A Review on The Role of Logistics Service Providers in Global Supply Chain Towards Competitive Advantage

Abstract

The demand for international logistics service providers has been increasing due to the reduction of international trade restrictions, improvement of trade integration, and free trade areas that cause global competition. The business has been competing for taking advantage of the opportunities to offer goods or services that respond to the needs of consumers with the best offerings under the limitation of the organization's time and expense. However, some of them still fail to control cost, resources, and a slow adaptation to the changes of business environments. The revolution has forced the organization to increase capability to manage both internal and external expectations together to accomplish the organization. Therefore, service providers need to have good practices in every process and procedure, from upstream to downstream, where products and services are delivered to consumers. On the other hand, the service providers hold a crucial role in ensuring high-quality service offerings throughout the supply chain. This paper aims to explore the role of logistics service providers (LSPs) to support competitive advantage in the global supply chain. It also conceptualizes the LSP and competitive advantage relationship based on theory and concept of competitive advantage and supply chain management through literature reviews, secondary sources information from books, research papers, published documents, and online databases. The descriptive method is used to obtain the final results. The findings indicated that the relationship between the firm's capabilities and competitive advantage based on theoretical perspectives is relatively recognized. Therefore, the logistics providers need to develop strategies and the capability to provide a high quality of service such as logistics competencies and innovation abilities. The Information Technology (IT) skills are essential to strengthen organizational resources and perform highly satisfying services in every part of the supply chain to maintain global competitiveness.