Description
The growth of the supply chain concept has required logistics organizations to improve the flow of information both internally and externally. The increased information requirements have facilitated an integration of logistics information systems (LIS) and supply chain information systems in many companies.
The impacts of the integrated logistics systems on
electronic commerce and enterprise resource planning systems
Stephen M. Rutner
a,
*
, Brian J. Gibson
b
, Susan R. Williams
c
a
Department of Marketing and Logistics, University of Arkansas, Fayetteville, AR 72701, USA
b
Department of Aviation Management and Logistics, Auburn University, Auburn, AL 36849, USA
c
Department of Information Systems and Logistics, Georgia Southern University, Statesboro, GA 30460, USA
Abstract
The growth of the supply chain concept has required logistics organizations to improve the ?ow of
information both internally and externally. The increased information requirements have facilitated an
integration of logistics information systems (LIS) and supply chain information systems in many compa-
nies. The increasing use of electronic commerce and enterprise resource planning and other LIS tools and
techniques will shape the business process for the foreseeable future. Companies should understand their
options and their impacts when making decisions to support their supply chain systems.
Ó 2003 Elsevier Science Ltd. All rights reserved.
Keywords: Logistics; Supply chain management; Information systems; LIS; SCIS; ERP
1. Introduction
There has been a steady growth of information systems in inventory management, production,
and logistics. This paper reports the results of a recent longitudinal study into the use of logistics
information systems (LIS). The survey results reported herein highlight an increasing use of LIS
and its ability to link functional areas of business. Additionally, the paper examines the role of
two information system tools––electronic commerce (EC) and enterprise resource planning
(ERP)––that had not been investigated in previous editions of the study. Information regarding
the respondentsÕ EC and ERP adoption sequences, use of key subsystems, and relationships with
integrated logistics systems are presented.
Transportation Research Part E 39 (2003) 83–93
www.elsevier.com/locate/tre
*
Corresponding author.
E-mail addresses: [email protected] (S.M. Rutner), [email protected] (B.J. Gibson), rebstock@gasou.
edu (S.R. Williams).
1366-5545/03/$ - see front matter Ó 2003 Elsevier Science Ltd. All rights reserved.
PII: S1366- 5545( 02) 00042- X
To accomplish these tasks, the paper is divided into six sections. Following the introduction, a
brief literature review provides insight into the issues of LIS adoption and integration. Other key
sections provide insight into the study methodology, survey respondent pro?les, and major
?ndings. Limitations of the study and future opportunities for analysis are also provided. Finally,
a conclusions section summarizes the key points of the research.
2. Previous research
LIS has been a major area of study in the logistics and operations areas for more than 25 years
(House and Jackson, 1976; Lambert et al., 1978; Williams et al., 1998; Whipple et al., 1999). Issues
relevant to the current research include: the usage rates of LIS tools, integration of logistics and
LIS, emerging LIS technologies, and LIS adoptions patterns. Key works in each relevant area are
discussed below.
A variety of researchers have examined the usage rates of various LIS tools. A number of these
studies were conducted approximately every ?ve years since 1975 (Gustin, 1984, 1993, 1995;
Rutner et al., 2001). This stream of research provided the framework for the current study and
includes a number of relevant ?ndings. Each study is much like a companyÕs ?nancial statement.
The study provides a ‘‘snapshot in time’’ of the current LIS tools in use as well as identifying
future possible trends. For example, each study identi?es the usage rates of approximately twenty-
?ve LIS subsystems. This series of studies provides the plan for not only the theoretical portion of
the study, but also the actual design of the longitudinal portion of the questionnaire used in this
study. Finally, a number of additional studies help to frame the overall LIS research by identi-
fying the various programs, data collection elements, and previous usage rates to ensure that all of
the traditional elements of a LIS are included within this study (Waller, 1993; Langley et al., 1988;
Kling and Grimm, 1988).
An additional related area of examination is an evaluation of the ability to integrate logistics
and LIS throughout the organization. The Gustin et al., research focuses on the impact of logistics
integration as compared to the adoption and success of LIS within an organization. They present
numerous signi?cant ?ndings based on the adoption of various LIS application tools and the level
of logistics integration (Gustin et al., 1995). They speci?cally asked the level of integration of
logistics throughout the respondentsÕ organizations. They identify that the companies that have a
higher level of logistics integration throughout the ?rm are also likely to be using more LIS
systems.
Since the ?rst part of the research is based on the previous research, there are additional op-
portunities to examine newer trends and IS areas. Therefore, a current trends in LIS section is
included to address emerging issues. Recent studies of IS tools help the researchers identify new
systems and methods that deserve examination. The previous (Gustin et al., 1995) research could
not incorporate all of the advances since their last study. Various more recent studies discuss new
types of supply chain management tools (Harrington, 1997), inventory related software (Maclead,
1994; Forger, 1999), functional execution systems for logistics and operations (Smith et al., 1998),
and transportation and distribution software suites (Anonymous, 1998). Two other topics also
receive extensive attention in the current trends literature––ERP (Bradley et al., 1998; Shaw, 1998;
Piturro, 1999; Bradley et al., 1999a) and EC (DeCovny, 1998; Bradley et al., 1999a,b; Witt, 1999;
84 S.M. Rutner et al. / Transportation Research Part E 39 (2003) 83–93
Brooksher, 1999). Of all these current trends, the increasing use of ERP and EC provide an in-
teresting area that should impact LIS.
