Role of logistics outsourcing on supply chain strategy and management

Abstract

PurposeThe purpose of this paper is to investigate the effects of logistics outsourcing in Northern Europe through survey research. Research work intends to shed more light on logistics outsourcing with other than case‐based company examples.Design/methodology/approachSurvey was completed during late 2007 and early 2008 in Finland and Sweden for the largest companies in industrial and service sectors. Altogether 34 answers were received, and they were gained mostly from industrial and trading companies.FindingsThe research results show that warehousing, IT, and customs brokerage outsourcing could have impact on some managerial and strategic aspects of supply chains (SC). Thus, none of the identified difference areas was found to be statistically significant. Potential impact areas of SC strategy and management are integrated IT systems of manufacturing and logistics, reverse logistics procedures, and re‐engineering of logistics processes. However, research shows that in‐house produced IT function, and potentially outsourced warehousing, have important roles in more international purchasing.Research limitations/implicationsAltogether, the amount of responses in the survey was relatively low, but treating Finnish and Swedish companies as one group gives us some opportunity for statistical analysis. This grouping might be one limiting factors of our study, and especially in its generalization power; however, our earlier analysis with the data shows that these countries operate in a rather similar interest area. Another limiting factor of our research findings is the difference in respondent profiles – operating principles of logistics and trade companies are different as compared to manufacturing.Practical implicationsResearch shows that IT is potentially having an important role in both, international purchasing emphasis as well as on warehousing outsourcing activities. Contrary to the common view, this research gives some indication that in‐house IT is valuable, and more integrated applications are needed for example, when warehousing is being outsourced.Originality/valueThis is one of the seminal research works regarding North European outsourcing practices, and their affects on SC strategies and management. Both of the countries have an advanced industrial sector, which gives perspective for the readers world wide.