A Focused Innovation Model for Logistics Service Providers
Managing Innovation: The New Competitive Edge for Logistics Service Providers, pp.
January (1st Quarter/Winter)
This paper is targeted to leaders of logistics service provider (LSP) firms. It makes several key contributions to the body of knowledge about managing and leading such firms. First, it introduces the goal of becoming the “essential link” in the markets that a LSP serves. Becoming the essential link means that a LSP has achieved a position of such strength in the markets it serves, that other par-ticipating organizations perceive no incentive to try to replace it. We argue that LSPs must innovate to become the essential link. For the first time in the literature, we present an integrated innovation model representing the union of the Stage-GateTM System and open innovation. We relate these specifically to LSPs. Once we understand the new model of innovation, the next question is to what do we apply it? We present three operating models of market leaders, and relate these models to LSPs. Since this combination of concepts has not appeared in the literature on LSPs, we review recent LSP publications to illustrate how well the concepts apply. Finally, we provide a summary of how the market leader concept can help the LSP to focus its innovation efforts, using the integrated innovation model, to achieve the goal of being the essential link for the markets that it serves.