Chapter II

Literature Review

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 CHAPTER - II
REVIEW OF LITERATURE

2.1 INTRODUCTION

The review of literature is very important not only to understand the nature and scope
of the problem but also the lacunae exist if any in the work already done by several earlier
workers. This chapter attempts to review the earlier literature related to the present study. The
main purpose of this review is to give a proper orientation and perspective to the present
dissertation. To provide the necessary background for the present study, some empirical and
evaluative studies on the subject are reviewed and the lacunae therein are indentified. An
overview of review of literature pertinent to the present problem has been made. The
literature has been collected from books, journals, published and unpublished material, local,
national and international dailies, websites etc.

Logistics is an absorbed area which includes logistics and supply chain management.
The link between the distributors and manufacturers are bridged between this. The future
trend also speaks that the growth of the country was interlinked with logistics management,
as the exporting and importing of the goods are ranking highest among the industrial sector.
To report the present study with several issues and challenges behind the logistics
management, the researcher has undergone with the following reviews to identify the
research gaps:

S Ramachandran, Mayur S Nakhava& Kumar Pratik (2015) opined that the global
logistics industry is estimated to be worth USD 300 billion. Though most of the large service
providers are headquartered in Europe, the biggest market is the US, which captures about
one-third of the world market. The global logistics industry is characterized by high costs of
operations, low margins, shortage of talent, infrastructural bottlenecks, demand from clients
for investing in technology and providing one-stop solutions to all their needs, and
consolidation through acquisitions, mergers and alliances. The logistics industry in India is
evolving rapidly and it s the interplay of infrastructure, technology and new types of service
providers that will define whether the industry is able to help its customers reduce their
logistics costs and provide effective services. Their study revealed that the global air
transportation services industry has been experiencing a decline in growth rate since 2012,
while the airline market is expected to reach £137 billion by 2017.after generated around
$194 billion in 2011, the global rail freight industry will have an annually growth rate of
35
more than 6 per cent until 2015, and the industry growth will increase to a yearly rate of 8 per
cent, reaching $286 billion by 2016, predicted by Market Line. The industry consumption
volumes have remained the growth of 4 per cent year on year.

Road freight industry is so far the leading segment in the global logistics industry,
representing over 74 per cent of the overall industry in terms of value. The global road freight
market is expected to top £2.2 trillion in 2015, which is a 28% increase over 5 years period
since 2010. The US represents for 56 per cent of the world road freight sector in terms of
value. The global shipping industry is expected to surpass 730 million TEUs by 2017,
according to Global Industry Analysts. Shipping containers is currently the major way of
global trading, the market performance is boosted by the increasing demand of trade,
investments in port terminal facilities, and the rising of global maritime transport networks.
Over the next few years, the global shipping sector is expected to grow mainly due to the
rising demand for oil and liquefied gas in Asian countries.

European Business Strategy Centre (2013) made its study on Indian Aviation sector and
opined that Manifold potential in sub-sectors of the transport and logistics industry are also
expected from the Indo-EU Trade and Investment Agreement (TIA) such as in road freight,
support in all modes of transport as well as in non-freight logistics. Transport and logistics
are closely related. Therefore, an optimal use of transport infrastructure is required to be able
to provide efficient logistics. And they also revised the facts on their study as:

In the road sector, the problem of inter-state movement of freight and the
fragmentation of the structure have to be addressed. In the railway sector, the development of
the dedicated freight corridor is projected to overcome this barrier. Concerning sea
transportation, connectivity between ports and the inland transport network constitutes an
important opportunity. Some reforms may be mode-overlapping. All in all, an expanded
capacity and upgraded technologies are required for each mode of transport. If the regulations
and improvements are not realized, it would lead to inefficiencies in the Indian transport and
logistics sector. Moreover, since logistics is entirely dependent on modes of transport, it is
necessary to improve them, e.g. through liberalization and fair competition. The rise in
vehicle emissions from the transportation sector may be slowed-down through different
ways:

 Shift from road to rail transport

36
  Higher confidence in public transport
 Improved efficiency standards

Garcia et al. (2013) adopted a new hybrid approach by combining operations Research
techniques with Artificial Intelligence (AI) search method in order to obtain good quality
solutions for complex intermodal transport problems, by exploiting the benefits of both kinds
of techniques. The solution has been applied to a real world problem from one of the largest
Spanish companies using intermodal transportation.

Sainathan (2013) considered pricing and ordering decisions faced by a retailer selling a
perishable product with a two period shelf life over an infinite horizon.

Grobe-Brockhoff et al. (2011) studied gasoline transportation and opined that WINGAS
Transport, a distributor of natural gas. The distribution is done by a pipeline system placed in
Germany. It supplies customers with natural gas from Russia and Great Britain. Due to a
static infrastructure, great amounts of natural gas can’t be transported efficiently by road,
capacities have to be planned and managed precisely. Legal obligations additionally
complicate the capacity management by setting requirements for example for the design of
entry and exit capacities of the pipeline system.

