Innovation Capabilities of Logistics Service Providers- an Investigation of Drivers for Innovation

INTRODUCTION The market for logistics services is characterized by changing customer demands regarding quality and higher service levels (Wagner 2008) (e.g. just-in-time delivery). An increasing number of customers requests for new and valuable services (for instance the provision of real-time data by using of Tracking & Tracing Systems (Arndt 2008)). Therefore, the competitiveness of Logistics Service Provider (LSP) depends on their ability to adapt their offered services to changing customer demands (Pfeiffer 2008). One general way to cope with changing customer demands and to ensure a company's competitiveness (Brockhoff 1996) can be innovations. Thereby, innovations can be understood as ideas, concepts, and practices to improve products as well as processes (Rogers 2003). If the improved products and processes are recognized as new and valuable by customers the innovations can lead to an increasing quality of the companies' service portfolio (Pfohl, Köhler & Röth 2008). A higher service level can have significant effects on a company's options for its positioning and differentiation from competitors and therewith on its corporate value (Song, Thieme 2006; Chapman, Hyland 2004). In conclusion, innovations can be seen as a key factor for economical growth and competitiveness (Pfohl, Köhler & Röth 2008) Thus, the competitiveness of LSP is related to their ability to be innovative (Wagner 2008). Hence, the question arises how LSP can increase their innovation capability. Flint et al. (2005) as well as Wagner state that in logistics research this question has been nearly ignored up to now (Flint et al. 2005; Wagner 2008). Therefore, the overarching objective of this paper is to identify drivers of innovation capabilities for LSP in order to provide the logistics innovation management with an approach to develop and control its success factors. Hence, the objectives of the paper are threefold: Firstly, the paper aims for a comprehensive description of innovation and innovation capability in logistics. Furthermore, the paper intends to generally analyze potential drivers, which influence the innovation capability of a company. Finally, the paper will discuss hypotheses regarding the importance of changing customer demands and different drivers of innovations for LSPs. Consequently, the paper will be structured as follows: In the second section, the innovation capability of LSPs will be characterized in order to deduce resulting deficits regarding their innovativeness. In the third section, drivers affecting the innovation capability of companies will be generally described by a broad review of innovation management literature. In section four, the identified …