The question regarding whether to produce in-house or to purchase from an external supplier is nowadays commonly highlighted as a central and strategic decision for manufacturing firms. Furthermore, the importance of creating a competitive and consistent make-or-buy strategy that is adapted to the context of the firm as well as to today´s dynamic business environment cannot be underestimated. Today, the division Surface and Exploration Drilling (SED) within Atlas Copco Rock Drills AB in Örebro lack a standardized and holistic process to support this decision making, why this is requested. Consequently, this master thesis aims to, in line with Atlas Copco´s business strategy, develop a decision model in order to facilitate the make-or-buy decision at the SED. In order to be able to fulfill the purpose, a thorough examination of the contemporary academic findings was executed. Furthermore, as the requested make-or-buy decision model should be adapted to the firm’s contextual circumstances, SED´s corporate strategy was analyzed and interviews with concerned employees from different functions were conducted. As a result of this, an initial list of parameters that affect the make-or-buy decision was generated. Thereafter, how to decompose, measure and prioritize this selected parameters were determined. Additionally, if any parameter should be considered as a knockout criterion was established as well. Based on this, the first draft of the decision model was developed and presented. An in depth analysis regarding areas of improvements was thereafter executed, and the first draft of the decision model was updated accordingly. Inputs to this analysis were gained from an empirical investigation. In more detail, interviews at both SED and at external suppliers, a calculative case study where the first draft of the model was tested as well as a workshop at SED were all sources of additional inputs. Based on the outcome of the in depth analysis, modifications of the first draft of the model was made which resulted in the final version of the make-or-buy decision model. The result of this investigation can consequently be described as a corporate adapted make-or-buy decision model. The model is divided into seven steps, namely: Core competence analysis Determination of module characteristics Configuration of the make-or-buy setup Request of quotations to potential supplier Volume flexibility, lead time and total cost analysis Risk evaluation Synthesis of above stated parameters, including the parameters: time flexibility impact on R&D operations acquiring competitive knowledge product flexibility the opportunity to share risks long-term capacity Furthermore, the end-user needs to have an idea of what module and what assembly level that could be of interest and use the decision model in order to investigate whether to reject or proceed with this suggested make-or-buy setup. The model also illustrates the need of a regular re-evaluation of the decision made, in order to cope with the dynamic internal and external business environment. One additional advantage with the decision model is that it takes both quantitative and more qualitative aspects into consideration after which a holistic analysis of these can be made.

A logística permite desenvolver estratégias para a redução de custos e aumento do nível de serviço ofertado ao cliente. A tomada de decisão sobre a empresa executar internamente as atividades logísticas ou terceirizar essas atividades é uma decisão tão importante que na grande maioria das empresas ela é feita em nível de Diretoria ou Gerência. A tendência empresarial de manter o foco no negócio é uma estratégia que vem sendo adotada cada vez mais pelas empresas. Consequentemente, atividades fora do core business estão sendo terceirizadas. No setor de distribuição de produtos químicos verifica-se a presença tanto de empresas que terceirizam suas atividades logísticas quanto de empresas que verticalizam, não havendo uma unanimidade a respeito no setor. Dado este contexto, o objetivo da pesquisa é o de analisar a adoção da verticalização ou da terceirização das atividades logísticas em empresas distribuidoras de produtos químicos. Assim, a questão de pesquisa é: Por que as empresas adotam a estratégia de verticalização ou de terceirização de suas atividades logísticas? A pesquisa é qualitativa descritiva e aplicou o método de estudo de caso, através da investigação de casos múltiplos realizada em empresas distribuidoras de produtos químicos. A pesquisa utilizou como