Essay About Logistics Outsourcing And Form Of Lower Prices

Gaining Competitive Advantage Through Outsourcing
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Gaining competitive advantage
through outsourcing
Authors:
Sarah Tagliapietra
Peter Platan
Ng Seow Li
Ralph Schneider
Executive Summary
Todays escalating, competitive and demanding environment has forced players in the
marketplace to be more efficient, to emphasize on a leaner organization and continuously
innovate new procedures to keep ahead of competitors. Adding final consumer value to the
product or service in the form of lower prices, quality and better service has become an
essential requirement in the global marketplace.
Logistics outsourcing has become an attractive option in order to take advantage of global
opportunities, to acquire state of the art logistics capabilities, significantly improve customer
service and to enable focusing on core competencies.
The purpose of this study is to present a theoretical framework for outsourcing actions as a
guideline for companies on why and how to outsource. It gives a deeper insight on logistical
outsourcing as a new and promising trend in the global environment while presenting the
main logistical areas of outsourcing as well as the advantages and disadvantages.
In order to effectively implement outsourcing, commitment from top to down management
and a wide understanding of all the stages and implications of outsourcing are required. In
order to achieve these prerequisites and a successful implementation process, a model
integrating the third- party logistics buying process and relationship improvement process is
presented. It emphasizes the importance of carefully identifying alternatives, the overall
analysis of partner selection with the help of specific criteria, mutual relationship building
between logistics service buyer and provider through joint team building and continuous
improvement and performance measurement. The relationship positioning tool model can be
used for the continuous enhancement and improving of the supplier-customer relationship.
The results and overall reasons of outsourcing should focus on adding value to the final
consumer of the product or service. By achieving lower logistical costs and a higher level of
quality and expertise these results can be used to add value to the consumer.
The study points out that there is an increasing need for logistical outsourcing as a way to gain
competitive advantage and as an instrument to meet the requirements of the companys
complex environment.
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