Technology Innovation and New Business Models: Can Logistics and Supply Chain Research Accelerate the Evolution?

• Published date: 01 June 2016
• DOI: http://doi.org/10.1111/jbl.12130
• Date: 01 June 2016

Editorial

Technology Innovation and New Business Models: Can Logistics

and Supply Chain Research Accelerate the Evolution?

Thomas J. Goldsby and Walter Zinn

The Ohio State University

Businesses today are facing an unprecedented rate of change by virtue of disruptive technologies –many of which are focused on achieving

“reach”efficiently in the marketplace. Organizations must evolve their business models to leverage the opportunities presented with the

advent of these technologies, yet the pathways to success and failure remain unclear. Researchers of logistics and supply chain management find

themselves on the front lines for these exciting developments. As editors, we encourage the research community to “get ahead”of business

actions, inform strategy, and shape the next generation of competition.

Keywords: logistics; supply chain management; innovation; disruptive technology; simulation

How often is it observed that we are living in a time of “un-

precedented change,”suggesting that the frequency and magni-

tude of change are increasing at levels never before witnessed?

Perhaps it has become clich

e, but the observation has merit in

the logistics and supply chain domains. The late Professor Don-

ald J. Bowersox remarked that the 1990s presented businesspeo-

ple with a “Logistical Renaissance,”asserting that “there have

been more changes in the process of logistics during the past

10 years than in all the decades since the industrial revolution.”

Commerce was becoming truly global, with large corporations

seeking distant markets for both supply and demand. Computeri-

zation was sufficiently widespread such that intra- and intercom-

pany communication and knowledge sharing became strategic

imperatives. And, this thing called the Internet was connecting

people and organizations in ways that we had never imagined. It

would have been hard to believe that the rate of change could

continue at that pace ... but here we are some 20 years later

and the Renaissance proceeds unabated.

Innovation in technology continues to drive immense change

in logistics and supply chain management—making today, per-

haps, the most exciting time in a generation to be a researcher of

logistics or supply chain phenomena. Technological innovation

leads to new ways of doing business as well as entirely new

business models. Take, for instance, the time around the develop-

ment of supermarkets in the United States around 1930. Super-

markets were revolutionary because they were larger stores than

the mom-and-pop and small chain stores with which they com-

peted. Their size allowed consumers to buy a wider assortment

of goods and to save money by buying larger quantities in each

shopping trip. However, because larger stores are typically fur-

ther apart than smaller ones serving the same market and because

larger purchases have to be stored for longer periods of time,

supermarkets only became economically viable when consumers

gained access to automobiles and to refrigerators, as was increas-

ingly the case at that time. The advent of supermarkets forever

changed supply chains, as stores could receive larger and less

frequent orders and deliverers had to make fewer stops.

The number of technologies impacting logistics and supply

chain management today is significant. We comment on a few

such advents here. First, transportation technology is being

affected in multiple ways by lower oil prices, increased supply

of natural gas and by, simultaneously, the driver shortage and

the development of driverless vehicles. As we know, transporta-

tion decisions do not impact the cost of transportation, alone;

these decisions affect the logistics network, associated costs, and

customer service as well.

Networks, costs, and customer service will also be impacted

by 3D Printing, or additive manufacturing. As this technology

evolves and increasingly sophisticated parts can be produced at

lower costs, opportunities arise to change inventory strategies

and warehouse management. For instance, what would be the

impact on supply chains if “C”parts could be produced on-

demand and no longer require long-term warehousing? Will we

witness a deluge of fake parts if they can be easily produced by

anyone with a CAD design and access to a printer?

A third development already making significant changes in

consumer behavior is omni-channel distribution. Omni-channels

improve service to customers, yet challenge managers to compete

under growing pressure to cut delivery times, adopt new tech-

nologies and, because there is little time to make corrections

when delivery time is so short, reduce error rates. Amazingly,

major retailers are engaged in these strategies today out of com-

petitive necessity—yet they openly admit to not knowing how to

yield profits providing such services!

Finally, to this short list we could add a few more, such as

increased visibility in supply chains, the increased usage of

robots in warehouses, and the Internet of Things (IoT). Together,

these and other technological developments point to major

changes in supply chains, logistics systems, and the skills needed

to operate in this new environment. The opportunities to do

meaningful research are endless. We urge our community to con-

sider them. Yet, logistics and supply chain scholars must do

Corresponding author:

Thomas J. Goldsby, Department of Marketing & Logistics, Fisher

College of Business, The Ohio State University, 2100 Neil Avenue,

Columbus, OH (USA) 43210; E-mail: Goldsby.2@osu.edu

Journal of Business Logistics, 2016, 37(2): 80–81 doi: 10.1111/jbl.12130

© Council of Supply Chain Management Professionals