CASE STUDY

Sony Broadcast And

The case was prepared by
Professor Robert S. Collins
IMD Lausanne
and Research Associate
Kimberly A. Bechler
as a basis for class discussion rather than to
illustrate either effective or ineffective
handling of a business situation.
Professional Europe (R):
becoming a virtual
company
In April 1997, senior management at
Sony Broadcast and Professional
Europe (BPE) was focused on making
the “virtual company” concept a reality.
BPE was moving away from a confe-
deration of national sales companies
towards a number of geographically
dispersed business teams serving all
of Europe. The case is its suitability The unabridged case won the
Supply Chain Management Award
for use as a vehicle to discuss the
in the 2000 European Case Writing
transformation of bricks and mortar
Competition organized by the
distribution systems to those needed
European Foundation for
to support-e-business. Management Development

Miles Flint, Deputy Managing Director - Western Europe,
paused for effect before delivering his concluding mes-
sage to the members of his management team attending
the Sony Broadcast and Professional Europe “Kick-off
Conference” held at Reading in April, 1997. This event
marked the beginning of the 1997 fiscal year.
When we meet for the 1998 Kick-off Conference in
about a year’s time, we shall be able to confirm to our-
selves that the way we are working, and the issues we
are challenging, truly reflect BPE’s mission of being a
virtual company. A year from now we shall be living
this mission, not just aspiring to it as is the case today.
Our mission, as we see it, will have become more of a
reflection of reality than a statement of intent.
lenges he and his colleagues faced in realising improve-
ments in supply chain flexibility, adaptability and res-
ponsiveness to market demand.
As Flint had remarked earlier,
For many of our customers, Sony is still too difficult to
do business with. That was OK when the customer had
no choice other than to buy from us. It simply will not
do in today’s competitive world. As margins are squee-
zed, pressures on supply chain performance, inventory
reduction and the need to eliminate duplication of
processes and costs will continue to intensify.
As management, we are in a race to accelerate our
capacity to change.

Flint had been a vocal champion and driving force
behind the virtual company concept since its inception.
It encompassed his own strongly held beliefs about how
Sony Broadcast and Professional Europe (Sony BPE)
should be structured and managed. His vision was of a
number of business teams working across the European
zone rather than in each country. The teams would not
operate out of the headquarters - rather, team leaders
and indeed team members would be geographically dis-
persed throughout the zone. Support functions, e.g.,
information systems/management, human resources,
supply chain and finance would be organised in such a
way as to provide the necessary infrastructure and sup-
port for the teams.
For Derry Newman, Divisional Director Information
Systems and Supply Chain, Flint’s comments only
underscored the operational opportunities and chal-
Sony Broadcast and Professional Europe
Sony BPE, with headquarters in Basingstoke some 45
minutes drive from London’s Heathrow Airport, served
markets in 116 countries in Western Europe, Eastern and
Central Europe, the Middle East and Africa. In fiscal 1996
it accounted for a commensurate proportion of Sony
Corp’s European sales of DM 17.6 billion. It employed
some 1500 people operating out of 23 locations, the
majority of which were in Western Europe.
Sony BPE comprised two major business groups:
Broadcast (BC) and Business & Industrial (B&I).
Broadcast served both state and private radio and TV
stations, production houses and music recording stu-
dios. The market channel was direct – business-to-busi-
ness. On the other hand, the Business & Industrial group
relied on indirect selling through dealers who handled a

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 SONY BROADCAST AND PROFESSIONAL EUROPE (R): BECOMING A VIRTUAL COMPANY
broad range of products, e.g., closed circuit television
security systems, projectors, camcorders, etc., as well
as specialised equipment for video conferencing, medi-
cal and educational applications and giant screen dis-
plays. With the exception of the Nordic countries, which
operated regionally, each of the Western European coun-
tries had their own National Sales Company (NSC) and
warehousing operations.
The issues we are challenging,
truly reflect BPE’s mission
of being a virtual company
Sony BPE Supply Chain – April 1997
As of April 1997, the vast majority of products sold by
Sony BPE were manufactured in Japan and imported
into one of two distribution centres. The Basingstoke
distribution centre was dedicated to BC products while
B&I products were distributed through Sony Logistics
Europe’s (SLE) hub at Vianen, The Netherlands, an
hour’s drive from Schiphol Airport. In terms of BPE
stock-keeping units (SKUs), Vianen handled 10 times
more than Basingstoke.
