Final answer:
Outsourcing logistics does give a company less flexibility because it forces them to focus more on core businesses.
Step-by-step explanation:
True or False: Outsourcing logistics gives a company less flexibility because it forces them to focus more on core businesses.
The statement is true. When a company outsources its logistics, it means that it hires an external service provider to handle its transportation, warehousing, and other supply chain activities. Although outsourcing can bring various benefits, such as cost savings and access to specialized expertise, it does come with some trade-offs, including reduced flexibility.
Outsourcing logistics requires the company to rely on the third-party provider for these critical functions, which can limit the company's ability to quickly adapt to changing market conditions or unforeseen events. The company must coordinate and communicate effectively with the service provider to ensure smooth operations. This increased reliance on the external partner can divert the company's attention from its core businesses or core competencies.
For example, if a company's core competency is manufacturing high-quality products, outsourcing logistics may divert resources and management focus away from improving production processes or developing new products. Instead, the company may need to spend more time coordinating with the logistics provider, addressing any potential issues or delays in the supply chain.
In conclusion, outsourcing logistics can reduce a company's flexibility by shifting its focus towards coordinating with the third-party provider and away from its core businesses or core competencies.