Logistics Self-outsourcing Decision Analysis

As one of the consequences of the severe competition in the commercial environment, it has been already a time of slim-profit for modern enterprises with less potential can be developed from the cost and profit. Various companies compete not only in technology and intelligence but also in the area of logistics and supply chain. For the purpose of reducing cost and gaining an advantage over the rivals, modern logistics has already become the "third profit center" for modem enterprises. Since the concept of "supply chain management" was introduced to China in 1980's, the whole logistics industry has made great headway and people are seeking maximum entire benefit under the management of supply chain. Currently there are two types of logistics management, i.e. self-supporting and outsourcing. More and more enterprises decide to outsource the logistical business to achieve more profit by lower operational costs and promoted service quality. In this paper, the advantages of self-supporting and outsourcing are illustrated respectively in the cases of Qingdao Haier and Jianlong Group.However, the logistics strategy depends on the development strategy of the enterprises. Different stage during the development process requires different logistics strategy, which should be suitable to the relevant development strategy. Otherwise the enterprise will be weakened because of blindness. So far most of the conventional decision-making methods of logistics outsourcing are qualitative but few are quantitative. Therefore it is very important to choose the proper logistics strategy in the various stages by use of the scientific method.This paper, after briefly introducing the supply chain theory including the difference between the supply chain and traditional logistics along with the relationship of supply chain and logistics management, analyses the different advantage of self-supporting and outsourcing logistics and presents decision-making methods of outsourcing. Furthermore, a multi-target function and logistics structure model for selection of outsourcing all or part of logistics business such as transportation, inventory etc. are set up basing on and incorporating with the different developing strategy of the enterprise, to determine the different logistics strategy accordingly by means of. the Analytic HierarchyProcess .Finally, the writer gives out how to optimize the logistics resource by means of probability under the selected strategy.All in all, this paper mainly focuses on the discussion of the decision-making methods and quantitative analysis of logistics outsourcing in different developing stages by providing the AHP model, which is quite helpful to reduce the logistics costs and promote logistics service level with the rapid development of the logistics in the current stage.