(PDF) Outsourcing: Definitions and analysis

RESEARCH
PROJECT

Table of Contents
TOPIC:-............................................................................................................................................3
CHAPTER 1: INTRODUCTION....................................................................................................3
Overview:-...................................................................................................................................3
Background:-...............................................................................................................................3
Rationale:- ..................................................................................................................................3
Aims:-..........................................................................................................................................4
Objectives....................................................................................................................................4
Research questions......................................................................................................................4
CHAPTER 2: LITERATURE REVIEW.........................................................................................4
Concept of outsourcing...............................................................................................................4
Benefits that Yusen logistics get through outsourcing its business operations...........................5
Risks Yusen logistics face while outsourcing of business..........................................................5
The relationship between outsourcing logistics and growth of Romanian Industry...................6
CHAPTER 3: RESEARCH METHODOLOGY.............................................................................7
Type of investigation...................................................................................................................7
Research Approach: ...................................................................................................................7
Research philosophy...................................................................................................................7
Ethical consideration:..................................................................................................................7
Data Collection Tools ................................................................................................................8
Data Sampling Tools...................................................................................................................8
CHAPTER 4: DATA ANALYSIS & INTERPRETATION...........................................................8
CHAPTER 5: CONCLUSION......................................................................................................17
CHAPTER 6: RECOMMENDATION & REFLECTION............................................................18
RECOMMENDATION............................................................................................................18
REFLECTION..........................................................................................................................18
REFERENCES..............................................................................................................................20

TOPIC:-
“To analyse the benefit and risk of outsourcing and offshoring for logistic in Romanian
industry”. A study on Yusen Logistics.
CHAPTER 1: INTRODUCTION
Overview: -
Outsourcing refer to the process of hiring a party outside the company in order to create
goods and perform services that are previously performing through in-house process by
company's employees. This is basically adopted by a company in order to reduce the cost of
company and achieving economies of scale (Alexandrova, 2015). This is because it affects the
wide range of jobs that are ranging from customer support services to manufacturing or back
office. The Romanian logistic industry is also putting efforts toward the adopting outsourcing
practices in order to reduce the cost of transportation and expanding the business operations of
country by providing a medium to offshore the product or services. One of the Romanian based
country named as Yusen Logistics is also working over this in order to outsource its business
operations. The main reason behind this is that outsourcing help Yusen organisation to easily
access the advanced technology, expertise and be able to reduce its cost.
Background:-
In order to conduct this investigation Yusen logistics has been consider which is one of
the largest and fastest growing logistic service provider of Romania. It offers complete supply
chain solution to the international blue-chip client which deals in retail, automotive, FMCG
sector etc. (ROMANIA 2019). In addition to this it also operates an intermodal terminal in
Bucharest handling block train services which is between the Black sea port of Constanta and
Bucharest and other intra-European freight (Blažek, 2015). This organisation operates at approx
17 locations across the Romania and not is planning to outsources its business to other nation in
order to expand its business operations which support in achieving higher profit.
Rationale:-
The main reason behind conducting this investigation is to identify several advantage as
well as risks that a company will get after outsourcing logistic operation at another place. This
information will further have used to recommended the appropriate actions that can be taken to
avoid those risks (Bucoveţchi, Stanciu and Badea, 2019). This investigation also support

researcher in enhancing its skills as well as knowledge regarding the particular topic of concern
as well as techniques that are used to perform investigation effectively. This research can be
further used for academical purpose which help in enhancing the knowledge of students toward
the outsourcing of logistics.
Aims:-
“To analyse the benefit and risk of outsourcing and offshoring for logistic in Romanian
industry”. A study on Yusen Logistics.
Objectives
 To learn about the concept of outsourcing.
 To identify the several benefits that Yusen Logistics get through outsourcing its business
operations.
 To determine risk that Yusen logistics will experienced while outsourcing its business.
 To ascertain the relationship between outsourcing logistics and growth of Romanian
Industry.
Research questions
 What is the concept of outsourcing?
 Describe about several benefits that Yusen Logistics get through outsourcing its business
operations?
 What are the risk that Yusen logistics will face while outsourcing its business?
 Explain about the relationship between outsourcing logistics and growth of Romanian
industry?
CHAPTER 2: LITERATURE REVIEW
Concept of outsourcing
According to Guerreiro, 2015, outsourcing refers to the practice of business in which
company hires another company or an individual to handle the operations and perform task
which was earlier done by the same company. Romania is best known for its service providing
services in BPO, IT and R&D. It stand at 13th position in the terms of financial quality, skills f
people and business availability (van Buren and et. al., 2016). With the help of outsourcing,
companies are able to lower down their cost and also able to improve the efficiency. The
outsourcing enable the company to appoint skill employees so that they are able to deliver more

