Services Innovation in Ireland - Options for ... - Europe INNOVA

Freight Traders, for example, was established in 2000 and is said to have 4,500 users from 1,000
companies 56 . In the Memphis logistics sector, Blue tooth and GPRS PowerBooks have been developed
for the courier market, achieving estimated savings of $20m per annum. In addition, client demand
from large corporations such as Wall Mart and Microsoft has helped to drive the adoption of RFID
throughout Memphis. FedEx is considering introducing RFID to the tracking of value added items
that may have specific requirements such as temperature control and the life cycle of produce,
meat and other time sensitive items. New technologies such as wireless networking therefore play
an important role by enabling companies to develop new and faster methods of interacting with
suppliers and clients.
New customer interfaces are also an important form of innovation in services. In financial services
for example, the emergence of supermarkets as finance providers opens up a field where banks
and insurance companies can re-organise and develop their product portfolios. The back office
functions in these new finance services providers are being offered by established banks, with the
front end interface being provided by an established retailer such as a supermarket. SCM-logistics
companies have also begun to experiment with innovation in customer interfaces through existing
resources such as courier agents. FedEx, for example, are responding to opportunities presented by
this customer interface by developing ‘look-up’ and ‘retrieval systems’ that enable couriers to answer
questions at the customer site on packaging rules or export regulations, as well as order supplies.
3.2.3 New Services Products
Services sectors are typically in a constant state of change with a rapid introduction of new products
and services. Shorter life cycles of services products are facilitated by strong competition, limitations
on IP protection, and the relatively low cost of new service launches, at least compared to major
new manufactured product introductions. Greater specialisation in new services is also driven by
competition with demand for cross-border services that offer greater volumes and economies of scale.
This is evident in the European financial services sectors because, although the European market is a
reality for the ‘wholesale’ financial markets the opportunity for innovation in cross-border consumer
banking is still limited. Consequently, innovative services providers who can obtain the benefits of
scale while effectively tailoring their services or financial products to different national markets will
be in a strong position to maximise their profit. Constant and rapid development of new services is
also necessary because copying is easy and product life cycles are becoming shorter.
An instrumental factor behind the development of the SCM-logistics sector in Memphis was the
decision by FedEx to launch a service offering the latest possible daily drop-off times to customers
using airfreight. This has helped to attract many businesses to the Memphis region. FedEx has
been engaged in a ‘battle’ with its rival UPS to introduce services products around new wireless
technologies. One of the most notable innovations in logistics services in recent years has been the
growing emphasis placed on tracking and tracing services. Such services allow on-line information
on shipment location on a real time basis and allow SCM-logistics companies opportunities to offer
clients new and easily introduced products and services in relation to stock control, warehouse
automation and control systems, order-picking, and fleet-management. In the context of the
Netherlands SCM-logistics hub the prominence of the 4PL logistics industry would appear to confirm
the shift to developing services that are more responsive to client demands.
As noted in Chapter 2, technology can be both an enabler and driver of services innovation
providing new customer interfaces but also providing a fresh ingredient in the services offered to
the client. Technology based electronic channels and services are particularly important in the case
of financial services since the product is immaterial and closely linked with information processing
56 http://www.freight-traders.com/
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