reading response w7

7_Dicken_2015_Global_Shift_CH17.pdf

Home >Reading homework help >reading response w7

Seventeen ‘MAKING THE CONNECTIONS,

MOVING THE GOODS’: LOGISTICS AND DISTRIBUTION

SERVICES

CHAPTER OUTLINE Taking logistics and distribution for granted 540 The structure of logistics and distribution services 541 The dynamics of the market for logistics services 544 Technological innovation and logistics and distribution services 545 E-commerce: a logistics revolution 546 The role of the state: regulation and deregulation of logistics and distribution services 550 Regulation and deregulation of transportation and communication systems 550 Corporate strategies in logistics and distribution services 553 Global logistics: from transportation companies to integrated logistics service providers 553 Global trading companies 556 Globalizing retailers 559 Logistics ‘places’: key geographical nodes on the global logistics map 562

17_Dicken-7E_Ch-17.indd 539 18/11/2014 11:03:19 AM

PART FOUR THE PICTURE IN DIFFERENT SECTORS540

TAKING LOGISTICS AND DISTRIBUTION FOR GRANTED

Whereas there is a huge literature and a continuous, often frenzied, debate on the role of financial services in the processes of globalization, logistics and distribution rarely make an appearance on the stage. They remain hidden, mainly confined to the specialist fields of supply chain management and transportation. The logistics and distribution processes get taken for granted.1 It is more or less assumed that, as transportation and communication systems have allegedly shrunk geographical distance, the problems of getting products from points of production to points of consumption have been solved.

In fact, the very opposite is the case. The circulation processes that connect together all the different components of the production network are absolutely fundamen- tal (see Chapter 3). The logistics industries themselves are huge:

As an area of economic activity, logistics were worth an estimated US$3.6 trillion in 2009 – and predicted to reach US$3.9 trillion by 2013 … Logistics costs account, on average, for 10–15 per cent of the final cost of finished products in the developed world, including trans- port costs (7–9 per cent), warehousing costs (1–2 per cent) and inven- tory holdings (3–5 per cent).2

They have become especially significant in light of the broader forces of change discussed in earlier chapters, notably:

•• new production methods, involving increased flexibility; •• changing relationships between customers and suppliers; •• increasing use of JIT procurement and delivery systems; •• increasing geographical complexity and extent of production networks; •• changing consumer preferences.

In particular, time has come to be seen as the essential basis of successful competi- tion.3 In such a context, the nature and efficiency of distribution systems become central:

Time- and quality-based competition depends on eliminating waste in the form of time, effort, defective units, and inventory in manufac- turing-distribution systems … [requiring] firms to practice such logis- tical strategies as just-in-time management, lean logistics, vendor-managed inventory, direct delivery, and outsourcing of logistics services so that they become more flexible and fast, to better satisfy customer requirements.4

17_Dicken-7E_Ch-17.indd 540 18/11/2014 11:03:19 AM

LOGISTICS AND DISTRIBUTION SERVICES 541

THE STRUCTURE OF LOGISTICS AND DISTRIBUTION SERVICES

The essential function of the logistics and distribution services – which should be regarded as GPNs in their own right – is to intermediate between buyers and sellers at all stages of a production circuit (Figure 17.1). This involves not only the physi- cal movement of materials and goods, but also the transmission and manipulation of information relating to such movements. They involve, above all, the organization and coordination of complex flows across increasingly extended geographical dis- tances. In that respect, these services have been revolutionized by the technological developments in transportation and communication discussed in Chapter 4. They have also been transformed by the increased outsourcing of logistics and distribu- tion services by manufacturing firms, by the intensifying pressures from the big retailers and by the emergence of new forms of logistics service providers.

In Figure 17.1 there are no political or other obstacles to complicate the basic system. In reality, of course, such obstacles greatly affect the structure and opera- tion of logistics and distribution processes. Two kinds of ‘barrier’ to movement are especially significant:

•• Physical conditions that necessitate the transfer from one transportation mode to another – for example, land/water interfaces.

•• Political boundaries that create complications of customs clearance, tariffs, duties, administration, and the like. Such barriers have become increasingly significant as economic activity has become more globalized.

DistributorManufacturer

Logistics service providers and carriers

Tier 3 suppliers

Tier 2 suppliers

Tier 1 suppliers

Tier 1 customers

Tier 2 customers

Tier 3 customers

Flows of materials and products

Flows of information (including customer orders)

Figure 17.1 Logistics and distribution in the production circuit

Source: based, in part, on Schary and Skjøtt-Larsen, 2001: Figure 1.6

17_Dicken-7E_Ch-17.indd 541 18/11/2014 11:03:19 AM

PART FOUR THE PICTURE IN DIFFERENT SECTORS542

Hence, as Figure 17.2 shows, there are many stages in the process of getting prod- ucts to their final market:

A typical door-to-door journey for containerised international ship- ments involves the interaction of approximately 25 different stake- holders, generates 30–40 documents, uses two to three different transport modes and is handled in 12–15 physical locations.5

However, the more extended a production circuit becomes – both organization- ally and geographically – the greater the potential problems. For example:

Companies deciding to source in China rather than producing in- house may think they are adding a single link to their supply chain … In fact, they are probably adding at least five: the production agent in China, a logistics company in China, China customs, the freight ship- per, customs and transport in the domestic market.6

The logistics and distribution processes shown in Figures 17.1 and 17.2 can be performed in a variety of ways and by a variety of organizational forms. At one extreme, each individual transaction may be performed by a separate firm; at the other extreme, the entire process may be carried out by a single integrated firm or related group of firms. Between these two ends of the spectrum there is, of course, a shifting of positions as circumstances change. However, there is a very clear trend towards greater outsourcing of logistics functions.7

The major types of organization involved in logistics and distribution include:

•• transportation companies •• logistics service providers (LSPs)

Local

transport

Customs:

import

clearance

Customs:

export

clearance

Local

transport

Customer Freight forwarder/

third party logistics provider

Carrier Freight forwarder/

third party logistics provider

Exporter

PortPort

Figure 17.2 Logistics processes in a transnational context

Source: adapted from Schary and Skjøtt-Larsen, 2001: Figure 11.7

17_Dicken-7E_Ch-17.indd 542 18/11/2014 11:03:19 AM

LOGISTICS AND DISTRIBUTION SERVICES 543

•• wholesalers •• trading companies •• retailers •• e-tailers.

