Insourcing i Danske virksomheder

Abstract

This project provides an analysis on how Risk, TCO, Quality and Strategy take part of a company’s considerations and decisions about insourcing and how insourcing affects these topics. The idea of the project is to investigate the reasons for insourcing and see which differences it makes compared to outsourcing. The project originates from a curiosity in the subject and the current trend of companies insourcing. The project contains of five business cases, with five companies from different industries. Each company is analyzed based on the four main topics of the project. Each topic will be tested using theory and models from the SCM literature. To analyze Risk, the project will use mitigation strategy and analyze which risk categories and risk drivers affect the company. To analyze if the insourcing trough risk management provides the company with an economic benefit, the Risk Reward model, together with a model to evaluate the probability of a negative impact from a supplier is incorporated. This will clarify how risk has affected the company while outsourcing and what has changed after insourcing. TCO will be evaluated trough a model containing 51 points of costs which can occur while outsourcing. The analysis will find points that have affected each company, while outsourcing and especially try to identify additional costs and unforeseen costs. Afterwards it will be evaluated if the company is better at, or if it is easier, to include all costs while insourcing. To test the Quality aspect in each Supply Chain the project will base the finding on the data collected in each company about their experience about the Quality of the products from Asia, together with a model on contract enforcement and how a supplier can impact on the company. When knowing the previously state of the Quality it will be compared to the Quality that the company has experienced trough insourcing. The Operations Strategy Matrix will help the project investigate if the companies are fit in the strategy both before and after insourcing and also which parts has affected the strategy. A discussion will hereafter find patterns and correlations in the four topics, across the five cases in order to generalize and broaden the outcome. The findings of the project are that the reason for insourcing is mainly due to Quality issues and Risk mitigating actions, because the companies are unsatisfied with the quality provided by the Asian suppliers. Further the companies want to be able to deliver the product at all times even though a major impact will occur. It is also found that all four topics processed in this project are closely related to each other and therefore all four topics are a part of the decision to insource. It is also seen when comparing the companies that those who choose to offshore, and make their own factory in Asia, had a better product and overall supply chain, than those who choose to outsource their production to a third party. The project has found that especially the distance between the companies and degree of guidance and control make a different to the final result.