Their study of work was continued with focusing on outbound logistics, which was
sub divided into warehousing and transportation. They came out with their study that in the
field of logistics the efficient utilisation of space is of foremost importance. Admittedly
handling capacities are also an important restriction on capacity that must be taken into
consideration during capacity management in outbound logistics. Via scheduling of loading
times and efficient termination of transport, for example, capacities can be utilised optimally.

In his study, it was revealed about the logistics sector challenges that 3PL research is
empirical-descriptive in nature and that it generally lacks a theoretical foundation. Survey
research is the dominant method employed, reflecting the positivist research tradition within
logistics. It identifies certain knowledge gaps and develops five propositions for future
research. It suggests that focus should be directed towards more normative, theory-driven and
qualitative method-based studies. It also argues that further empirical study of his research
relation to 3PL design/implementation and fourth party logistics services is needed.

37
Rajendra Kumar Shukla, Dixit Garg and Ashish Agarwal (2011) revealed that Supply
Chain Management is a network of facilities that produce raw materials, transform them into
intermediate goods and then final products, and deliver the products to customers through a
distribution system. The management of the supply chain and the roles of various factors
involved differ from industry to industry and company to company. As a result Supply Chain
Management (SCM) has become a vital issue for manufacturers, professionals and
Researchers. It is felt that to manage the supply chain effectively entire structure of supply
chain must be understood properly.

Organizations have multiple objectives like enhanced competitiveness, better

customer service and increased profitability etc. To seek these objectives organizations
employ various defensive as well as offensive business performance improvement
approaches. Approach we have discussed (SCM) covers all functional areas of organization.
It is the network of customers, suppliers, manufacturers, and distributors concentrating the
flows of material, information, and finance through physical and human resources.

In this study, it was suggested that managers must probe why to manage, what to
manage and how to manage the supply chain. We discussed the concept of supply chain
management along with the need of SCM from organization point of view. This provides
deeper insights for those managers investigating the concept of supply chain management. In
order to explore the domain of supply chain management we have argued that one must
examine the nature, interrelations and dependency among business operations .We
interrogated the theory and research practice to find what are the various supply chain
activities.

Next big challenge for organizations is to make a suitable roadmap for adoption and
implementation .We have suggested a six- step approach to meet this challenge. This step-by-
step assessment of business operations would certainly assist organizations to completely
understand the concept of supply chain management. Current trends like outsourcing,
information technology adoption and third party logistics presents an opportunity for
development of SCM. It is felt that in future all organizations will have to adopt partnership
information sharing initiative with suppliers. Therefore establishment of mutual trust within
supply chain to share the vital information for effective SCM practice; and development of
suitable mathematical model for the same would be the greatest challenge for researchers and
practitioners
38
Jinesh Kumar Jain et al. (2010) opined that the supply chain management is an exploding
field, both in research and in practice. Major international consulting firms have developed
large practices in the field of supply chain, and the number of research papers in the field is
growing rapidly. Firms operate in global environments, deal with multiple suppliers and
customers, are required to manage inventories in new and innovative ways, and are faced
with possible channel restructuring. The field promises to continue growing as the research
advances and as firms continue to apply new knowledge in their global networks. It would be
almost impossible to foray into the unknown and predict the future course research in SCM is
likely to take.

However, there are a few issues within SCM which are identified as suitable and
appropriate for further research exploration. Large MNC’s tend to be severely confidential
and closed, and depend on their own particularly in the developing economies where the
possibilities of research largely exist. Due to this reason, most research has been limited to
individual aspects of SCM with limited data, and mostly has been empirical research. Large
consultants do have access to corporate working and data, and that is perhaps one reason that
more and more information is sought by researchers on the Internet, where one can find
secondary and processed data like the reports of major consultants like McKinsey. The
researcher community needs to find a way around this problem. Geographic distances
between the different parts of a supply chain present another problem. A normal researcher
can work at one location, and trade, tariff, financial and diplomatic barriers often prevent the
researcher from accessing the other parts of a global supply chain.

They also opined that the future researchers will use the gaps identified herein to
generate much needed conceptual and empirical work in the SCM literature, thereby creating
a body of literature that is more heavily influenced by a deeper analysis of the supply chain
on a chain wide or network basis.

There is an increased interest in SCM and Internet by academicians and practitioners.

Some directions for further research that we have identified are: to conduct empirical studies
about the impact of Internet on several e-SCM processes, as for example the reverse and
demand management processes which, so far, have only been considered by a couple of
authors. Another important area of research is the application of decision models and
technologies on Internet. As more and more firms have high quality and real-time

39
information available, the use of these decision technologies will increase, since they add
significant value to the members of a supply chain.

Phuc, T., T. Nguyen, Lin Crase and Geoffrey R. Durden (2008), studied is attempted to
draw upon the existing literature and develop a more generalized typology which can
encompass the logistics operations of firms engaged in the provision of services. To illustrate
the usefulness of this approach, some case findings from the logistics activities of IMT firms
in Vietnam have been presented. The general conclusion from this analysis is that the
logistics processes of IMT firms in this setting were “mixed” and “responsive”.

