Insourcing and Outsourcing in Manufacturing as a Strategic Decision
Open Access
- Author:
- Karamanos, Maria
- Area of Honors:
- Supply Chain and Information Systems
- Degree:
- Bachelor of Science
- Document Type:
- Thesis
- Thesis Supervisors:
- Robert Alexander Novack, Thesis Supervisor
John C Spychalski, Thesis Honors Advisor - Keywords:
- Manufacturing
Supply Chain
Insourcing
Outsourcing
Network Integration
Grocery - Abstract:
- Company A, a grocery retailer, is seeking clarity on best practices for insourcing and outsourcing their packaging materials and supplies. Additionally, they are bringing on more nodes to their network, leading to concerns as to how to integrate them into the current model. This thesis provides a recommendation as to if they should insource or outsource their packaging supplies by considering the costs and benefits included with both options. It also outlines a framework for integrating new nodes into their network with an emphasis on the integration of service centers. The methodology of this thesis consists of publicly available sources and experts within Company A. The publicly available sources are primarily found through the database resources at Penn State as well as case studies in similar industries. In addition, examples of strategies regarding the decision to insource or outsource in a variety of industries were considered to ensure a comprehensive decision-making process. Tradeoffs impacting the network of Company A were considered and analyzed, funneling into a framework outlined to address the addition of new nodes in the network. The framework and outlined considerations work to ensure a balance between cost and service on the part of Company A and emphasize the importance of a positive return on the investments being made.