Logistics Outsourcing Essay
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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