Vadims Kolmogorovs

Logistics Outsourcing: a Way to Increase Efficiency Vadims Kolmogorovs

Revision with unchanged content. In recent years the strategy of concentrating on core competencies of com­pa­nies led to a vertical disintegration of processes along the value chain. Prac­ti­cal experience shows that companies focusing on their core competencies in first turn outsource logistics operations within their supply chain to external ser­vice providers. A fundamental question to ask in this work is whether out­sour­cing is really value enhancing and, in particular, whether the firm that un­dertakes outsourcing becomes more efficient as a result. It will be shown that in an attempt to increase efficiency by reducing ex­pen­ses and turning fixed costs into variable costs, companies pursue re­struc­tu­ring procedures that include outsourcing of non-core activities to specialists ha­ving a lower cost base due to better economies of scale and scope. Anyone who wants to outsource a function, or who wants to know more about how outsourcing works, can find within this book a discussion of se­lec­ted issues that may arise during this process, putting the main emphasis on the planning stage as it is considered to be the critical factor in a successful out­sourcing project.