Broadcast products were shipped to Basingstoke by air
freight, the elapsed time from factory to Basingstoke
being typically 5 days. At Basingstoke, the BC products
went through a customer-specific configuration and tes-
ting process before being shipped via Vianen for ultima-
te distribution from a NSC warehouse to the customer. In
some instances, products were re-checked and re-confi-
gured at the NSC warehouse before shipment. Transport
from Basingstoke to Vianen took one week. This inclu-
ded preparation and despatching of the physical goods
together with appropriate shipping documents, alloca-
ting space on a truck making daily deliveries to Vianen,
then receipt and cross-docking procedures on arrival.
Only a small percentage of BC products were shipped
directly from Basingstoke to the customer.
Unfortunately the system was prone to error due to inef-
ficiencies in both material and information handling pro-
cesses, which resulted in partial shipments and late deli-
veries.
All B&I products were distributed through SLE at
Vianen. Some 83% of B&I products were shipped from
Japan by sea. The elapsed time from factory to distribu-
tion centre amounted to some 40 days, which included 2
days for container unloading, customs clearance and
local delivery. Sony BPE had DM 40 million-worth of
goods on the water at any one time. In those instances
in which air freight was used, the elapsed time was redu-
ced to 5 days.
SLE undertook all material handling, distribution and
transportation activities. It invoiced the Sony product
divisions accordingly. Transport was provided by a com-
bination of owned vehicles and third party logistics pro-
Supply Chain Forum An International Journal Vol. 2 - N°1 - 2001
viders. Vianen, originally built for inter-warehouse ope-
rations, acted as a staging area to serve the 14 national
sales company warehouses. Shipments between Vianen
and the NSC warehouses were scheduled on a regular
basis. Some warehouses (France, Germany, Italy, Spain
and the UK) were served every 2-3 days, while smaller
country operations were served only weekly.
Procurement was a two-stage process. It was initiated at
the NSC level through the submission of a 7-month rol-
ling forecast of demand by product to the supply chain
administration teams. The monthly forecasts were
based on both historic data and market intelligence,
with equal attention being paid to all products. Given
the forecasts of demand, replenishment orders were
determined based on on-hand inventory, anticipated
receipts, and a desired target stock level (TSL). The
replenishment cycle was weekly from stock held at
Vianen.
At Basingstoke and Vianen, supply chain administration
teams consolidated the forecasts and orders received
from the NSCs to assess projected supply/demand
balance. In placing monthly orders on the Japanese fac-
tory, consideration was given to aggregate demand and
the accuracy of the forecasts, on-hand inventory, antici-
pated receipts, and a desired TSL. The TSL was to cover
demand both during the manufacturing lead time and
the length of the procurement cycle. It also included
some safety stock. For B&I products, the TSLs varied
from 60-90 days. Order-delivery cycles were of 4-5
months’ duration depending on the product.
As management, we are in a race to
accelerate our capacity to change
Opportunities for Virtual Logistics
In January 1997, Derry Newman had commissioned an
internal study of the B&I supply chain with the express
purpose of increasing its flexibility, adaptability and res-
ponsiveness. Newman believed,
The factory to customer logistics process can be repre-
sented by a ‘virtual warehouse,’ where the majority of
physical activities from factory gate to customer pre-
mises can be outsourced to a global logistics vendor(s).
The manufacturer should not be concerned with the
physical location of product within the virtual warehou-
se provided that product is delivered to the customer at
the agreed time and place thereby meeting an agreed
and demonstrable service level.
The creation of a “virtual warehouse” would require the
re-evaluation of BPE inventory holding policies and the
use of Sony’s SAP system R/3 to integrate suppliers, ven-
dors and internal divisions.
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 SONY BROADCAST AND PROFESSIONAL EUROPE (R): BECOMING A VIRTUAL COMPANY
Use of Air Freight
The report recommended that a significant proportion
of B&I products should be shipped by air freight. The
increased cost of air freight would be offset by the bene-
fits of reducing overall transit time from 40 days to 5
days. These included:
1. Overall reduction in inventory investment, i.e. safety
and transit stocks.
2. Improved responsiveness.
3. Reduced planning horizons giving rise to increased
forecasting accuracy and potential reduction in slow-
moving inventory.
