Logistics and the Extended Enterprise: Benchmarks and Best Practices for the Manufacturing Professional

Citation

van Hoek, R. (2000), "Logistics and the Extended Enterprise: Benchmarks and Best Practices for the Manufacturing Professional", Supply Chain Management, Vol. 5 No. 2, pp. 110-110. https://doi.org/10.1108/scm.2000.5.2.110.1

Logistics and the Extended Enterprise is a managerial book presented as a support to performance management and measurement in the supply chain. Given my research note on the need for more work on supply chain measurement, recently published in this journal, the relevance that I see in this work does not need any further explanation. The book is structured in two parts and an appendix. The first part introduces best practices identified by the authors in a research project claimed to be based upon a large, comprehensive empirical database. The second part aims to suggests how to benchmark and achieve best practices. The appendix includes a diagnostic tool that can be used in this process.

The first part places a strong focus on outsourcing in the supply chain, in particular outsourcing to third party logistics service providers. Even though the interfaces between third party and outsourcing company are a critical part of the extended enterprise or the supply chain, other relevant interfaces, such as with industrial suppliers, are not as actively covered, if at all. The results from a large scale survey (claimed to be the largest available, yet with a response rate below 5 per cent) are presented. The findings display patterns among respondents in covering questions like, why outsource, what to outsource, contracting and performance. However, it could be questioned to what extent covering the general patterns displays best practices which might be beyond the average pattern.

There are only a few examples of best practices in addition to the survey findings, and some are questionable, such as the centralization of supply chain management at headquarters. Others, such as appointing logistics in top management, can be considered features of an organization but not of its best practice performance, nice as this advice may be for a managerial audience!

The second part of the book goes into benchmarking and the application of best practices in the supply chain. The authors also disclose their benchmarking survey (they call it supply chain diagnostic) in the appendix. Potentially, this provides insights into the research on which the book is based, while offering managers a tool that they can apply to their own business. It is a pity, in that respect, that the tool proves to be not much more than a semi‐structured interview guide usable as a rough scan of business issues and challenges but not as a quantitative ranking tool.

The authors are also guilty of using a poorly defined framework. They use value chain (Porter’s conceptualization of an internal chain of operations), logistics and the supply chain as interchangeable terms, when they are clearly not the same. They also make some future projections on how to move forward. At first the authors claim to foresee globally operating third party logistics service providers. Shortly after that they claim that third parties already operate as global players, yet in my research experience, as well as that of Lieb et al., as referenced in the book, this is not at all a common practice yet. In fact, there is an inconsistency here – findings from the survey (Table 5.5) indicate that an international scope of third parties is not at all among the top ranking third party attributes. Is it really important then? Another inconsistency in the book is the inclusion of the insourcing versus outsourcing decisions as part of the implementation part (step 5) and the development of a re‐engineering plan (step 4) of the benchmarking process as explained in chapter 7. These mistakes are especially unfortunate given that the main research focus in the book is on third parties and outsourcing, as mentioned above.

All together it is worth the attempt to further bring supply chain management practices to a managerial audience, given the growing need for their (further) development. This book, however, does not live up to its promise.