Outsourcing vs. Insourcing av båtlastning: En studie genomförd hos Holmen Paper i Braviken
Independent thesis Advanced level (professional degree), 20 credits / 30 HE creditsStudent thesis
Transportation is commonly seen as a necessary function, but not as a value-giving process and is therefore sometimes considered a waste. This has led to more industrial companies choose to outsource and to focus on their core competencies. Though, there is a growing trend of insourcing processes as the outsourcing has not generated the expected results. Since year 1977 Holmen Paper Braviken has outsourced parts of its vessel loading process to NHS. Due to decreasing profitability, Holmen Paper Braviken have gotten more aware of its costs and are now suspecting that the cost of NHS services are too high and that there might be cheaper alternatives. The purpose of this master thesis is to look into if it would be profitable for Holmen Paper to take over NHS work and to carry out the vessel loading themselves. The results shall serve as an economical basis for future negotiations with NHS. Boat transportation stands for a third of all the goods transportations and vessel loading is often conducted twice a week. Braviken is in charge of the work in the warehouse during vessel loading, whilst NHS is in charge of transporting and loading the paper on the boat. Holmen Paper Braviken pays a stevedoring fee, goods- and harbor dues for NHS services. The stevedoring fee stands for about 62 % of the total cost and is the only fee that is affected by an insourcing decision. If Holmen Paper Braviken were to insource, they would have to invest in new machinery equipment and employ more personnel that can replace NHS resources.The conclusion is that there exists a large savings opportunity if Holmen Paper Braviken would to insource the vessel loading. The increase of capacity that insourcing would bring could improve the work rotation by varying the truck drivers everyday tasks. Insourcing would also give more time to maintenance, which could counteract stone damages on the paper and reduce the wear of the machinery equipment. The increased capacity would though increase the personnel cost, which prolongs the pay- back time for the company to start profiting. With the current circumstances Holmen Paper Braviken is therefore recommended not to insource the vessel loading with own personnel.In order to reduce personnel costs, flexible staffing is required as the utilization rate of full- time staff is low, which results in a high cost per ton. The most profitable alternative is to recruit two full- time truck drivers to Braviken and to hire three truck drivers from Pema. The difficulty with this option is to find extracurricular work for the full- time truck drivers during days without vessel loading, which may reduce overtime at the mill. Therefore, it is less risk to let the external personnel be responsible for the vessel loading, as Holmen Paper Braviken only needs to pay for the labor time during vessel loading. NHS has carried out stevedoring work for many years and holds great skills in dock work, which justifies a continued partnership with NHS. This option provides a relatively short payback time, but will then bring high annual savings for the company. Therefore Holmen Paper Braviken is recommended to invest in new machinery, but to outsource the labor work of vessel loading to NHS. For future research Holmen Paper Braviken should investigate if a capacity increase will reduce overtime costs at the mill. If so, insourcing with full- time employees can be profitable. Another area worth investigating is how a reallocation of capacity for the different transport modes can influence the decision of insourcing. If it is possible to release more capacity for vessel loading, the need of employing new personnel would decrease.
Place, publisher, year, edition, pages
2016. , 84 p.
Social Behaviour Law
Samhälls-, beteendevetenskap, juridik, Logistik, insourcing, outsourcing, make or buy- beslut, båtlastning, sjötransport
IdentifiersURN: urn:nbn:se:ltu:diva-46673Local ID: 44bd6ebe-ecd8-4bbb-ac2a-d8c4b6409e6dOAI: oai:DiVA.org:ltu-46673DiVA: diva2:1019988
Subject / course
Student thesis, at least 30 credits
Industrial and Management Engineering, master's level
Validerat; 20160626 (global_studentproject_submitter)2016-10-042016-10-04Bibliographically approved