eas that provide an advantage are likely to receive increased internal investment,
while those that do not are likely to be either eliminated entirely
or put in competition with an ever-expanding marketplace of external
service providers, that is, they are considered for outsourcing. According
to Corbett (2004), outsourcing is a management tool which is
used to move an organization away from the traditional vertically integrated,
self-sufficient structure; one that is increasingly ineffective in
today’s hyper-competitive, performance-driven environment. Through
outsourcing, the organization moves toward a business structure where
it is able to make more focused investments in the areas that provide its
unique competitive advantage.
Logistics outsourcing is one of the fastest growing areas. The number
of outsourcing companies and logistics service providers has increased
dramatically and competition has intensified. Both, outsourcing companies
and service providers, face great challenges in their outsourcing
venture. A better understanding of success and failure factors and the
concerns involved is needed so that outsourcing companies can take better
advantage of the outsourcing opportunity. Since the early 1990s, there
has been a significant increase in the number of organizations that have
decided to outsource all or some aspects of their logistics function. As
a result, research into logistics outsourcing has also increased. A careful
review of existing literature reveals amismatch between theory and practice
in outsourcing. Collectively, these studies suggest that outsourcing
companies should take great care in what, how and whom they choose
to outsource an activity. Such research papers have limitations and are
not useful to everyone, as organizations have their own unique circumstances.
There is a need to gain insight into the key success factors to
logistics outsourcing so that others can learn from their experiences.
Different authors (Ellram 1995; Lambert, Emmelhainz and Gardner
1999; Tate 1996; Greaver 1999; Mayer Brown 2003; Cohen and Young
2006) ascribe different importance to key success factors. Successful outsourcing
does not relate only to financial and business goals. As outsourcing
may have considerable impact on a company’s competitiveness
over time, it is a comprehensive vision of managing the relationship that
demands careful consideration. Without an understanding of different
participants’ perspectives on those involved and affected in the process,
measuring the success of outsourcing is not possible. Furthermore, outsourcing
companies need conceptual tools to evaluate their outsourcing
case in order to understand which key success factors must be consid-