Transportation companies (rail, road, shipping, airlines), wholesalers and retailers perform fairly clearly defined and restricted roles in the production circuit. On the other hand, trading companies and the more recent specialist logistics service providers perform a far broader range of activities. Not only are the boundaries between these types of organization often blurred, but also one form of organiza- tion may mutate into another, as we will see later in this chapter. At the same time, the significance of some types of intermediary has changed.

For example, traditionally, the wholesaler played a major role in collecting materials or products from a range of individual producers and then distributing them to the next stage of the production process, or to the retailer in the case of final demand. However, the importance of the wholesaler as the key inter- mediary has changed substantially as the major retailers have bypassed whole- salers to deal directly with the manufacturer, or as other forms of logistics and distribution services have developed. In a similar way, the development of e-commerce makes it possible to bypass the traditional retailer as the key inter- mediary between producer and final consumer and to create a new type of retailer: the e-tailer. Figure 17.3 shows just one way in which the production/ supply circuit may be organized.

Figure 17.3 A potential way of organizing logistics services

Source: adapted from Schary and Skjøtt-Larsen, 2001: Figure 7.4

Supplier Customer

Lead logistics provider

Asset-based

provider

Information

services Carrier

DC services

Local transport

Parcel service

Tier 1

Tier 2

Tier 3

17_Dicken-7E_Ch-17.indd 543 18/11/2014 11:03:19 AM

PART FOUR THE PICTURE IN DIFFERENT SECTORS544

THE DYNAMICS OF THE MARKET FOR LOGISTICS SERVICES

In aggregate terms, the growth of the market for logistics and distribution ser- vices is closely related to growth in the economy as a whole. Hence, the 2008 economic recession had a huge impact, reducing demand for transportation and logistics services and putting on hold some major infrastructural projects in ports and other transportation and communications hubs and routes. But beyond this cyclical variation in demand, the market for logistics and distribution services is highly heterogeneous. Demand for some kinds of distribution services has grown more rapidly than others.

Ultimately, as Figure 17.1 shows, the system is driven by the demands of the final consumer, although this influence becomes increasingly indirect the further back up the production circuit we go. Although the primary driver of final con- sumer demand is the level of disposable income, consumption, as we have dis- cussed at various points in this book, is an immensely complex socio-cultural process. The intensely competitive retail markets have major repercussions on the demand for distribution and logistics services further up the production circuit. As we saw in the agro-food (Chapter 13) and clothing (Chapter 14) industries, the major retailers and buyers exert intense pressure on their suppliers to deliver more rapidly, more cheaply and in greater variety. This, in turn, creates opportunities (and challenges) for the suppliers of logistics and distribution services to provide a faster and more integrated supply system between the different components of the production circuit.

The enhanced power of the major retailers greatly affects the logistics firms responsible for getting the products to the retail stores:

A shifting power structure in the retail trade not only changes market shares but also the structure of the distribution network. The major international retail customers ask for customized logistics solutions across borders. Apart from negotiating frame orders with significant price advantages with suppliers, the most powerful retailers also require information sharing services, such as electronic data inter- change, advance shipping notices via the Internet and track and trace capabilities. They typically prefer delivery to their own distribution centers where goods are consolidated with other products for delivery to their retail stores.8

In effect, there has been a pronounced shift from ‘supply push’ to ‘demand pull’, a shift which generates pressure to develop new logistics systems. Hence, there is a link between the changing demand pressures on the suppliers of logistics and distri- bution services and changing technologies. Let us now look at these technologies.

17_Dicken-7E_Ch-17.indd 544 18/11/2014 11:03:19 AM

LOGISTICS AND DISTRIBUTION SERVICES 545

TECHNOLOGICAL INNOVATION AND LOGISTICS AND DISTRIBUTION SERVICES

Three criteria dominate the logistics and distribution services:

•• speed •• flexibility •• reliability.

Technological innovations have revolutionized all three. At a general level, techno- logical developments in transportation and communication have been immensely important in transforming the basic time–space infrastructure of the logistics and distribution industries. Likewise, these industries have also been revolutionized by the shift in process technologies from mass production to more flexible and cus- tomized production systems. The mass production systems of the late nineteenth and first two-thirds of the twentieth century were facilitated by mass distribution systems, based on rapidly developing rail, road and ocean shipping networks (see Chapter 4).

Such mass distribution systems depended heavily on the use of large ware- houses to store components and products and from which deliveries were made to customers on an infrequent basis. This was an immensely expensive system in terms of the capital tied up in large inventories. It was also, very often, a source of waste in terms of faulty products that were not discovered until they were actually used. Together with a major shift towards lean, JIT, systems of production, there has also been a parallel shift towards lean systems of distribution, whose purpose is to minimize the time and cost involved in moving products between suppliers and customers, including the holding of inventory.

Three key elements form the core of such lean distribution systems:9

•• Electronic data interchange (EDI). This enables the rapid transmission of large quantities of data electronically (rather than using paper documents). Such data can encompass all aspects of the logistics and distribution system throughout the production circuit, including the retailer. Information on product specifi- cations, purchase orders, invoices, status of the transaction, location of the ship- ments, delivery schedules, and so on can be exchanged instantly. EDI requires a common software platform to enable data to be read by all participants in the chain.

•• Bar code systems and radio frequency identification technology. Bar codes were first developed in the 1970s by grocery manufacturers and food chain stores to enable each item to be given a unique, electronically readable identity. They are now ubiquitous throughout the production circuit: ‘Bar codes permit organizations to handle effectively the kind of vast product differentiation that

17_Dicken-7E_Ch-17.indd 545 18/11/2014 11:03:19 AM

PART FOUR THE PICTURE IN DIFFERENT SECTORS546

would have been prohibitively expensive in an earlier era. They also facilitate instantaneous information at the point of sale, with significant effects on inventory management and logistics.’10 Radio frequency identification (RFID) technology greatly increases the sophistication and flexibility of the bar code principle. Bar codes can be difficult to read (they require a clear line of sight). RFID technology gets around this by using small radio tags that allow goods to be tracked continuously throughout their progression through a production circuit. By combining the tag with a unique electronic product code (EPC) it becomes possible to incorporate a large quantity of information about each object. One observer (admittedly with a vested interest in RFID technology) described it as ‘a bar code on steroids’.11

