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Russia

Contract Logistics and Outsourcing in Russia

The first report issued by the Deutsche Bahn and Russian Railways Center for International Logistics and Supply Chain Management, St. Petersburg, provides first-time insight into the structure and potential development of logistics services outsourcing.

The global recession of the late 2000s and early 2010s has added pressure on organizations to find ways to improve productivity, reduce cost, and improve service. Manufacturing firms in industrialized countries engage contract logistics service providers and outsource functions and activities as a means to control productivity, cost, and service and to provide a greater focus on core competencies. Their organizational behaviors, managerial beliefs, and related performance outcomes are relatively well documented and understood through research projects undertaken by academic institutions and consulting companies and through case studies. Less well understood are the organizational issues of businesses engaging contract logistics service providers and in outsourcing that operate in developing countries.

The report “Contract Logistics and Outsourcing in Russia” presents survey data of 780 manufacturing industries with operations in Russia from each of the eight Russian Federal Districts.

The Purpose of this report is to provide managerial insight into contract logistics and outsourcing in Russia through three aspects:

  • Outsourcing levels, asset specificity, and opportunities
  • Barriers and drivers of outsourcing
  • Contracts and performance

The study found that outsourcing contract completeness (including attention to the contract and goal alignment) is critical to outsourcing effectiveness, and that the level of outsourcing and asset specific are connected. As a result of the report Significant perceptual barriers exist among manufacturers in terms of outsourcing logistics functions.

“The processes underlying the outsourcing of logistics functions among Russian manufacturing bear many similarities to the experience of firms in developed economies. Logistics activities that require more specialized assets are less likely to be outsourcing. Russian managers are reluctant to outsource due to concerns with loss of control over operations. And attention paid to outsourcing contracts and the alignment of business with outsourcing goals is critical to the performance of outsourcing arrangements”, noted Prof. Richard Germain, the head of the DB and RZD Center for International Logistics and Supply Chain Management in St. Petersburg.

About CIL

The Deutsche Bahn and Russian Railways Center for International Logistics and Supply Chain Management (CIL) at the Graduate School of Management in St. Petersburg was established in July 2009 under an agreement between the sponsors DB Mobility Logistics AG and Russian Railways, and the academic partners Graduate School of Management of St. Petersburg University, EBS University of Economics and Law (Germany), and Petersburg State Transport University.The CIL mission is to develop education and research in logistics and supply chain management in order to improve the quality and competitiveness of transport and logistics in European and Russian markets

Last modified: 10.08.2012

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