The outsourcing of supply chain activities

• Main Author: Rudolph, Andrew
• Published: 2012
• Subjects: Contracting out; Delivery of goods > Management
• Online Access: http://hdl.handle.net/10210/5551

M.Comm. === In order to achieve and sustain a competitive advantage in the present global trade environment, companies need to find ways to distinguish themselves from their opposition. One way by which this advantage can be gained, is by exercising superior supply chain management. Shortening product life cycles and multiple possible suppliers per product make it even more important to provide excellent customer service. Once again, these events imply the need for superior supply chain management. The question of how to improve supply chain management now arises. The aim of this study is to determine whether the outsourcing of certain supply chain activities can lead to the desired result. A secondary aim is to give an overview on supply chain management, as knowledge on this topic is often lacking or poorly understood, while it is seen as highly important for the reasons stated above. A key step in the process of determining whether or not a company should make use of a third-party supply chain provider, is in determining the strategic objectives of the company. During this step the company needs to determine its key competencies, which in turn helps the company to establish its goals. Once the above process has taken place, a decision can be made on whether to consider the outsourcing of supply chain activities. Companies that are considering the outsource of their supply chain activities, are looking for benefits such as reduced costs and increased service, reduced capital investment, increased flexibility to fluctuating demand, and a focus on core competencies. There are however, possible disadvantages associated with the outsourcing decision. Examples include, negative effects on workforce morale, a fear for loss of control by some supply chain professionals, breaches of confidentiality, and a loss of customer contact.