Global business strategy and innovation: A Canadian logistics perspective (pj00542)

In the international marketplace, supply chain performance is an importantcompetitive differentiator. Innovative supply chain strategists claim that supplychain design, structure and sophistication are influenced by six main factors:globalization, increasing logistics ^{Footnote A} complexity, rising risk, increasing labour costs in the developing world, sustainability, and growing volatility. ¹ In this context, logistics has prospered over the last decade as the flow of information has become paramount to supply chain efficiency across industries.

Ongoing innovation in logistics has been a key enabled in the development ofglobal value chains. Changing parameters in manufacturing, global sourcing,investment, technology and security requirements are compelling logisticsexecutives to revise procurement and decision making processes. Over thelast few years, a critical competitiveness factor for Canadian firms has beenthe ability to develop and implement logistics solutions that enhance agilityand adaptability throughout the supply chain. ²

Industry Canada has partnered with Canadian Manufacturers and Exporters(CME) and Supply Chain & Logistics Association Canada (SCL) to review the valuable core business function of logistics. By collecting insights from industry, academia and international research organizations, and using economic analysis conducted by Industry Canada, this industry-academia-governmentpartnership has produced a complete profile of logistics innovation and globalbusiness strategies in Canada, summarized here in this report.

Key Findings

• The sharp increase in international trade has propelled logistics activities tothe forefront of business strategy.
• Manufacturers, retailers and natural resources industries are relying on theirlogistics networks to deliver seamless, integrated, secure, reliable and efficient solutions to leverage their global value chains.
• The use of continental logistics strategies is an emerging trend across numerous industries.
• A growing trend in logistics outsourcing is the use of long-term initiatives with dedicated facilities, personnel, processes and technologies.
• Firms are utilizing a mix of strategies within a 4 Tier global sourcing frameworkto balance the trade-offs between opportunities.
• Firms are seeking to establish dynamic, responsive, automated and low-costdistribution centres (DCs) that will support their logistics global business strategies.
• Investment in DCs in Canada has increased by 106 percent over the past five years (main areas of investment located in Ontario, Alberta, Quebec and British Columbia).
• Small and medium-sized firms are investing in DCs to better respond to customer mandates and to integrate further into global value chains.
• Logistics innovation is at the forefront of global value chain network integration.
• Supply chain mandates have a direct impact on innovation across value chains.
• The top 20 percent performers in total landed cost and on-time shipment are morelikely to invest in logistics network strategies—such as capability to electronicallycollaborate with networks of key suppliers and customers—and supply chain modelling applications.