AN EMPIRICAL INVESTIGATION INTO THE OUTSOURCING LOGISTICS CONTRACT

It is widely acknowledged that a carefully designed contract is the best method of protection for companies that plan to engage in outsourcing arrangements. In the most commonly accepted definitions, outsourcing logistics involves the transfer of some logistics activities or processes to an external provider. In addition to mutual trust, constant communication and cooperation, a carefully designed and complex contract will protect both partners against financial losses and other inconveniences. All in all, even if the outsourcing logistics strategy is very popular and also very beneficial for companies, the majority of outsourcing logistics contracts fail in the first year. Starting from this fact, this paper is aiming to examine the main parts of an outsourcing contract, including performance issues, financial issues, legal issues and HR-related issues in the Romanian manufacturing industry. Our purpose is to identify the major malfunctions of such contracts in an attempt to formulate a set of recommendations for companies in order to avoid the failure of such relationships. Our research method is a quantitative one based on a questionnaire on the outsourcing logistics contracts of Romanian production companies with a wide experience in outsourcing some or all logistics activities.