advanced services. It also reduces the overhead cost of the company as because the outsourcing
company uses its own facilities, equipment to perform the task (Salanta and Popa, 2015).
According to the latest ABSL report, it revealed that 90% of the companies which are
participating in outsourcing is recommending Romania as potential investor to conduct the
business operations. At present banking and insurance sector covers 16% of Romania market,
15% in telecom sector, 8% in healthcare sector, 14% in industrial sector and around 7% in
logistic, pharmaceutical sector. As many international sector are outsourcing in Romania, each
sector is expecting to grow a lot.
Benefits that Yusen logistics get through outsourcing its business operations
As per the view point of Lee Chris, 2018, the rise in on-demand delivery expectations has
leads businesses to rethink over their traditional logistic operational model and improve it by
outsourcing the entire function to new location. This support in reducing the complexity of
making fast delivery options possible without spending much cost over it. Following are some
benefits that Yusen logistics get with the outsourcing of its business,
 Access to expertise:- Outsourcing logistics includes people, technology and processes at
a level beyond then a manner a single company can develop independently. Hence
despite of fluctuating capacity, enhanced shipper disruption and demand of Yusen
Logistic's customer can be manage much effectively by improving the supply chain
management using information and analytics to drive decisions.
 Access to technology:- Another major benefit that Yusen Logistics gets through
outsourcing logistics is that it will be able to access latest technology (Rennung,
Luminosu and Draghici, 2015). On of the best example that can be given for this is
Internet of things functionality which support Yusen logistics to improve its standard of
supply chain as it is an integrated and very essential part of maintaining customers for
longer period of time.
Risks Yusen logistics face while outsourcing of business
According to the view point of Lee Chris, 2018, outsourcing of logistics is very
beneficial for Yusen logistic company as it provide more benefits and help in reducing
operational cost. But apart from this outsourcing also includes several risk that may affect the
business operations of Yusen logistics. These includes,

Loss of control:- Most of outsourcing logistics results in adoption of client branding for
employees as well as assets and as a result of which relationship get invisible to customers.
Hence the party in another country will handles the operations of Yusen logistic and it will be
responsible for maintaining relation with customers (Pomponi, Fratocchi and Rossi Tafuri,
2015). Therefore its management can affect the goodwill as well as perception of customer
toward company.
Integrating information technology:- Outsourcing of logistics require Yusen logistics
to get integrated with IT which is one of the biggest challenge as data flow between systems as
well as parties which require deep visibility to manage and optimization of network. This may
leads to misuse of data that can affect business operations, practices and brand image of
company.
The relationship between outsourcing logistics and growth of Romanian Industry
According to Gurung and Prater, 2017, Logistic is a important tool in the development of
the economy.A well organised logistics and transport facility is required in country in order to
improve the efficiency of all over the world. Around 1.5% of the population of Romania is
engaged in outsourcing and it offers job to 1,25,000 of its employees. In order to meet the
demand from the growing pharma industry in Romania, Yusen logistic helped a lot. This led to
increase the overall sales of pharmaceutical during from 11.8% to 3.15 million. In the year 2015,
Romania has spent over 4.9% of GDP on health. The logistic market in Romania has grown
because of the foreig investrs have entered in the field of different activities due to the lower cost
(Oshri, Kotlarsky and Willcocks, 2015). As a fact, the logistic space also start growing and thus
the volume of transactions on the logistic market reached to 250,000 meter square. In the year
2007, the rate of occupying the logistics space was around 98%. Overall it is said that, the
logistic industry has led to the growth of Romania in the terms of reducing the work of back
office as its saves the time for other activities and help in increasing the productivity of the
country.

