Importance Of Logistics

Words: 1834
Pages: 8
Open Document
Outsourcing in Logistics.

The global use and importance of logistics outsourcing has increased dramatically in recent decades and will continue to do so. Indeed, a recent study shows that of the total logistics costs in 2005, 57% in Western Europe and 44% in the US headed for logistics outsourcing. For these data, we expect to see growth rates of 18% in Western Europe and 16% in the US in the near future (2008-2010). Similarly, the utilization rates for logistics outsourcing services in the United States has increased from about 40 per cent of Fortune 500 companies in the early 1990s to around 80% in 2004. It has also been estimated that about 40 percent of global supply has commissioned external partners. The ongoing world-of-use work will …show more content…
She then changes also induce the four phases of logistic growth. Another important driving force behind this was the increasing globalization of business. The growing global markets and the accompanying supply of spare parts and materials from other countries has in creased requirements on the operation of supply and lead to more complex supply chains. The lack of expertise and adequate infrastructure in targeted markets forced companies to turn to the competence of service providers logistics. In recent years, the outsourcing trend has become even more dynamic, such as the consent to companies formed that the use of a logistics service provider generally can reduce the cost of logistics processes and increase their quality. Service Providers Logistics (LSP) suitable for the provision of such services now exist in abundance in response to the ever increasing demands of customers and then developing markets. Due to the fact that some companies do not see logistics as a core competency or even if they do, are willing to outsource, outsourcing has become a relevant option. However, since the needs differ in each individual case, each company must answer two important questions before actually …show more content…
Investments in facilities can be reduced while spending costly information technology can be saved when assigned to a service provider for logistics. Beyond, logistics outsourcing also allows for the reduction of the workforce and the related investments, which especially valuable in countries with strictly regulated and inflexible labor markets, such as Germany and France. The side effects listed above resulting from the reduction of capital investment ideally allow a business to purchase only the necessary logistics services and turn so the older fixed costs of infrastructure support systems variable costs. Apart from all these different possibilities for cost reduction, however, logistics outsourcing has some additional benefits for the company .. Especially in recent years the realization has spread among business outsourcing logistics can also lead to improved performance in logistics house could not be achieved. Among these improvements
Show More

Related Documents: Importance Of Logistics

Business Studies Operations Business Report Essay

Through the aid of this report, ADF Engineering should be able to successfully navigate its current supply chain management issues; such as global sourcing, e-commerce, logistics and as a result understand how these changes are crucial in creating or sustaining a competitive advantage. To assist in the exploration of outsourcing, advantages and disadvantages have been listed that should assist when decision-making or undertaking research and development. The consultancy has also identified and recommended…

Words 995 - Pages 4

Logistics Challenges

Topic: Logistics Challenges Logistics is an important bond to connect the world. However, it has been suffering challenges in years. I would like to find the logistics challenges met by different countries, and try to discover some strategy to address the challenges. 1. KRIZNER, K. E. N. (July 01, 2013). Major Market Meets Logistics Challenges. World Trade: Wt100, 26, 7.) The Northeast is one of the most heavily traveled and congested regions in the United States. However, some logistics challenges…

Words 686 - Pages 3

Essay on Purchasing and Supply Management REPORT

this report aims to analyse how a leading sourcing company such as Li & Fung (LF henceforth) can achieve and maintain these targets, while accounting for various challenges that they may face in the global sourcing market. Three key theoretical pillars, namely outsourcing, supply chain strategies and sustainability, have been used to demonstrate LF’s capacity to achieve the desired goals and to emphasize on those value­added competencies that reveal their scope in increasing profit and satisfying customers.…

Words 3820 - Pages 16

Supply Chain study Guide Essay

relationships; sourcing, purchasing, procuring Total cost of ownership Before: finding, assessing, selecting supplier During: buying, receiving items After: storing & owning items incl. after sale (warranty, defect, replacement, repairs) The importance of supply management Ensures timely availability of resources Assess supply risk—unplanned event that will negatively affect firm’s ability to serve customers; ex. disruption to production, earnings, time to market, etc. Reduces total cost (not…

Words 1433 - Pages 6

Outsourcing Security

I would like to choose outsourcing security because the guaranteed benefits of outsourced security are so attractive and the possible risks of outsourcing are considerable. Outsourcing of information systems function has become a regularly picked alternative of providing information services. Outsourcing is a practice used by a different company to reduce costs by transferring portions of work to outside supplier rather than completing it internally. According to McMillan in his article The Benefits…

Words 1156 - Pages 5

Essay on Supply Chain Strategy Shop

movement of goods, materials and information from a supplier through a series of customers to the final customer’. Cox (1999) argues that the main concept or factors for the supply chain are operational effectiveness and efficiency. Today, the word Logistics is heavily used and is…

Words 4432 - Pages 18

Supplier Relationship Management Case Study

for a lower price. This also forces businesses to continuously improve their processes and output to meet these customer requirements. This global competition is growing due to these improved communication possibilities, and the possibility of outsourcing production, but also opening new branches abroad. Businesses are now competing on a worldwide scale, products and services must for example be produced or provided with competitive labor costs and product materials that meet the quality requirements…

Words 2987 - Pages 12

Essay about United: Supply Chain Management and Flyweather

chain strategy, more accurately the lack of one. Flyweather had continued supplying quality products but not considered exactly how to deliver their supplies which was hindering their competitive advantage. Supply chain strategy focuses on the logistics of the company. Considers the sourcing of materials and the distribution of products. From the perspective of UPS was being able to deliver across Asia with Flyweather’s distribution centers/staff and to Flyweather’s customers. A problem because…

Words 1433 - Pages 6

SM380 DHL Essay example

in Global Logistics Services When Adrian Dalsey, Larry Hillbolm, and Robert Lynn founded DHL as a door-to-door express service between San Francisco and Honolulu in 1969, no one could have imagined the business evolving into a crossborder express delivery group linking 120,000 destinations in more than 220 countries and territories. Now owned by the German company Deutsche Post World Net, DHL offers express services, international air and ocean freight, contract logistics, and value-added…

Words 1835 - Pages 8

MKT 431 Exam 2 review Essay

that we have learned, so be sure to understand, not just memorize. Materials from prior exam Ideas related to the strategic profit model, ROA, how logistics decisions affect B/S and I/S—this is also in Topic 8 The profit leverage affect What it means How to calculate it Lean principles in general 8- The Basics of Inventory Management The importance of inventory and having the right amount of inventory Inventory & firm performance Holding Cost: sum of financial opportunity costs and physical costs…

Words 3610 - Pages 15