4. Reduction in space requirements at warehouses.
5. Reduced time to market.
6. Increased reliability of air freight versus sea freight.
The Centralisation of Inventory and
Direct Delivery
On the basis of a detailed cost analysis, it was recom-
mended that BPE products should be distributed direct-
ly from Vianen to customers and that the actual delive-
ries, in most cases, be undertaken by a third party logis-
tics provider. Tangible savings were to be achieved
through the elimination of cycle stocks at the NSC ware-
houses and the reduction in the level of safety stocks for
individual products. Such safety stocks proliferated as
the number of national sales company warehouses
increased. Intangible benefits were also cited. These
included:
1. Increased responsiveness to customer demand.
2. Increased levels of customer satisfaction.
3. The opportunity to undertake forecasting on a pan-
European basis and, as a result, improve forecasting
accuracy.
4. Facilitation of product life cycle management,
particularly at the end of the life cycle where obsoles-
cence risk through overstocking was high.
5. The holding of inventory at a lower value-added
position in the supply chain.
Additionally, it was shown under what conditions the
costs of a third party logistics provider would be less
than the combined transportation and handling costs if
products were shipped from Vianen to the customer via
the NSC warehouse.
Supply Chain Forum An International Journal Vol. 2 - N°1 - 2001
The Choice of a Third Party Logistics Provider
TNT, Danzas, UPS and Euro Express were four compa-
nies short-listed by Newman as potential third party
logistics providers. In making a final selection, Newman
considered the following to be of critical importance.
1. Geographic Reach and Capacity
The preferred supplier would have pan-European opera-
tions with an ability to provide next day/48-hour service
anywhere in Europe at competitive rates. The supplier
should be capable of expanding to match the growth in
Sony BPE volumes and be flexible in meeting changing
market requirements. The supplier would be expected
to dedicate full-time resources to the Sony account.
2. Customer Interface and IT Focus
As the supplier would be Sony’s representative in inter-
acting with the customer, an ability to project Sony’s
image locally was critical. To this end the supplier
should have a local presence rather than sub-contract
to a local carrier. The supplier would also be expected to
commit to and demonstrate a high level of delivery ser-
vice. Criteria would include on-time delivery reporting,
same-day reporting of proof of delivery and the resolu-
tion of non-deliveries within 24 hours. A pan-European
tracking system would be essential.
3. Rewards and Penalties
A bonus/penalty system would apply and be based on
service levels achieved against targets. In the event of
damage, the service provider would be expected to
issue a credit note covering the service charge for the
complete consignment.
Getting Started
Re-engineering the supply chain to support the virtual
company meant that Newman needed to address the
challenges posed by the centralisation of inventory,
direct delivery and the selection of an appropriate third
party logistics provider. How should he go about addres-
sing the concerns of dealers, national sales companies
and BPE employees in order to ensure that the “virtual
warehouse” might be realised? Newman was also
conscious of the imperative to safeguard Sony’s reputa-
tion for customer care and thereby its brand image.
Under the circumstances, was the timing of the change
to the centralisation of inventory and direct delivery too
ambitious?
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 SONY BROADCAST AND PROFESSIONAL EUROPE (R): BECOMING A VIRTUAL COMPANY
COMMENTS ON THE CASE STUDY
Olivier MAIGRET
ESENCIA, Organisational Development
The present case study is a good example of the type
of challenges being faced by today’s organisations. The
overall environment is in constant mutation, and fac-
tors such as competitors, customer requirements, tech-
nologies and subcontractor services are constantly
changing. Within this context, an organisation has to
change if it is to continue to satisfy its clients by offe-
ring a higher level of service than its competitors.
There is no other solution.
How does a company come to understand that the pro-
ducts or services that it has been providing are out-of-
date? Usually this occurs when its Key Performance
Indicators turn to red: stock levels and costs are too
high; the manufacturing and product development
cycles are too long; staffing numbers rise; and all the
while turnover remains stable, or even drops.
Customary ways of meeting these challenges
A typical reaction is to cut stocks of finished products.
Inventory usually accumulates when the provider and
customer cycles do not mesh (the provider/client tan-
dem can either be internal or external). In Sony’s case,
compare the 7-month rolling forecasts and consolida-
tion measures, or the 4-5 months cycle, with the fact
that deliveries to customers are made on a daily or
weekly basis. These cycles do not mesh at all, and this
decoupling leads to a build-up of inventory. However,
a company is a complex system that has its own equili-
brium. If you only modify one of its constituents, such
as its inventory levels, you will create an imbalance in
other areas, thus incurring the risk of creating supply
chain shortages: late deliveries, partial shipments, etc.
