A decision framework for outsourcing logistics in the pharmaceutical supply chain

Abstract

With a constantly changing environment, organizations today are more than never required to optimize their supply chains while reducing costs and offering high levels of performance. Pharmaceutical firms in particular perform in a market that is characterized by highly fluctuating demands and are often asked to expand their capacity to meet their requirements. Having the choice of either investing in new human/infrastructure resources or outsourcing to an external logistics service provider, many firms consider logistics outsourcing (LO) with the expectation of lowering costs and/or attaining higher level of service performance. This study contributes to the literature by developing a theoretical framework to consider the option of outsourcing logistics in the pharmaceutical products supply chain (PPSC). The process of identification of relevant factors to consider and a logical flow diagram are described.