Type: Definition Essays
Sample donated: Maxine Simpson
Last updated: September 24, 2019
SummaryNowadays, logistics outsourcing is a process that companiesare increasingly using. It is for an industrial or commercial company to”entrust all or part of a supply chain, previously provided internally, toan external service provider”. The purpose of this thesis is to questionthe conditions of outsourcing, the criteria that will lead a company to choosea particular type of logistics service provider. Given these criteria and thecurrent and future challenges faced by both industrialists and providers, thiswill help determine what type of service providers and services will develop:Third Party Logistics, Lead Logistics Provider, Fourth PartyLogistics, This thesis will be illustrated by a field survey ofindustrialists and service providers such as Geodis, FM logistic, Alstom, DHLSupply Chain, Johnson & Johnson, etc.INTRODUCTIONAt the end of the 1980s, companies began to outsourceperipheral activities such as computers, reprography or payroll management forexample.The reason for this first wave of outsourcing was thenpurely economic, based on cost criteria.
Other factors then came to reinforcethis phenomenon, notably the lack of own capacity to perform these services.This outsourcing could be manifested by a transfer of staff and assets to theprovider.Outsourcing then gained ground for functional servicesbefore finally addressing the core functions of the company. Logistics has infact been found directly involved in this process. The closer these outsourcedfunctions have become to the core of the company’s business, the more complex,expensive and time-consuming the outsourcing process has become. Outsourcinghas therefore become a strategic decision within companies. Service providersthus have adapt and propose more and more advanced and elaborate offers.
As far as logistics is concerned, it has moved from thefirst phase of outsourcing to a logic of advanced flows, where the onlyproblems were to transport and store, with a logic of drawn flows, with a morecommercial-oriented vision, placing the final consumer at the center of itsconcerns. The issues then became much more complex and numerous.In fact, logistics outsourcing has evolved, offering evermore complex services, and ever more integrated with manufacturers ordistributors. Originally composed of so-called standard services (transportonly or transport and warehousing), we have seen the appearance of much moreelaborate services, companies even going so far as to entrust to a third partythe management of all its logistics is what was called fourth party logistics,or 4PL.
The purpose of this thesis will be to focus on the reasonswhich push an industrialist to outsource his logistics, and on the relationsthat this one will maintain with his service provider.This thesis will be articulated around the followingproblematic:The phenomenon of logistics outsourcing today in France andthe strategic positioning of logistics service providers in close synergy withindustry through strong partnerships.First of all, an inventory of the logistics outsourcingmarket will be drawn up today in France.
The various actors present and theissues associated with them will be reviewed, as well as the relationshipbetween these protagonists.An analysis will then be conducted to determine the elementsthat will characterize, for a company, if the use of outsourcing is ofinterest, and in fact what type of service will be chosen by the company. Giventhese results, it will then be possible to conduct a second survey to highlightthe types of benefits that appear to have the best chance of succeeding in thefuture.A final research will be carried out on the new challengesfor the industrialists as for the providers in the near future, on the turnsthat these last ones will not have to miss to progress or simply to continue.
I. Thephenomenon of logistics outsourcing todayThis first part will be used initially to define what is logisticsoutsourcing, the different actors involved in this phenomenon, different typesof services offered and present today on the market.1.1 Definition ofoutsourcingIn this paragraph, the outsourcing in general will bedefined, then the case particular of logistics outsourcing, with the most concerned.1.1.1 Outsourcing1.1.
1.1 Definition”Outsourcing is a service defined as the result of theintegration of a set of basic services intended to entrust to a specialized serviceprovider all or part of a “customer” company function within theframework of a multi-year contract, based on fixed, with a defined level ofservice and duration”. It is a technique to dissociate from outsourcing,since using outsourcing the company, a modification of its scope of activity.Outsourcing is therefore in a “transfer of some or all of the activitiesof a firm to a contractor external specialized”.Outsourcing can also be defined as the activity that”consists of to procure from a provider a service that was previouslyprovided by the services internal of the company”. The elements taken intoaccount in this type of decision are varied, since all sectors of the enterprise,for the most part, can be concerned.
Thus, economic, human and organizationalcriteria accounting, technical, etc … can be retained in the decision toresort, or not, to the “outsourcing.Even more marked than for outsourcing, the decision toregister in a decision-making process must be long-term, for two reasons :· The duration of the preparation andimplementation, as well as the commitment of financial, technical and human resources· Outsourcing relies on a contractual cooperationbetween the two parts.
The implementation of an outsourcing strategy is thereforevery complex in terms of time, money and loss or acquisition of know-how.Using outsourcing also means trusting an outside company, withall that implies. This type of decision is therefore the fruit of a maturereflection; especially for large groups, where strategy and decision-making aremore centralized.