Logistics Outsourcing Case Study

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Logistics Outsourcing: Right or Wrong?
Today’s companies face increased competition and many challenges in meeting customers’ requirements. Along with factors such as globalization and continuous improvement, managers are facing tremendous pressures in meeting the priority of reducing costs and increasing efficiencies. However to build state of art and dynamic supply chain, greater need for innovation and strategic outsourcing that adapts to changes is required to provide the company with a competitive advantage. But how does a company decide that outsourcing logistics is the right choice for its operations?
This article covers some common factors that can motivate companies to consider outsourcing some or all of their logistics.
Necessity of saving / reducing costs_ Saving costs becomes more than a simple strategic goal; it is a competitive necessity for many companies. The impact of transportation costs on most firms has been often considered as a sunk cost. Paradoxically, it is a priority for more CFOs and CEOs today to target these costs for important savings. Today more companies realize that continuous costs cutting and costs avoidance through process improvement and visibility is critical for long term sustainability and
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According to the State of Logistics Research only 1% of the full time faculty in the US is devoted to supply chain management, transportation, and logistics. According to the same study, only few university graduates are able to tackle the challenges of global supply chain management. For these reasons many companies tend to outsource, rather than hire their own employees. Given the gap between the demand and the availability of logistics and SCM experts, there are six job openings for every university graduate emerging from a SCM program today, said Jake Barr former Procter & Gamble executive and actual CEO of Blueworld Supply Chain Consulting
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