The combination of previous research of LIS and the emerging trend in IS provided an ex-
cellent framework to build this research. However, the do not in them selves provide a theoretical
framework for analysis. To ensure that this current research does not provide another ‘‘snapshot’’
set of ?ndings, a key element of LIS adoption was the timing of the adoption of the technologies
and that impact. While most of the previous studies identify some timing issues, the di?usion rate
of these technologies is an important point. Rodgers (1995) provides an excellent framework to
identify the early verse the late adopters and the impacts of di?erent timing. He identi?es that (1)
early adopters will di?er from late adopters, (2) the perceived attributes of an innovation
will a?ect its rate of adoption, and (3) that critical factors must be in-place to create the
‘‘S-shaped’’ curve. These points present an excellent framework to test the impacts of imple-
mentation of the various LIS, ERP, EC and other IS factors on various logistics areas including
integration.
All of the articles in the literature help to identify the gaps within the current body of
knowledge. The previous works identify a number of snapshots of usage. Also, do not examine
the impact of the most current technologies of EC and ERP. Finally, they highlight the need to
evaluate the impacts of the timing and di?usion.
3. Methodology
The previous research identi?ed a number of goals to accomplish with this research. The study
should identify the impact of EC and ERP to LIS. Also, it should highlight how the di?usion
will impact early or late adopters. Finally, it should provide a current snapshot of current data
usage.
To achieve these goals and to gather accurate and generalizable data, a set of possible re-
spondents was generated from two organizations: Council of Logistics Management (CLM) and
the attendee list from the Distribution Computer Expo (DCE). Both the CLM membership and
DCE lists were limited to the LIS/SCMIS managers and users. This screening process provided a
set of very technical LIS professionals working in logistics organizations. The goal was to reach
large numbers of LIS personnel working within logistics organizations within the United States
and Canada. Based on the objectives, a traditional mail survey with follow-up mailings was de-
termined to be the most appropriate data collection instrument (Dillman, 1978).
A survey instrument was developed based on previous studies and pre-tested. The ?nal ques-
tionnaire was an eight-page booklet that had 160 items examining current LIS systems, data
collection, use of EC and ERP, demographic, and other types of questions. Since this was a
longitudinal study, seven of the eight pages did not change from previous studies. The ‘‘current
topics’’ page was pre-tested by ?fteen CLM professionals. After minor modi?cations, the ?nal
instrument was produced.
To further reduce the list, consultants, 3PLs, carriers, and academics were also removed from
the overall lists. The ?nal combine CLM and DCE list produced 1949 possible informants. Of
the surveys sent, 265 completed and returned. This was a response rate was 13.59% after the
S.M. Rutner et al. / Transportation Research Part E 39 (2003) 83–93 85
undeliverable surveys were removed from the sample. This appears to an acceptable rate for a
lengthy questionnaire in an era of reduced response rates using the traditional mail survey.
1
Furthermore, two tests of non-response bias found no signi?cant di?erence between respondents
and non-respondents. The ?rst was a test of public information of company demographics
(Rutner and Langley, 2001) and the second was the more traditional comparison of early to late
respondents (Lambert et al., 1978).
The research methodology allowed the researchers to test not only the e?ects of LIS integra-
tion, but also continued the longitudinal study of LIS. Furthermore, it gathered data on critical
new areas impacting LIS and various areas across the business organization.
4. Research ?ndings
4.1. Respondent demographics
The large number of respondents created a dataset in which most types of businesses, indus-
tries, and sizes of companies were represented in the results. The one concern was the large
percentage of respondents from the manufacturing sector. Therefore, it was appropriate to test if
this group biased the total data. A simple T-test to compare manufactures to other respondents
did not identify any statistically signi?cant di?erences in over twenty random chosen variables.
Table 1 provides a breakdown of the respondentsÕ key demographic information.
In summary, the typical survey respondent was a sizable manufacturing company that pro-
duced consumer goods (durables, food products, textiles, etc.), used a centralized approach to
supply chain management and logistics, and was located at the companyÕs central o?ce.
4.2. Logistics integration
In the previous surveys, the questionnaire asked the respondents to report the level of logistics
integration within their organization. After a description of integrated logistics systems, the
survey asked, ‘‘In your ?rm, is it your opinion that the nature of the integrated logistics concept
has?’’ The respondents could choose between (1) not been recognized, (2) been recognized but the
decision was made not to implement it, (3) been recognized and adopted but not successfully
implemented, or (4) been adopted and successfully implemented.
The respondents were fairly evenly distributed between the four choices. All four of the re-
sponses were between 19% and 32%. The most common was that the integrated logistics concept
had been recognized within the organization, but not adopted. Fig. 1 presents the overall results
from this question.
Surprisingly, this ?nding had not change from much from any of the previous Gustin surveys
(1984, 1993, 1995) (Rutner et al., 2001). With the growth of logistics knowledge and LIS
throughout industry, the assumption would be that more ?rms would have migrated through the
1
Based on a comparison of response rates for mail surveys in Journal of Business Logistics, Vol. 11, No. 1 (1990)
through Vol. 21, No. 2 (2000).
86 S.M. Rutner et al. / Transportation Research Part E 39 (2003) 83–93
various phases toward the full integration. However, the ?ndings indicated that ?rms remain in
various states of logistics integration.
This question identi?ed updated the previous ?nding on the levels of LIS integration and gather
the current level. However, this only presents part of the overall ?ndings. This information does
not discuss the timing of integration throughout the ?rms.
Fig. 1. Integrate logistics systems.
Table 1
Respondent demographics
Demographic category Percentage of companies
Primary business
Manufacturing 61.9%
Service (retailing, wholesaling, etc.) 29.4
Not indicated 12.7
Industry
Consumer durable products 11.6%
Food production and processing 9.7
Textiles 8.5
Chemicals 6.9
Electrical machinery and equipment 6.2
Other (remaining nine categories) 20.7
Not indicated 35.1
Division annual sales
a
Under $100 million 75.7
Between $100 million and $1 billion 10.8
Over $1 billion 0.1
Not indicated 12.7
Logistics operations
Centralized 48.1%
Decentralized 14.0
Combination 32.6
Other/not indicated 5.3
a
Both division and total sales were gathered, however division sales was chosen as a more useful measure for various
analysis.
