Romanian Logistics: Outsourcing Benefits and Risks for Yusen Logistics

This research project investigates the benefits and risks of outsourcing and offshoring for Yusen Logistics within the Romanian logistics industry. The study begins with an overview of outsourcing, its rationale, aims, and objectives, followed by a literature review exploring the concept of outsourcing, its benefits for Yusen Logistics, the associated risks, and the relationship between outsourcing and the growth of the Romanian industry. The methodology chapter outlines the type of investigation, research approach, research philosophy, ethical considerations, and data collection and sampling tools employed. The project then presents a data analysis and interpretation, followed by conclusions, recommendations, and reflections. The project aims to analyze the benefits and risks of outsourcing and offshoring for logistics in the Romanian industry, using Yusen Logistics as a case study, addressing research questions regarding outsourcing concepts, benefits, risks, and its impact on industry growth. The research utilizes both primary and secondary data collection methods, including questionnaires and literature reviews, to provide a comprehensive analysis of the subject matter.

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