How are sourcing strategies determined in production organizations? Using a two case study approach

Tariq H. Choudhry

Student thesis: Master thesis

Abstract

This master thesis is the ending assignment, before obtaining a master degree within supply chain management at Copenhagen Business School. The master thesis subject is sourcing strategies. A sourcing strategy is where production is done in-house by an insourcing and/or offshoring strategy, or production can be done by an outsourcing strategy. The theories used to understand how sourcing strategies are determined are: Double Helix, PLC theory, transaction cost theory, core competence theory, and chaos theory. Double Helix determines sourcing strategies by its focus on industry structure, where the sourcing strategy chances from for example in-house production to outsourcing of production, due to the industry structure. PLC theory determines different sourcing strategies depending on the products standardization state in the product life cycle. Transaction cost theory determines sourcing strategies by choosing production where the lowest costs from transactions are to be found. Core competence theory determines sourcing strategies by letting the identification of core competencies decide what to produce and what to outsource. Chaos theory determines the sourcing strategies depending on the search for organizational stability in core parts of the organization, but still using organizational chaos to learn and adapt to the changing environment. The case organizations sourcing strategies are determined by the theories in different degrees. Alu Technologies sourcing strategy is in-house production through insourcing strategy. The sourcing strategy is a result of being affected in medium degree by: Double Helix, PLC theory and transaction cost theory. And affected in high degree by: Core competence theory and chaos theory. SystemTekniks sourcing strategy is in-house production through insourcing and offshoring strategy. The sourcing strategy is a result of being affected in medium degree by: Double Helix, PLC theory, transaction cost theory and core competence theory. And affected in high degree by: Chaos theory

EducationsMSc in Supply Chain Management , (Graduate Programme) Final Thesis
LanguageDanish
Publication date2010
Number of pages134