S.M. Rutner et al. / Transportation Research Part E 39 (2003) 83–93 87
4.3. Electronic commerce and logistics
In addition to the level of logistics integration, another part of the research is to identify the
impacts of EC and ERP on integration. The ?rst part of this section presents the usage of the
various areas of EC. The remaining portion evaluates the relationships between LIS and EC.
Not surprisingly, the respondents reported a high usage of EC. However, the research subdi-
vided EC into four speci?c categories: sales through EC, purchasing with EC, use of an intranet,
and customer access to an extranet. When the speci?c areas of EC were examined, the ?ndings
were not as universal. Many companies reported high use of one area of EC and little or no plans
to use another portion. Fig. 2 presents the level of EC usage by the various categories.
As can be seen from Fig. 2, intranet-based systems were the most widely adopted EC appli-
cation, with more than 60% of the ?rms surveyed reporting successful implementations. By
contrast, only 25% of the ?rms had successfully implemented Internet-based sales applications.
Even fewer ?rms (12%) reported successful implementations of Internet-based purchasing sys-
tems, and only 11% had successfully implemented extranet-based supply chain coordination and
planning systems.
A second ?nding of the usage of EC identi?es that there appears to be a sequence or process
that companies follow when adopting EC. First, a company will have an internal intranet. This is
followed by a sales oriented approach with the adoption of a sales Internet page(s). The ?nal two
areas appear to be interchangeable by organization. The di?usion theory implies that the intranet
portion has gathered enough factors to be in the S-shaped portion of the process while the lack of
universal acceptance by the ?nal two areas can be used to di?erentiate between the early and late
adopters.
Using the di?erent areas of EC adoption to frame the comparison, an examination of the re-
lationship between the level of logistics integration and EC implementation produced some in-
teresting ?ndings. Table 2 presents the summary results of the Pearson Chi-square test.
Table 2 reveals signi?cant di?erences in the implementation of (1) Internet-based purchasing
activities, (2) intranet-based communication, and (3) extranet-based supply chain coordination
with respect to the level of logistics integration. Closer examination of the data suggests that ?rms
that have successfully implemented the integrated logistics concept are signi?cantly more likely to
have also implemented these EC applications. An interesting ?nding is that the implementation of
Internet-based sales applications appears to be independent of the level of logistics integration.
Fig. 2. EC implementation process.
88 S.M. Rutner et al. / Transportation Research Part E 39 (2003) 83–93
The lack of a signi?cant relationship between logistics integration and Internet-based sales
appears to be due to the large number of manufacturers within the respondent pool. At the time of
the data collection, a large number of manufacturing ?rms were still working on implementation
plans for business-to-business websites. This is re?ected by the large percentage of ?rms that
responded that the company was in the implementation process of Internet-based sales.
The second key point relates to the failure of many dot.com type organizations to ful?ll their
on-line promises due to inadequate logistics support. The companies that tie their logistics and EC
together should be more successful in the business place. The relationship between logistics in-
tegration and information systems reinforces this concept.
The ?nal point is that the di?usion of EC technology appears to have slowed beyond the in-
tranet. Many companies are not beyond the basic implementation of EC. The relationship be-
tween logistics integration and the increased number of LIS tools employed may be valid here as
well. A company that is successful in implementing logistics integration will be more advanced in
LIS and EC. Also, an assumption can be made that companies that had advance LIS are more
likely to advance through the EC phases more quickly since LIS pre-dates EC. However, the
opposite may be true as well and presents an opportunity for future testing.
In summary, the relationship between EC and logistics integration presents both interesting
?ndings and opportunities to organizations. First, the results present a baseline for companies to
benchmark their operations. Furthermore, the more advanced companies have tied their logistics
operations with other portions of the ?rm to include EC. However, this only addresses one goal of
the research––EC and logistics integration.
4.4. Enterprise resource planning and logistics
After looking at the impacts of one of the major new areas of information systems (EC), the
next logical step was to determine any possible e?ects caused by the relationship between logistics
integration and ERP. The questionnaire asked the respondents to address a number of issues
about ERP. Each company identi?ed its current status: had implemented ERP, was in the process,
or had no plan to implement. The level of ERP usage is presented in Fig. 3.
The vast majority of respondents used ERP in some form. Almost 73% of the companies were
using some portion of an ERP system. Furthermore, 20% were in the process of implementing and
only 7% had no plan or were unsure. Therefore, the data supports the concept that ERP is be-
coming a widely accepted computerized process for handling data in American corporations with
over 92% of companies using or in the process of implementing.
Table 2
Logistics integration and EC implementation
EC activity Value p-value
Internet sales 9.981 0.352
Internet purchasing 23.840 0.005
Ã
Intranet activity 24.984 0.003
Ã
Extranet activity 35.847 0.000
Ã
*
Signi?cant at the 0.05 level.
S.M. Rutner et al. / Transportation Research Part E 39 (2003) 83–93 89
With ERP becoming so widespread, the more important question was the use of speci?c areas.
The companies had to identify which business areas or functions used ERP (i.e., ?nancial control,
MRP, inventory management, etc.) Just as EC had a high overall usage with a wide variation in
speci?c application areas, the various ERP areas had a wide range of results. Fig. 4 presents a
summary of the four logistics based areas of ERP reported by the respondents.
The relationships between logistics integration and the implementation of key ERP compo-
nents are summarized in Table 3. Table 3 presents the results of the Chi-square test comparing the
Next 12
Months
13%
Over 12
Months
7%
No Plan
5%
Unsure
2%
Use Now
73%
Fig. 3. CompaniesÕ use of ERP.
Fig. 4. ERP subsystem plans.
