent 30% or slightly more. Although the neutral
group is in the majority, it is also an indication that only 36.7% did not use logistics as a
strategic tool at all, leaving the remaining 63.3% as the majority of the companies that do
use logistics at the highest or intermediary level to gain competitive advantages.
The next research topic concerned the degree of involvement of logistics executives in
the formation of the overall business strategy as compared with other functions. Table 3
shows the results.

Table 3 Functional participation in overall business strategy formulation

Functional area Neutral Supportive Strategic

Engineering/R&D 1.14 2.00 4.78

Marketing/Sales 2.71 4.22 5.44
Finance 1.86 4.11 5.67
Logistics 2.14 5.67 6.00
Information systems 1.86 4.50 4.89
Operation/production 2.43 4.50 5.22
Human resources 1.29 3.13 4.44

Note: Means are based on seven-point Likert scale, ‘1’ for ‘Low participation in overall strategic
formulation and planning for company’, ‘7’ for ‘High participation in overall strategic
formulation and planning for company’

The first interesting outcome is that neutral companies have very low means of
participation in all organisational functions. This clearly indicates that these firms actually
lack strategic thinking and planning as a whole. At the other end of the scale, strategic
companies scored quite highly in all functions, while supportive companies lie, again, in
the middle. These results suggest that if strategic orientation exists then it is likely to be
evident in all functions of a company. The second outcome is that all groups scored highly
in logistics compared with the other functions. In neutral companies logistics scored
second, while in both supportive and strategic companies it scored first. These results
could indicate the increased importance of logistics for strategy development in Greece.
If so, then it is a strong statement in support of the existing literature on the contribution
of logistics to the creation of value and to the competitiveness of modern companies.
However, this statement can only be verified with further, and possibly, qualitative
research. Other explanations are possible and cannot be excluded at this stage. Alternative
explanations include managing directors passing the questionnaire to their logistics or
logistics-related managers, or answering it with a bias in favour of logistics, due to the
questionnaire’s nature.
Regarding the emphasis placed on various logistics activities over the past two years,
Table 4 shows the results from the activity with the most emphasis to the activity with the
least. Due to world-limit constrains, only the two top and two bottom activities appear in
the table on the next page.
 Logistics strategic planning in Greece 53

Table 4 Logistics-related activities emphasised over the last two years

SI group Mean

Neutral
Achieving operational efficiency 5.91
Skills upgrading/training of workers 5.73
Using better vehicle scheduling systems 3.46
Obtaining ISO 9000 certification 3.27

Supportive
Ability to deliver orders on time 6.30
Achieving operational efficiency 6.30
Using better vehicle scheduling systems 3.78
Forming strategic alliances 2.44

Strategic
Obtaining ISO 9000 certification 6.37
Ability to deliver orders on time 6.22
Forming strategic alliances 4.56
Using outsourcing for more areas 4.22

Note: Means are based on seven-point Likert scale, ‘1’ for ‘Not emphasised’, ‘7’ for ‘Heavily
emphasised’

It is obvious from this table that strategic companies have, overall, shown an increased
emphasis on logistics activities as a whole over the last two years when compared with the
other two groups. The overall mean of all the activities is 5.76 for the strategic companies,
4.70 for the supportive, and 4.67 for the neutral. Another interesting outcome is that
although the first two groups emphasised achieving operational excellence, it is only the
strategic companies that focused primarily on obtaining an ISO 9000 certificate,
something which actually proves their attention to standardising and optimising their
processes.
Table 5 presents the scores for logistics-related information technologies and systems
that either are currently used or are intended to be used within the next two years.
Again it is the strategic companies that have overall higher scores for all but two,
technologies. There is a ‘chicken and egg’ dilemma in this situation. Is it because of the
strategic orientation of logistics that strategic companies use more technologies or is it
because they use these technologies that they realise the importance of logistics strategy?
Although assuming the former would be a logical choice, it would not be a scientifically
sound one. Further research is, therefore, also needed on this point.
54 M. Kotsifaki, N. Dimitriadis, P.H. Ketikidis and F. Missopoulos