•• Distribution centres. Modern distribution centres hold inventory for much shorter periods of time and turn it over very rapidly: ‘Four technologies have made the modern distribution centre possible: (1) bar codes and associated software systems; (2) high-speed conveyers with advanced routing and switch- ing controls; (3) increased reliability and accuracy of laser scanning of incom- ing containers; and (4) increased computing capacities.’12 In the most advanced distribution centres – such as the system used by the US retailer Wal-Mart – a method known as ‘cross-docking’ is used. This is a ‘largely invisible logistics technique … [in which] … goods are continuously delivered to Wal-Mart’s warehouses, where they are selected, repacked, and then dispatched to stores, often without ever sitting in inventory. Instead of spending valuable time in the warehouse, goods just cross from one loading dock to another in 48 hours or less. Cross-docking enables Wal-Mart to achieve economies that come with purchasing full truckloads of goods while avoiding the usual inventory and handling costs.’13

Computer-based electronic information systems are at the heart of all three of these technological developments in logistics and distribution systems. They have evolved over a period of 30 years, often incrementally rather than as a spectacular ‘revolution’. Now, however,

[l]iterally every item in motion in the physical flows of the global economy can be (and often is) tagged with detailed digital informa- tion about its origin, contents and destination and is already deeply integrated into factory production schedules or retail sales.14

E-commerce: a logistics revolution The later 1990s brought into existence an entirely new set of distribution methods based upon the Internet: e-commerce. In essence, e-commerce has developed out of the convergence of several technological strands: EDI, the Internet, e-mail and

17_Dicken-7E_Ch-17.indd 546 18/11/2014 11:03:19 AM

LOGISTICS AND DISTRIBUTION SERVICES 547

the medium of the World Wide Web (WWW).15 The e-commerce revolution has changed the world of distribution and the main reason, once again, is speed.

Although four types of e-commerce are shown in Figure 17.4, two dominate:

•• B2B (business-to-business). This encompasses potentially the whole range of trans- actions between businesses, notably procurement of products and services and logistics. B2B websites are electronic ‘marketplaces’ where firms come together to buy or sell products and services. They may be ‘vertical’: that is, industry spe- cific. One example is the B2B procurement system, Covisint, established in 2000 by General Motors and Ford, together with some other automobile manufactur- ers, to increase the efficiency of component purchasing. Covisint is now a diver- sified cloud computing company involved in a wide range of sectors. Alternatively, B2B websites may be ‘horizontal’, organized around the products and services provided rather than the industry. Connecting together large numbers of buyers and sellers through electronically automated transactions has a number of poten- tial benefits, notably vastly increasing choice to both sellers and buyers, saving costs on transactions, and increasing the transparency of the entire supply chain.

•• B2C (business-to-consumer). B2C business is the selling of consumer products and services directly over the Internet by a Web-based firm. The pioneers included Amazon, eBay and Dell but, of course, the dotcom revolution created millions of ‘e-tailers’, some with a very short life. E-tailing has also been adopted by the traditional retailers. Indeed, contrary to predictions that traditional retailers would be adversely affected by Internet shopping, the opposite has occurred, especially with the development of comparison sites which allow customers to

Figure 17.4 Types of e-commerce

Source: based, in part, on Gereffi, 2001: Figure 2

Internet equipment suppliers

PC manufacturers & component suppliers

PC and E-business software

Web browsers

Internet Service Providers (ISPs)

Internet Content Providers (ICPs)

Customers

Businesses (B2B)

Consumers (B2C)

B2B

Business

B u

si n

e ss

Consumer

C o

n su

m e

r C2B

B2C

C2C

On-line procurement

e.g. job auctions, consumer bidding for services

On-line consumer purchasing

e.g. consumer auctions, classified ads.

Purchaser

S u

p p

li er

Types of e-commerce

The major components of e-commerce organization

17_Dicken-7E_Ch-17.indd 547 18/11/2014 11:03:20 AM

PART FOUR THE PICTURE IN DIFFERENT SECTORS548

compare products and prices and read reviews. The potential benefits of B2C transactions are, to the consumer, greater choice, ease of comparison of prices, instant (or very fast) delivery to the home or on a click-and-collect basis from a local store, and, to the seller, direct access to a massive potential market with- out the need for physical space in the form of retail outlets and the associated inventory and staffing costs. As a result, online shopping has grown extremely rapidly. One estimate is that in the UK it accounted for 12.7 per cent of total retail sales in 2012; in the USA for around 9 per cent.16

E-commerce (both B2B and B2C) has enormous potential implications for the traditional intermediaries of business and retail transactions. Early predictions were that many would disappear as their functions were displaced by direct online transactions. In fact, this has not happened to anything like the extent predicted. On the contrary, e-commerce has actually enhanced opportunities for such roles and created entirely new Internet-based service companies. Some traditional intermediaries have adapted and found new ways of adding value as providers of logistics, information and financial services; new intermediar- ies have emerged.17 Some of these are what are sometimes termed infomediaries, notably the Internet service and content providers shown in Figure 17.4. Figure 17.5 shows that in the case of both physical goods and electronic goods and services, either old intermediaries transform themselves or new ones appear. As in financial services (Chapter 16), both disintermediation and reintermediation occur simultaneously.

Conventional system

E-commerce in physical goods

E-commerce in electronic goods and services

Supplier Intermediary Producer/provider Intermediary Customer

Old intermediary

New or old intermediary

Physical goods

Electronic goods / services

‘Physicalized’ information

Electronic information

Figure 17.5 The continuing role of intermediaries in an e-commerce world

Source: based on Kenney and Curry, 2001: Figure 3.2

17_Dicken-7E_Ch-17.indd 548 18/11/2014 11:03:20 AM

LOGISTICS AND DISTRIBUTION SERVICES 549

•• ‘Dell’ model. The supplier receives orders for specific products, which are then integrated directly into production: ‘The customer order activates the supply chain. Customers can “design” their products from a list of options to be incorporated into a production schedule. The order then initiates a flow of component parts from suppliers to be assembled into a final product, turned over to a logistics service provider, merged with a monitor from another source and delivered to a final customer. The system avoids holding finished product inventory, providing both lower cost and more product variety.’19

•• Drop shipment model. The e-commerce firm receives an order and passes on the order to a manufacturer for production and delivery direct to the customer from the manufacturer.

•• ‘Amazon’ model. This is the electronic version of an old mode of direct retailing where a ‘catalogue’ of products is held electronically and accessed via the Internet. Customer orders are either fulfilled by the seller from its own distri- bution centre or ‘drop-shipped’ direct from the manufacturer or other provider.

