Using an independent service provider for logistics can be highly beneficial under certain circumstances. Here’s a breakdown of when this is most appropriate:
Market Penetration: A shoe company aiming to enter a foreign market would benefit from an independent logistics provider's local expertise, established networks, and infrastructure, reducing the complexity and cost of setting up its own logistics operations.
Global Reach: Independent providers often have a global reach and can offer efficient and reliable services that would be costly and time-consuming for a company to develop internally.
Scalability and Flexibility: These providers offer scalability and flexibility in logistics operations, allowing the shoe company to adapt quickly to market demand changes without investing heavily in logistics assets.
Focus on Core Competencies: By outsourcing logistics, the shoe company can focus on its core competencies such as design, production, and marketing, rather than the intricacies of international logistics.
Other scenarios such as a business with global plants and warehouses might already have the infrastructure needed, making an independent provider less necessary. For a financial services company or a cable television company, logistics is not a core function, and thus the question of outsourcing logistics is less pertinent.
References:
Langley, J., & Capgemini. (2019). Third-Party Logistics Study: The State of Logistics Outsourcing.
Coyle, J. J., Langley, C. J., Novack, R. A., & Gibson, B. J. (2017). Supply Chain Management: A Logistics Perspective. Cengage Learning.
