(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.