General Views of Logistics, Outsourcing, and Logistics Outsourcing

Abstract

There seem to be a definitional confusion in the management literature about what is meant by the term “outsourcing.” Several years ago, the control of the product development cycle from raw materials through delivery of product to the customer became important, and the typical examples of make or buy (internalize or externalize) and vertical integration appeared. A theoretical clarification of outsourcing, however, must essentially be grounded in an answer to the question of what is within the firm and what is outside? This chapter presents extensive literature review of definitions on logistics, outsourcing, and logistics outsourcing, as well as empirical evidence on outsourcing decisions. Nonetheless, the author believes that outsourcing must be regarded as a management strategy by which a firm hands over non-core business operations and/or services to efficient outside service specialists, in order to support the core strategy of the client organization.