CHAPTER 3: RESEARCH METHODOLOGY
It refers to the plan of action that is used in completing the research efficiently.
Methodologies are used in collecting of the information with the purpose of creating a decision
that helps to overcome a issue (Nero, 2018).
Type of investigation
A research is based on two different types namely quantitative and qualitative research
method. Quantitative methods refers to collecting of information numerically (Kherbach and
Mocan, 2016). Methods commonly used here are questioners. Where as qualitative information
refers to gathering of information through non numerical data. In the existing Research,
quantitative Research has been used by the Researcher thus it is the best source for creating
appropriate results as measurable and justifiable result are gathered.
Research Approach:
There are two type of research approach namely deductive and inductive approach. The
deductive approach is mainly concerned with making of new theories which supports the
hypothesis whereas inductive approach contributes to the emergence of new theories (Kovács
and Kot, 2016). Both approach is important in order to study a topic but the best suits in this
research is deductive method as the study of this is dependent upon the quantitative facts.
Research philosophy
It provides direction to research work in appropriate manner. In other words it help the
researcher to perform right work in right direction. There are two type of research philosophy
namely interprivitism and positivism. Interprivitism is depended on the qualitative fact where as
positivism philosophy is based on quantitative data collection method. In order to conduct this
research, positivism philosophy is used as quantitative method is used in drawing a appropriate
solution.
Ethical consideration:
Conflicts may arise at any time during the conducting of research. The information
collected by the researcher must be reliable and valid. Moreover the information should be kept
private and not be disclosed in front of anyone (Mina and Olteanu, 2017). It is also required for
the Research to consider time and cost as their key aspects because these are also needs to be
managed in respect to completion of the research work in efficient manner.

Data Collection Tools
It is considered as one of the most important tool of research methodology. For carrying
out the research, there are two methods of collecting the data, i.e., Primary and Secondary.
Primary data refers to the data which is collected for the very first time. The information
collected here is fresh and new (Kozerska and Pabian, 2017). Where as on the other hand
secondary data refers to the information which is collected from the published sources like
articles, magazines, journal etc. In the present research report, both methods are used. As
questioners is a primary tool which is helpful in conducting the survey where as secondary
method is used in conducting the data for literature review.
Data Sampling Tools
Data sampling is a method which is used to select subset from large population. There are
two methods of collecting the sample, i.e., probabilistic and non probabilistic tool. In
probabilistic sampling, each member has a probability of being selected where as non
probabilistic refers to the sampling where each population doesn't have equal change of getting
selected (Mariotti, 2015). To conduct this investigation, random sampling method is used
because it supports the investigation. Sample size of 40 respondents are selected in order to
conduct this survey.
CHAPTER 4: DATA ANALYSIS & INTERPRETATION
Questionnaire
Q1. Are you aware about the concept of outsourcing ?
Yes
No
Q2. Does outsourcing help an organisation in smoothing out its trade practices?
Yes
No
Q3. What are the factor that pushes an organisation to outsource its business practices?
Reduction of cost
Global reach

Maintaining specialisation of operations
Easy delivery of services
Q4. What are the benefits that Yusen logistics get by outsourcing its business operations?
Access to expertise
Cost reduction
Access to technology
Economies of scale
Q5. What risk does Yusen logistics will have to face while outsourcing of business?
Management difficulties
Lack of confidentiality and security
Instability
Service delivery issues
Q6. Do you think that increase in outsourcing logistic practices helps in growth of Romanian
industry?
Yes
No
Q7. Which kind of relation does outsourcing logistic and growth of Romanian industry?
Positive
Neutral
Negative
Q8. Does Logistic industry of Romania is effective for the economical growth of Romanian
industry?
Yes
No
Q9. Recommend the ways through which Romania industry can achieve growth by outsourcing

logistics.
Theme 1: The concept of outsourcing
Q1. Are you aware about the concept of outsourcing ? Frequency
Yes 30
No 10
Yes No
0
5
10
15
20
25
30
30
10 Frequency