Table 3
Logistics integration and ERP implementation
ERP component Value p-value
Logistics planning 48.828 0.000
Ã
Production scheduling/MRP 25.252 0.003
Ã
Financial management 33.768 0.000
Ã
Inventory management 16.021 0.066
ÃÃ
Demand forecasting 18.607 0.029
Ã
Human resources management 21.971 0.009
Ã
*
Signi?cant at the 0.05 level.
**
Signi?cant at the 0.10 level.
90 S.M. Rutner et al. / Transportation Research Part E 39 (2003) 83–93
use and planned use of all of the ERP components with the level of integration within the ?rm.
The test compared the companies reported stage of logistics integration with the current level of
adoption of ERP subsystems. Signi?cant di?erences were found for ?ve of six major ERP com-
ponents. More advanced logistics ?rms, those that have successfully implemented the integrated
logistics concept, are more likely to have implemented the logistics planning, production sched-
uling, ?nancial management, demand forecasting, and human resources components of an ERP.
Interestingly, the ?ndings suggest that implementation of an inventory management component is
not related to the level of logistics integration. A likely explanation for this ?nding is that virtually
all companies (97%) responding to this survey indicated that they were already using inventory
management systems.
As with EC, there appears to be a number of relationships between the level of logistics inte-
gration and ERP adoption. First, there is a very strong relationship between logistics integration
and implementation of the various ERP components. Companies that have moved farther
through the logistics integration process were statistically more likely to have implemented var-
ious ERP products. Even inventory management, which 98% of the respondent companies re-
ported currently measuring and managing in some form, had a relationship with ERP (0.1 level).
Therefore, the relationship implies that the adoption of ERP helps companies to integrate across
logistics areas with other business functions (i.e., accounting, and HRM (see Table 3)). Another
possible solution is that businesses that integrate logistics throughout the organization are more
likely to implement an ERP product that also integrates various areasÕ data.
The practical implication is that companies considering integrating either ERP or logistics will be
more successful in the adoption if they have implemented the other portion. As with the EC rela-
tionship, the assumption is that since LIS pre-date ERP, logistics integration improves ERP imple-
mentation. Therefore, a company that has an integrated logistics philosophy will be more successful
at adopting an ERP package. However, it is possible that the reverse relationship is true as well.
The second key point is the results provide practitioners another opportunity to benchmarking
their companies. The high levels of ERP adoption present a business necessity for most organi-
zations. The ERP packages are becoming requirements in the logistics and business environments.
Companies should consider not only adopting ERP, but evaluate which modules will present the
most bene?ts for their speci?c organization and supply chain partners.
In summary, the research supports previous studies that both EC and ERP are becoming
widely accepted business tools throughout the supply chain. Also, it appears that companies are at
di?erent levels of implementation and are not choosing to adopt all subsystems. This is likely due
to the various types of companies within the sample (i.e., manufacturers, distributors, retailers,
etc.) Therefore, the vast majority of companies will be using a combination of EC and ERP to
manage logistics operations in the near-term. Finally, both EC and ERP are directly related to the
level of logistics integration throughout the organization. The companies that integrate logistics
appear to be more successful at implementing the more current systems of ERP and EC.
5. Research opportunities
Based on the initial research ?ndings, there are a number of key areas for future exploration.
The ?rst is the interaction of logistics integration with other portions of LIS. This study focused
S.M. Rutner et al. / Transportation Research Part E 39 (2003) 83–93 91
on the ‘‘new’’ areas of EC and ERP. However, it would be logical to assume that there are e?ects
on other portions of LIS that may be as dramatic. The second important question is the level of
impact of the ?rst set of ?ndings. While there are signi?cant di?erences between the groups based
on the level of logistics integration, a future study should examine what are the e?ects on a
companyÕs ?nancial and operational performance. The ?nal opportunity for additional research
would expand the concept of integration beyond the company and compare the impact with
Supply Chain Management. This would identify if there are similar results for organizations that
integrate their business processes across companies possibly using LIS, EC, and/or ERP as linking
tools.
6. Conclusions
While there are limitations as with any study, several important points are identi?ed
by the research. First, there continues to be growth in the adoption of EC systems that sup-
port logistics integration. Companies that have successfully implemented the integrated lo-
gistics concept are signi?cantly more likely to have also implemented some form of EC than
those who have not, although the type of EC application varies considerably. More advanced
companies are beginning to extend their logistics operations to the EC environment through
the implementation of Internet-based purchasing and extranet-based supply chain manage-
ment applications. For companies that have moved as far through the integration process,
the implementation of systems that support intranet-based activities and communication ap-
pears to be an important ?rst step toward achieving logistics integration via other, advanced EC
tools.
Second, logistics integration and ERP implementation go hand-in-hand, with success in one
area fostering success in the other. This is to be expected, as ERP systems provide a mechanism
for collecting, managing and sharing (i.e., integrating) organizational data across business func-
tions, including the data needed to support the integration of logistics operations. Like EC, there
continues to be growth in the adoption of ERP systems. However, unlike EC, ERP implemen-
tation is already very widespread. So widespread, in fact, that they have essentially become a
necessity within the logistics and business environments. Thus, companies should focus not on
whether to implement an ERP, but on determining which components of an ERP will product the
greatest bene?t to the ?rm.
Finally, implementation of EC and ERP systems provides higher levels of support for the
integration of logistical operations by improving both the access to and linkages among diverse
types of information that are important to the logistics function. If current trends in logistics and
information systems integration persist (and there is no reason to believe they will not), not only
will reliance on such systems continue to increase, but so too will the level of system complexity,
as more and more inter-enterprise functionality is added. As such, it will be increasingly
important for managers in both the information system and logistics ?elds to strengthen and
tighten the working relationships between the two functions––i.e., information systems will need
to support logistics, and vice versa. Successful implementation of the integrated logistics concept
and the information systems that enable it will depend on a spirit of mutual support and
cooperation.
