Development and Implications of Surveys of Logistics and Supply Chain Management in Estonia during 2005-2018

Abstract

Logistics and Supply Chain Management (SCM) are vital factors in business and international trade. Due to their strategic importance, the measurement and evaluation of these disciplines have become of increasing interest to practitioners and logistics researchers.

Logistics / SCM performance refers to the capability of a system to meet customer requirements and ensure the availability of tradable goods and timely deliveries in a cost-effective manner. The study of logistics / SCM performance at the macro level (of a country or region) is usually based either on the use of available macroeconomic statistical data (e.g., national statistics) or on the collection of relevant data first hand from local shippers and/or logistics service providers through questionnaires.

The given research focuses on the investigation of the logistics performance of Estonian companies during the period 2005-2018, based on a set of three consecutive large-scale Internet questionnaire-based studies conducted at 5-year intervals among local manufacturing, trade (including wholesale and retail) and logistics companies in 2007, 2012/13 and 2018. The survey samples included 2960 Estonian-based companies in 2007, 5000 in 2012/13, and 2520 in 2018, resulting in 186, 97, and 151 answered questionnaires, respectively, on the processing and interpretation of which the research results and conclusions are based.

The main research question is aimed at finding out what the main development trends in logistics / SCM of Estonian companies were during 2007-2018. Answering this question involves several dimensions of logistics operations, including operating conditions in the local market, respondents' self-assessment of the impact of logistics on their business performance and competitiveness, logistics costs, key logistics performance indicators, the extent of logistics outsourcing, ICT usage in logistics operations, critical disadvantages and future development needs. This research is the first attempt to measure and assess the state of logistics / SCM in Estonia. The methodology used for the studies is similar to that used for the regular bi-annual State of Logistics surveys in Finland, which makes it possible to compare some results (e.g., the level of logistics costs and the extent of outsourcing) of the Finnish and Estonian simultaneous studies.

During the period under review (2005-2018), the Estonian logistics environment has undergone significant changes and developments, mainly caused by Estonia's accession to the European Union in 2004, the global economic recession affecting the local economy during 2009-2016, the steady increase in labor costs and the decline in transit (and total trade) with Russia in the second decade of this century. Some key sentences summarizing the results of three surveys on the Estonian logistics market could be "relatively low valuation of logistics for the performance and competitiveness of companies", "volatile extent of logistics outsourcing depending on the macroeconomic situation", "increase in warehousing costs due to the increase in labor costs", "purchasing and demand forecasting are consistently the logistics functions that have the greatest impact on the competitiveness of local companies", and "continuous improvement in the percentage of perfect orders, lengthening of order fulfillment and cash conversion cycles, increase in finished goods inventories".