The enablers and outcomes of logistics benefits of clusters
Creators: name: HALLOCK, David
Publisher: name: RMIT University
Year: 2024
Subjects: classificationCode: 350903
subject: Logistics

description: Concentrations of industrial, medical, film production (Hollywood and Bollywood, Hong Kong), IT (California, Bangalore and Taiwan), and wine production (the Coonawarra, Yarra Valley, Hawkes Bay and Marlborough (New Zealand), Napa Valley (the United States (US)), Bordeaux and Rhone are well-known examples of activities, firms or outputs that are clustered in generating economic added values and require logistics support. In Australia, data available in 2021 from the Australian Government indicate that the freight logistics industry contributed about 9% to Australia¿s gross domestic product (GDP), comparable to the US (2018) around 8% of GDP and 10% of the United Kingdom's GDP (UNESCAP 2017), substantiating the importance of logistics to a national economy. A 1%  improvement in logistics efficiency in Australia can have an impact on value-added of approximately AUD1.3 Billion. Despite the national significance of logistics, research on the causal factors (Enablers) leading to logistics benefits arising from the clustering of firms (LCBs) and how LCBs affect the logistics performance of the firm (FLP) is scarce. Thus, this research addresses a gap in a thinly researched field by formalising and exploring the relationships between these research constructs, which have been neither established nor explored in the literature previously. Accordingly, two research questions were examined, namely, `what are the enablers of LCBs?', and `how do LCBs influence FLP?'

Silos of previous research are fragmented and have only looked at part of the overall picture. This research addresses the two research questions by synthesising the existing literature into a framework that facilitates the exploration of the two questions. Specifically, what factors help derive LCBs is an important question that has not been previously explored. Similarly, whether LCBs, growth in business activity, and the availability of a specialised supply of labour have an impact on FLP, specifically on constructs service quality and operational efficiency, has not been investigated.
 
Pragmatism is the research paradigm supporting multiple methods of data collection and a mixed-methods approach. Examination of the research questions is exploratory and causal requiring diverse sources of data. A qualitative phase used a Delphi protocol for data collection to explore themes in an initial conceptual framework developed from the literature. The Delphi panel comprised 11 industry experts who contextualised and refined themes in the literature providing supplemental and nuanced views. The experts were from manufacturing and extractive industries, academia, terminal operators, fourth-party logistics providers (4PL), transport operators, logistics industry consultants and the government. The Delphi panel outputs resulted in a revised conceptual framework (RCF) that proposed a modified model of Enablers/LCBs/FLP, enabling the conduct of a survey in the quantitative phase. The RCF identified the availability of value-added logistics services (VALS), Proximity and Targeted Logistics Investment (TLI), and Supply Chain Integration (SCI) as Enablers, macroeconomic benefits as LCB with links to FLP.

The Delphi process informed the creation of a questionnaire that was administered in a survey via email to a population of approximately 5,000 firms in logistics, retail, manufacturing, and agro-industries in Australia commencing in November 2018, over 5 months, with 289 usable responses received. Factor analyses and structural equation modelling (SEM) were used for data reduction and analysis.

The empirical exploration of Enablers and outcomes of LCBs, relied on several theories that supported the proposed RCF. Specifically, cluster theory states that the co-location of industries in specific regions creates advantages. Hence, cluster theory is best used to explain the creation of LCBs. SCI has both a direct and mediated relationship via VALS with LCB, thus the Relational Resource-Based View (RRBV) supports the direct links based on collaboration among industries for SCI and LCB. The reliance on unique VALS capability by SCI is explained by Dynamic Capability Theory (DCT). The provision of VALS in the creation of LCB relies on the use of the best capabilities at the disposal of the firm and is explained using DCT. The availability of access to labour and efficient markets are LCBs that allow firms the capability to access these resources to enhance FLP. Hence, RBV can be used to explain the link between LCB and FLP. LCBs are solely related to the availability of skilled labour; a flexible supply of labour and an abundant supply of local labour create intangible capabilities that enable the achievement of FLP of transport and location efficiency and are explained by RBV. The service quality aspect of FLP is where VALS mediated by LCB has an impact that can be explained by RBV.

The findings of this research were that the availability of VALS, collaboration among industry (INDCOL), and supply chain collaboration (SCCOL) were enabling factors confirmed to have positive relationships with LCBs. A mediated relationship between SCCOL and LCBs through VALS was also confirmed. Mediation through LCB was established between VALS and FLP, INDCOL and FLP and SCCOL, VALS, LCB and FLP.

There are implications of this research for academia, firms, and the state. The academic contribution of this research is that this is one of the first studies that explores and empirically validates factors that lead to logistics benefits derived from the clustering of industry, thus enriching knowledge of clusters in general and specifically of logistics activity in clusters. The significance of the research questions and resultant findings have not been discussed in previous studies. Therefore, the validation of links between INDCOL, SCCOL and logistics activities of firms that are clustered has not been previously validated. Further, the mediation links between SCCOL and LCB through VALS, as well as between VALS and FLP, INDCOL and FLP and SCCOL, VALS, LCB and FLP have not been validated before. Therefore, both new knowledge and new constructs are outcomes of this research.

The empirical findings from this research supplement current decision-making tools used by policymakers and by jurisdictions when resourcing infrastructure investments, especially for the development of logistics. This is because the indicators of each of the factors of Enablers, LCBs and FLP provide causal links that are an elaboration and guide to policymakers intent on making growth-focused decisions on the urban form including the creation of regional industrial clusters.
 
This research can be readily adapted to develop tools to manage the challenges of supply chain resilience arising out of COVID-19. Enablers relating to VALS provide measures of timeliness, ubiquity, and cost, while those relating to collaboration demonstrate the value of embedded relationships in the supply chain. The measures underlying FLP can be used to audit the operational exposure and risk to supply chains of unforeseen disruptions as well as environmental catastrophes.
 
Policy responses to ensure supply chain security can use the finding that industry, when clustered, has benefits in logistics operations. Therefore, the state can examine whether there is a benefit in promoting clustering around ports/airports or selected overseas locations for a nation's trade.
 
The key limitations are that only Australian firms were surveyed and that more participation could have occurred. It would have been preferable for data to have been collected in a single phase.Further all clusters were assumed to be homogenous and differences in the stage of development or decay were not allowed for.