The Cost And Benefit Analysis Of Logistics Outsourcing In The Manufacturing Industry

In the end of the twentieth century, the concept of Outsourcing Logistics was brought forward in some western developed countries such as the USA, Germany and England and was put into practice successfully.The essay first makes theoretic reasoning based on the economics of Outsourcing Logistics. In the essay, we begin with the theory of dividing of work, and then emphasize on the presentational theories of the business cost of Coase and Williamson. At the end of this part, the essay analyses and compares three decision-making models of whether to choose Insourcing Logistics or Outsourcing Logistics.The essay later brings forward a model which the manufacturing corporations can use it to decide whether to outsource their logistics or not. The model evaluates and synthesizes corporations in three aspects: the cost of logistics, the core competence of the corporation and the customer satisfaction.Then, the essay takes the company A for an example to validate the model. Using the model to analyses the data and the business status both before and after company A outsourced their logistics, we find that the cost of logistics of company A decreased and both the core competence and the customer satisfaction have greatly improved.And finally, the essay makes some suggestions on how to make good use of TPL.