Interpretation: From the above given information it has been found that 30 out of 40
respondents have knowledge regarding the concept of outsourcing and manner in which it
benefit the organisation. But on the other side 10 respondents from the sample of 40 doesn't
holds any idea regarding the concept of outsourcing and how it is used.
Theme2: Outsourcing help an organisation in smoothing out its trade practices
Q2. Does outsourcing help an organisation in smoothing out its trade
practices?
Frequency
Yes 25
No 15
Yes No
0
5
10
15
20
25
25
15
Frequency

Interpretation:- From the above present information it can interpret that outsourcing is
very helpful to an organisation as it simplify the operations and also reduce the time taken to
deliver the services which in turn improve the quality of services. Through the survey it has been
found that 25 out of 40 respondents are agree with the fact that outsourcing helps an organisation
in simplifying its trade practices by reducing the distance. On the other side 15 out of 40
respondents are disagree with the fact that outsourcing help an organisation in smoothing up its
trade practices.
Theme 3: Factor that pushes an organisation to outsource its business practices
Q3. What are the factor that pushes an organisation to outsource its
business practices?
Frequency
Reduction of cost 10
Global reach 5
Maintaining specialisation of operations 10
Easy delivery of services 15
Reduction of cost
Global reach
Maintaining specialisation of operations
Easy delivery of services
0
2
4
6
8
10
12
14
16
10
5
10
15
Frequency

Interpretation:- From the above given information it has been found that 10 out of 40
respondents said that outsourcing help an organisation in reducing cost. But apart from that 5
respondents said that an organisation get attracted toward outsourcing as it get benefit of global
reach. Despite of this 10 out of 40 respondents believes that an organisation become able to
maintaining specialisation of operations when it outsource its business practices which pushes an
organisation to adopt this option. On the other side 15 out of 40 respondents believes that
organisations usually adopt method of outsourcing for simplifying their delivery of services.
Theme 4: Benefits that Yusen logistics get by outsourcing its business operations
Q4. What are the benefits that Yusen logistics get by outsourcing its
business operations?
Frequency
Access to expertise 5
Cost reduction 10
Access to technology 15
Economies of scale 10

Interpretation:- As per the above presented information it can be interpret that there are
number of benefits that Yusen logistics get by outsourcing its business practices. Over this
investigation it has been found that 5 out of 40 respondents said that company will be able to
have easy access to expertise when it adopt outsourcing of its business operations. But 10 out of
40 respondents said that Yusen logistics will be able to minimise its cost by reducing the
transportation expenses with the outsourcing of its operation. On the other side 15 respondents
said that company will be able to get access to advance technology when it will adopt
outsourcing option. But 10 respondents said that Yusen logistics become able to achieve
economies of scale with the help of outsourcing logistics.
Theme 5: Risk faced by Yusen logistics while outsourcing business
Q5. What risk does Yusen logistics will have to face while Frequency
Access to expertise
Cost reduction
Access to technology
Economies of scale
0
2
4
6
8
10
12
14
16
5
10
15
10
Frequency

outsourcing of business?
Management difficulties 10
Lack of confidentiality and security 15
Instability 5
Service delivery issues 10
Interpretation:- From the above presented information it has been interpret that along
with benefits there would be certain kind of risk that Yusen logistics will have to face while
performing outsourcing logistics. Through the investigation it has been found that 10 out of 401
respondents said that a company will have to face difficulties in terms of management of
business operations. On the other side 15 out of 40 respondents said that the major risk that
Yusen logistics have to face is lack of confidentiality as well as security because outsourcing
require integration 0of information technology which leads to sharing of data to several partner.
Apart from this 5 respondents said that Yusen logistics have to face instability in its operation
Management difficulties
Lack of confidentiality and security
Instability
Service delivery issues
0
2
4
6
8
10
12
14
16
10
15
5
10
Frequency

with the outsourcing of logistics. But 10 out of 40 respondent said that Yusen logistics will face
issues in term of delivering of services when it outsources business practices at another place.
Theme 6: Outsourcing logistic practices helps in growth of Romanian industry
Q6. Do you think that increase in outsourcing logistic practices helps
in growth of Romanian industry?
Frequency
Yes 30
No 10
Interpretation:- From the above presented information it has been interpret that 30 out
of 40 respondent are agreed with the fact that increase in outsourcing logistics practices will help
in the growth of Romanian industry. But 10 out of 40 respondents said that outsourcing of
logistic practices will not support in growth of Romanian industry.
Yes No
0
5
10
15
20
25
30
30
10
Frequency

