The Externalization off Physical Distribution
The concern here is with situations in which the entire
physical distribution function is contracted out to a logistics
service provider. This means that the warehousing and
transportation functions are entirely performed by a third
party distribution specialist. This specialist also performs
the control function which usually, but not always, includes
order entry and ordering (the full range of activities
contracted out is shown by the shaded area in Figure 1).
Well-known examples of contract distribution in the
Netherlands are the distribution of Tulip computers by
Intexo and the distribution of Xerox copiers by Frans Maas.