Table 5 Logistics-related technologies per company group

Technology Neutral Supportive Strategic Total

Electronic data interchange (EDI) 18.2 50.0 66.7 43.3

Bar-coding 36.4 60.0 88.9 60.0
Warehouse management systems (WMS) 18.2 70.0 66.7 50.0
Distribution resource planning (DRP) 9.1 20.0 55.6 26.7
Automated storage/retrieval systems 0.0 30.0 33.3 20.0
(AS/RS)
Freight consolidation 9.1 10.0 33.3 16.7
Vehicle routing/scheduling 36.4 20.0 33.3 30.0
Radio frequency (RF) 0.0 0.0 22.2 6.7
Fibre optics communications technology 18.2 10.0 22.2 16.7
Satellite communications technology 9.1 0.0 33.3 13.3

Note: Figures show the percentages of companies that use or intend to use – in the next two
years – the technology/systems presented above

Literature identifies outsourcing as a major strategic move for modern companies that
leads to partnerships and networks, especially in logistics, where 3PL companies provide
an increasing number of operations and logistic-related solutions. The results of this study
indicate that in Greece the most popular areas of outsourcing are out-bound transportation,
distribution and packaging. The area of out-bound transportation was the first choice for
all three groups. The reason for this phenomenon is easily explained due to the strict Greek
legislation for the permissible number of driving licenses for trucks. On average, it appears
that strategic companies practiced outsourcing more than the other two groups. Neutral
companies were the ones that practiced outsourcing the least of all. Regarding motives,
outsourcing cost is the key reason for all the groups. Flexibility and responsiveness also
appeared as major reasons for outsourcing for the neutral and supportive companies, but
not for the strategic companies. This means that strategic companies might not consider
outsourcing as a strategic move that could help them increase competitiveness. Table 4
showed that strategic companies had focused almost the least on outsourcing over the
preceeding two years than on any other logistics-related activity. One possible explanation
for these results could be that strategic companies have been using outsourcing for a long
period of time and it is not now considered a tool providing any significant advantages.
On the other hand, it could mean that outsourcing for these specific companies is, and has
always been, the least important activity, a peculiar result if the existing literature is taken
into account.
When asked about the criteria of choosing third party logistics providers – 3PL,
service reliability and consistency, cost of service, and flexibility in accommodating
changes were the three most important. Thus, Greek companies, independently of their
strategic position seem to require from their partners quality and effectiveness but, still,
low cost of services. Rather demanding indeed, probably leading to fierce competition
between 3PL companies. It might be expected that respondents would have placed greater
emphasis on selection criteria such as adding value to company’s relationships with their
customers and availability of international operations and networks. Due to globalisation
 Logistics strategic planning in Greece 55

of business and the radical changes occurring in their external environment, companies
need to look at the important contribution of 3PL providers to their ultimate competitive
advantage. However, results indicate either that this level of partnering awareness is not
yet developed or that 3PL in Greece are currently providing only supplementary services
without the ability to assist companies with value-adding strategic capabilities. It is
evident that if any country aims at developing and supporting significant business
activities, then not only companies but also various providers must be in place and able to
create the necessary infrastructure.
The last part of the study concerned factors that can potentially affect logistics strategy
in the future. Table 6 below presents the four most important factors for each company
group as well as overall scores for all factors.

Table 6 Factors affecting future logistics strategy

SI group Mean

Neutral
Increased competition 6.36
Higher customers’ expectations of services and products 6.27
Increased globalisation of business 6.09
Increased emphasis on ISO 9000 and other quality standards 5.55
Supportive
Higher customers’ expectations of services and products 6.00
Increased competition 5.70
Increased globalisation of business 5.40
Rapid technological advancement (e.g. AS/RS, satellite, RF) 5.40
Strategic
Higher customers’ expectations of services and products 6.33
Increased emphasis on ISO 9000 and other quality standards 6.22
Increased competition 6.00
Increased globalisation of business 6.00
Overall
Higher customers’ expectations of services and products 6.20
Increased competition 6.03
Increased globalisation of business 5.83
Increased emphasis on ISO 9000 and other quality standards 5.67
Rapid technological advancements (e.g. AS/RS, satellite, RF) 5.43
Increased environmental concerns 5.23
Increased use of third-party logistics services 5.20
Downsizing of firms 4.97
Lack of qualified logistics personnel 4.83

Note: Means are based on seven-point Likert scale, ‘1’ for ‘Not important factor’, ‘7’ for ‘Very
important factor’
56 M. Kotsifaki, N. Dimitriadis, P.H. Ketikidis and F. Missopoulos

