1、Liang ChenTimothy J. NormanPeter EdwardsJohn D. Nelsondot.rural RCUK Digital Economy Research Hub, University of AberdeenAbstract: The purpose of this paper is to identify requirements for logistics and transport services of small and micro rural businesses. This paper explores the empirical finding
2、s of two case studies of small rural business. These findings suggest that businesses are confined to small-scale commercial activities due to a basic communication and information sharing problem. We argue that, in order fbr businesses to operate on a larger scale, appropriate support for the logis
3、tics requirements of rural businesses calls fbr intelligent software platforms that provide solutions to this basic problem. We suggest the use of Electronic Logistics Markets （ELM） fbr choosing services and infrastructures to manage trans-shipments in an efficient manner and to allow service provid
4、ers to offer certified services, via trusted third parties.Key words： Logistics and transport solutions, freight transport, digital economies, intelligent agents.1 IntroductionToday9 s rural economy is a complex mix of commercial activities, where food production coexists with tourism, recreation, a
5、nd various public and private services （HM Government, 2002）. A significant potential fbr growth has been recognised fbr the rural economy （Lowe and Ward, 2007） and with the advent of the digital economy, online sales systems and information platforms become enablers, in particular, for small and mi
6、cro rural businesses to expand their commercial activities beyond local and regional areas.Although selling products to consumers without geographical boundaries is now a reality, there is generally no straightforward strategy fbr how businesses handle the logistics of distributing their products gl
7、obally. We, therefore conducted a detailed study into how small rural businesses operate and, in particular, how the delivery of goods to customers is planned and managed. We identified the phenomenon of small businesses establishing localised “eco systems” - a company producing goods is working tog
8、ether with one or two trusted transport service providers fbr delivery and, often, are serving only a small clientele with their products.The purpose of this paper is to identify logistics and transport needs of micro and small rural businesses. The paper also seeks to examine the use of existing lo
9、gistics solutions and their applicability in a rural business context. Ultimately, we aim to elicit the features required of a software solution that aids businesses within the rural economy to overcome logistics issues.With businesses delivering to wider target markets, there is also now a growing
10、need to consider the environmental impact of their logistics operations. An example of how technology can help in tackling such issues is the MIT m-Logistics initiative （MIT Center fbr Transportation Logistics, 2010）, which presents a mobile software platform that can enable distribution of products
11、 to low-income markets with substantially lower overhead. The remainder of this paper will outline the theoretical background to the empirical investigation; address the method fbr data collection; show the results of the fieldwork followed by discussions pointing out key requirements fbr logistics
12、services faced by small rural business. Finally, future challenges and conclusions provide some insights into the kinds of digital technologies that could be applied in order to establish solutions to these requirements.2 Logistics Customer ServiceCustomer service is a process for providing signific
13、ant value-added benefits to the supply chain in a cost effective way” （La Londe et al., 1988, p. 5）. From a logistic perspective, customer service is the result （output） of all logistics activities or processes within the supply chain （logistics system） （Ballou, 2004, Lambert, Stock and Ellram, 1998
14、）. Over the years, the meaning of customer service presented here has been identified in different ways, including logistics customer service （Huiskonen and Pirttila, 1998） and physical distribution service （Mentzer el al., 1989）. In this study we use the term Logistics Customer Service （LCS）.La Lon
15、de and Zinszers work （1976） is among those seminal in the discipline of logistics. They classify the elements of LCS in terms of pre-transaction elements, transaction elements, and post-transaction elements （Figure 1）. This classification was used as the basis for the development of our study. This
16、perspective of the logistic system is particularly useful in this research for grouping into one single model the key elements of interest. Other frameworks based on the principle of integrated business processes across the supply chain （Lambert, Cooper and Pagh, 1998） would add complexity that is n
17、ot relevant to small rural business, even though they are important to LCS in general.It is worth mentioning that LCS models agree that the degree of importance attached to each service element varies from case to case. In other words, different groups of customers tend to have specific needs, which
18、 should result in different services. Fishers work （1997） can be used as an example of how to address different needs. He classifies products as functional versus innovative, which would require a physically efficient process and a market-responsive process respectively. The discussion of the possib
19、le categorizations of products and the relationship with the supply chain design are beyond the scope of this paper.3 Research MethodThe research design applied was an exploratory qualitative approach with multiple case studies. Such a design emphasizes the perspective of people involved with resear
20、ch issues, the description of context where the studied phenomena happens and the time line of events （Bryman, 1989, Yin, 2003）. One characteristic of the qualitative approach that is worthy of note is the flexibility it provides the investigation through the use of observation, interviews and docum
21、ent analysis （Bryman, 1989）.The choice of multiple case studies was motivated by the need to cover different types of small businesses at this exploratory stage. There are benefits of carrying out more than one case study as this provides more external validity of findings and enables a range of com
22、panies with different service level requirements to be surveyed （Yin, 2003）.The elements of LCS （La Londe and Zinszer, 1976） provided the foundation for a semistructured questionnaire. By taking the small rural business as the focal company in a supply chain, we explored the LCS that the focal compa
23、ny offers to their customers and what is the expected logistic service level in this link within the supply chain.4 Main Empirical FindingsWe conducted several interviews with owners of small and micro businesses from different sectors located in rural areas in Northeast Scotland. In this paper, we
24、highlight the results from two of these cases, which are referred to as Company A and Company B in order to keep the real names of the companies confidential. The reasons for emphasizing these two cases are: first, because they represent two completely different situations, one of them being more fo
25、cused on business to consumer （B2C） sales and the other business to business （B2B）; and second, because the shelf-life of the products sold by each company differ significantly. The main product of Company A has a shelf life of one day, while those of Company B have a shelf life of at least 12 month
26、s. Even though the market sectors they operate within are different, they face a common issue - both have human-based procedures, which could be automated.4.1 Case 1 - Company ACompany A is a small farm-based business located in a rural area, which started operations in 2006 and currently employs 3
27、people full-time. The main products of Company A are premium fresh fruit coated with chocolate. Their annual turnover is 80,000 and they sell their products via two different channels: 50% through trade partners, and 50% through online sales directly to consumers. We interviewed the owner of the com
28、pany as the main source of data, and also gathered data from the companys website.4.1.1 Pre-transaction elements of customer serviceCompany A does not have an explicit policy in terms of delivery, warranty and returns. The interviewee justified this since each case is slightly different. For example
29、, sometimes the receiver doesnt know about the order, because it is a gift, or they may not be at home or on holiday at the time of delivery. If problems occur during delivery or with the quality of the product delivered, the company encourages the customer to get in touch with them as soon as possi
30、ble, so they can solve the problem. Besides this, a customer can contact the company anytime via phone or e-mail, if there is a problem with an order.4.1.2 Transaction elements of customer serviceMost customers use Company As online ecommerce system to place orders, with orders over the telephone be
31、ing the exception. In order to make the online system as friendly as possible, it was extensively tested before making it available to consumers. When Company A receives an order, the priority is to make sure that the product is delivered in the best possible condition. Given that the product has a
32、shelf life of one day, punctuality of delivery is critical. One order dispatched but not delivered will become waste. Failure to deliver also increases the risk of losing the customer.Company A uses courier companies （3rd party couriers （3PC）, as a logistic service provider for the distribution of all their products/orders. Mainly they use the services provided by a courier, which we call 3PC-a”, for deliveries in mainland UK, and a different courier （which call u3PC-b） as a second option for l