•• Bricks-and-mortar model. This combines both conventional retail stores, fed by distribution centres, with an Internet website that channels orders to the same distribution centres. A problem with this system is that whereas retail orders generally require large orders, individual Internet-based orders require indi- vidual units.

Manufacturer Fulfilment centre

E-commerce site Distribution centre

Customer Physical flow

Retailer Information flow

InventoryE

Home delivery

model

Inventory-pooling

model

Bricks-and-mortar

model

E C

‘Amazon’

model

Drop-shipment

model

M C

Su p

p lie

‘Dell’

model

Figure 17.6 Methods of fulfilling e-commerce orders

Source: based, in part, on Schary and Skjott-Larsen, 2001: Figure 4.5

Related to the perception that e-commerce spells the end for the traditional inter- mediary organization is the idea that traditional physical infrastructures will also be displaced. Again, this is an illusion. As Figure 17.6 shows, there are several ways of fulfilling e-commerce orders:18

17_Dicken-7E_Ch-17.indd 549 18/11/2014 11:03:20 AM

PART FOUR THE PICTURE IN DIFFERENT SECTORS550

•• Inventory-pooling model. This enables customers in a specific industry to acquire common components from an inventory pool controlled by a Web-based provider.

•• Home delivery model. Customers requiring regular deliveries of, say, groceries, can place their order with a Web-based service which will deliver on a routine basis to the customer’s home address.

Thus, a whole variety of technological developments has transformed the nature and operations of the logistics and distribution industries. Initially, in the early twentieth century, they were the technologies that enabled mass distribution sys- tems to facilitate the output of the mass production systems of the day. By the last two decades of the twentieth century, the technologies had become predominantly electronic. Such technologies facilitate the operations of more flexible production systems through their ability to transmit and process vast quantities of information on all aspects of the supply circuit. Increasingly, these processes take place in the ‘cloud’ (see Chapter 4).

THE ROLE OF THE STATE: REGULATION AND DEREGULATION OF LOGISTICS AND DISTRIBUTION SERVICES

There is a significant obstacle to the smooth, seamless operation of the kinds of logistics and distribution systems made possible by these technological innovations: the existence of state regulatory regimes. By definition, transnational production and distribution involve crossing political boundaries. All national governments regulate, in various ways, the cross-border movement of goods and services. We have discussed one aspect of this in Chapter 6 and in the other case study chapters: the variety of trade measures (both tariff and non-tariff barriers, including customs requirements and procedures) that states use. The existence of such regulations creates major discontinuities in the geographical surface over which distribution services operate (see Figure 17.2).

In this section, we are concerned with the regulatory structures affecting the basic functions of the logistics and distribution services themselves, especially transportation and communication systems. Such regulations are implemented at various political–geographical scales: international, regional and national. In the past three decades, in particular, there have been major waves of deregulation.

Regulation and deregulation of transportation and communication systems Regulation of transportation and of communications has a very long history.20 It has involved a varying mix of national and international level systems in the

17_Dicken-7E_Ch-17.indd 550 18/11/2014 11:03:20 AM

LOGISTICS AND DISTRIBUTION SERVICES 551

public sphere, as well as private organizations in the form of the operators them- selves. Much of the regulatory system in air and sea transportation relates to issues of safety and security, while in communications a key issue is harmonization of standards to enable communications originating in one place to be received and understood in other places. International bodies such as the IMO (International Maritime Organization), the ICAO (International Civil Aviation Organization), and the ITU (International Telecommunication Union) are the primary players.

Within such international frameworks, individual national states have also regu- lated telecommunications and air transportation. These are both sectors in which states believe (or have believed until recently) that ‘natural monopolies’ exist. For example,

telecommunications’ regulation contains one of the earliest examples of international regulatory cooperation between states, with the crea- tion of the International Telegraphic Union (ITgU) in 1865. But in other respects the regulation of telecommunications is a story of ter- ritorial containment. Much of the early regulatory development in the first half of the twentieth century was influenced by the economic view that telecommunications is a ‘natural monopoly’. But no state thinks that there should be one world monopolist. Instead, the con- tours of this natural monopoly correspond with state boundaries.21

In most cases this involved state ownership, although in the USA it was a private monopoly, AT&T.

Similarly in the air transportation industry,

just as almost every nation ha[d] its telecommunications carrier (and rarely more than one), almost every nation ha[d] a flagship airline (and rarely more than one). The state controls landing rights (just as it tends to control the telecommunications infrastructure) and rations those rights, usually in ways that favour the national flag-carrier.22

In both cases, the operation of the regulatory framework has involved a tension between

•• the desire on the part of most states for control over their own national spaces and;

•• the drive (primarily by business organizations) for the least possible regulation consistent with safety and efficiency.

As globalizing processes have intensified, however, the balance has shifted deci- sively towards greater deregulation of the nationally based systems and the privati- zation of state-owned companies. In the case of telecommunications, the initial moves came in the USA, with the enforced break-up of the AT&T monopoly in

17_Dicken-7E_Ch-17.indd 551 18/11/2014 11:03:20 AM

PART FOUR THE PICTURE IN DIFFERENT SECTORS552

the early 1980s. The US example stimulated a wave of European deregulation in telecommunications during the 1980s, led by the UK’s Thatcher government.

The air transportation industry has experienced a similar wave of deregulation. Again, the early moves began in the USA. In the late 1970s, a US–UK bilateral agreement was signed which helped to undermine the cartelization of the airline industry within IATA. In 1978, the US domestic airline industry was deregulated. Subsequently,

both the US and the UK then set about reshaping their bilateral agreements towards more liberal policies. For example, France has been the most vigorous opponent of liberalization, so the US worked at isolating France by negotiating open-skies agreements with Belgium and other countries around France … In short, the process in the 1990s is US-led liberalization that is seeing the world become gradually and chaotically more competitive. The process is chaotic because even the most liberal states, such as the US and UK … are ‘liberal mercantilists’ … Another chaotic element is that many European, African, and South American states support liberalization within their continents but want protection from competition outside the continent (especially from the US).23

The continuing tensions between states in terms of their own air spaces (and often their ‘national’ airlines) has important implications for logistics and distribution ser- vices. Two examples illustrate this. First, the continuing disagreement between the USA and the UK over mutual access over the North Atlantic route means that, on the one hand, US airlines have restricted access to London Heathrow while, on the other, British airlines are not allowed to fly routes onwards within the USA beyond their initial point of entry. This also means that the US company FedEx has been unable to operate a fully fledged operation from its UK base at Stansted; it is allowed to fly from the USA to Stansted but only to a small number of destinations from there. Instead, it has to charter planes to fly from the UK to Paris to connect with its European hub.24