Increasing global competition, higher customer expectations of services and products and
increasing globalisation of business have the greatest impact on future logistics
management. Companies seem to pay scant attention to factors such as lack of qualified
logistics personnel and the downsizing of firms. Strategic and supportive companies,
being more customer-focused, give a very high score to customer expectations of services
and products. This suggests that they will remain customer focused in the future and will
give considerable emphasis to customer satisfaction via quality services and products. On
the other hand, neutral companies believe that increased competition is the most important
factor. Other important issues that will affect future logistics are increased emphasis on
ISO 9000 and rapid technological improvements. As for the emphasis on ISO 9000, it is
probably acting as a mechanism to permit entry to international markets more easily. To
go a step further, it is an important tool for the various funding opportunities offered by
the European Union but most of all it is a vehicle that provides customer, internal and
external, satisfaction, administrative improvements, speed of operations and productivity
and recognition between companies working in the same field and towards customers
(Loukas, 2003). Improvements in IT will also affect the future of logistics. All groups did
not consider the use of 3PL and the lack of qualified logistics personnel as potentially
important. The limited use of 3PLs in the future is explained by the fact that they do not
involve them in their strategic plans, as the previous section revealed, while the limited
attention to qualified personnel obviously creates concern as to how exactly these
companies perceive their logistics operations.

5 Conclusions

This study examined the current use of logistics strategy and its future prospects in Greece.
The results and their discussion as developed in the previous section led to three important
observations.
The first regards the considerable differences according to the categorisation of firms
as strategic, supportive and neutral. Using a framework such as the Strategic Index is
invaluable for any analysis of similar research issues. This study added to the argument
that different companies have different needs and require different types of attention.
Companies belonging to the strategic group seemed to understand and practice strategic
integration not only regarding logistics but all other business functions as well. This means
that strategy orientation is something that a company either has or does not have. If it
is developed, sooner or later it will positively influence all aspects of its operation. On
the other hand when companies lack strategic orientation then this has an immediate,
top-down impact on all current functions, along with their future direction. Some
companies however, seem to lie in the middle not because they selectively choose to
operate strategically in certain ways only, but most probably because they have not yet
fully implemented a strategic orientation. Still, these companies score much higher in
important elements, such as the use of advanced technologies and customer orientation,
than the neutral ones.
Secondly, logistics partnerships and strategic alliances, as they are mirrored by scores
in outsourcing and future logistics strategy, were not found to be at a satisfactory level.
Most companies seemed not to consider this field as of strategic importance. However,
partnerships are vital for achieving a high competitiveness level in a globalised and
 Logistics strategic planning in Greece 57

demanding modern business environment. Regardless of whether these results are because
of an inappropriate mentality dominating the participating companies or/and the limited
value of services offered by 3PL providers, it should be a major topic of future
investigation. The road to the future is not a road of isolation. On the contrary, it is a road
of close cooperation and of partnerships at all business levels which allows companies to
achieve results on a global scale.
The last issue refers to logistics strategic planning itself. Without a doubt, logistics
strategic planning is necessary for aligning logistics with the overall business strategy, for
coordinating different logistics activity, for motivating employees, for measuring results
and ultimately for delivering internal and external value. However, strategic planning in
general has received two main criticisms over the last decade, the first being its extensive
use (Mintzberg, 1994) and the second, the unpredictability of the modern business
environment (Carter, 1999). Regarding the first, due to the extensive use of the term
‘strategic planning’ it has lost its true meaning, leading to confusion and even alienation.
Regarding the second, it has been argued that a volatile environment does not provide the
luxury of a well written and detailed plan, as initially predicted. This means that
companies without a plan can actually perform better than companies with a plan. In any
case however, the main advantages of logistics strategic planning still remain and a plan,
formal or informal, is almost always needed to achieve long-term goals. Furthermore,
apart from the existence of a detailed and formal plan, strategic orientation in logistics also
means the existence of a logistics department and of specialised logistics executives and
personnel, but most importantly it means the existence of a mentality at all levels that puts
logistics at the centre of a company’s efforts to create present and future competitiveness.
The two main limitations of the study include the low response rate and its quantitative
nature. Regarding the first, a 10% response rate, resulting in a relatively small sample size
of 30 companies, does not allow for immediate generalisations. However, as the
discussion of the findings has shown, this study has still developed interesting and
valuable insights on the research topics. Regarding the second, although quantitative
research is appropriate for explanatory studies, as indicated within the analysis, qualitative
research is needed in order for more light to be shed on the various research outcomes of
this study.

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