Flashcards in Logistics Deck (12)
Factors affecting logistical decisions.
Nature of product
Cost of transport
Type of business
Size of business
Nature of demand
Mode of transport
Benefits of internal logistics
Cheaper long term
Increase the asset value
Benefits of external logistics
No initial setup costs
Easier to forecast
What is Reshoring
It is the act of reintroducing domestic manufacturing to a country
What is offshoring
It is the relocation of a business process from one country to another
What is Outsourcing
It is to obtain a good service by contract from an outside supplier.
Reasons for reshoring
Greater certainty around delivery times
Minimising risk of supply chain disruption
Reducing the complexity of the supply chain
Making it easier to collaborate with home based suppliers
Greater certainty about quality of inputs
Reasons for offshoring
Lower manufacturing costs.
Access to potentially better skilled and higher quality supply.
To take advantage of free trade areas.
Make it easier to supply target international markets.
Reasons for outsourcing
Used for reducing costs
Meeting change in demand
They could be better out of it however less control
What is subcontracting
The production of a particular part of the product is undertaken by another firm.
Advantages of subcontracting
They might be better at the job
Cope with demand