92 S.M. Rutner et al. / Transportation Research Part E 39 (2003) 83–93
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doc_490558930.pdf
The growth of the supply chain concept has required logistics organizations to improve the flow of information both internally and externally. The increased information requirements have facilitated an integration of logistics information systems (LIS) and supply chain information systems in many companies.
The impacts of the integrated logistics systems on
electronic commerce and enterprise resource planning systems
Stephen M. Rutner
a,
*
, Brian J. Gibson
b
, Susan R. Williams
c
a
Department of Marketing and Logistics, University of Arkansas, Fayetteville, AR 72701, USA
b
Department of Aviation Management and Logistics, Auburn University, Auburn, AL 36849, USA
c
Department of Information Systems and Logistics, Georgia Southern University, Statesboro, GA 30460, USA
Abstract
The growth of the supply chain concept has required logistics organizations to improve the ?ow of
information both internally and externally. The increased information requirements have facilitated an
integration of logistics information systems (LIS) and supply chain information systems in many compa-
nies. The increasing use of electronic commerce and enterprise resource planning and other LIS tools and
techniques will shape the business process for the foreseeable future. Companies should understand their
options and their impacts when making decisions to support their supply chain systems.
Ó 2003 Elsevier Science Ltd. All rights reserved.
Keywords: Logistics; Supply chain management; Information systems; LIS; SCIS; ERP
1. Introduction
There has been a steady growth of information systems in inventory management, production,
and logistics. This paper reports the results of a recent longitudinal study into the use of logistics
information systems (LIS). The survey results reported herein highlight an increasing use of LIS
and its ability to link functional areas of business. Additionally, the paper examines the role of
two information system tools––electronic commerce (EC) and enterprise resource planning
(ERP)––that had not been investigated in previous editions of the study. Information regarding
the respondentsÕ EC and ERP adoption sequences, use of key subsystems, and relationships with
integrated logistics systems are presented.
Transportation Research Part E 39 (2003) 83–93
www.elsevier.com/locate/tre
*
Corresponding author.
E-mail addresses: [email protected] (S.M. Rutner), [email protected] (B.J. Gibson), rebstock@gasou.
edu (S.R. Williams).
1366-5545/03/$ - see front matter Ó 2003 Elsevier Science Ltd. All rights reserved.
PII: S1366- 5545( 02) 00042- X
To accomplish these tasks, the paper is divided into six sections. Following the introduction, a
brief literature review provides insight into the issues of LIS adoption and integration. Other key
sections provide insight into the study methodology, survey respondent pro?les, and major
?ndings. Limitations of the study and future opportunities for analysis are also provided. Finally,
a conclusions section summarizes the key points of the research.
2. Previous research
LIS has been a major area of study in the logistics and operations areas for more than 25 years
(House and Jackson, 1976; Lambert et al., 1978; Williams et al., 1998; Whipple et al., 1999). Issues
relevant to the current research include: the usage rates of LIS tools, integration of logistics and
LIS, emerging LIS technologies, and LIS adoptions patterns. Key works in each relevant area are
discussed below.
A variety of researchers have examined the usage rates of various LIS tools. A number of these
studies were conducted approximately every ?ve years since 1975 (Gustin, 1984, 1993, 1995;
Rutner et al., 2001). This stream of research provided the framework for the current study and
includes a number of relevant ?ndings. Each study is much like a companyÕs ?nancial statement.
The study provides a ‘‘snapshot in time’’ of the current LIS tools in use as well as identifying
future possible trends. For example, each study identi?es the usage rates of approximately twenty-
?ve LIS subsystems. This series of studies provides the plan for not only the theoretical portion of
the study, but also the actual design of the longitudinal portion of the questionnaire used in this
study. Finally, a number of additional studies help to frame the overall LIS research by identi-
fying the various programs, data collection elements, and previous usage rates to ensure that all of
the traditional elements of a LIS are included within this study (Waller, 1993; Langley et al., 1988;
Kling and Grimm, 1988).
An additional related area of examination is an evaluation of the ability to integrate logistics
and LIS throughout the organization. The Gustin et al., research focuses on the impact of logistics
integration as compared to the adoption and success of LIS within an organization. They present
numerous signi?cant ?ndings based on the adoption of various LIS application tools and the level
of logistics integration (Gustin et al., 1995). They speci?cally asked the level of integration of
logistics throughout the respondentsÕ organizations. They identify that the companies that have a
higher level of logistics integration throughout the ?rm are also likely to be using more LIS
systems.
Since the ?rst part of the research is based on the previous research, there are additional op-
portunities to examine newer trends and IS areas. Therefore, a current trends in LIS section is
included to address emerging issues. Recent studies of IS tools help the researchers identify new
systems and methods that deserve examination. The previous (Gustin et al., 1995) research could
not incorporate all of the advances since their last study. Various more recent studies discuss new
types of supply chain management tools (Harrington, 1997), inventory related software (Maclead,
1994; Forger, 1999), functional execution systems for logistics and operations (Smith et al., 1998),
and transportation and distribution software suites (Anonymous, 1998). Two other topics also
receive extensive attention in the current trends literature––ERP (Bradley et al., 1998; Shaw, 1998;
Piturro, 1999; Bradley et al., 1999a) and EC (DeCovny, 1998; Bradley et al., 1999a,b; Witt, 1999;
84 S.M. Rutner et al. / Transportation Research Part E 39 (2003) 83–93
Brooksher, 1999). Of all these current trends, the increasing use of ERP and EC provide an in-
teresting area that should impact LIS.
