Operating the Transport Function Internally –A Viable Option?
Abstract
At
one
point
or
another,
insourcing
and
outsourcing
of
transport
services
becomes
a
dilemma
that
companies
must
deal
with
in
order
to
stay
competitive.
It
is
very
common
for
companies
to
outsource
functions
of
the
supply
chain
that
do
not
qualify
as
their
‘core
competency.’
The
motivation
behind
this
case
study
is
to
provide
justification
in
allowing
companies
to
understand
that,
although
a
function
may
be
cheaper
to
operate
internally,
theory
and
experience
may
prove
otherwise.
I
have
been
asked
by
Company
X
to
act
as
a
consultant
in
creating
a
tool
that
can
be
used
to
accumulate
the
costs
involved
in
operating
the
transport
function
of
the
supply
chain
internally.
In
order
for
the
company
to
stay
competitive
from
insourcing,
the
outcome,
(including
cost),
must
be
a
positive
reflection
and
also
gain
value.
If
determining
organic
costs
of
the
operation
will
give
the
company
a
perspective
on
total
costs,
Company
X
will
determine
if
they
will
bring
the
outsourced
function
in-‐house,
or
keep
it
as
an
outsourcing
function,
but
use
the
results
from
the
model
as
negotiation
material.
There
are
three
expected
contributions
connected
to
this
case
study:
proposed
model,
case
study,
result
of
applying
the
model
and
testing
the
model,
based
on
empirical
material.
After
extracting
material
from
industry
best
practices,
interviews
with
transportation
professionals,
as
well
as
government
sources,
the
results
prove
that
operating
internally
will
reduce
initial
costs.
However,
when
aspects
like
experience
and
training
are
taken
into
consideration,
the
results
may
prove
otherwise.
From
a
theoretical
and
experimental
perspective,
using
an
external
party
proves
to
be
the
best
option.
Degree
Master 2-years
Other description
Msc in Logistics and Transport Management
Collections
View/ Open
Date
2014-12-11Author
D’Oria, Daniela Nicole
Keywords
Outsourcing, Insourcing
Transportation
Core Competency
Dedicated Route
Operational Cost Model
Partnership
Less-‐than-‐truckload
Cost
Case Study and Greater Toronto Area (GTA)
Series/Report no.
Master Degree Project
2014:49
Language
eng