COMPETITIVE ADVANTAGE IN COST SENSITIVE GLASS PACKAGING INDUSTRY THROUGH OUTBOUND LOGISTICS

Abstract

Achieving and maintaining a long-term competitiveness is one of the key prerequisites of a sustainable business. Companies put a lot of effort into enhancing different value chain activities in order to achieve it. Initially, manufacturing companies were focused inwardly on increasing efficiency of tightly controlled logistics activities. When those opportunities were exhausted, the focus expanded beyond the firm boundaries through establishing trust-based relationships with specialized logistics service provider (LSP) companies. The aim of this paper is to analyse a case of innovative outbound logistics practice within mature glass packaging industry. Due to relatively high weight and low utilisation of freight space, glass packaging is considered as unsuitable for long-distance transportation. With incrementally small developments in improvement of freight space utilisation, high transportation cost remains as one of the most restrictive industry level success factors. Based on a series of in-depth interviews with management personnel of a European mid-sized glass packaging producer, innovative approaches in its outbound logistics practices has been evaluated. Paper analyses the process of close cooperation between the manufacturer, customer and LSP which resulted in an innovative solution and optimisation improvements within the outbound logistics activities. As the findings suggest, close cooperation between stakeholders and customer co-creation contribute to the company’s competitive advantage.

Keywords: outbound 3PL, customer value, value co-creation, glass packaging industry