Bring it Back? An Examination of the Insourcing Decision
Purpose - Discussion regarding the implications of and antecedents to the decision to outsource manufacturing functions has dominated both the academic literature and popular press for over 30 years. However, economic and competitive landscapes across the globe have changed such that the tenability of outsourcing is being re-evaluated by many organizations. Using the rich body of literature regarding the decision to outsource as a starting point, the purpose of this paper is to investigate the reasons why firms insource and the associated implications thereof.
Design/methodology/approach - This case study research captures data from 12 firms in the manufacturing industry that have insourced a previously outsourced function. Data were collected via interviews with executives, researcher observations, and archival records over a nine-month period.
Findings - The findings suggest that the primary drivers for insourcing were predominantly the same as those cited for outsourcing. However, insourcing decisions are often made in response to a specific, external trigger event and not necessarily in concert with long-term, strategic goals. This is in contrast to firms’ desires to make more strategic location decisions. The findings also show that insourcing/outsourcing location decisions require continuous evaluation in order to optimize competitiveness and align with long-term firm goals.
Abstract @ 2017, Emerald Publishing Limited
International Journal of Physical Distribution & Logistics Management
Hartman, P. L., Ogden, J. A., & Hazen, B. T. (2017). Bring it back? An examination of the insourcing decision. International Journal of Physical Distribution & Logistics Management, 47(2/3), 198–221. https://doi.org/10.1108/IJPDLM-09-2015-0220