A similar reaction is the drive to cut delivery costs.
What happens when a company concentrates on its
delivery systems alone? It might focus on its fleet of
trucks or warehouse, and try to make cuts in one
and/or the other area. By so doing it can lower its cost
base somewhat– but it will also incur quality-related
risks such as late deliveries.
Reactions like these are driven by business paradigms.
One example is the notion, “This is how we have been
running our business for several years now, so we
know what we are doing and are experts”. These sorts
of paradigms are a kind of “mental prison”, depriving
the company of other ways of visualising how their
business can be run.
How Sony Broadcast and Professional Europe
met these challenges
Faced with a challenging business situation, Miles Flint
acted in a variety of manners:
1/ With an eye on market and customer needs, he
devised a long-term vision for Sony BPE and shared
it with the whole management team, giving them a
fixed but ambitious target.
Supply Chain Forum An International Journal Vol. 2 - N°1 - 2001
2/ To solidify his vision, he put together his own
concept of which processes should be targeted,
acting with support from his IS and Supply Chain
Director, Derry Newman.
3/ He ensured that his staff remained forward-looking
(and focused on the successfulness of his Vision) by
highlighting flexibility, adaptability and responsive-
ness to market demand.
He fully assumed his Leader’s role, setting the tone by
defining a PROJECT that was clear, consistent and sha-
red; by more or less setting up the PROCESSES that
could support this project; and by motivating PEOPLE
to carry it out.
Here we have the 3 key components of an efficient
organisational development project. Moreover, as
soon as one of them is missing, the project cannot be
100% fulfilled.
The staff is perfectly aware of the ambitious targets it
has to reach. It sees the credibility of the underlying
theoretical processes; understands the importance of
the whole endeavour; and is looking towards the futu-
re. Moreover, with his staff concentrating solely on
what it has to gain from the change (rather than on
what it has to lose), Miles Flint has minimised the risks
of failing in his change management drive. His team is
now ready to modify its paradigm(s) and to consider
new ideas. People are ready to forget their own area
of responsibility; to lend their energy to a global pro-
ject; and to build an INTERDEPENDENT organisation.
Interdependence vs. Independence
Interdependence (as opposed to independence) is a
key word in efficient organisations, especially with
supply chain projects.
To characterise independence-based organisations, we
can say that every entity in the organisation is respon-
sible for one part of its total performance, yet has its
own role and mission working towards this end.
Performance is measured by the way in which each
entity fulfils this role. Every department
(Manufacturing, Procurement, Logistics, Quality,
Maintenance, etc.) is responsible for its own costs, but
does not consider itself to be responsible for the ove-
rall cost. Indicators might not be consistent with global
performance – for example, by reducing purchasing
costs there may be a decrease in productivity, a rise in
the number of defects, etc. Bonus systems are also
involved (i.e. volume-based bonuses for the
Manufacturing staff may impact quality levels; reve-
nue-related bonuses for the Sales staff may impact
forecasting accuracy) or on customer orders changes in
planning “frozen zone”.
For many companies, the corporate culture revolves
around the concept of independence.
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 SONY BROADCAST AND PROFESSIONAL EUROPE (R): BECOMING A VIRTUAL COMPANY
In an interdependence-based
organisation, every entity feels
responsible for total performance
yet understands that it is “only”
one link in a chain. This chain
derives from customer demand
rather than the Company products
supply. In this type of organisation,
airfreight becomes possible becau-
se the only real priorities are the
firm’s overall costs; customer satis-
faction; and added value (via grea-
ter responsiveness, shorter plan-
ning horizons, a lesser need of
space in the warehouses, overall
reduction in investments in inven-
tory, etc.). It is also possible to
envisage Inventory Centralisation
inasmuch as the only priorities are
to achieve customer satisfaction
through improved forecasting
Serge BEKAERT
serge.bekaert@celerant.cc
Monique FRANT
monique.frant@celerant.cc
Henk DE JONG
henk.dejong@celerant.cc
CELERANT Consulting
The Sony BPE case paints a picture
that applies to many organisations
throughout Europe. Mr Flint’s sta-
tement of the problem – “Sony is
still too difficult to do business
with” – lists a number of areas for
improvement, but gives no clear
sense of what the problem actual-
ly is. Is Sony worried about custo-
mer satisfaction levels? Is the cost
of service disproportionate to that
in the rest of the market? The
improvement programme centres
on the establishment of a virtual
warehouse model. What other
alternatives were considered?