Logistics managers in general and those engaged with IMT firms in particular, can
utilize the typology offered here and the findings from the exploratory case analysis as a basis
for reflecting upon their own operations. Nevertheless, further research is necessary to both
validate the models offered within the typology and to verify other important relationships
with additional empirical work.

Win (2008) stated that 90% of the study said fourth party logistics aroused as a solution for
problems of demand and supply chain, which could be suitable for various kinds of
companies. A fourth party logistics is service provider of which integrates the supply and
demand chain for the clients independently without asset. Fourth party logistics service
providers have competencies involving advanced information system, knowledge
availability, keeping favourable relationship with all participators of supply chain.

Konstantinos Selviaridis and Martin Spring(2007) revealed that The proposed 3PL
research classification framework is based on a comprehensive literature review, which
concentrates on peer-reviewed journal papers published within the period 1990-2005. A total
of 114 academic sources have been retrieved and analysed in terms of research purpose and
nature, method employed, theoretical approach and level of analysis.

Pankaj Chandra and Nimit Jain (2007) revealed that how the logistics spend is increasing,
sometimes dramatically, across various industrial sectors. Steel, pharmaceuticals, food &
agro-business, and auto have also been the sectors that are growing most rapidly in the
national economy – it is no surprise that their logistics costs have been increasing at a faster
rate. A few observations are in order here. The low change in order processing &
administrative costs in the cement sector could possibly be due to the use of call centers by
various producers for order processing and dispatch planning. Steel and pharmaceutical
40
sectors have seen maximum changes in component costs. The distribution practice of pushing
goods down the channel might be responsible for high increase in the inventory and
warehousing costs in the pharmaceutical industry. Investments in new cold chains and losses
might be the causes of high change in the warehousing, packaging & losses related costs.

Warehousing has also been typically dominated by small players with small capacities and
poor deployment of handling, stacking and monitoring technologies. While it has had
detrimental effect on almost all sectors, the food sector has been the one that has suffered the
most due to low investment in cold chains and allied machinery. Erratic power outages have
also meant low dependence on technology and a more manual operation. Another fact that
has affected both the location as well cost of operating a warehouse has been the “octroi tax.”
Firms have been locating warehouses outside city limits.

Sanjai (2006) According to this survey, most of the 3PL service providers offer limited
services. In future, their role as coordinators will require that they offer a wider menu of
value adds services. They also have the potential of integrating SME channels through a
variety of logistics services and technology across a network of small producers. The
logistics industry is evolving rapidly and it is the interplay of infrastructure, technology and
new types of service providers that will define whether the industry is able to help its
customers reduce their logistics costs and provide effective service. Changing government
policies on taxation and regulation of service providers will also play an important role in this
process. Coordination across various government agencies require approval from multiple
ministries and is a road block for multi modal transport in India (e.g., ports, roads, railways,
container freight operations etc. are all managed by different ministries in the Government of
India. At the firm level, the logistics focus will have to move towards reducing cycle times in
order to add value to their customers. These are few of the issues one need to take account
before the logistics industry can boom significantly in India.

Yung-yu TSENG, Wen Long YUE and Michael A P TAYLOR (2005) revealed that the
operation of transportation determines the efficiency of moving products. The progress in
techniques and management principles improves the moving load, delivery speed, service
quality, operation costs, the usage of facilities and energy saving. Transportation takes a
crucial part in the manipulation of logistic. Reviewing the current condition, a strong system
needs a clear frame of logistics and a proper transport implements and techniques to link the
Producing procedures.
41
R.P. Kampstra and J. Ashayeri (2006) informed that “Three realities of SCC are identified
– establishing the prerequisites for the collaboration process; where the process starts; and
where it terminates”. Moreover, a realistic structured approach to SCC containing three loops
is outlined. The reality is that many SCC initiatives fail. Still, the world believes in the value
of selective collaboration. It is our job to improve the ratio of supply chains that achieve
higher performance through successful collaboration. Therefore, this paper carefully
addresses some misunderstandings about the collaboration process.

First, collaboration comes in many formats. The structure of the particular

collaboration depends on the business roles of the supply chain entities involved, i.e. the
powerhouses in the chain. Equal partnership in every relationship is not a necessity. Second,
at some point in the collaboration the group will face a supply chain constraint that limits
further collaboration. Remember that the structure of the collaboration group significantly
impacts the types of constraints it can deal with. Third, supply chains or channels are not
necessarily all collaborative. Of the three or four possible dominant buying behaviors present,
it is important to recognize which (if any) displays collaborative characteristics. Fourth,
collaboration ends up in failure when the start is all wrong. Too often compromises cloud the
collaboration process. The result is a mixed-up balance between global effectiveness and
local efficiencies. On the whole, collaboration can only fail, and that is exactly what will
happen. Given these realities they described prerequisites of the collaboration process in the
form of three loops. These interact with each other and make the collaboration a continuous
process. The SCC process therefore more of a journey than an end result in itself.