A second example is the now resolved dispute between the USA and Hong Kong, which was especially important for the large express couriers (FedEx, DHL and UPS). The US company FedEx was allowed only five flights a week from Hong Kong to destinations outside the USA. This was because Hong Kong wanted its airline, Cathay Pacific, to be able to fly within, as well as to, the USA (which it refused to allow). The agreement signed in 2002 increased the daily flights for all-cargo carriers from 8 to 64, phased in over three years, although Cathay Pacific insisted that the agreement over-benefited US carriers.25

Some of the biggest changes in the regulatory environment affecting the logistics industries have resulted from the emergence of regional economic blocs, such as the EU and the NAFTA. The completion of the Single European Market in 1992 removed virtually all obstacles to internal movement of goods and services within

17_Dicken-7E_Ch-17.indd 552 18/11/2014 11:03:20 AM

LOGISTICS AND DISTRIBUTION SERVICES 553

the EU. Liberalization of trucking within and between the USA, Canada and Mexico was also a part of the NAFTA. Under this 1994 agreement, the US and Mexican border states were to be opened to international trucking by the end of 1995. By January 1997, Mexican trucking companies would be allowed to operate as domestic carriers in the border states and for international cargo in the rest of the USA and, by January 2000, they would be able to file to operate in the entire USA. In fact this did not happen. Not until 2004 did the US Supreme Court overthrow the opposition of the House of Representatives to Mexican and US truckers oper- ating in each other’s domestic markets. In fact, it still did not happen. In 2009, Mexico retaliated with tariffs against US products because of the continued failure to implement the NAFTA. Finally, in 2011, some 16 years late, an agreement was reached, though not without huge opposition from some groups in the USA.

Regulating transportation and communication systems is not easy, given the num- ber of conflicting interests involved. But it is far easier than regulating the Internet. As a medium that ‘knows no boundaries’ and that is allegedly (although, as we have seen, not actually) ‘placeless’, it involves some intractable issues as to who regulates it. The answer is far from clear, not least because of the very newness of the Internet and e-commerce and its phenomenally rapid growth. The key issue is ‘whose laws apply?’ when e-commerce transactions transcend different national jurisdictions.

CORPORATE STRATEGIES IN LOGISTICS AND DISTRIBUTION SERVICES

Logistics and distribution services cover an immensely wide range of activities and encompass a mix of traditional shipping and carriage of goods through to the highly complex and sophisticated logistics service providers (LSPs), from trading companies to large transnational retail chains. In this section we outline the major trends in corporate strategies as firms have responded to market, technological and regulatory forces. Although there are many niche areas within the distribu- tion sector, there is a broad tendency in most activities for the size of firms to be increasing and for higher degrees of concentration into a smaller number of large firms. Growth through merger and acquisition, and through network alliances, has been especially prominent in this sector as firms strive to provide global logistics services. This has meant that the names and identities of many firms are continu- ously changing. Table 17.1 lists the world’s 10 largest logistics firms.

Global logistics: from transportation companies to integrated logistics service providers As customer demands have become more complex (and more global), the provid- ers of logistics and distribution services have responded in a number of ways. Some

17_Dicken-7E_Ch-17.indd 553 18/11/2014 11:03:20 AM

PART FOUR THE PICTURE IN DIFFERENT SECTORS554

have diversified into complete ‘one-stop shops’; others have remained more nar- rowly focused on providing a limited range of functions. In both cases, the trend has been towards greater consolidation and concentration through acquisition and merger. Some examples illustrate this trend.

In the shipping sector, Maersk acquired Nedlloyd in 2005 to become the larg- est container operator in the world. In the logistics field, acquisitions and mergers have accelerated. For example, in 2000 Exel was formed from a merger of a ship- ping company, Ocean, and a contract logistics supplier, NFC. In 2004, Exel pur- chased the second-largest UK logistics company, Tibbett and Britton, to become the sector leader with 111,000 employees in more than 135 countries. In turn, in 2005, Deutsche Post World Net (owner of DHL, which it had acquired in 2003) acquired Exel. This created by far the world’s largest logistics service company, providing air freight, ocean freight and contract logistics services. The new group, DHL Logistics, employs over 280,000 people worldwide.

As a result of such developments, together with the movement of other service companies into logistics provision, we can identify four major types of logistics service firm (Figure 17.7), according to the kinds of physical and management services they provide:26

•• Traditional transportation and forwarding companies provide the simplest functions and are the longest established.

Table 17.1 Leading global logistics firms (ranked by revenue)

Company Country Revenue, 2011 ($m) Employment

Number of offices

Number of countries

DHL Logistics Germany 37,780 >280,000 c.18,000 >220

Kuehne & Nagel Switzerland 22,104 >63,000 >1,000 >100

DB Schenker

Logistics

Germany 19,685 94,600 >2,000 c.120

CEVA Logistics Netherlands 9,593 >51,000 n.d. >130

C H Robinson

Worldwide

USA 8,741 >15,000 >235 ex.

N. America

DSV Denmark 8,162 22,000 n.d. >70

Panalpina Switzerland 7,331 15,000 500 >90

SNCF Geodis France 6,200 >20,000 n.d. >50

Expeditors

International

USA 6,150 >13,000 >250 n.d.

UPS Supply

Chain Solutions

USA 6,058 n.d. n.d. >150

n.d. – no data. Source: based on material in www.supplychaindigital.com; company reports and websites

17_Dicken-7E_Ch-17.indd 554 18/11/2014 11:03:20 AM

LOGISTICS AND DISTRIBUTION SERVICES 555

•• Asset-based logistics providers first emerged during the 1980s, developing primar- ily from the diversification of some traditional transportation companies into more complex LSPs. Several of the world’s leading container-shipping compa- nies, such as Maersk-Sealand and Nedlloyd/P&O, moved in this direction. For example, in 1992 Nedlloyd took on responsibility for all of IBM’s distribution activities as part of its strategy to become a worldwide logistics provider.