Theme 7: Relation between outsourcing logistic and growth of Romanian industry
Q7. Which kind of relation does outsourcing logistic and growth of
Romanian industry?
Frequency
Positive 25
Negative 5
Neutral 10
Interpretation:- From the above presented information it has been found that 25 outs of
40 respondents said that outsourcing logistics shares a positive relation with growth of Romanian
industry. On the other side 5 outs of 40 respondents said that outsourcing logistics share a
negative relation with growth of Romanian industry as it brings up several risk. But another 10
respondents said that outsourcing logistics and Romanian industry growth shares up a neutral
relationship.
Positive Negative Neutral
0
5
10
15
20
25
25
5
10 Frequency

Theme 8: Logistic industry of Romania is effective for the economical growth of Romanian
industry
Q8. Does Logistic industry of Romania is effective for the economical
growth of Romanian industry?
Frequency
Yes 30
No 10
Interpretation:- As per the investigation performed it has been found that 30 out of 40
respondent are agreed with the fact that logistics industry of Romania is effective and very
crucial for the economic growth of Romanian industry. On the other side 10 out of 40
respondents are disagree with the fact that logistics industry of Romania is responsible for the
economic growth of Romanian Industry.
CHAPTER 5: CONCLUSION
From the above investigated information, it can be summarised that outsourcing plays a
crucial role within improving the operations of a company by reducing the distance among
customer and organisation. In addition to this it also provides several benefits such as access to
expertise, reduction in cost of operations, access to technology and achieving the economies of
Yes No
0
5
10
15
20
25
30
30
10
Frequency

scale. But despite of all these it also involve certain risks such as difficulties in management, lack
of confidentiality and security, instability in operations and issues related to delivery of services.
From the survey conducted with the help of questionnaire it has been found that majority of
people said that outsourcing of logistics support in economic growth and development of a
country as well as company. Apart from this majority of people state that outsourcing of business
operation supports a company in smoothing up its practices by reducing the distance as well as
time barriers.
CHAPTER 6: RECOMMENDATION & REFLECTION
RECOMMENDATION
From the above identified issues it has been found that there are number of issues that
Yusen logistics will found while outsourcing its business at another geographical area. So in
order to overcome this issues following recommendations are presented:
 The major issue that Yusen logistics have to face is difficulties in managing operations
and in order to deal with such issues it is recommended that organisation must hire high
skilled employees to work efficiently. In addition to this, the leaders of organisation can
held meeting with third party who is managing work at another country to have a regular
check over their work.
 In order to avoid the risk of security and confidentiality, Yusen logistics must focuses
toward preparing a networking source which consists of number of security threat in
order to avoid any kind of unauthenticated access. This in turn help in reducing the
chance of data hack.
 For avoiding the risk of affecting the brand image due to instability of business
operations, Yusen logistics can try to interact with customer to identify the issues that
they are facing from the services of company. This will help in improving the operations
performed at new location so that actions can be performed as per the expectation of
customers.
REFLECTION
I am glad that I got an opportunity to perform an investigation over such a knowledgable
topic i.e. “A study on the benefit and risk of outsourcing logistics in Romanian Industry”. This

investigation has supported me in enhancing my knowledge in this regard that further support in
my future practices. Apart from this I also become able to enhance my researcher skill by getting
knowledge regarding the number of tools and techniques that are used to gather, evaluate,
arrange and interpret the information effectively. For performing this investigation, I have both
type of data collection method such as primary and secondary method. In order to collect
secondary data, I have go through several articles, journals and book to critical evaluate the view
point of several authors. For gathering primary data, I have prepared a questionnaire and send it
to several people in order to present information. The main reason behind selecting questionnaire
is that time and budget provided for investigation was very limited other options will take lots of
time. Through this investigation I have experienced several issues such as time & Budget was
low, respondents are not ready to reply properly etc. But despite of all these issues I have tried
my best to perform this investigation effectively. In future, if I again get this opportunity than I
will perform my work more effectively and appropriately by using knowledge that I have gained
through this investigation.

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Online
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