Outsourcing Logistics Management Activities

In most developed economies the costs of logistics management are steadily growing and account for an increasing proportion of the gross national product. Logistics costs have become an important part of the added value of products and logistics management is increasingly regarded as an important weapon in the international competitive struggle, in particular by large market‐oriented companies. The emphasis in marketing strategies is shifting from product and price to promotion and place. Rapidly changing customer demands have an increasing effect on company policies. Reduction of product life cycles and assortment expansion will lead to faster development and delivery of new products and to smaller‐sized and more frequently placed delivery orders. Advancing technology will cause production to require more focus. Customers are becoming more demanding and manufacturers have to react faster to changing demand on the part of both private consumers and industrial customers. This requires enormous flexibility, which will be increasingly aimed at conquering and securing sales potential in the liberalized European market. Successful companies will focus on core activities. Activities other than core activities, but serving them, will have to be outsourced.