fontes de evidência entrevistas e análise de documentos, sendo inicialmente feitos dois estudos de caso pilotos e após as devidas correções foram feitos mais dois estudos de casos. Os resultados obtidos permitiram a constatação dos seguintes fatores como sendo motivadores da adoção da verticalização das atividades logísticas: reduzir custos, ter maior controle da operação, aumentar os níveis de serviço logístico e focar em logística (competência central) foram determinantes, enquanto dispor de habilidades e recursos e aumentar a proximidade com o cliente foram considerados importantes. O fator atender todos os requisitos logísticos do negócio não foi levado em consideração na adoção da verticalização das empresas. Em relação à terceirização das atividades logísticas, os seguintes fatores foram identificados como motivadores de sua adoção: reduzir investimentos em ativos, reduzir custos e focar no core business foram determinantes, enquanto os fatores expandir mercados e aumentar a flexibilidade da operação foram considerados importantes. Os fatores: ter acesso a competências externas; melhorar as tecnologias de informação utilizadas e aumentar os níveis de serviço logístico não foram fatores considerados pelas empresas quando optam por terceirizar suas atividades logísticas. Assim, a dissertação buscou trazer contribuições para a área de Logística, pois explorou e analisou um tema sempre considerado atual e estratégico que é o da terceirização ou verticalização das atividades logísticas, em um mesmo contexto. Já para a prática gerencial, a principal contribuição pretendida foi a de fornecer subsídios para ajudar os executivos de logística na tomada de decisão terceirizar x verticalizar. / Logistics allow the company to develop strategies for cost reduction and increase the level of the service offered to the client. For the company to make the decision of executing internally the logistics activities or to outsource these activities is such an important one that in most of the companies this decision is made by the directors or managers. The companies’ trend to keep the focus on the business is a strategy which has been adopted more and more. Consequently, activities out of the core business of the companies are being outsourced. In the sector of distribution of chemicals we can observe the presence of companies that outsource their logistics activities and companies that insource, meaning that there is no unanimity about this in the sector. Given this context, the objective of the research is to analyze the adoption of insourcing or outsourcing of logistics activities in chemicals distribution companies. Thus, the research question is: Why do companies adopt the strategy of insourcing or outsourcing their logistics activities? The qualitative research is descriptive and applied the method of case studies, by investigating multiple cases performed in distributors of chemicals. The research used interviews as sources of evidence and analysis of documents and initially two pilot case studies were made and after corrections two more case studies were made. The results led to the finding of the following factors as drivers of the adoption of the vertical integration of logistics activities: reduce costs, greater control of the operation, increase levels of service and focus on logistics (core competency) were determinants, while having skills and resources and increase customer proximity were important. The factor meet all the requirements of the logistics business was not taken into consideration in the adoption of vertical integration of enterprises. Regarding outsourcing logistics activities, the following factors were identified as motivators of the adoption: reduce asset investment, reduce costs and focus on core business were decisive factors while the factors market expansion and increase the flexibility of the operation were considered important. The factors: have access to external expertise, improve the information technology used and increase levels of logistical service were not considered by companies when they choose to outsource their logistics activities.The dissertation sought to bring contributions to the field of logistics, since it explored and analyzed a theme that is always current and strategic, which is the outsourcing or insourcing of logistics activities, in the same context. For the management practice, the main contribution intended was to provide information that can help the logistics executives in the decision to outsource x insource.