With a firm grasp of the problem,
it would be possible to identify
and evaluate a number of diffe-
rent ways for Sony to move for-
ward. Whatever the solution cho-
sen, care and attention are needed
to resolve the people and IT issues
that will be major factors in bloc-
king or accelerating implementa-
tion.
Assessing alternative solutions
Mr Flint’s concerns about increa-
sing competition, low margins,
Supply Chain Forum An International Journal
accuracy; avoiding the delivery of
any obsolescent products; and
greater responsiveness to market
demand. Lastly, the relationship
that is built up with an outside
provider can begin to resemble a
real partnership, one which is
based on trust, service quality and
complete respect for the brand.
To summarise Interdependence, I
would say that in this kind of orga-
nisation, 1+1=3 or 5 or 20 or….
Ensuring the fulfilment of
Sony’s project
How should students answer the
last two questions Bob Collins asks
of them? The idea of managing
pressure on supply chain manage-
ment performance, and stock
reduction are shared throughout
the world. The old borders – com-
petitive, geographic, between
markets and industries – are blur-
red, and keep moving. Partners
from the past are now our compe-
titors and vice versa. Information
can be shared throughout the
world in a simple and efficient
manner, at relatively low cost.
Distance is much less significant.
Where distance does matter, of
course, is in transport. In the Sony
case, emphasis is placed on the
reduction of transport time by
making more use of air transport.
This is expected to reduce the cost
of work in progress, and also the
costs of operating distribution
centres such as the national sales
company warehouses in each
country.
The question should be raised: Is a
‘virtual’ warehouse, and the re-
design of the logistics process, the
right answer for all the challenges
listed? Can other solutions contri-
bute to better customer service,
greater flexibility and the reduc-
tion of costs?
One possible alternative is a re-
design of the production process,
producing some of the products
for the European market locally.
This solution has several advan-
tages. It allows production of cus-
tomised products. Re-testing after
Vol. 2 - N°1 - 2001 72
change by providing a clear idea
of what each and every person
involved is going to gain from it is
key to getting everyone to move
in the same direction. National
Sales Companies have to be invol-
ved in the project as an interde-
pendent link of supply chain, even
if they are not under Miles Flint’s
responsibility. Will Miles get sup-
port from Sony Europe’s senior
management? In the affirmative,
the answer to the last question
will be No: the change’s timing, in
terms of the inventory centralisa-
tion and direct delivery processes
it implies, is not overly ambitious.
There is a great deal of staff inter-
dependence, and process re-engi-
neering will be easier and faster.
logistics is no longer necessary.
Logistics costs can be reduced
while total control is maintained
over the process.
Another possibility is to use mar-
ket or product segmentation to
differentiate between urgent and
less urgent deliveries. This opens
the way to becoming truly virtual
for some clients or products, by eli-
minating all warehouse activities
and delivering to the customer
directly from the factory. This
solution has the advantage of
making some more of the logistics
operation obselete, and reducing
the amount of stocks being held,
without jeopardising the desired
customer service levels.
The virtual warehouse approach
The virtual warehouse approach
preferred by Sony management
has its own advantages and disad-
vantages. On the plus side, Sony
can focus itself on its core business
(rather than worrying about ware-
housing and its associated issues,
which are not considered core). By
entering into partnership with a
logistics company, Sony can also
improve its geographical network.
This can only be advantageous for
customer service and OTIF (on time,
in full) delivery. It can also deliver
operational benefits where short
lead times and high delivery reliabi-
lity are essential. A financial advan-
tage can be found in the lower
warehouse and transport costs.
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 SONY BROADCAST AND PROFESSIONAL EUROPE (R): BECOMING A VIRTUAL COMPANY
However, each of these advan-
tages has disadvantages associated
with it.
At a strategic level, a disadvantage
lies in the time needed to set up a
coordinated effort between Sony
and its partner(s). Moreover, Sony
may not gain real insight into the
performance of its partner(s) for
some time. With a partner presen-
ting the ‘face of Sony’ to custo-
mers, lower quality levels at deli-
very will damage Sony’s image.
At an operational level, Sony may
be disadvantaged by becoming
dependent on a third party. What
happens if the partner does not
abide by the contractual agree-
ment?
