Logistics outsourcing by manufacturers in South Africa

Abstract

As organisations find themselves in an increasingly dynamic and competitive world they are seeking new strategies to ensure their competitive advantage and profitability. Logistics presents an area in which these organisations can improve customer service and reduce costs, and strategies in support thereof such as the outsourcing of logistics activities, should be considered. However, it is critical that logistics outsourcing is done diligently to avoid potential problems for the organisation and to achieve the best possible benefits. In South Africa little research has been done regarding current outsourcing practices of local manufacturers. In this article literature on international logistics outsourcing as well as research on some of the logistics outsourcing practices of South African manufacturers is discussed. The findings of a questionnaire survey of South African manufacturers provided information on their logistics outsourcing practices and problems. Prominent issues seem to include inadequate managerial involvement in the logistics outsourcing process, as well as insufficient time spent on many of the important aspects of the outsourcing agreement, the transitioning of resources and ongoing management of the outsourced relationship. It is concluded that a thorough outsourcing process should be followed in order to achieve the benefits of logistics outsourcing.