A logística permite desenvolver estratégias para a redução de custos e aumento do nível de serviço ofertado ao cliente. A tomada de decisão sobre a empresa executar internamente as atividades logísticas ou terceirizar essas atividades é uma decisão tão importante que na grande maioria das empresas ela é feita em nível de Diretoria ou Gerência. A tendência empresarial de manter o foco no negócio é uma estratégia que vem sendo adotada cada vez mais pelas empresas. Consequentemente, atividades fora do core business estão sendo terceirizadas. No setor de distribuição de produtos químicos verifica-se a presença tanto de empresas que terceirizam suas atividades logísticas quanto de empresas que verticalizam, não havendo uma unanimidade a respeito no setor. Dado este contexto, o objetivo da pesquisa é o de analisar a adoção da verticalização ou da terceirização das atividades logísticas em empresas distribuidoras de produtos químicos. Assim, a questão de pesquisa é: Por que as empresas adotam a estratégia de verticalização ou de terceirização de suas atividades logísticas? A pesquisa é qualitativa descritiva e aplicou o método de estudo de caso, através da investigação de casos múltiplos realizada em empresas distribuidoras de produtos químicos. A pesquisa utilizou como fontes de evidência entrevistas e análise de documentos, sendo inicialmente feitos dois estudos de caso pilotos e após as devidas correções foram feitos mais dois estudos de casos. Os resultados obtidos permitiram a constatação dos seguintes fatores como sendo motivadores da adoção da verticalização das atividades logísticas: reduzir custos, ter maior controle da operação, aumentar os níveis de serviço logístico e focar em logística (competência central) foram determinantes, enquanto dispor de habilidades e recursos e aumentar a proximidade com o cliente foram considerados importantes. O fator atender todos os requisitos logísticos do negócio não foi levado em consideração na adoção da verticalização das empresas. Em relação à terceirização das atividades logísticas, os seguintes fatores foram identificados como motivadores de sua adoção: reduzir investimentos em ativos, reduzir custos e focar no core business foram determinantes, enquanto os fatores expandir mercados e aumentar a flexibilidade da operação foram considerados importantes. Os fatores: ter acesso a competências externas; melhorar as tecnologias de informação utilizadas e aumentar os níveis de serviço logístico não foram fatores considerados pelas empresas quando optam por terceirizar suas atividades logísticas. Assim, a dissertação buscou trazer contribuições para a área de Logística, pois explorou e analisou um tema sempre considerado atual e estratégico que é o da terceirização ou verticalização das atividades logísticas, em um mesmo contexto. Já para a prática gerencial, a principal contribuição pretendida foi a de fornecer subsídios para ajudar os executivos de logística na tomada de decisão terceirizar x verticalizar. / Logistics allow the company to develop strategies for cost reduction and increase the level of the service offered to the client. For the company to make the decision of executing internally the logistics activities or to outsource these activities is such an important one that in most of the companies this decision is made by the directors or managers. The companies’ trend to keep the focus on the business is a strategy which has been adopted more and more. Consequently, activities out of the core business of the companies are being outsourced. In the sector of distribution of chemicals we can observe the presence of companies that outsource their logistics activities and companies that insource, meaning that there is no unanimity about this in the sector. Given this context, the objective of the research is to analyze the adoption of insourcing or outsourcing of logistics activities in chemicals distribution companies. Thus, the research question is: Why do companies adopt the strategy of insourcing or outsourcing their logistics activities? The qualitative research is descriptive and applied the method of case studies, by investigating multiple cases performed in distributors of chemicals. The research used interviews as sources of evidence and analysis of documents and initially two pilot case studies were made and after corrections two more case studies were made. The results led to the finding of the following factors as drivers of the adoption of the vertical integration of logistics activities: reduce costs, greater control of the operation, increase levels of service and focus on logistics (core competency) were determinants, while having skills and resources and increase customer proximity were important. The factor meet all the requirements of the logistics business was not taken into consideration in the adoption of vertical integration of enterprises. Regarding outsourcing logistics activities, the following factors were identified as motivators of the adoption: reduce asset investment, reduce costs and focus on core business were decisive factors while the factors market expansion and increase the flexibility of the operation were considered important. The factors: have access to external expertise, improve the information technology used and increase levels of logistical service were not considered by companies when they choose to outsource their logistics activities.The dissertation sought to bring contributions to the field of logistics, since it explored and analyzed a theme that is always current and strategic, which is the outsourcing or insourcing of logistics activities, in the same context. For the management practice, the main contribution intended was to provide information that can help the logistics executives in the decision to outsource x insource.

