Some Propositions About Outsourcing The Logistics Function

As business firms and even public sector operations opt to run leaner operating systems, the question of outsourcing becomes an increasingly popular topic for discussion. There are substantial differences between countries and between industries on what is considered “best practice” in outsourcing. There is ample evidence that some of these views on outsourcing are changing and will continue to change during the 1990s. This paper offers eight central propositions on logistics outsourcing with special emphasis on warehousing. The paper briefly reviews selected foundation literature in the area and then shapes the eight propositions. Findings are reviewed from an empirical study of U.S. firms. Among the findings are that there are significant differences across industries in their use of outsourcing. Each of the propositions are examined in turn, the evidence reviewed and conclusions and implications presented. The thrust of the findings suggest a new level of consideration for outsourcing as an element of logistics strategy.