The combination of previous research of LIS and the emerging trend in IS provided an ex-
cellent framework to build this research. However, the do not in them selves provide a theoretical
framework for analysis. To ensure that this current research does not provide another ‘‘snapshot’’
set of ?ndings, a key element of LIS adoption was the timing of the adoption of the technologies
and that impact. While most of the previous studies identify some timing issues, the di?usion rate
of these technologies is an important point. Rodgers (1995) provides an excellent framework to
identify the early verse the late adopters and the impacts of di?erent timing. He identi?es that (1)
early adopters will di?er from late adopters, (2) the perceived attributes of an innovation
will a?ect its rate of adoption, and (3) that critical factors must be in-place to create the
‘‘S-shaped’’ curve. These points present an excellent framework to test the impacts of imple-
mentation of the various LIS, ERP, EC and other IS factors on various logistics areas including
integration.
All of the articles in the literature help to identify the gaps within the current body of
knowledge. The previous works identify a number of snapshots of usage. Also, do not examine
the impact of the most current technologies of EC and ERP. Finally, they highlight the need to
evaluate the impacts of the timing and di?usion.
3. Methodology
The previous research identi?ed a number of goals to accomplish with this research. The study
should identify the impact of EC and ERP to LIS. Also, it should highlight how the di?usion
will impact early or late adopters. Finally, it should provide a current snapshot of current data
usage.
To achieve these goals and to gather accurate and generalizable data, a set of possible re-
spondents was generated from two organizations: Council of Logistics Management (CLM) and
the attendee list from the Distribution Computer Expo (DCE). Both the CLM membership and
DCE lists were limited to the LIS/SCMIS managers and users. This screening process provided a
set of very technical LIS professionals working in logistics organizations. The goal was to reach
large numbers of LIS personnel working within logistics organizations within the United States
and Canada. Based on the objectives, a traditional mail survey with follow-up mailings was de-
termined to be the most appropriate data collection instrument (Dillman, 1978).
A survey instrument was developed based on previous studies and pre-tested. The ?nal ques-
tionnaire was an eight-page booklet that had 160 items examining current LIS systems, data
collection, use of EC and ERP, demographic, and other types of questions. Since this was a
longitudinal study, seven of the eight pages did not change from previous studies. The ‘‘current
topics’’ page was pre-tested by ?fteen CLM professionals. After minor modi?cations, the ?nal
instrument was produced.
To further reduce the list, consultants, 3PLs, carriers, and academics were also removed from
the overall lists. The ?nal combine CLM and DCE list produced 1949 possible informants. Of
the surveys sent, 265 completed and returned. This was a response rate was 13.59% after the
S.M. Rutner et al. / Transportation Research Part E 39 (2003) 83–93 85
undeliverable surveys were removed from the sample. This appears to an acceptable rate for a
lengthy questionnaire in an era of reduced response rates using the traditional mail survey.
1
Furthermore, two tests of non-response bias found no signi?cant di?erence between respondents
and non-respondents. The ?rst was a test of public information of company demographics
(Rutner and Langley, 2001) and the second was the more traditional comparison of early to late
respondents (Lambert et al., 1978).
The research methodology allowed the researchers to test not only the e?ects of LIS integra-
tion, but also continued the longitudinal study of LIS. Furthermore, it gathered data on critical
new areas impacting LIS and various areas across the business organization.
4. Research ?ndings
4.1. Respondent demographics
The large number of respondents created a dataset in which most types of businesses, indus-
tries, and sizes of companies were represented in the results. The one concern was the large
percentage of respondents from the manufacturing sector. Therefore, it was appropriate to test if
this group biased the total data. A simple T-test to compare manufactures to other respondents
did not identify any statistically signi?cant di?erences in over twenty random chosen variables.
Table 1 provides a breakdown of the respondentsÕ key demographic information.
In summary, the typical survey respondent was a sizable manufacturing company that pro-
duced consumer goods (durables, food products, textiles, etc.), used a centralized approach to
supply chain management and logistics, and was located at the companyÕs central o?ce.
4.2. Logistics integration
In the previous surveys, the questionnaire asked the respondents to report the level of logistics
integration within their organization. After a description of integrated logistics systems, the
survey asked, ‘‘In your ?rm, is it your opinion that the nature of the integrated logistics concept
has?’’ The respondents could choose between (1) not been recognized, (2) been recognized but the
decision was made not to implement it, (3) been recognized and adopted but not successfully
implemented, or (4) been adopted and successfully implemented.
The respondents were fairly evenly distributed between the four choices. All four of the re-
sponses were between 19% and 32%. The most common was that the integrated logistics concept
had been recognized within the organization, but not adopted. Fig. 1 presents the overall results
from this question.
Surprisingly, this ?nding had not change from much from any of the previous Gustin surveys
(1984, 1993, 1995) (Rutner et al., 2001). With the growth of logistics knowledge and LIS
throughout industry, the assumption would be that more ?rms would have migrated through the
1
Based on a comparison of response rates for mail surveys in Journal of Business Logistics, Vol. 11, No. 1 (1990)
through Vol. 21, No. 2 (2000).
86 S.M. Rutner et al. / Transportation Research Part E 39 (2003) 83–93
various phases toward the full integration. However, the ?ndings indicated that ?rms remain in
various states of logistics integration.
This question identi?ed updated the previous ?nding on the levels of LIS integration and gather
the current level. However, this only presents part of the overall ?ndings. This information does
not discuss the timing of integration throughout the ?rms.
Fig. 1. Integrate logistics systems.
Table 1
Respondent demographics
Demographic category Percentage of companies
Primary business
Manufacturing 61.9%
Service (retailing, wholesaling, etc.) 29.4
Not indicated 12.7
Industry
Consumer durable products 11.6%
Food production and processing 9.7
Textiles 8.5
Chemicals 6.9
Electrical machinery and equipment 6.2
Other (remaining nine categories) 20.7
Not indicated 35.1
Division annual sales
a
Under $100 million 75.7
Between $100 million and $1 billion 10.8
Over $1 billion 0.1
Not indicated 12.7
Logistics operations
Centralized 48.1%
Decentralized 14.0
Combination 32.6
Other/not indicated 5.3
a
Both division and total sales were gathered, however division sales was chosen as a more useful measure for various
analysis.
