Logistics Flashcards
Factors affecting logistical decisions.
Nature of product Production site Market Cost of transport Type of business Size of business Nature of demand Mode of transport Lead time
Benefits of internal logistics
Advertisement Total control More reliable Greater flexibility Cheaper long term Better reputation Increase the asset value
Benefits of external logistics
Faster Cheaper Specialist firm 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
Produce more
Cope with demand
Disadvantages of subcontracting
Less control as you rely on a business
More expensive
Longer lead time
