Logistics in relation to strategy in dairying: The case of New Zealand dairy

The earliest known instance of scholarly writing on logistics (in 1901) is actually located in agribusiness. While case illustrations of productivity improvements in logistics in agribusiness have routinely featured in the academic literature since then, such efficiency gains are rarely cast in a broader, strategic perspective – a somewhat surprising omission. Consequently, this study seeks to clarify the relationship between logistics and generic business strategy in dairy organisations/industries by using the New Zealand dairy industry as a case in point. (The focus is more on operations than on distribution and service). We first clarify that the New Zealand dairy co‐operatives and the (export‐oriented) New Zealand dairy industry as a whole, have generally followed a strategy of cost leadership. We then review the various ways in which efficiency has been realised in logistics in the industry, and especially dwell on how the structure (e.g. co‐operative ownership, vertical integration) of the dairy industry has supported and/or hindered the focus on cost leadership. We also examine the extent to which our analysis of supply‐chain efficiency extends to other dairy organisations/industries.