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In the late 1990s, renown strategist Michael Porter argued that clusters make organizations more competitive by increasing the pace of Innovation and stimulating new business formation. National and regional governments quickly embraced the idea and immediately supported its development by providing the necessary funding support. As expected, good things started to happen: businesses became interested to set up in the area drawing employees and, at the same time, more employers.

In recent decades, numerous Industrial Clusters have developed around the world. But there is one sectorâ€”the Logistics sectorâ€”where Industrial Clusters have a brighter long-term future. The Logistics Cluster provides operational flexibility and distribution efficiencies that can greatly benefit many global supply chains. Logistics Clusters are local networks of businesses providing Logistics services. It is a community of companies that come together to share Logistics expertise and know-how.

Logistics Clusters are self-reinforcing and offers advantages based on the interchangeability of its Transportation and Logistics assets. There are key value areas Logistics Clusters have demonstrated greater effect.

1. Industry Growth
2. Job Creation

As the global economy moved into the 21st Century, Logistics has become a critical part of Supply Chain Management.
Globalization will continue to fuel the expansion of Logistics Clusters. Companies just need to understand its dynamics to reap the full benefits that it has to offer.

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Source: Supply Chain Management (SCM): Logistics Clusters PowerPoint document

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Tag(s): Competitive Advantage Supply Chain Management Logistics

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