Outsourcing and offshoring
Issues related to outsourcing have already become a kind of canon in supply chain management. This results from the very essence of logistics. However, in light of the changes taking place in the market, this issue is taking on new meaning.
A similar goal drives activities related to offshoring. However, this concerns entire departments or service divisions of a company operating on the international market. In search of cheaper operating markets, they are relocated to countries that are able to create the expected conditions, often additionally ensuring (thanks to the time difference) the possibility of offering services or production in a 24-hour cycle. In the long term, however, this may lead to a decrease in the level of integration (cohesion) of the company’s operations as a result of allocating functional departments in different countries, and an increase in the risk of sub-optimization. As a result, serious difficulties in effective process management may also arise.
Two contexts of outsourcing
In the following article, I have focused primarily on presenting the conclusions resulting from 3PL market research worldwide (systematically prepared for 10 years by consultants, suppliers, and operators, broken down by region), logistics awareness research conducted by KPMG in Central Europe (including Poland), and my own research regarding customer satisfaction in the TSL industry in Poland.
The first two reports concern 2005, while the last one concerns 2006. The phenomenon of outsourcing can be discussed in two aspects: (1) in the context of using this business model in enterprises – clients of logistics services, as well as (2) among logistics operators.
In the second aspect, the above issue mainly concerns contractual agreements with carriers, but also other company activities (HR, legal services, PR, financial services, partial IT support, training services, warehouse services, etc.), which in my opinion should be analyzed separately. However, in my article, I focus primarily on the first aspect, assuming that this point of consideration well illustrates the directions of changes in markets regarding the evolution of logistics management, and also depicts the prospects for the development of this industry in the future.
Over the last two years, these changes in Poland have been primarily related to the expansion of the European Union and the dynamic development of information and communication technologies. It can be considered that the EU has gained direct access to countries with a dynamically developing economy, relatively cheap, well-educated, and determined labor force. During this time, many mergers and acquisitions took place in the logistics sector, aimed at expanding competencies and creating distribution networks, which often constituted the key competencies of the companies.