Operations research practice on logistics management in Taiwan: An academic view

Abstract

The opinions of logistics educators in Taiwan on OR practices in the domestic logistics industry are explored in this research. In this study, questionnaires were given to 42 pre-screened educators at 10 logistics departments and graduate institutes. According to the 37 valid returned questionnaires, 70% of the responding educators believe the major source of OR techniques in Taiwan’s logistics industry originates from individual employee training, while 92% believe OR is not widely used primarily because companies are unfamiliar with OR techniques. OR techniques were considered helpful in solving problems by 73%. Generally speaking, familiarity with OR techniques is not associated with implementation of OR techniques by educators. Additionally, logistics educators express concern about insufficient training for logistics students in Taiwan. However, they are optimistic about the logistics industry’s willingness to more actively adopt OR techniques in Taiwan in the next two years.

Introduction

Despite being mainly associated with IT-related industries, the logistics industry in Taiwan began in the 1980s with less specific industrial characteristics and mainly provided warehousing and material handling services, lagging far behind its Western counterparts. Not until the late 1990s did related industry policies begin to develop, due to increasing pressure from Western customers for global logistics capabilities, while service industries exhibited the trend of tailor-made logistics and large-variety-and-small-quantity home delivery. Logistics industry operations were moving toward the goals of process integration and value-added, innovative services (Hsieh, 2003).

As the form of services has changed, so there have been different hardware requirements. Racks, forklifts and pallet trucks were replaced with modern wireless hand-held terminals, electronic tags, WMS systems, and high-speed selectors. Software requirements were more closely connected with information systems through communications enabled by software languages such as ASP and XML. Application technologies, such as the Global Positioning System (GPS) and Enterprise Resource Planning (ERP), were developed.

It is not uncommon for scholars to conduct studies on logistics problems using operations research (OR) technologies. However, while logistics providers are busy upgrading their hardware facilities, few adopt OR to increase their competitiveness. Kao et al. (1997) conducted a questionnaire survey on the operations of 1000 top enterprises in both the manufacturing and service industries in Taiwan. The questionnaire attempted to find the status of OR department within enterprises, frequently used OR techniques, frequency of OR use in different occupations, difficulties encountered in OR practice, and supporting factors for successful OR applications. The survey found that 37.4% of enterprises interviewed did not establish any OR-related departments and the frequency of OR use was below average. Among reasons given for using OR, most interviewed enterprises chose the ability of “solving problems efficiently.” Their study indicated OR is still not widely applied in enterprise operations, even though it is believed by many to be useful.

Though helpful in theory and practice, current OR applications in the Taiwan logistics industry remain unknown, while it is difficult to tell if departments and graduate institutes offer sufficient OR-related courses or if the courses meet the logistics industry requirements. By collecting teacher opinions of OR-related courses at logistics institutes, this research can help to better understand opinions about OR education and current OR use in the domestic logistics industry to determine if there is any gap between education and actual industrial needs.