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According to research by consultancy Booz Allen Hamilton, the logistical costs of getting products into, around and out of China may end up outweighing the cost advantage gained by going there in the first place; if the labor costs of manufacturing the product in the West account for 25 percent or less of the total product cost, it may be to companies' advantage to keep manufacturing in the West. Besides logistical complications, other factors - such as inflexible production lines and limited ability for many Chinese factories to handle last-minute design changes - can also make the risk of going to China bigger than the potential savings.

The logistics landscape is littered with failed relationships between third-party logistics companies - so-called 3PLs - and companies like one's own. Companies frequently consider outsourcing logistics functions to reduce costs. But achieving those savings is often easier said than done. The notion of outsourcing logistics to reduce costs before first attempting to improve performance and cut costs internally is ill advised.

According to the U.S. Department of Commerce, the size of the logistics industry in the United States is $900 billion a year, which is more than 10 percent of the country's gross domestic product. Outsourcing logistics allows manufacturers to save money and to focus on their primary goal of creating better products. Even as this process is occurring, 3PL providers are changing dramatically, expanding from traditional competencies such as warehousing into new services made possible by the development of customer-tailored e-business applications.