•• Network-based logistics providers such as DHL, FedEx, UPS and TNT appeared on the international scene during the early 1990s:

These third-party logistics providers started as couriers and express par- cel companies and built up global transportation and communication networks to be able to expedite express shipments fast and reliably. Supplemental information services typically include electronic proof- of-delivery and track-and-trace options from sender to receiver … Recently, these players have moved into the time-sensitive and high- value-density third-party logistics market, such as electronics, spare parts, fashion goods and pharmaceuticals, and are competing with the tradi- tional asset-based logistics providers in these high margin markets.27

The nature of these logistics services demands geographically extensive, and tightly integrated, networks of operations. All the leading firms, therefore, have a global presence, each company operating global hub-and-spoke transportation networks, either owned by themselves or with partners.

•• Skill-based logistics providers became increasingly significant in the later 1990s. These are firms that do not own any major physical logistics assets but provide

Asset-based logistics providers

Traditional transportation and forwarding companies

Major functions

Warehousing

Transportation

Warehousing

Inventory management

Export documentation

Postponed manufacturing

Customs clearance

Skill-based logistics providers

Network-based logistics providers

Major functions

Management consultancy

Express shipments

Information services

Track and trace

Financial services

Electronic proof-of-delivery

Supply chain management

JIT deliveries

Solutions

P h

y si

c a

se rv

ic e

Management ser vices

Figure 17.7 Types of LSPs

Source: based, in part, on Schary and Skjott-Larsen, 2001: Figure 7.3

17_Dicken-7E_Ch-17.indd 555 18/11/2014 11:03:20 AM

PART FOUR THE PICTURE IN DIFFERENT SECTORS556

a range of primarily information-based logistics services. These encompass consultancy services (including supply chain configuration), financial services, IT services and a range of management expertise. Examples include GeoLogistics, a firm created in 1996 through the merger of three existing logistics companies (Bekins, LEP, Matrix) and recently rebranded as Agility, now the 12th-largest logistics company in the world.

Global trading companies Trading companies have a history going back many hundreds of years. From the earliest days of long-distance trade they played an especially important role in facilitating trade in materials and products. Here we look at two important con- temporary examples, both taken from East Asia.

The first example is the Japanese sogo shosha. The common translation of the term sogo shosha is ‘general trading companies’, but they are very much more than this, having been central to the development of the Japanese economy since the late nineteenth century.28 This was the true Japanese general trading oligopoly, each member of which had a major coordinating role within one of the Japanese keiretsu (see Figure 5.10). The five leading sogo shosha – Mitsubishi, Mitsui, Itochu, Marubeni, Sumitomo – operate a massive network of subsidiaries and thousands of related companies across the globe (Figure 17.8) and handle tens of thousands of different products.

Historically, the sogo shosha developed to organize exchange and distribution within the Japanese domestic market. Subsequently, they became the first Japanese companies to invest on a large scale outside Japan. These foreign investments were primarily designed to organize the flow of imports of much needed primary materials for the resource-poor Japanese economy and to channel Japanese exports of manufactures to overseas markets. It was the particular demands of these Japanese-focused trading activities that necessitated the development of the globally extensive networks of the sogo shosha. In other words, they were to set up a global marketing and economic intel- ligence network. Once in place, this network, with all its supporting facilities, not only facilitated the growth of Japanese trade, but also enabled a whole range of Japanese firms to venture overseas. Indeed, a good deal of the early overseas investment by Japanese manufacturing firms was organized by the sogo shosha.

Their four primary functions are:

•• trading and transactional intermediation: matching buyers and sellers in a long- term contractual relationship;

•• financial intermediation: serving as a risk buffer between suppliers and purchasers; •• information gathering: collecting and collating information on market conditions

throughout the world; •• organization and coordination of complex business systems: for example, major infra-

structural projects.

17_Dicken-7E_Ch-17.indd 556 18/11/2014 11:03:20 AM

LOGISTICS AND DISTRIBUTION SERVICES 557

1 10 100 500 2000

Number of employees

Figure 17.8 The global distribution of Japanese sogo shosha offices

Source: company reports

Product manufacturers

Raw materials producers

and materials manufacturers

Sales agents (wholesalers)

Retailers

Trading

Finance

Investment

Mitsubishi Corporation

Downstream (Products)

Upstream (Raw materials)

Personnel and management support Supply of raw materials Product sales

Value chain manager

Financial services provider

Strategic investor (dividends, equity in earnings)

Trading

Finance

Mitsubishi Corporation

Sales agents (wholesalers)

Manufacturers

Investment Invested to increase transactions Investment

Intermediary commissions

Extended credit (Shosha finance)

(a) Past business model

(b) Present business model

Major function: to act as intermediary in commercial transactions

Major function: to participate in entire value chain

Figure 17.9 Mitsubishi Corporation’s strategic shift

Source: Mitsubishi Corporation

17_Dicken-7E_Ch-17.indd 557 18/11/2014 11:03:21 AM

PART FOUR THE PICTURE IN DIFFERENT SECTORS558

As the position of the Japanese economy in the global system has changed, how- ever, the role of the sogo shosha has also had to change. In the early 1990s, they were responsible for roughly 70 per cent of total Japanese imports and for 40 per cent of Japanese exports. By the early 2000s, this had fallen to 22 per cent and 12 per cent respectively. Figure 17.9 shows one example: the changing strategies of the Mitsubishi Corporation as it has moved from acting primarily as an interme- diary in commercial transactions to participating in the entire value chain across a variety of sectors.

In 2013, each of the leading sogo shosha announced plans to shift the balance of their activities by accelerating ‘investments in unconventional areas such as food, retail and healthcare, as earnings from their mainstay energy and miner- als businesses suffer from across-the-board falls in commodity prices’.29 For example:

•• Mitsubishi Corp. said it would seek to double its earnings from non-natural resources businesses by about 2020 and aim at a 50:50 balance between resource and non-resource assets.

•• Marubeni Corp. announced a new medium-term strategy involving allocating 60 per cent of its budget over three years to non-resource assets, such as infra- structure, transportation, machinery and food.

The second example of a trading company, also taken from East Asia, is the Hong- Kong-based firm Li & Fung. This firm is not only the biggest export trading company in Hong Kong, but also – and more importantly – a sophisticated logistics company, with offices spread across over 40 countries (see Figure 17.10), employing more than 28,000 people. Established in Canton in 1906, Li & Fung was originally a simple commodity broker, connecting buyers and sellers for a fee. Today, although still a Chinese family firm, it has been transformed from the simple brokerage to an immensely sophisticated organizer of geographically dispersed manufacturing and distribution operations, still with a strong speciali- zation in garments (see Chapter 14) but increasingly in a whole variety of other consumer goods:

Li & Fung provides sophisticated, one-stop-shop supply chain solu- tions to meet customers’ specific needs. From product design, raw material sourcing and production management to quality control, logistics, shipping and other important functions, its spectrum of ser- vices covers the entire supply chain end-to-end.30

These two examples show that traditional trading companies have carved out new roles for themselves, both responding to and creating new demands for distribu- tion and logistics services.

