Service Models for a Small-sized Logistics Service Provider – A Case Study from Finland

Abstract

Manufacturing companies today are cutting operational costs considerably in Europe. Many globally operating companies have moved their production to lower labour cost countries, like China or India. However, some companies have decided to stay in Europe, but they then must focus on cost reduction. One solution for decreasing operational costs is outsourcing. This paper is a case example from the Finnish manufacturing industry, where a small sized manufacturing company decided to focus on its core competencies. Core competencies were product development and production, but not the logistics process. The case company decided to outsource its logistics process. The challenge being, where to find a small sized logistics service provider that would be interested in the needs of the case company? The case company’s requirements for services included in-bound, in-house and outbound logistics. In our project, the other case company was the service provider. This paper describes the service provider’s service offerings development process. During that project, VTT Technical Research Centre of Finland, was with the aid of the service provider, developing new logistics service offerings for industry needs.