The decision on the selection of the service provider is a strategic one and it has long-term effects on the customer service capabilities of the organization. In the Indian context, majority of corporations still have a traditional outlook and want to perform all management functions by themselves, without losing control over any of the operations or passing confidential information on to a third party. In such cases, the organizations will have to change their outlook and policy regarding the involvement of a third party in their operations.
Due to the competitive pressure, more and more corporations are now opting for logistics outsourcing to take cost out of the supply chain and enhance customer service capability. Service provider selection process is described in Figure 12.3.
Source: Sople V.V (2013), Logistics Management, Pearson Education India; Third edition.