Few informed logistics professionals would suggest that outsourcing is not a meaningful force in their industry; indeed, this entire book, as well as the previous edition, is based on the premise that it is extremely important today and will become even more so in the future.
It would appear, however, that in some respects the growth in logistics outsourcing has continued to be more by accident than by design. While success stories are plentiful, less publicly, the industry also has been a victim of poor planning, lack of understanding, inadequate performance, or in some cases, abject failure.
Logistics outsourcing is still an emerging industry, and emerging industries often are characterized by false starts and business failures.
There are a number of reasons for this, but in my opinion, lack of understanding on the part of both client and provider, more often than not, is the major cause of difficulty and failure in logistics outsourcing relationships.
It is hoped that this book will make some contribution to that understanding and serve as a useful tool to those who are contemplating or implementing a logistics outsourcing relationship.
In addition to a refining of the basic history and principles, there have been a number of developments in out-sourcing that warrant attention.
For example, since the publication of the first edition, there has been much more emphasis on the outsourcing of supply chain management systems. The list of traditional logistics service providers now contains names of companies that were unheard of a few years ago. This subject will be discussed in considerable detail in this edition.
After years of discussion and writing about them, we finally have begun to see true global outsourcing arrangements. Up until recently, while there were any number of firms that had operations in foreign countries, but in most cases their logistics activities were confined to the countries in which they were located and those in close proximity. Today, we routinely move products back and forth throughout the world. To some firms outsourcing has become as important internationally as it has been in the United States. This edition addresses these opportunities.
Finally, logistics service contracts are becoming more sophisticated and are placing more pressure on the relationships to provide process and cost improvements and share these benefits with the client. The chapters on contracts and gain sharing reflect some of the new thinking in the development of outsourcing contracts.