How Does Outsourcing Affect the Efficient Deployment of Supply Chain

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The Answer is Partnering organizations are becoming increasingly efficient at dividing responsibility for supply chain management.Outsourcing,or contract logistics,is a rapidly growing initiative in which a manufacturer or a supplier turns over an entire logistical function (often buying and managing transportation,warehousing,and/or light postponed manufacturing)to an independent third-party logistics company (3PL).These service providers sell logistics solutions instead of physical products Common 3PL products include warehouse space,transportation solutions,information sharing,manufacturing postponement,and enhanced technological innovations.Outsourcing enables companies to cut inventories,locate stock at fewer plants and distribution centers,and still provide the same level of service or even better.The companies then can refocus investment on their core business.The most progressive companies are engaging in vested outsourcing relationships,whereby both parties collaborate deeply to find mutually beneficial arrangements that allow both parties to "win" by reducing overall costs while achieving better performance.Thus,outsourcing is becoming increasingly important in the efficient deployment of supply chain management.

How Does Outsourcing Affect the Efficient Deployment of Supply Chain

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