Outsourcing or insourcing logistics activities: a Brazilian case study

Lucas Eric Da Silva, Kaique Doratiotto and José Geraldo Vidal Vieira

International Journal of Integrated Supply Management, 2019, vol. 12, issue 3, 167-192

Abstract: Studies show that logistics outsourcing is a way to reduce costs, enhance performance, increase service quality, and consequently improve consumer satisfaction. However, the decision between outsourcing and insourcing is a highly complex logistics procedure due to several criteria concerning the selection of alternatives. This decision is also not easy to address when we consider the activities of a distribution centre, where the governance structure in Brazil regarding logistics operations must consider a high use of workforce. We apply methods based on multicriteria decision analysis (MCDA) to provide a recommendation to the decision-maker on whether to insource or outsource the logistics operations of a Brazilian company. Although there are few differences between the insourcing and outsourcing of logistics operations, benefits based on flexibility, working conditions, risks, reputation, innovation and responsiveness, encompassing much more than only costs, were crucial for the decision-making of sustaining insourcing of logistics activities.

Keywords: outsourcing; insourcing; decision; multicriteria decision analysis; MCDA; logistics operations; distribution centre. (search for similar items in EconPapers)
Date: 2019
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