Submitted by: Submitted by nelsonjake18
Views: 10
Words: 7047
Pages: 29
Category: Business and Industry
Date Submitted: 05/23/2016 08:46 PM
The Emerald Research Register for this journal is available at
http://www.emeraldinsight.com/researchregister
The current issue and full text archive of this journal is available at
http://www.emeraldinsight.com/0960-0035.htm
Developing a framework for
evaluating the logistics costs in
global sourcing processes
Evaluating the
logistics costs
785
An implementation and insights
Amy Z. Zeng
Department of Management, Worcester Polytechnic Institute, Worcester,
Massachusetts, USA, and
Christian Rossetti
Department of Supply Chain Management, College of Business,
Arizona State University, Tempe, Arizona, USA
Keywords Sourcing, Transportation, Logistics, Performance measures, Case studies
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.
1. Introduction
Improved technology and intensified competition have enabled and forced
companies to expand their markets worldwide. The most successful companies
often develop their products in Europe and the USA, manufacture in Asia and
Latin America, and sell worldwide (Burnson, 1999). As one of the consequences
of this trend, global sourcing has rapidly arisen as a...