Aviation Logistics and Competitive Advantage Term Paper

Logistics in Aviation

Aviation logistics: Competitive advantage and technological innovation

Prelude

In the modern era, the worldwide logistics and supply chain is very cut throat and keeping an edge over others is important for all the firms in operation. Worldwide competition in aviation logistics business is cut throat with numerous firms. Firms in this business survive only when they maintain an edge over their rivals in the business in order to keep the clients in check. Most of the firms are very lenient to their clients as they listen to their client's needs and requirements, complaints along the way, implementing long-term marketing programs as well as short-term. Companies also make use of their resources in order to acquire competitive edge over their rivals in the marketplace which leads to satisfactory profits (Sakchutchawan, 2011). The resource advantage theory stipulates that having edge in resources paves way for competitive edge in the market. The resources of a company consist of:

Assets

Processes

Information

Knowledge

These factors improve competency and efficacy (Barney, 1991). The final goal for the firm is to acquire competitive edge by keeping resources in reservoir which helps in keeping ahead of the rivals. According to Hunt and Morgan, innovation also plays a pivotal role in case of resource-advantage theory. The companies will need to constantly innovate in order to be in the top position (Hunt and Morgan, 1996). The companies having top positions with respect to competitive edge can keep their spots by innovating continuously in order to make sure that they remain ahead of their rivals. The companies following these top notch firms behind can close the gap by innovating in return. Mentzer thinks that the objective of logistics was to amplify the size, number and topographical organization of warehouse and plants in question (Mentzer et al., 1999), choose methods of shipment and manage the cost of distribution (Mentzer et al., 1999), Stalk concluded that time was the only factor which mattered in gaining competitive edge, due to the fact that companies delivering right on time had tendency to follow protocols of quality, adjusting to client's needs, step in new markets around the world, startups, devising new ideas and using them in their business (Stalk et al., 1992).

Hence the aviation companies began cutting loose the waste material attached to them such as time, unworthy units and manufactured inventory (Larsen and Lusch, 1990). Aviation logistics is all about time and quality in essence as its imperative for majority of the firms especially for those present in the merchandise/commodity/goods marketplace. In the words of Christopher and Bowersox, the implementation of logistics systems was fore more necessary in comparison to marketing strategies (Christopher, 1998; Bowersox et al., 1995). Correspondingly, Lynch also thinks the same way as he concluded that logistics provide competitive edge in business (Lynch et al., 2000). Apart from that, Day and Wensley concluded that superior operating skills of the staff also matters when rival's staff is taken in consideration. But simultaneously resources are also needed for that matter. Hence they established that companies can gain competitive edge by strategy development and implement them in logistics segment (Day and Wensley, 1988).

In the present aviation logistic climate, the competition is tight and companies need to step up their game, build and create value in the industry (Brewer and Hensher 2001). It has become a boundary spanning function in supply chain, excellence in logistics is now a symbol of competence and a prime ingredient for competitive edge in the market (Stank, et. al., 2005). Aviation firms now view logistics as a prime source of saving costs and deem it as a form of service offerings / enhancing product on the whole in order to drive competitive edge (Mentzer, et al., 2004). Apart from that, logistics is an area of resource which can enable newer strategic tactics application in the industry (Abrahamsson and Stahre 2003).

Aviation logistics and technology: Two side by side innovations

Technological inventions, innovations and monetary crisis have overturned the face of the competition in the aviation logistic industry. Undoubtedly, information technology is shaping the aviation logistic industry as we speak. Many surveys have been done in this regard in order to know the extent and viability of information technology for logistic operations (Hardakeret al., 1994). Apparently, information is a useful logistic resource for that matter. Necessity of information flow in logistic channels is deemed imperative just as important as material flow. In words of Closs, he thinks that information technology affects the entire face of logistics business (Closs1997).The logistic channels are becoming intricate and lengthy, it involves more channel members as well which makes the system ever so complicated and dense (Sakchutchawan, 2011).

Apart from the alteration of the business functions from national to international, logistic information systems (LIS) are deemed as instant driver of success in business marketplace (Bardiet al., 1994). Most of the logistic service providers (LSP) are making use of information technology for gaining an edge with the help of high productivity, less cost and great customer services. Now the capabilities and accuracy of logistic process is also taken in consideration, it involves time taken to take inventory to the clients from the supply chain, the adoption of the logistic information system is now a staple in the process (Lai et al., 2005). In the words of Christopher, logistics management is the key to distinguish between services and products and drive competent advantage for companies (Christopher, 1993).

Langley has addressed the connection between the logistics and information in a new way. Langley has shown the necessity of having the proper information at the proper time in the proper place (Langley, 1988). This famous logistical paradigm referring to merchandise is known to have significant importance in case of managing information. Introna says that logistical systems translates materials in products, driving value for clients, information system translates data in information for facilitating managerial decision making (Introna, 1991).Both think that information technology is a prime resource that can be utilized in case of making decisions which hence propel flexibility, efficiency and logical effectiveness. Bowersox says that the leading ten distinguishing factors between top firms and average companies is that their willingness to pave way for newer technologies to take over (Bowersox, et. al., 2000).Technology will affect the technological innovation; technological innovation is driven forwards when technology has better transferability. Transferability of technology is decided by technology's explicitness. Apart from that, the tendency of technology to fit in well with company's processes is also important in deciding the relevant competence (Tornatzky & Fleischer, 1990). Similarly, technological innovation has a certain technological model as well (Teece, 1996).The nature of technologies is cumulative as it influences further innovation in the technological industry. Hence the companies with a thorough experience in usage of technologies will have a particularly wondrous time driving completive edge and technological innovation (Mentzer, et. al., 2004). In layman words, technology has a direct relation to logistics innovation (Sakchutchawan, 2011).

Innovation in logistics

As the world moves from the industrial economy to the global competitive economy in form of information technology system capability, it is very important for firms to maintain their competitive advantage. In order to meet this strained demand, the company's desire proper logistics innovation that will keep the client's expectations in check whilst keeping an eye on delays, costs, problems and hindrances companies face during delivery. Competitive advantage is all about fast response and rapid delivery. Aviation Logistics basically is a part of the supply chain which takes in consideration time and place. It's all about managing goods movement, resources and information and services from one point to another in order to meet the customer demands (Sakchutchawan, 2011).

In the words of Lin, aviation logistics is all about the following:

Integrating information

Transportation

Warehouse

Material handling

Security

Packaging

He also thinks that it all about the demand and supply at the right time in the right amount, in the right place, with the suitable costs and at the appropriate place. Innovation can also be created for processes, services and business models (Lin, 2006). It's not only relevant to supply chain management, logistics, manufacturing and computer science field (Sakchutchawan, 2011).

Roger thinks that innovation is somewhat a new idea, notion, object and practice which are deemed as new by people or adopters. Hence logistics innovation relates to logistics which includes new service methodology in order to become competitive and better to a targeted audience (Roger, 1995). Aviation logistics innovation could be quite simple or it can be very delicately intricate applied to internal services and operations along with business partners (Flint et al., 2005). In words of Eisenhardt and Martin, innovation consists of new service development and new product design. It is termed as dynamic capability (Eisenhardt and Martin, 2000). Dynamic capabilities framework spears through the source of wealth and caption by the companies in a corporate climate where technological change is a constant (Teece et al., 1997). However, an innovation.....