17_Dicken-7E_Ch-17.indd 558 18/11/2014 11:03:21 AM

LOGISTICS AND DISTRIBUTION SERVICES 559

Globalizing retailers Retailing is the final link in the production circuit. As such, it is extremely sensi- tive to the specific characteristics of the consumer markets it serves. Consumer markets continue to have a high degree of individuality, despite the apparent uni- versalization of some types of consumer preference. Consequently, retailing has always had – and continues to have – a strong local orientation, although retailers invariably source their products from a much broader spectrum of geographical locations. A few retailers moved into foreign markets at a relatively early stage in their development. One of the pioneers was the US company F.W. Woolworth, which opened stores in Canada in 1897, in the UK in 1909 and in Germany in 1926. Indeed, so familiar did Woolworths become in most big cities in the UK that few of its customers realized it was a foreign firm. But this was an exceptional case. For the most part, retailers were very reluctant entrants into foreign markets. Where they did so, it was usually into geographically and/or culturally proximate locations.

But there has been a marked acceleration in the transnational activities of major retailers in recent years.31 Table 17.2 lists the world’s leading transnational retailers ranked by their international sales volume. The list includes the big food retailers discussed in Chapter 13 (see Figures 13.8 and 13.9). It is significant that only five of the top twenty transnational retailers are from the USA; many very large US retailers remain entirely domestically oriented.

Figure 17.10 The global spread of the offices of Li & Fung

Source: Li & Fung

17_Dicken-7E_Ch-17.indd 559 18/11/2014 11:03:22 AM

PART FOUR THE PICTURE IN DIFFERENT SECTORS560

Table 17.2 The world’s leading transnational retailers, 2012 (ranked by international sales volume)

Company Headquarters International sales (US$m)

Percentage of total sales

No. of countries

Wal-Mart USA 121,456 28 14

Carrefour France 62,715 55 26

Metro Germany 53,856 61 33

Ahold Netherlands 51,590 77 10

Schwartz Germany 42,872 52 23

Auchan France 41,254 60 11

Aldi Germany 37,847 52 16

IKEA Sweden 35,314 94 33

Tesco UK 33,930 35 11

Seven & I Japan 31,036 30 16

Amazon USA 26,602 54 29

Costco USA 24,010 27 9

Casino France 20,185 45 11

Rewe Germany 17,824 28 11

H & M Sweden 16,419 94 28

Delhaize Belgium 16,274 77 11

Apple USA 14,065 44 19

Inditex Spain 13,685 73 40

Best Buy USA 11,535 25 6

Kering France 10,637 94 102

Source: data supplied by Neil Coe

Transnational retailing

Impact on logistics service providers

Selling products to the final consumer in different

geographical markets

Sourcing products from geographically-dispersed

suppliers Power relations

Figure 17.11 Two dimensions of transnational retailing

Transnational retailing has two main dimensions: selling products and sourcing products (Figure 17.11).

Selling products in transnational markets involves setting up a new store, merg- ing with or acquiring an existing retailer in a target market, or setting up a joint

17_Dicken-7E_Ch-17.indd 560 18/11/2014 11:03:22 AM

LOGISTICS AND DISTRIBUTION SERVICES 561

venture with a local firm. The latter two modes have been by far the most prevalent. In some cases, this is because local regulations restricted direct entry. The major retail chains have shown a particular propensity to invest heavily in the emerging markets of East and South Asia, Latin America and Eastern Europe.

The core of this process involves four major types of transfer into a new market:32

•• Transfer of the total culture and business model of the firm: ‘All aspects of the culture and business model of the retailer are transferred to the host retail economy when retailers decide that they are international firms with internationalization integrated into their strategy. Within Tesco, for example, this has become known as “Tesco in a Box”’ (p. 389).

•• Transfer of the capability to adapt to the market: ‘Retailing is a response to culture. An international retailer, in order to be successful, has to adapt to the consumer culture in the market … Adaptation involves not only the understanding of the difference between home and host country but also the differences in consumer culture within the host country … The absence of this capability either in the firm generally (Boots, Marks and Spencer) or in the transfers to a particular country (Ahold in China, Carrefour in Japan and in the USA, IKEA’s original entry to Japan, Wal-Mart in Germany) is one of the reasons for “failed” international retailing’ (p. 390).

•• Transfer of operational techniques of retailing: ‘The operations of an international retailer (the formula of the retailer) interact with and become part of the structure of the total retail system … A firm may use different entry and growth mecha- nisms with acquisitions, joint ventures, agents and merchandising agreements with consequential different types of transfer of operations in each case’ (p. 391).

•• Transfer of consumer values and expectations: ‘Retailers create consumption in addition to responding to consumer needs. In a foreign market international retailing often brings to a country new consumer values and expectations. These in turn change the ways that consumers behave … The retailer helps to create the consumer culture and in doing this delivers changes in lifestyle … In countries where consumption cultures have been weak for an extended period, for example in Central and Eastern Europe, and in cultures where there is rapid change in consumption culture, for example, East Asia, then the foreign retailer, with a clearly defined formula, generates a substantial impact on consumer values and expectations’ (pp. 391, 392).

Sourcing of products is the second dimension of transnational retailing shown in Figure 17.11. We referred to this process in the case of food retailing and clothing in Chapters 13 and 14. But there has been a general trend across virtually all retail sectors for firms to increase the geographical extent of their sourcing systems as well as to extend their power and influence over their sup- pliers. As a result retail supply and logistics networks have been transformed in the following ways:33

17_Dicken-7E_Ch-17.indd 561 18/11/2014 11:03:22 AM

PART FOUR THE PICTURE IN DIFFERENT SECTORS562

•• Centralization: the establishment of centralized distribution centres, distribu- tion systems and buying activities.

•• Upgrading of logistics systems: adoption of sophisticated logistics technologies and management systems, including electronic data exchange, vendor management inventory, etc.

•• A shift from traditional to specialized/dedicated procurement agents: switch away from use of wholesalers to specialized procurement agents, often involving contrac- tual-type relationships with suppliers.