More research work has to be conducted to quantify the cost and benefits of
collaboration in supply chains and how collaboration works through the types of cultural
enablers and inhibitors of their study describe by Barratt (2002) and the Kampstra and
Ashaveri took it as base for their study. Some work in areas such as risk pooling
measurement, and the value of information sharing has already been done. The framework
presented here can help to identify some of the underlying mechanisms at work in SCC, and
to point the way for further study of the financial implications of good and bad collaboration.

The research was undertaken to assist logistics managers, researchers and

transportation planners to define and comprehend the basic views of logistics and its various
applications and the relationships between logistics and transportation.

42
 Their study revealed that logistics and transportation have some relevance. (1)
Logistics system has a more and more important position in our society activities. (2)
Transportation and logistics systems have interdependent relationships that logistics
management needs transportation to perform its activities and meanwhile, a successful
logistics system could help to improve traffic environment and transportation development.
(3) Since transportation contributes the highest cost among the related elements in logistics
systems, the improvement of transport efficiency could change the overall performance of a
logistics system. (4) Transportation plays an important role in logistics system and its
activities appear in various sections of logistics processes. Without the linking of
transportation, a powerful logistics strategy cannot bring its capacity into full play.

Viswanadham, N and Puvaneswari, M (2004) opined that major drivers of logistics market
in India and the current strategies adopted by the players are focused with the 3PL Service
sectors however, on the third party logistics (3PL) service providers, both the local and
multinational companies, where they identify their potential growth strategies in India, such
as establishing an organic growth, acquisition and joint ventures within the country. We
discuss the structuring policies for the most popular expansion strategy of joint venture with
some recent cases in the country. In order to create a solid foundation for the long-term
success in the logistics business, it is important that they understand the opportunities,
challenges including the complex tax laws on implementation of value added tax (VAT) and
compelling ways to approach the local logistics market.

They revealed that their study would be of immense value to multinational 3PL
service providers in manufacturing and logistics wanting to enter India, and to the existing
local 3PL service providers who are set to expand their service portfolios. Representatives
from the local government authorities, regulatory agencies and trade associations would also
benefit from the information given as this would assist them greatly in identifying ways to
streamline operations in order to prepare the country to meet the global logistics needs. It is
also our hope that this report will foster interactions between the many players involved in
the logistics and supply chain marketplace to further stimulate the fast growing industry in
India.

Chandra, P. and T. Sastry (2004)expressed that the truck manufacturers could integrate the
tracking technology in its products and IT servicing firms could provide information service
on highways tracking movement of vehicles. This would provide information to distribution
43
firms and help track both the consignment as well as the truck better. As of now, the best
service is the one provided by Reliance Connect at their petrol pumps on the highways where
truckers stop by and call their firms to inform them of their whereabouts. Such service
providers become very valuable to tiny and small trucking companies that proliferate the
logistics industry and who do not have the wherewithal to either install or operate their own
IT systems. As the concentration in the industry increases, the need to manage larger number
of trucks, routes, warehouses and customers will require decision support systems that
perform dynamic planning and scheduling.

As observed by Chandra and Sastry, the IT base is indeed low and firms need to
compete on the basis of real logistics costs instead of clever accounting practices before the
sector will see increased IT penetration. As the need to have visibility in the supply chain
increases, better technology applications will also appear.

Wang (2003) refer the involvement of global third party logistics in e commerce and
globalization. An effective global supply chain management (GSCM) seeking to secure
market share. Global third party logistics (3PL) has developed into an alternative for the
needs of global collaboration. In this, the authors present a new application of collaboration
in GSC execution, namely collaboration transportation management (CTM) that can reduce
delivery time and to improve delivery reliability

Agarwal and Shankar (2002) proposed an analytic network process (ANP)-based model
for analyzing the alternatives affecting supply chain performance. It also provides the
decision methodology to prioritize these alternatives, so that supply chain performance can be
improved. A process-based systematic perspective was employed to build an effective model
to measure the holistic performance of complex supply chains.

Bowersox et al. (2002) opined that the inventories are built up in decentralized warehouses
and services are scheduled for specific geography locations. The user has the option to decide
to buy or not buy a pre-produced product, or a pre-planned service.

Frankel et al. (2002) showed that one of the most common usages of partnerships is in the
provision of transport and distribution services. Authors recommended that rather than
devoting effort and resources to build an in-house supply chain it can often be much more
cost effective to form a partnership with a shipping company, and allow them to perform the
job of distribution at a lower cost than the enterprise could manage itself.
44
Bask (2001) expressed that in the logistics postponement strategy, manufacturing is based on
speculation (i.e. economies of scale) and the logistics of postponement. Finalized products
are distributed from centralized inventory directly to customers”.

Gunasekaran et al. (2001) developed a conceptual framework to link up SC relationship

dynamics and manufacturing performance and found out the less evidence of SC relationship
dynamics on manufacturing performance.

