Comparing in-house versus outsourced fulfillment strategies for Company X
Abdelrahman, Mohamed Gamal Mahmoud (2023)
2023
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https://urn.fi/URN:NBN:fi:amk-2023120734872
https://urn.fi/URN:NBN:fi:amk-2023120734872
Tiivistelmä
The importance of order fulfillment has recently increased as a competitive advantage to differentiate companies’ service levels and to enhance customer satisfaction. Although fulfillment strategies have been a part of outbound logistics and supply chain for decades, companies start focusing on fulfilment operation when E-commerce and online business grow. Offering the customers fast delivery time and easy return process became a key factor in customer satisfaction, while having a smooth and efficient fulfilment process became cornerstone on the company’s competitive logistics.
The objective of this research-oriented thesis is to assist a small e-commerce company in the textile industry in choosing the right fulfillment strategy for the business. Comparing the main fulfillment strategies (In-house versus Outsourced) based on selected criteria identified by the author, considering variable factors related to fulfillment and logistics operation.
The research starts by introducing the main concepts related to fulfillment and outbound logistics to familiarize the readers with the terms and the topics discussed. Then it will investigate the potential fulfillment strategies, characteristics, pros, and cons of each one. As well as the recommended one for the commissioning company based on its business, vi-son, and market requirement. The primary data will be collected through qualitative research by interviewing logistics experts to gain viewpoints on the strategies, comparison, and the recommendation. Finally, an integrated recommendation from the secondary date collected by the author through various Supply chain books and articles, and the primary data collected through interviewing industry professionals will be presented and suggested to the commissioning company.
The research type was a qualitative interview while the research method was semi structured face to face interview. The research consisted of three investigated questions that guide the collection of the secondary and primary data, and 7 interview questions that deeply discuss the topic with the interviewee and gain their point of view on the fulfillment strategy. Three interviews were conducted in June 2023, September 2023, and in October 2023. All the interviewees recommended in-house fulfillment as a suitable strategy for small companies while outsourced is more beneficial when companies are large enough.
The outcome of the thesis indicates that in-House fulfillment strategy is the optimal choice for the commissioning company. Selecting in-house fulfillment at this stage is the most suitable strategy for the company due to its nature of business, inventory level and numbers of customer orders. While considering Outsourced fulfillment when the business is growing could be more efficient for the company.
The objective of this research-oriented thesis is to assist a small e-commerce company in the textile industry in choosing the right fulfillment strategy for the business. Comparing the main fulfillment strategies (In-house versus Outsourced) based on selected criteria identified by the author, considering variable factors related to fulfillment and logistics operation.
The research starts by introducing the main concepts related to fulfillment and outbound logistics to familiarize the readers with the terms and the topics discussed. Then it will investigate the potential fulfillment strategies, characteristics, pros, and cons of each one. As well as the recommended one for the commissioning company based on its business, vi-son, and market requirement. The primary data will be collected through qualitative research by interviewing logistics experts to gain viewpoints on the strategies, comparison, and the recommendation. Finally, an integrated recommendation from the secondary date collected by the author through various Supply chain books and articles, and the primary data collected through interviewing industry professionals will be presented and suggested to the commissioning company.
The research type was a qualitative interview while the research method was semi structured face to face interview. The research consisted of three investigated questions that guide the collection of the secondary and primary data, and 7 interview questions that deeply discuss the topic with the interviewee and gain their point of view on the fulfillment strategy. Three interviews were conducted in June 2023, September 2023, and in October 2023. All the interviewees recommended in-house fulfillment as a suitable strategy for small companies while outsourced is more beneficial when companies are large enough.
The outcome of the thesis indicates that in-House fulfillment strategy is the optimal choice for the commissioning company. Selecting in-house fulfillment at this stage is the most suitable strategy for the company due to its nature of business, inventory level and numbers of customer orders. While considering Outsourced fulfillment when the business is growing could be more efficient for the company.