In most businesses there is a need for transactions to occur so as to ensure that a business runs effectively. The path that goods, services and any resources use is logistics. Logistics involves delivery/transportation, distribution, handling of cargo and other systems in that line. Considering how vital this aspect is in a business, it is important that in the event of a crisis or situation, a contingency plan is available. According to Mind Tools (N.D), after identifying operations that are critical in a business, the next step is identifying the threats that could deter operations. After the threats are realized, scenarios can be created to see what the worst case scenarios can be and their triggers. Triggers are important in ascertaining the point at which a contingency plan should be put into action. Solutions to the threats need to be thought out and this should cover the people that will be responsible in the event of a crisis.
There are various threats that can affect the logistics function in a business. Some of these would include security issues, performance problems, costs, thefts and more. According to Adams (2019), the use of a third party external supplier to manage a specific business function is outsourcing. This can be one of the resolutions that can be highlighted in the contingency plan to help avert any issues in logistics. The hiring of a specialized firm to conduct a business’ logistics can be very beneficial. According to Arizona State University (2019), outsourcing can bring the following benefits; cost reduction, risks are shared, internal resources will be freed up for other work and improved efficiency. The use of a firm that is specialized in logistics will help a company enjoy the benefits that arise form specialization. This is because the third party firm’s focus is to ensure that logistics run effectively and all possible scenarios would have been considered.
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Part II
What issues can arise if a contingency plan is not effectively done in regards with logistics?
References
Mind Tools. (N.D). Contingency Planning . https://www.mindtools.com/pages/article/newLDR_51.htm
Adams, E. (2019). Top Reasons to Outsource Logistics Services for Businesses. http://coastaltrans.org/top-reasons-to-outsource-logistics-services-for-businesses/
Arizona State University. (2019). Why Do Companies Outsource? https://web.asu.edu/accolades/why-do-companies-outsource