•• A shift towards preferred supplier systems: the use of a smaller number of suppliers willing/able to meet the stringent standards of quality, price and speed and flexibility of delivery.

•• Increased use of quasi-formal and formal contracts: to increase control and ensure on-time delivery.

•• Imposition of private standards: adoption of private, rather than public, standards of quality and/or safety.

LOGISTICS ‘PLACES’: KEY GEOGRAPHICAL NODES ON THE GLOBAL LOGISTICS MAP

These developments in the global logistics industries have highly distinctive geog- raphies, which help to shape their activities and are also shaped by them. For example, among the thousands of seaports and airports across the world, a few key nodes have become increasingly important. They reflect three sets of forces:

•• Their position in the twenty-first-century global economy, especially in light of the global shifts in economic activities we have been discussing throughout this book.

•• The strategies of states in investing in port, airport and IT facilities: for exam- ple, the highly focused investment strategies of the Singaporean government to create a ‘globally-integrated logistics hub’:

an integrated IT platform that manages the flow of trade-related infor- mation … will enable exchange of information between shippers, freight forwarders, carriers and financial institutions to facilitate the flow of goods within, through and out of Singapore … The government will invest up to S$50 million over five years to develop the platform.34

Other states are pursuing broadly similar strategies to develop their logistics capabilities.35

•• The strategies of the major logistics firms in creating their own globally- dispersed operations and choosing certain key places as their ‘hubs’.

17_Dicken-7E_Ch-17.indd 562 18/11/2014 11:03:22 AM

LOGISTICS AND DISTRIBUTION SERVICES 563

Figures 17.12 and 17.13 show two examples of these trends. The emergence of East Asia as the most dynamic economic region in the world is clearly reflected in Figure 17.12. No fewer than 14 of the 20 leading container ports are located in East Asia, 8 of them in China (excluding Hong Kong). None of

Figure 17.12 The leading world container hubs

Source: based on World Shipping Council data

Shanghai

Singapore

2 Hong Kong

Shenzhen

Busan

Ningbo- Zhoushan

Guangzhou

Qingdao

Dubai

Tianjin

Rotterdam

Port Kelang

Kaohsiung

Hamburg

Antwerp

Dalian

Tanjung Pelepas

Los Angeles

Xiamen

Bremerhaven

Rank 1 TEU = 1 20-foot container

32.6

Top 20 container ports, 2012

(million TEUs)

Hong Kong

Memphis

Shanghai

Anchorage

4 Incheon

Paris

6 Frankfurt

Dubai

8 Louisville

Tokyo

Singapore

11Miami

Los Angeles

Beijing

Taipei

London

Amsterdam

17 New York

Bangkok

Chicago

Rank

2 1

Top 20 cargo airports, 2011

(million tonnes)

Figure 17.13 The leading world cargo airports

Source: based on Airports Council International data

17_Dicken-7E_Ch-17.indd 563 18/11/2014 11:03:24 AM

PART FOUR THE PICTURE IN DIFFERENT SECTORS564

them was in the top ten in 1995; now six of them are. Conversely, the leading European container ports – Rotterdam and Hamburg – have fallen down the rankings.

The global map of leading cargo airports (Figure 17.13) has some features in common with the container ports map. Certain key cities, for example Hong Kong, Shanghai, Tokyo, Singapore, Los Angeles, Dubai, have developed as leading air cargo hubs as well as major container ports. They are, indeed, key geographical nodes on the global logistics map. But there are other leading cargo airports that are quite different. They are the strategic hubs of the leading specialist freight and logistics firms themselves. The place of Memphis, Tennessee, as the world’s second- biggest cargo airport is entirely due to its role as FedEx’s main hub. In similar vein, Louisville, Kentucky, is the main hub of UPS. The importance of Anchorage Airport in Alaska, likewise, is attributable to its role as a key hub for FedEx and UPS in their links with China. Leipzig, in Germany, is likely to join this group in the future: DHL opened its principal European hub there in 2008, replacing its former hub in Brussels.

NOTES

1 Coe (2014) provides an excellent review of the logistics industries in the context of GPNs. See also Wrigley (2000).

2 Coe (2014: 225). 3 Schoenberger (2000). 4 Min and Keebler (2001: 265). 5 OECD (2004: 178). 6 Financial Times (25 August 2005). 7 Coe (2014: 228). 8 Schary and Skjøtt-Larsen (2001: 129). 9 Abernathy et al. (1999: chapter 4). 10 Abernathy et al. (1999: 61). 11 Quoted in the Financial Times (20 April 2005). 12 Abernathy et al. (1999: 66). 13 Stalk et al. (1998: 58). 14 Zook and Shelton (2012: 43). 15 Leinbach (2001: 15). 16 Centre for Retail Research (2013), www.retailresearch.org/onlineretailing.php. 17 US Department of Commerce (2000: 18). 18 Schary and Skjøtt-Larsen (2001: 132–6). 19 Schary and Skjøtt-Larsen (2001: 132). See also Fields (2004). 20 See Braithwaite and Drahos (2000). 21 Braithwaite and Drahos (2000: 322). 22 Braithwaite and Drahos (2000: 454). 23 Braithwaite and Drahos (2000: 456–7).

17_Dicken-7E_Ch-17.indd 564 18/11/2014 11:03:26 AM

LOGISTICS AND DISTRIBUTION SERVICES 565

24 The Sunday Times (23 January 2005). 25 Commercial Aviation Today (21 October 2002). 26 This section is based primarily on Schary and Skjøtt-Larsen (2001: 230–41). 27 Schary and Skjøtt-Larsen (2001: 231). 28 See Dicken and Miyamachi (1998). 29 Financial Times (9 May 2013). 30 Company website, www.lifung.com/eng/company. 31 Coe and Wrigley (2009), Dawson (2007). 32 Dawson (2007: 388–92). Numbers in parentheses refer to pages in this work. 33 Coe and Wrigley (2009). 34 Singapore Economic Development Board, June 2004. 35 Wang and Cheng (2010) provide a detailed analysis of the transition of the port of

Hong Kong from a hub port city to a ‘global supply chain management centre’.

Want to know more about this chapter? Visit the companion website at www.guilford.com/dickenGS7 for free access to author videos, suggested reading and practice questions to further enhance your study.

17_Dicken-7E_Ch-17.indd 565 18/11/2014 11:03:26 AM