Min and Keebler (2001) lamented that the responsiveness to the individual customer’s
demand has complicated order processing – a major logistics activity. In addition to
traditional activities such as order preparation, order entry, or order filling.

Van Hoek and Chong (2001) defined 4PL as a supply chain service provider that
participates rather in supply chain co-ordination than operational services. It is highly
information based and co-ordinates multiple asset-based players on behalf of its clients.

According to Gronoroos (2000), the competition nowadays is focused more on the basis of
services not on the basis of physical products. As the cost and efficiency of logistics services
grow to have greater impact on economic activities, outsourcing the services to another
independent company becomes a popular choice. Third and fourth party logistics providers
are businesses of which offering that kind of help. Since third party logistics is a familiar
concept and introducing a new era in these days.

Chang-Ing I-Jin (1999) shows the relation between average logistics cost per item,
consumer demand and the interrelationship between them are analyzed. Commodities are
distributed through a depot directly or through single intermediate terminal to many retail
establishments. Minimizing average logistics cost, or maximizing total supply subject to the
demand supply equality determines the optimal density of retail establishments and local
terminals. The envelope curves for the optimal configuration strategies corresponding to
different values of total market area and terminal cost are derived.

Bagchi and Virum (1998) stated 3PL process, but their framework is wider in scope than the
previous two, dealing with post-contracting issues such as performance measurement and
goal redefinition

45
Sink and Langley (1997) emphasize 3PL process issues such as need identification, top
management commitment, formation of cross-functional buying team, development of
selection criteria and service implementation

Tilanus (1997) considered that theLogistics Management is ‘the process of anticipating

customer needs and wants; acquiring the capital, materials, people, technologies, and
information necessary to meet those needs and wants; optimising the goods- or service-
producing network to fulfill customer requests; and utilizing the network to fulfill customer
requests in a timely way’.

Bowersox and Closs (1996) acknowledged that, in recent years that functions of logistics
services have expanded from marketing and manufacture to warehousing, transportation
activities, purchasing, distribution, inventory management, packaging and customer services,
which summarized the logistics services integrated. Apart from the abundant service
functions, the relationship between clients and logistics service providers evolved from tactic
solution of cost reduction to strategic alliance.

Leahy et al. (1995)opined that the 3PL is usually associated with the offering of multiple,
bundled services, rather than just isolated transport or warehousing functions.

The UNCTAD Secretariat (1995) also believes that these two benefits will give rise to
improved quality and more competitively priced door-to-door transport services. Service
providers and transport operators, on the other hand, are encouraged to adapt to transport-
related technology.

Marx (1978) operations of IMT are somehow different from other types of transport, the
benefit provided by IMT is the very one provided by the transport industry in general, that is
the change of the location of goods, and is accordingly a service.

According to Marx (1978), the productive process of the transportation industry is the
transportation process itself. “Goods travel together with the means of transportation and
their traveling constitutes the process of production effected by these means of transport”

Luo et al. examine the efficacy of cost sharing in a model of two competing manufacturer
retailer supply chains who sell partially substitutable products that may differ in market size.

46
Some counterintuitive findings suggest that the firms performing the advertising would rather
bear the costs entirely if this protects their unit profit margin.

2.2.4 Issues and Challenges in Logistics Management

AnilaGod,e D., Naveen Kumar and Vidhyasagar, L. (2016) in their article revealed that
around 29 state and federal taxes and tariffs for a single tax at the point of sale. The current
combined Centre and State statutory rate for most goods works out to be 26.5% (Cenvat of
14%, and VAT of 12.5%), whereas post GST implementation the same is expected to reduce
to standard rate of about 18-21% which will be levied on most goods and all services.

Post GST implementation the 3PLs would have to restructure its assets and realign its
operations in line with changes in the operations of its customers in the new scenario.
Currently, 3PLs have warehouses located near major distribution centers of its key clients
(different industries) irrespective of its geographic disadvantage mainly to avoid interstate
taxes. However, post GST implementation 3PLs are expected to build integrated warehouses
at logistic suitable locations. So accordingly, 3PLs would have to restructure the assets to
accommodate the long distance consignments which will occur with this scenario of free
movement of goods across the country. The consumer durables sector is expected to witness
maximum drop in the logistics costs as percentage of total sales, as their warehouses are built
at different states to avoid interstate tax. Mostly, the consumer-oriented industries are going
to have high impact of GST on its operations model rather than capital intensive industries.

The hurdles and milestones which the bill has to face and cross before it is actually
implemented is a tedious and time guzzling task at every stage of passage lest there is drive to
expedite the same. Apart from above the success of GST depends upon robust IT network
connecting all the state governments, trade, industry, financial institutions, etc. The
development of real time business model by the special purpose vehicle in the name of Goods
and service tax network (GSTN) promoted by Government of India, various state
Government bodies and non-Government financial institutions plays a vital role.

Jain et. al. (2010) stated that in order to meeting the pot of many functions and activities of a
firm, namely logistics and transportation there would be need of supply chain management.

