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Outsourcing of logistics Outsourcing of
logistics
functions: a literature survey functions
Mohammed Abdur Razzaque
Department of Marketing, National University of Singapore, Singapore 89
and
Chang Chen Sheng Received June 1997
Revised April 1998
YCH Group of Companies, Singapore
Introduction
Management of logistics functions in modern organizations involves decision
making for the complete distribution of goods and services in the marketing
function (Watson and Pitt, 1989) with a view to maximize value and minimize
cost. A growing awareness that competitive advantage comes from the delivery
process as much as from the product (Muller, 1991a) has been instrumental in
upgrading logistics from its traditional back-room function to a strategic
boardroom function (Foster, 1994). The following reasons have been proposed to
explain this trend:
• There is a growing need to be more responsive to customer service and
market demand (Horne, 1989). As an integrative concept that cuts across
the traditional functions of the business (Christopher, 1993), logistics can
deliver better customer service.
• Logistics activities involve a large commitment of capital.
• The logistics function can be the key facilitator in the cross-functional
effort towards supply chain integration (Harrington, 1995a). Hence it is
not surprising that concepts such
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