From a financial point of view,
there are extra costs involved in
creating the kind of coordination
needed to make the partnership(s)
work. Extra costs may arise if a
decision is taken to change part-
ner, or if a partner does not live up
to the required standards.
An additional, and not insignifi-
cant, set of costs can be incurred in
making employees redundant
when a virtual warehouse is set
up. It may be possible to reach an
agreement with the logistics part-
ner, such that the Sony employees
affected become part of the part-
ner’s workforce; but this is not a
given.
Taking into consideration the
advantages and disadvantages of
the virtual warehouse solution,
several other questions need to be
addressed: Who carries the res-
ponsibility for the Sony product
during handling by a partner?
How will the partner be assessed
in terms of customer satisfaction?
What if something happens to the
customer, e.g. financially? Is there
a fall-back position?
Clearly, there is much more invol-
ved in setting up a ‘virtual’ ware-
house than first meets the eye.
Management needs to understand
all the implications of its chosen
solution, both positive and negati-
ve. At the very least, if the virtual
warehouse plan is to proceed, a
sound service level agreement is
required; and a solid project
management approach needs to
be implemented at Sony.
Supply Chain Forum An International Journal
Sustainable improvement –
making it work
An approach that has delivered
successful outcomes at many of
Celerant’s clients could also be the
route to success for Sony BPE. It is
based on the philosophy that sus-
tainable results can only be achie-
ved by changing the way the orga-
nisation behaves. And to achieve
this behavioural change, work is
needed on four aspects of the
organisation: the processes, the
systems, the people and the infor-
mation technology (IT).
Sony needs to understand how its
new logistic process will function.
That means mapping out the new
process, and the other processes it
will affect, and communicating
and validating these mappings
throughout the whole organisa-
tion. It is important that everyone
has the same vision.
Systems are needed to continuous-
ly support the logistics process.
With the help of business perfor-
mance indicators, appropriate
management systems will enable
the measurement and manage-
ment of process efficiency, as well
as ensuring clarity about who is
responsible for what. Possible
indicators in the Sony case could
be customer satisfaction, OTIF deli-
veries, required lead-time, trans-
port time, stock costs, and so on.
People are usually the key to suc-
cess for a change project such as
this. Therefore extra attention
should be giving to making people
aware of the need for change at
Sony, and coaching them to work
in the new environment. New
opportunities should be created,
so that people can see a ‘win-win’
situation ahead. If people have to
be let go, e.g. those working at
the national sales companies, then
personal support services such as
outplacement must be provided.
IT is an essential ingredient in
ensuring the virtual warehouse
concept can work. Several
changes will be entailed: in the
communication between the sales
organisations, the warehouse and
the production locations; and also
in the interfaces with the logistics
partner(s), customs and other
external players.
Vol. 2 - N°2 - 2001 73
If these four aspects of the change
programme are implemented well,
the organisation can change its
behaviour, and the desired results
– better customer service, greater
flexibility, and reduced costs – can
be achieved for Sony BPE within
the allowed timespan of a year.
In taking on the challenge, howe-
ver, management at every level
needs to be fully committed to
supporting the organisation as it
introduces the agreed changes
while maintaining ‘business as
usual’. New capabilities may need
to be brought in to the organisa-
tion (e.g. IT or project manage-
ment skills). Communications with
employees, partners, and other
stakeholders (such as unions and
customs) will require considerable
and consistent attention and
effort. As a result, there should be
an acceptance that costs may rise
during implementation. And a
reliable and committed partner
will be important to support the
change process through the tight
schedule envisaged.
Conclusion
The Sony case provides a clear
example of the ‘virtual warehouse’
approach to supply chain manage-
ment. More and more companies
are doing exactly what Sony did:
going back to their core business
and questioning their secondary
activities. In terms of Porter’s
value chain, companies are focu-
sing on their primary processes
and seeking partners for the
secondary processes who can pro-
vide added value.
IT outsourcing has been around
for a long time and has yielded
mixed results. ‘Logistics outsour-
cing’ is another way of looking for
added value, gaining popularity.
Whatever the challenge, manage-
ment should make a sound study
of the wide-ranging options open
to the company, and look out for
all the possible advantages and
disadvantages. Once a solution
has been reached, the two prere-
quisites for successful implementa-
tion are a detailed and realistic
plan, and full management com-
mitment.
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