Developing a framework for evaluating the logistics costs in global sourcing processes An implementation and insights

Developing a framework for evaluating the logistics costs in global sourcing processes An... Global sourcing is becoming a prerequisite for companies competing in today's market. The logistics costs often comprise a large portion of the total global sourcing cost, thereby determining the effectiveness of this procurement strategy. However, evaluating the logistics cost in a global context is frequently difficult. This paper presents a five‐step evaluation framework and illustrates how this framework can be implemented using a case study at a leading firm in the US aviation industry and its part supplier in Chengdu, China. The framework not only identifies the key logistics cost items, but also suggests a way of quantifying each of the cost elements. The computational part of the framework can be easily implemented on spreadsheets and offers substantial flexibility to accommodate assessment of various transportation alternatives and sensitivity analysis. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png International Journal of Physical Distribution & Logistics Management Emerald Publishing

Developing a framework for evaluating the logistics costs in global sourcing processes An implementation and insights

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Publisher
Emerald Publishing
Copyright
Copyright © 2003 MCB UP Ltd. All rights reserved.
ISSN
0960-0035
DOI
10.1108/09600030310503334
Publisher site
See Article on Publisher Site

Abstract

Global sourcing is becoming a prerequisite for companies competing in today's market. The logistics costs often comprise a large portion of the total global sourcing cost, thereby determining the effectiveness of this procurement strategy. However, evaluating the logistics cost in a global context is frequently difficult. This paper presents a five‐step evaluation framework and illustrates how this framework can be implemented using a case study at a leading firm in the US aviation industry and its part supplier in Chengdu, China. The framework not only identifies the key logistics cost items, but also suggests a way of quantifying each of the cost elements. The computational part of the framework can be easily implemented on spreadsheets and offers substantial flexibility to accommodate assessment of various transportation alternatives and sensitivity analysis.

Journal

International Journal of Physical Distribution & Logistics ManagementEmerald Publishing

Published: Nov 1, 2003

Keywords: Sourcing; Transportation; Logistics; Performance measures; Case studies

References

  • Multimodal transport: the case of Laotian garment exporters
    Banomyong, R.; Beresford, A.
  • Estimating the effects of carrier transit‐time performance on logistics cost and service
    Tyworth, J.E.; Zeng, A.Z.
  • Activity based costing and decision support
    van Damme, D.A.; van der Zon , F.L.A.

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