S.M. Rutner et al. / Transportation Research Part E 39 (2003) 83–93 87
4.3. Electronic commerce and logistics
In addition to the level of logistics integration, another part of the research is to identify the
impacts of EC and ERP on integration. The ?rst part of this section presents the usage of the
various areas of EC. The remaining portion evaluates the relationships between LIS and EC.
Not surprisingly, the respondents reported a high usage of EC. However, the research subdi-
vided EC into four speci?c categories: sales through EC, purchasing with EC, use of an intranet,
and customer access to an extranet. When the speci?c areas of EC were examined, the ?ndings
were not as universal. Many companies reported high use of one area of EC and little or no plans
to use another portion. Fig. 2 presents the level of EC usage by the various categories.
As can be seen from Fig. 2, intranet-based systems were the most widely adopted EC appli-
cation, with more than 60% of the ?rms surveyed reporting successful implementations. By
contrast, only 25% of the ?rms had successfully implemented Internet-based sales applications.
Even fewer ?rms (12%) reported successful implementations of Internet-based purchasing sys-
tems, and only 11% had successfully implemented extranet-based supply chain coordination and
planning systems.
A second ?nding of the usage of EC identi?es that there appears to be a sequence or process
that companies follow when adopting EC. First, a company will have an internal intranet. This is
followed by a sales oriented approach with the adoption of a sales Internet page(s). The ?nal two
areas appear to be interchangeable by organization. The di?usion theory implies that the intranet
portion has gathered enough factors to be in the S-shaped portion of the process while the lack of
universal acceptance by the ?nal two areas can be used to di?erentiate between the early and late
adopters.
Using the di?erent areas of EC adoption to frame the comparison, an examination of the re-
lationship between the level of logistics integration and EC implementation produced some in-
teresting ?ndings. Table 2 presents the summary results of the Pearson Chi-square test.
Table 2 reveals signi?cant di?erences in the implementation of (1) Internet-based purchasing
activities, (2) intranet-based communication, and (3) extranet-based supply chain coordination
with respect to the level of logistics integration. Closer examination of the data suggests that ?rms
that have successfully implemented the integrated logistics concept are signi?cantly more likely to
have also implemented these EC applications. An interesting ?nding is that the implementation of
Internet-based sales applications appears to be independent of the level of logistics integration.
Fig. 2. EC implementation process.
88 S.M. Rutner et al. / Transportation Research Part E 39 (2003) 83–93
The lack of a signi?cant relationship between logistics integration and Internet-based sales
appears to be due to the large number of manufacturers within the respondent pool. At the time of
the data collection, a large number of manufacturing ?rms were still working on implementation
plans for business-to-business websites. This is re?ected by the large percentage of ?rms that
responded that the company was in the implementation process of Internet-based sales.
The second key point relates to the failure of many dot.com type organizations to ful?ll their
on-line promises due to inadequate logistics support. The companies that tie their logistics and EC
together should be more successful in the business place. The relationship between logistics in-
tegration and information systems reinforces this concept.
The ?nal point is that the di?usion of EC technology appears to have slowed beyond the in-
tranet. Many companies are not beyond the basic implementation of EC. The relationship be-
tween logistics integration and the increased number of LIS tools employed may be valid here as
well. A company that is successful in implementing logistics integration will be more advanced in
LIS and EC. Also, an assumption can be made that companies that had advance LIS are more
likely to advance through the EC phases more quickly since LIS pre-dates EC. However, the
opposite may be true as well and presents an opportunity for future testing.
In summary, the relationship between EC and logistics integration presents both interesting
?ndings and opportunities to organizations. First, the results present a baseline for companies to
benchmark their operations. Furthermore, the more advanced companies have tied their logistics
operations with other portions of the ?rm to include EC. However, this only addresses one goal of
the research––EC and logistics integration.
4.4. Enterprise resource planning and logistics
After looking at the impacts of one of the major new areas of information systems (EC), the
next logical step was to determine any possible e?ects caused by the relationship between logistics
integration and ERP. The questionnaire asked the respondents to address a number of issues
about ERP. Each company identi?ed its current status: had implemented ERP, was in the process,
or had no plan to implement. The level of ERP usage is presented in Fig. 3.
The vast majority of respondents used ERP in some form. Almost 73% of the companies were
using some portion of an ERP system. Furthermore, 20% were in the process of implementing and
only 7% had no plan or were unsure. Therefore, the data supports the concept that ERP is be-
coming a widely accepted computerized process for handling data in American corporations with
over 92% of companies using or in the process of implementing.
Table 2
Logistics integration and EC implementation
EC activity Value p-value
Internet sales 9.981 0.352
Internet purchasing 23.840 0.005
Ã
Intranet activity 24.984 0.003
Ã
Extranet activity 35.847 0.000
Ã
*
Signi?cant at the 0.05 level.
S.M. Rutner et al. / Transportation Research Part E 39 (2003) 83–93 89
With ERP becoming so widespread, the more important question was the use of speci?c areas.
The companies had to identify which business areas or functions used ERP (i.e., ?nancial control,
MRP, inventory management, etc.) Just as EC had a high overall usage with a wide variation in
speci?c application areas, the various ERP areas had a wide range of results. Fig. 4 presents a
summary of the four logistics based areas of ERP reported by the respondents.
The relationships between logistics integration and the implementation of key ERP compo-
nents are summarized in Table 3. Table 3 presents the results of the Chi-square test comparing the
Next 12
Months
13%
Over 12
Months
7%
No Plan
5%
Unsure
2%
Use Now
73%
Fig. 3. CompaniesÕ use of ERP.
Fig. 4. ERP subsystem plans.
