Supply chains have evolved to become demand-driven value networks (DDVNs). Companies that want to survive in the 21st century must operate in networked models. These companies must focus on what they can do best, and outsource to partners to manage processes and activities that do not represent strategic differentiation for the company. In the supply chain, this often means using one or more third-party logistics (3PL) providers, instead of performing warehousing, transportation or related activities yourself.
Companies that properly align their outsourcing strategy and selection process with their supply chain and business goals will make more balanced decisions. In contrast, consider the problems several manufacturers experienced when the decision was made based primarily upon cost.