WAREHOUSE MANAGEMENT SYSTEMS: RESOURCE COMMITMENT, CAPABILITIES, AND ORGANIZATIONAL PERFORMANCE

Journal of Business Logistics, 2005 by Autry, Chad W, Griffis, Stanley E, Goldsby, Thomas J, Bobbitt, L Michelle

Note: The views expressed in this article are those of the authors and do not necessarily reflect the official policy or position of the United States Air Force, the Department of Defense, or the U.S. Government.

Every day, logistics managers sift through mountains of information, looking to answer questions concerning their operations. For example, where should the most frequently ordered parts be located in the warehouse? How should inventory be deployed to optimize sales during a period of forecasted high demand? Or which motor carrier should be selected to provide transportation service to a new and potentially valuable customer? Information that could help managers to find solutions to these questions is often collected and available, but the sheer volume of data can be overwhelming. The ability to link information to immediate action is critical. Without reliable information support for logistics, firms could miss the chance to respond to market opportunities, become vulnerable to competitive threats, or struggle to simply provide good service.

The need for data management to support logistics processes has created demand for specialized information systems, custom-designed for logistics management needs (Copacino 1998; Gold et al. 1998; Knill 1998). Many firms are beginning to better understand the need for logistics information support, and as a result, have begun to invest in technologies that enhance decision-making capabilities for transportation management, warehouse management, and demand forecasting and planning among others (Bowersox, Closs, and Stank 1999; Closs and Savitskie 2003). The benefits of these technologies can be significant. The ability to use and leverage information in a timely fashion has been associated with increased internal efficiencies (Bowersox and Daugherty 1995; Closs, Goldsby, and Clinton 1997), as well as better customer responsiveness (Mentzer, Flint, and Hult 2001; Walton and Miller 1995), increased supplier-customer integration (Closs, Goldsby, and Clinton 1997; Closs and Savitskie 2003), enhanced perceptions of logistics service quality (Mentzer, Flint, and Huit 2001), and improved customer satisfaction and performance ratings (Bowersox and Daugherty 1995; Closs and Savitskie 2003; Gustin, Daugherty, and Stank 1995; Rabinovich and Evers 2003). As a result, the adoption and use of technology in support of logistics decision-making is more frequent and more important than ever before.

Significant research has examined the adoption and implementation of component technologies used for capturing and communicating logistics-related data, such as bar-coding, electronic data interchange, (EDI) and, more recently, radio frequency identification (RFID). However, despite the interest in information, little research to date has examined systems-level "smart" technologies, i.e., those that process data into a usable format for decision-making in logistics operations. The most commonly implemented systemic technologies include transportation management systems (TMS) and warehouse management systems (WMS). The current research represents an initial endeavor into the evaluation of these "smart" logistics information systems (LIS), by examining WMS applications within a set of sample companies. This study is designed to determine whether investment in operations-oriented WMS is likely to result in desirable outcomes for the warehouse firm or distribution center. The article concludes with a summary of the research findings and, based on these, suggests an agenda for future research related to WMS, as well as implications for the overall area of LIS and the integration of the technologies into firm and supply chain environments.

LOGISTICS INFORMATION SYSTEMS

Logistics information systems are defined as the "people, equipment, and procedures used to gather, sort, analyze, evaluate, and distribute needed, timely and accurate information to decision makers" (Murphy and Wood 2004, p. 66). A variety of LIS has been designed and implemented for different logistics activities and strategic purposes. Some of the more commonly implemented systems are used to support transportation management, warehouse management, yard management, and operations planning and scheduling. Regardless of their intended function, it is generally believed that these "smart" systems aid significantly in decision making related to the planning, assessment, and control of logistics activities (Bowersox and Daugherty 1995; Closs, Goldsby, and Clinton 1997).

Information and how it is managed have been frequent topics of interest to researchers over the past decade. Research has addressed a number of specific topics in the areas of information availability, integrated decision making, and technology adoption (Bardi, Raghunathan, and Bagchi 1994; Bookbinder and Dilts 1989; Closs, Goldsby, and Clinton 1997; Gustin, Daugherty, and Stank 1995; Rutner, Gibson, and Williams 2003; Walton and Miller 1995). However, despite these advances in theoretical development, little research has addressed LIS from a holistic systems perspective. Studies to date have tended to focus on information itself, and its outcomes, rather than the systems that are used to gather, manage, and control it. Furthermore, implementation and usage have rarely been connected to logistics organizations' strategic objectives. Research by Closs, Goldsby, and Clinton (1997), made an initial assessment of the outcomes of operating and planning systems on LIS capabilities and overall logistics competencies. More recently, Closs and Savitskie (2003) examined the relationships between logistics information technology integration and customer service performance, suggesting that customer integration mediates the technology - service relationship. There is still a need for research that establishes linkages between the implementation of logistics technologies, firm capabilities, and performance.