Essay Example on Outsourced Logistics: Improving Business Environmental Credentials

Introduction

Most companies are currently outsourcing logistics. On the bottom line, the decision to keep logistics in-house or to contract with some service provides is strategic and has many significant impacts (Giri and Sarker, 2017). This essay focuses on discussing how outsourced logistics may improve the environmental credentials of business by discussing the importance of a sustainable and environmentally-friendly logistics activity, and analyzing benefits and challenges with outsourcing logistics activities.

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Importance of Sustainable Or Environmentally Friendly Logistics Activity

The essence of a sustainable and environmentally-friendly logistics activity lies in the fact that most market participants today face competitive and overdemanding environmental forces and need to be more active in establishing a more efficient organization (Giri and Sarker, 2017). Businesses need to develop new innovative approaches to continue to stay ahead of their competitors. The phenomena of logistics outsourcing impact everyone that is involved, from industrial to distributors through the logistics service providers.

How Outsourced Logistics May Improve the Environmental Credentials Of A Business

The interface that exists between logistics and the environment is entailed in the value-adding functions that a company performs (Zhu, Wang, and Zhao, 2017). The more resources are utilized to create desired utilities, and pollutants are produced implicitly as by-products in every step of the integrated supply chain process. Proper awareness and management of the environmental impacts of logistics activities reduce adverse impacts significantly. By integrating environmental management, there is a suggestion that each element in the corporate value chain gets involved in minimizing the company's total environmental effect, from the beginning to the end of the product life cycle. Managers can reassess their logistics in a manner that will enable them to respond to impacts that come from other functions, including; manufacturing and marketing, and external sources like the consumer and the government (Zhu et al., 2017). Logistic managers act to manage the company's environmental program, since their decisions, besides getting affected by the other functions, are also impacted by the supply chain and have direct impacts on the environment.

Benefits and Challenges Associated with Outsourcing Logistics Activity

Benefits

By outsourcing logistics, a company gets greater flexibility in adapting to changes in the market. Whenever demand in the market exceeds the capabilities of a business, a logistic service provider may be needed to meet the increased demand. One of the potential benefits of logistic partnerships is shorter lead times., this is because the turnaround time is often an issue and needs more extensive transit in stocks. Logistics outsourcing is essential to logistic service providers in helping companies to reduce delivery time through many strategies of restructuring, including faster transportation modes, more direct transportation and elimination of local inventory (Yang and Zhao, 2016). Logistics outsourcing ensures improved operational performance through a reduction of operating costs, improves customer satisfaction, reduces lead time, and ensures on-time delivery of customer services.

Challenges of Outsourcing Logistics Activity

One of the most potential barriers to outsourcing logistics is the reservation that restrains enterprises from the employment of 3PL service providers and the loss of control of 3PLs. These tendencies are caused majorly by distinct attitudes and objectives of the logistics service providers, and users towards skills, services, strategy, and profits (Yang and Zhao, 2016).

Another challenge is that the adoption of outsourcing could lead to circumstances where critical knowledge that is linked to process and customers leaks to potential competitors. Outsourcing of logistics has risks of increased costs, moral problems among employees, and losing touch with essential data (Yang and Zhao, 2016). Other hazards include; inability to respond to varying needs and unreliable promises of the providers.

Conclusion

One of the functions that companies are currently outsourcing is logistics. The decision to keep this function to a contract or in-house with service providers is strategic and has immense impacts on the company. Outsourcing of logistics ensures that activities -are run more effectively and efficiently, creating a more significant effect on the performance of logistic services. Any organization's innovation capacity is dependent on the progressive grasping that has been accumulating over time, due to experience. Business leaders are advised t minimize logistic costs while using other specialized companies, and also take into consideration some factors that can promote networking. Enterprises need to focus on utilizing their expertise and knowledge in new services and products to cater for the demands of customers; this will ensure that there is attainment of better customer service through experience of each detail inability of the service provider to deliver products required by customers at the acceptable cost, within the desired duration in a consistent manner.

Reference List

Giri, B.C. and Sarker, B.R., 2017. Improving performance by coordinating a supply chain with third party logistics outsourcing under production disruption. Computers & Industrial Engineering, 103, pp.168-177. https://www.sciencedirect.com/science/article/abs/pii/S0360835216304387

Yang, Q. and Zhao, X., 2016. Are logistics outsourcing partners more integrated in a more volatile environment?. International Journal of Production Economics, 171, pp.211-220. https://www.sciencedirect.com/science/article/abs/pii/S0925527315003746

Zhu, W., Ng, S.C., Wang, Z. and Zhao, X., 2017. The role of outsourcing management process in improving the effectiveness of logistics outsourcing. International Journal of Production Economics, 188, pp.29-40. https://www.sciencedirect.com/science/article/abs/pii/S0925527317300622