Document Type

Article

Abstract

By capturing the hidden value in the multi-national enterprise’s (MNE’s) supply-chain in areas such as quality, value and innovation; logistics providers can increase the MNE’s operating efficiency and enhance its capital utilization, within and enhanced competitive advantage framework. Today, many multinational enterprises (MNEs) use the global communication channels of the internet to strategically move their global activities to more competitive positions. The trend has been to outsource more and more of their non-strategic business functions, with their logistics providers acquiring these new sources of business. These logistics providers are classified as 1st to 4th party logistics providers [1]. A 4th party logistics provider (4PL) offers the complete supply side coordination solutions for the MNE, plus a degree of demand side coordination service [2].

At its peak, the MNE-logistics provider model activates the entire service value chain. Here the 5PL delivers a value chain level of both outsourcing and service. The complete integration of the value chain logistics provider with its vast array of ‘added-value skills’ and its block of partnered MNEs, yields a unique, innovative, flexible and highly agile partnership, whereby pathways towards ‘sustainable’ competitive advantage [3] may be developed, and possibly maintained. The MNE, whilst maintaining its final assembly, branding, research, and innovation functions, is increasingly becoming a service orientated, highly ‘front-end’ (or customer focused) operation. This paper develops a technique to ascertain the positioning of MNE and logistics provider(s), and where the logistics provider – MNE integration level may be enhanced.

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