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Article
Developing a Framework for Evaluating the Logistics Costs in Global Sourcing Processes: An Implementation and Insights
International Journal of Physical Distribution and Logistics Management (2003)
  • Amy Z. Zeng, Worcester Polytechnic Institute
  • Christian L. Rossetti, Georgia Southern University
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.
Keywords
  • Sourcing,
  • Transportation,
  • Logistics,
  • Performance measures,
  • Case studies
Disciplines
Publication Date
2003
DOI
10.1108/09600030310503334
Citation Information
Amy Z. Zeng and Christian L. Rossetti. "Developing a Framework for Evaluating the Logistics Costs in Global Sourcing Processes: An Implementation and Insights" International Journal of Physical Distribution and Logistics Management Vol. 33 Iss. 9 (2003) p. 785 - 803 ISSN: 0960-0035
Available at: http://works.bepress.com/christian_l_rossetti/19/