Global Business Strategy and Innovation: A Canadian Logistics Perspective
Highlights and Key Findings
In the international marketplace, supply chain performance is an important competitive differentiator. Innovative supply chain strategists claim that supply chain design, structure and sophistication are influenced by six main factors: globalization, increasing logistics Footnote A complexity, rising risk, increasing labour costs in the developing world, sustainability, and growing volatility. 1 In this context, logistics has prospered over the last decade as the flow of information has become paramount to supply chain efficiency across industries.
Ongoing innovation in logistics has been a key enabler in the development of global value chains. Changing parameters in manufacturing, global sourcing, investment, technology and security requirements are compelling logistics executives to revise procurement and decision making processes. Over the last few years, a critical competitiveness factor for Canadian firms has been the ability to develop and implement logistics solutions that enhance agility and adaptability throughout the supply chain. 2
Industry Canada has partnered with Canadian Manufacturers and Exporters (CME) and Supply Chain & Logistics Association Canada (SCL) to review the valuable core business function of logistics. By collecting insights from industry, academia and international research organizations, and using economic analysis conducted by Industry Canada, this industry-academia-government partnership has produced a complete profile of logistics innovation and global business strategies in Canada, summarized here in this report.
Key Findings
- The sharp increase in international trade has propelled logistics activities to the forefront of business strategy.
- Manufacturers, retailers and natural resources industries are relying on their logistics networks to deliver seamless, integrated, secure, reliable and efficient solutions to leverage their global value chains.
- The use of continental logistics strategies is an emerging trend across numerous industries.
- A growing trend in logistics outsourcing is the use of long-term initiatives with dedicated facilities, personnel, processes and technologies.
- Firms are utilizing a mix of strategies within a 4 Tier global sourcing framework to balance the trade-offs between opportunities.
- Firms are seeking to establish dynamic, responsive, automated and low-cost distribution centres (DCs) that will support their logistics global business strategies.
- Investment in DCs in Canada has increased by 106 percent over the past five years (main areas of investment located in Ontario, Alberta, Quebec and British Columbia).
- Small and medium-sized firms are investing in DCs to better respond to customer mandates and to integrate further into global value chains.
- Logistics innovation is at the forefront of global value chain network integration.
- Supply chain mandates have a direct impact on innovation across value chains.
- The top 20 percent performers in total landed cost and on-time shipment are more likely to invest in logistics network strategies — such as capability to electronically collaborate with networks of key suppliers and customers — and supply chain modelling applications.
Footnotes
- Footnote 1
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Logistics is the management and coordination of transportation, inventory, strategic sourcing, global trade management, forecasting, compliance mandates and performance measurement across global value chain partners.
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