Wenping Luo et. al.(2010) stated that cross cultural logistics relating to non-western
developing countries. Referring to cross-cultural research in other disciplines, the difference

47
between the western and non western developing countries includes economic systems,
culture and logistical infrastructure too.

Daniel P. Jeschonowski et.al (2009) provided an overview of the literature covering the area
of management control systems (MCS) in logistics and supply chain management (SCM). It
is motivated by the increasing attention the two fields of MCS and logistics/SCM have lately
attained, fueled by an augmenting competitive pressure companies are facing. For logistics
and supply chain practitioners to realize the existing potentials, effective MCS are necessary.
In order to facilitate future research in the field of MCS, which consequently also benefits
practitioners, it is necessary to consolidate the extant literature. To do so and to identify
promising avenues for future research is the purpose of this article. We provide a literature
overview that covers the main aspects of MCS in context of logistics and SCM by applying
content analysis. To account for quality of publication, the analysis is restricted to
international top journals. The literature review shows foremost that research into the
development and implementation of a holistic MCS for logistics and SCM should be
intensified which could be achieved by further case studies as well as survey-based studies.
More conceptual work could be necessary to enable a better practical utilization of MCS in
logistics and supply chain settings. We reveal a considerable potential for further research on
MCS in logistics and SCM, from which both research and practice alike will profit.suggested
in their study that the SCM is motivated by increasing attention the tow fields of MCS and
logistics have lately attained, fuelled by an augmenting competitive pressure companies are
facing. For logistics and supply chain practioners to realize the existing potentials, effective
MCS are necessary.

Fawcett et al. (2008) reviewed the recent scientific literature on the potential barriers to
SCM. They classified the barriers into two categories namely inter-firm rivalry and
managerial complexity. They noted the following barriers under inter-firm rivalry category,
in order of significance; internal and external turf wars, poor SCM planning, lack of vision of
SCM, lack of trust, executive commitment and poor SCM understanding. All these barriers
work against agility in SC and management should reduce their impact. However the worst
barrier, internal and external turf wars needs urgent attention by SCPs as its negative impact
is fast and severe leading to the disruption of the SC. Poor planning and lack of vision are
symptoms of failure by SCs, though their effects may be slow to appear their eventual impact
is disastrous.

48
Burgess et. al. (2006) reviewed 100 randomly selected articles from 614 usable articles
found in the ABI/Inform Database across a 19 year (1985 to 2003) period.. Their sample
addressed manufacturing and consumer goods industries, and the research articles reviewed
by them focused on a more narrowly defined operations management approach to Supply
Chain Management. They classified the articles into four groups, namely (1) Descriptive
features of SCM, (2) Definition issues, (3) Theoretical concerns and (4) Research
methodological issues. They found SCM to be a relatively young field with exponential
growth in interest from researchers in the recent past. The importance of this research in
contrast to Burgess et al. (2006) is that instead of sampling 100 articles from a pool of 614
over a 5-year period, we examined 588 articles over 18 years. This not only makes for a more
in-depth review, but provides a larger base from which to chart the maturation of the SCM
field. It also helps to assess gaps in the literature and project future trends, thereby
underscoring the importance and robustness of this study. Finally, Burgess et al., include
books, manuscripts and conference proceedings while this research focuses solely on
published articles in peer reviewed SCM journals.

Finch (2006) aims to link all the supply chain agents to jointly cooperate within the firm as a
way to maximize productivity in the supply chain and deliver the most benefits to all related
parties.

Koh and Tan (2006) used the principles of fuzzy logic for analyzing and monitoring
performance of suppliers based on the criteria of product quality and delivery time.

Patricia et al. (2006) viewed that the physical network that begins with the supplier and
ends with the customer. Traces of all the organizations with within a supply chain include all
tiers of suppliers and distribution.

Blowfield (2005) discussed the experience of employing global social and environmental
standards, in terms of a global ethic. It was concluded that strategic development of SCM
capabilities such as efficient inbound and outbound transportation, warehousing, inventory
control, production support, packaging, purchasing, order processing, and information
dissemination enables a manufacturing firm to identify key performance measures.

Power (2005) presented a conceptual framework to investigate supplier relations, lean

manufacturing, environmental management practices; and their relationship to one another. It
is found that efforts to improve a supplier’s environmental management practice raise critical
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issues of transaction costs and efficacy of approach for the buyer. It is recommended that an
environmental bias is to be introduced into the decision making process which would allows
more environmentally conscious decisions to be made.

Chen and Paulraj (2004)used supplier-base reduction, long-term relationship,

communication, cross-functional teams and supplier involvement to measure buyer-supplier
relationships.

Chiu and Lin (2004) showed how the concepts of collaborative agents and artificial neural
networks (ANNs) can work together to enable collaborative supply chain planning (SCP).

According to Min and Mentzer (2004) there are seven elements of supply chain practice
such as agreed vision and goals, information sharing, risk and award sharing, cooperation,
process integration, long-term relationship and agreed supply chain leadership.

