3rd Party Logistics Essay

1181 WordsNov 26, 20125 Pages
Supply Chain, Logistics and Transportation Outsourcing Pro’s and Con’s Lisa Powelson Chattahoochee Technical College Abstract Outsourcing supply chain, logistics and transportation functions (total outsourcing) is a strategic decision for any company. To understand the implications of total outsourcing, it is necessary to understand the complexity of outsourcing, in and of itself. Once the complexity of outsourcing is understood and embraced by a company, then the advantages and disadvantages of the outsourcing relationship can be identified. Supply Chain, Logistics and Transportation Outsourcing Pro’s and Con’s Outsourcing supply chain, logistics and transportation functions (total outsourcing) is a strategic decision which will have significant implications to company performance, brand value and customer service levels, both positive and negative. This magnitude of a decision must be clearly aligned with the organizations overall business objectives, mission and cultural alignment to be successful. To better understand the implications (pro’s and con’s) of total outsourcing, it is best to first understand the terminology. According to (Mentzer 2001), a supply chain, as opposed to supply chain management, is a set of organizations directly linked by one or more of the upstream and downstream flows of products, services, finances and information from a source to a customer. Managing a supply chain is “supply chain management” (pp 1-25). The definition of Logistics, (Murphy & Wood, 2011) according to the Council of Supply Chain Management Professionals, is that part of supply chain management that plans, implements, and controls the efficient, effective forward and reverses flow and storage of goods, services and related information between the point of origin and the point of consumptions to meet customers’ requirements. (p 310). Also

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