The question of whether the company should itself undertake all of the many activities involved in the distribution function is of extreme importance. It is always open to a company to subcontract all or part of its distribution activities to specialist distribution service companies. Clearly this is a question akin to a make‐or‐buy decision and therefore all the relevant factors concerning costs and benefits must first be brought into focus. For example is the loss of control over some of the vital elements of customer service worth the cost savings that might be achieved? Or conversely, can we improve the company's financial performance by disinvesting in our own distribution capability and make use of the shared economies of a distribution service company?
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1 February 1988
This article was originally published in
International Journal of Physical Distribution & Materials Management