Carter and Ellram (2003) further recommended conclude that purchasing and supply
management, as a scientific discipline, is maturing. It is interesting to note that the authors
have consistently used the terms ‘purchasing’ and ‘supply’ management, which speaks a lot
about the stage of development of the discipline of ‘Supply Chain Management’ till 1999.

Gunasekaran and McGaughey (2003) extended the scope of SCM beyond material
management, partnership, information technology to the Total Quality Management areas
like management commitment, organizational structure, training and behavioural issues. As
firms' survival lies on integration, a good understanding of the integration process is a key
aspect in SCM.

Mouritsen et al. (2003) discussed that basic hypothesis “the more integration (wider the
scope) – the better the management of the chain" is not always true and proved that it
depends very much on the environment" of the supply chain and the power relations between
the participants in the supply chain. Authors proposed a set of management techniques and
tools to analyze successful SCM strategies.

Taniguchi et al. (2003) considered that there are three necessary targets that could be
achieved by applying City Logistics: (1) mobility; (2) sustainability; (3) liveability. Mobility
is ease of movement, which is the basic requirement for transport of commodities in urban
areas. Goods are supposed to be delivered Just-In-Time. Therefore, the balance between

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sufficient road network capacity and reduced traffic congestion is a main issue. Concerning
sustainability, which is more and more important, environmental issues and energy
conservation would need to be taken into account. Liveability should be thought of for the
residents. It involves an assessment of the conditions that are experienced and interpreted
within an individual’s life area, such as safety, peacefulness, attractiveness and charm.

Coyle et al. (2003) in their work on Tool for Improvement aired that the performance
measurement system should focus on improvement. Moreover, in case of strategic alignment,
the performance measurement system must be consistent with the overall strategy of the
supply chain. For instance, if the overall supply chain objective is short delivery times,
logistic strategies that emphasize low cost could be in conflict.

Desouza et al. (2003) linked the impact of organizational structure in knowledge transfer and
utilization among the different participating functions in the perspective of systems theory.
Knowledge management (KM) involves individuals and groups, both within and between
firms, managing tacit and explicit knowledge to make better decisions.

Jennings (2002) and Zeng (2003) projected strategic benefits and problems relating to the
outsourcing decision. These include issues of cost, quality, flexibility, strategic focus, and
diversification, the potential loss of critical skills and knowledge, and appropriation of final
product value. A model was developed, structuring the contextual factors: capability, cost,
technology, supply and product market conditions, to enable a consideration of the
outsourcing decision.

Tan et al. (2002) viewed six elements of supply chain practice (using factor analysis): supply
chain integration, information sharing, supply chain characteristics, customer service
management, geographical proximity and JIT capability

Alvarado and Kotzab (2001) Using inter-organizational systems in supply chain practice
such as EDI,and elimination of excess stock levels by postponing customization toward the
end of the supply chain .

Horvath (2001) proposed that Collaboration through intelligent e-business networks would
provide the competitive edge to all the participants in a value chain to prevail and grow. It is
found that collaborative partnerships can be achieved both via trust and through
electronically mediated exchange.

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Lambert and Pohlen (2001) in their paper on Handling conflicting objectives stated that the
performance measurement system should assess the different trade-offs within a supply chain
and visualize the results to prevent sub-optimization.

Taniguchi et al. (2001b) considered that the City Logistics is the process for totally
optimising the logistics and transport activities by private companies with the support of
advanced information systems in urban areas considering the traffic environment, its
congestion, safety and energy savings within the framework of a market economy.

Reynolds-Feighan (2001) said air freight logistics is selected ‘when the value per unit
weight of shipments is relatively high and the speed of delivery is an important factor’. The
characteristics of air freight logistics are that: (1) airplanes and airports are separated.
Therefore, the industries only need to prepare planes for operation; (2) it allows to speed
delivery at far destinations; (3) air freight transport is not affected by landforms.

Cooper (2000)aired that the process-based successful SCM requires a change from
managing individual functions to integrated activities within key supply chain business
processes.

Van Laarhoven et al. (2000) opined that thecost savings evaluation can be difficult due to
the shipper’s lack of awareness of internal logistics costs. Indeed, the outsourcing option may
be chosen in order to give an indication of in-house costs and serve as an external benchmark
for logistics efficiency.

Alavi and Leidner (1999) defined knowledge management as the systematic and
organizationally specified process of acquiring, organizing, and communicating knowledge
so that employees can use it to become more effective and productive in their work.

Houlihan and Houlihan (1999) expressed that the integration of various functional areas
within an organization enhances the flow of goods from immediate strategic suppliers
through manufacturing and distribution chain to the end user.

Lambert et al. (1999) emphasize main drivers for relationship formation (e.g. asset/cost
efficiencies), facilitating factors (e.g. compatibility of culture), main partnership components
(e.g. joint planning and control) as well as outcomes (e.g. improved customer service and
competitive advantage) of 3PL collaboration.

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Christopher (1992, 1998) expressed that the management of upstream and downstream
relationships with suppliers and customers to deliver superior customer value at less cost to
the supply chain as a whole. Signifies the importance of relationships, customer focus and
cost reduction.

