Outsourcing vs In-House Management in Industrial Processes Impacts on Competitiveness

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School of Business | Bachelor's thesis
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Date

2024

Department

Laskentatoimen laitos

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Mcode

Degree programme

Laskentatoimi

Language

en

Pages

30

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Abstract

The objective of this research was to determine the feasibility of achieving cost competitiveness by transitioning a previously fully outsourced process to partial in-house management. The analysis was conducted as a case study within an industrial company, where equipment acquisition costs significantly impact the company's overall projects, which involve delivering production facilities to end-users. The findings indicate that substantial cost savings can be realized by sourcing equipment directly from original equipment manufacturers (OEMs), which can potentially offset the internal costs associated with the equipment. The research methodology involved collecting data through questionnaires administered to representatives of the equipment manufacturers. The study reveals that equipment costs constitute a considerable portion of outsourcing expenses in industrial production processes. If a company possesses the necessary resources and capacity for enhanced risk management, it may be advantageous to reorganize the outsourced process by integrating part of it into in-house management. This research provides a foundation for further exploration into optimizing cost structures in industrial processes through strategic man-agement decisions. Future studies could investigate the scalability of this approach across various industries and its impact on long-term financial performance. Companies are encouraged to assess their internal re-sources and risk management capabilities to determine the feasibility of similar transitions, potentially leading to broader applications of these findings in diverse industrial contexts.

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Thesis advisor

Yamada, Ryoko

Keywords

outsourcing, organisation, responsibilities, in-house management

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https://urn.fi/URN:NBN:fi:aalto-202409156371

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