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With so many companies cutting back on employees and even hours within their production areas, where does this leave supply chain logistics? Surely with fewer products to move there will be less of a need for supply chain logistics–right?
In reality there will always be a need for supply chain logistics because in spite of many companies producing few products, there still exists the need for the distribution of those products. In addition, we know there always have been periods when business has slowed for many companies and picked up again. Temporary slowdowns have always existed and will continue to do so.
The difference the future may have for supply chain management lies in the way it will be conducted. If the past decade is any indication, there will be more companies choosing to outsource the functions of supply chain logistics in order to save money not only in payroll but other overhead costs as well.
Even if a company owns its own warehouse and fleet of trucks outsourcing those services means the company will be able to eliminate the overhead by selling the trucks and closing the warehouse thus saving on operating costs from both ends. The warehouse remaining unused will save money on electricity, heating, air conditioning, and employees to work in the warehouse as well.
There are more companies than at any time in the past looking to outsource many functions they used to perform inside–supply chain logistics is only one of those functions. While it may look to some outsiders as though this choice to outsource so many functions contributes to the rise in unemployment, the reality is the need still exists for people to perform the functions for the outsourcing company. Thus while there may be a decrease in logistics employees working for some companies, there will be an increase in logistics employees for the long term.
Supply chain logistics has come quite a distance since its humble beginning before we even had name for the functions. Warehouse workers, truck drivers, supply clerks and many other names that defined one specific function were common. Now that there are so many function within the area of supply chain logistics, there is little need for the functions to be as specific as they once were. Today computer systems are even designed to tell workers where to place inventory within the warehouse, so it has come evolved substantially from its inception.