Table 3
Logistics integration and ERP implementation
ERP component Value p-value
Logistics planning 48.828 0.000
Ã
Production scheduling/MRP 25.252 0.003
Ã
Financial management 33.768 0.000
Ã
Inventory management 16.021 0.066
ÃÃ
Demand forecasting 18.607 0.029
Ã
Human resources management 21.971 0.009
Ã
*
Signi?cant at the 0.05 level.
**
Signi?cant at the 0.10 level.
90 S.M. Rutner et al. / Transportation Research Part E 39 (2003) 83–93
use and planned use of all of the ERP components with the level of integration within the ?rm.
The test compared the companies reported stage of logistics integration with the current level of
adoption of ERP subsystems. Signi?cant di?erences were found for ?ve of six major ERP com-
ponents. More advanced logistics ?rms, those that have successfully implemented the integrated
logistics concept, are more likely to have implemented the logistics planning, production sched-
uling, ?nancial management, demand forecasting, and human resources components of an ERP.
Interestingly, the ?ndings suggest that implementation of an inventory management component is
not related to the level of logistics integration. A likely explanation for this ?nding is that virtually
all companies (97%) responding to this survey indicated that they were already using inventory
management systems.
As with EC, there appears to be a number of relationships between the level of logistics inte-
gration and ERP adoption. First, there is a very strong relationship between logistics integration
and implementation of the various ERP components. Companies that have moved farther
through the logistics integration process were statistically more likely to have implemented var-
ious ERP products. Even inventory management, which 98% of the respondent companies re-
ported currently measuring and managing in some form, had a relationship with ERP (0.1 level).
Therefore, the relationship implies that the adoption of ERP helps companies to integrate across
logistics areas with other business functions (i.e., accounting, and HRM (see Table 3)). Another
possible solution is that businesses that integrate logistics throughout the organization are more
likely to implement an ERP product that also integrates various areasÕ data.
The practical implication is that companies considering integrating either ERP or logistics will be
more successful in the adoption if they have implemented the other portion. As with the EC rela-
tionship, the assumption is that since LIS pre-date ERP, logistics integration improves ERP imple-
mentation. Therefore, a company that has an integrated logistics philosophy will be more successful
at adopting an ERP package. However, it is possible that the reverse relationship is true as well.
The second key point is the results provide practitioners another opportunity to benchmarking
their companies. The high levels of ERP adoption present a business necessity for most organi-
zations. The ERP packages are becoming requirements in the logistics and business environments.
Companies should consider not only adopting ERP, but evaluate which modules will present the
most bene?ts for their speci?c organization and supply chain partners.
In summary, the research supports previous studies that both EC and ERP are becoming
widely accepted business tools throughout the supply chain. Also, it appears that companies are at
di?erent levels of implementation and are not choosing to adopt all subsystems. This is likely due
to the various types of companies within the sample (i.e., manufacturers, distributors, retailers,
etc.) Therefore, the vast majority of companies will be using a combination of EC and ERP to
manage logistics operations in the near-term. Finally, both EC and ERP are directly related to the
level of logistics integration throughout the organization. The companies that integrate logistics
appear to be more successful at implementing the more current systems of ERP and EC.
5. Research opportunities
Based on the initial research ?ndings, there are a number of key areas for future exploration.
The ?rst is the interaction of logistics integration with other portions of LIS. This study focused
S.M. Rutner et al. / Transportation Research Part E 39 (2003) 83–93 91
on the ‘‘new’’ areas of EC and ERP. However, it would be logical to assume that there are e?ects
on other portions of LIS that may be as dramatic. The second important question is the level of
impact of the ?rst set of ?ndings. While there are signi?cant di?erences between the groups based
on the level of logistics integration, a future study should examine what are the e?ects on a
companyÕs ?nancial and operational performance. The ?nal opportunity for additional research
would expand the concept of integration beyond the company and compare the impact with
Supply Chain Management. This would identify if there are similar results for organizations that
integrate their business processes across companies possibly using LIS, EC, and/or ERP as linking
tools.
6. Conclusions
While there are limitations as with any study, several important points are identi?ed
by the research. First, there continues to be growth in the adoption of EC systems that sup-
port logistics integration. Companies that have successfully implemented the integrated lo-
gistics concept are signi?cantly more likely to have also implemented some form of EC than
those who have not, although the type of EC application varies considerably. More advanced
companies are beginning to extend their logistics operations to the EC environment through
the implementation of Internet-based purchasing and extranet-based supply chain manage-
ment applications. For companies that have moved as far through the integration process,
the implementation of systems that support intranet-based activities and communication ap-
pears to be an important ?rst step toward achieving logistics integration via other, advanced EC
tools.
Second, logistics integration and ERP implementation go hand-in-hand, with success in one
area fostering success in the other. This is to be expected, as ERP systems provide a mechanism
for collecting, managing and sharing (i.e., integrating) organizational data across business func-
tions, including the data needed to support the integration of logistics operations. Like EC, there
continues to be growth in the adoption of ERP systems. However, unlike EC, ERP implemen-
tation is already very widespread. So widespread, in fact, that they have essentially become a
necessity within the logistics and business environments. Thus, companies should focus not on
whether to implement an ERP, but on determining which components of an ERP will product the
greatest bene?t to the ?rm.
Finally, implementation of EC and ERP systems provides higher levels of support for the
integration of logistical operations by improving both the access to and linkages among diverse
types of information that are important to the logistics function. If current trends in logistics and
information systems integration persist (and there is no reason to believe they will not), not only
will reliance on such systems continue to increase, but so too will the level of system complexity,
as more and more inter-enterprise functionality is added. As such, it will be increasingly
important for managers in both the information system and logistics ?elds to strengthen and
tighten the working relationships between the two functions––i.e., information systems will need
to support logistics, and vice versa. Successful implementation of the integrated logistics concept
and the information systems that enable it will depend on a spirit of mutual support and
cooperation.
92 S.M. Rutner et al. / Transportation Research Part E 39 (2003) 83–93
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