The Effects of Process Innovation in Logistics Service

Abstract

As a key determinant of competitiveness and economic growth, innovation is an important issue for many industries in modern economies. Accordingly the concept of innovation becomes a topic of interest among academicians and practitioners. There are many studies and classifications concerning innovation such as technical, process, product and administrative. However, much of what is written about innovation focuses generally on product innovation while underestimating the process dimensions of innovativeness. Thus it is a great mistake to consider the concept of innovativeness only in the frame of product and high-tech issues. Process innovativeness is also a main theme to acquire competitive advantage in many industries such as logistics. Logistics is a basic activity in the context of value chain. It is widely acknowledged that logistics and its sub factors are vital for utilizing business strategies successfully through distribution flexibility and responsiveness. As a result of the blurring boundaries from local to the international and global in globalizing economies, logistics industry today seems to be highly dynamic. Innovativeness on logistics processes appears to be an important way to differentiate the logistics capabilities and ultimately to achieve sustainable competitive advantage. Whether the literature abounds of evidences about the positive effects of logistics capabilities on business performance; there are only a few studies on logistics in concept of innovation. Based on contents of logistics and innovativeness, and in the context of process innovativeness, this paper aims to investigate the relationships among logistic capabilities, process innovativeness and firm performance. For this purpose a survey is conducted on 39 logistics firms from the database of Istanbul Chamber of Commerce. The collected data is submitted to validity, reliability and exploratory factor analysis. Then we used regression analysis to explore mutual relationships between the variables. As a result, the effects of process innovativeness on business performance of logistic firms are revealed and the moderator role of process innovativeness on the relationship between logistic capabilities and quantitative business performance is uncovered.