Ross (1998) defined SCM as ‘a continuously evolving management philosophy that seeks to
unify the collective productive competencies and resources of the business functions found
both within the enterprise and outside in the firm’s allied business partners located along
intersecting supply channels into a highly competitive, customer-enriching supply system
focused on developing innovative solutions and synchronizing the flow of marketplace
products, services, and information to create unique, individualized sources of customer
value.’

Tan et al. (1998) hoped that it is management philosophy that extends traditional intra-
enterprise activities by bringing trading partners together with the common goal of
optimization and efficiency. Focuses on how firms utilize their suppliers' processes,
technology and capability to enhance competitive advantage.

According to Neely et al. (1997) the simplicity of the performance measurement system
should be easy to understand at all levels in the organizations and it should contain a limited
number of relevant measures.

Monczka and Morgan (1997) viewed that the Integrated SCM is about going from the
external customer and then managing all the processes that are needed to provide the
customer with value in a horizontal way. Highlights are the necessity of flat organizational
structure and customer focus.

Saunders (1997) aired that the supply chain is the total chain of exchange from original
source of raw material, through various firms involved in extracting and processing raw
materials, manufacturing, assembling, distributing, and retailing to end customers. The
network of firms interacting to deliver product or service to the end customer, links flows
from raw material supply to final delivery.

Weeld and Roszemeijer (Ho, 1997) discerned three revolutions in business that have
substantial impacts on the purchasing and supply strategies of the manufacturing sectors.

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These three revolutions are: (1) the globalisation of trade; (2) the coming of the information
era; (3) more demanding consumers and continuously changing consumer preferences.

Sink et al. (1996) stated that Terms such as “logistics outsourcing” “logistics alliances”
“third party logistics” “contract logistics” and “contract distribution” have been used
interchangeably to describe the organisational practice of contracting-out part of or all
logistics activities that were previously performed in-house.

Cox et al. (1995) aired that the functions within and outside a company that enable value
chain to make and provide products to the customer. Attempts to identify strategic partners
within supply chain.

Berry et al. (1994) opined that SCM aims at building trust, exchanging information on
market needs, developing new products, and reducing the supplier base to particular original
equipment manufacturer so as to release management resources for developing meaningful,
long term relationship and highlights the importance of supplier relationships in achieving
supply chain objectives.

Ellrarn Cooper (1993) expressed that an integrating philosophy to manage the total flow of
a distribution channel from supplier to ultimate customer identifies the importance of
integration within supply chain.

Lee and Billington (1992) gave an idea that the networks of manufacturing and distribution
sites that procure raw materials, transform them into intermediate and finished products, and
distribute them to customers. Attempts to show conventional functions of supply chain.

Council of Logistics Management (1991) defined that logistics is ‘part of the supply chain
process that plans, implements, and controls the efficient, effective forward and reverse flow
and storage of goods, services, and related information between the point of origin and the
point of consumption in order to meet customers’ requirements’.

Ellaram (1991) The integration of the processes, systems, and organizations that control the
movement of goods from the supplier to a satisfied customer without waste and highlights the
necessity of integration among the organizations, physical \movement and the waste
reduction principal of JIT.

Pennsylvania State University (1991) calls logistics management of physical and service
flows “supply chain logistics” and “service response logistics” correspondingly.

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Scott and Brook (1991) aired that the chain linking each element of the manufacturing and
supply process from raw materials to the end user, encompassing several organizational
boundaries and highlights the significance of coordination among constituent members.

Fair et al. (1981) expressed that transportation plays a connective role among the several
steps that result in the conversion of resources into useful goods in the name of the ultimate
consumer. It is the planning of all these functions and sub-functions into a system of goods
movement in order to minimize cost maximize service to the customers that constitutes the
concept of business logistics. The system, once put in place, must be effectively managed.

2.2 Research Gap

This study is an exploratory research to identify the issues and challenges that are
arising in the logistics sector. The present chapter revises that many studies has undergone
with the concept of logistics and supply chain management but there is no such study that has
undergone specifically entitled with “A study on the Current Issues and challenges in the
management of logistics Companies”. The following are the research gaps which enforced
the researcher to go with the present study.

 Since the last few decades’ logistics is also an important operation for business,
however, unlike marketing or sales it is more a back end and not front line operation.
 Being a cost centre, the revenue it can generate is only by reducing costs for the
organization. Hence identifying drivers for this function is a challenge.
 While a lot of studies have been carried out to understand the management and
process of supply chain, few studies have been attempted to understand the emerging
challenges in the modern day supply chain logistics.
 This paper aims at understanding holdups in Reverse logistics, transporting and
shipping logistics as a sustainable business operation.

2.3 CONCLUSION

The above reviews configure that there is a scope and opportunity to study the present topic
“A Study on the Current Issues and challenges in the management of logistics
companies” by the researcher. Thus, the above reviews help to identify research gaps from
while the objectives for the study are framed.

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