A logística permite desenvolver estratégias para a redução de custos e aumento do nível de serviço ofertado ao cliente. A tomada de decisão sobre a empresa executar internamente as atividades logísticas ou terceirizar essas atividades é uma decisão tão importante que na grande maioria das empresas ela é feita em nível de Diretoria ou Gerência. A tendência empresarial de manter o foco no negócio é uma estratégia que vem sendo adotada cada vez mais pelas empresas. Consequentemente, atividades fora do core business estão sendo terceirizadas. No setor de distribuição de produtos químicos verifica-se a presença tanto de empresas que terceirizam suas atividades logísticas quanto de empresas que verticalizam, não havendo uma unanimidade a respeito no setor. Dado este contexto, o objetivo da pesquisa é o de analisar a adoção da verticalização ou da terceirização das atividades logísticas em empresas distribuidoras de produtos químicos. Assim, a questão de pesquisa é: Por que as empresas adotam a estratégia de verticalização ou de terceirização de suas atividades logísticas? A pesquisa é qualitativa descritiva e aplicou o método de estudo de caso, através da investigação de casos múltiplos realizada em empresas distribuidoras de produtos químicos. A pesquisa utilizou como fontes de evidência entrevistas e análise de documentos, sendo inicialmente feitos dois estudos de caso pilotos e após as devidas correções foram feitos mais dois estudos de casos. Os resultados obtidos permitiram a constatação dos seguintes fatores como sendo motivadores da adoção da verticalização das atividades logísticas: reduzir custos, ter maior controle da operação, aumentar os níveis de serviço logístico e focar em logística (competência central) foram determinantes, enquanto dispor de habilidades e recursos e aumentar a proximidade com o cliente foram considerados importantes. O fator atender todos os requisitos logísticos do negócio não foi levado em consideração na adoção da verticalização das empresas. Em relação à terceirização das atividades logísticas, os seguintes fatores foram identificados como motivadores de sua adoção: reduzir investimentos em ativos, reduzir custos e focar no core business foram determinantes, enquanto os fatores expandir mercados e aumentar a flexibilidade da operação foram considerados importantes. Os fatores: ter acesso a competências externas; melhorar as tecnologias de informação utilizadas e aumentar os níveis de serviço logístico não foram fatores considerados pelas empresas quando optam por terceirizar suas atividades logísticas. Assim, a dissertação buscou trazer contribuições para a área de Logística, pois explorou e analisou um tema sempre considerado atual e estratégico que é o da terceirização ou verticalização das atividades logísticas, em um mesmo contexto. Já para a prática gerencial, a principal contribuição pretendida foi a de fornecer subsídios para ajudar os executivos de logística na tomada de decisão terceirizar x verticalizar. / Logistics allow the company to develop strategies for cost reduction and increase the level of the service offered to the client. For the company to make the decision of executing internally the logistics activities or to outsource these activities is such an important one that in most of the companies this decision is made by the directors or managers. The companies’ trend to keep the focus on the business is a strategy which has been adopted more and more. Consequently, activities out of the core business of the companies are being outsourced. In the sector of distribution of chemicals we can observe the presence of companies that outsource their logistics activities and companies that insource, meaning that there is no unanimity about this in the sector. Given this context, the objective of the research is to analyze the adoption of insourcing or outsourcing of logistics activities in chemicals distribution companies. Thus, the research question is: Why do companies adopt the strategy of insourcing or outsourcing their logistics activities? The qualitative research is descriptive and applied the method of case studies, by investigating multiple cases performed in distributors of chemicals. The research used interviews as sources of evidence and analysis of documents and initially two pilot case studies were made and after corrections two more case studies were made. The results led to the finding of the following factors as drivers of the adoption of the vertical integration of logistics activities: reduce costs, greater control of the operation, increase levels of service and focus on logistics (core competency) were determinants, while having skills and resources and increase customer proximity were important. The factor meet all the requirements of the logistics business was not taken into consideration in the adoption of vertical integration of enterprises. Regarding outsourcing logistics activities, the following factors were identified as motivators of the adoption: reduce asset investment, reduce costs and focus on core business were decisive factors while the factors market expansion and increase the flexibility of the operation were considered important. The factors: have access to external expertise, improve the information technology used and increase levels of logistical service were not considered by companies when they choose to outsource their logistics activities.The dissertation sought to bring contributions to the field of logistics, since it explored and analyzed a theme that is always current and strategic, which is the outsourcing or insourcing of logistics activities, in the same context. For the management practice, the main contribution intended was to provide information that can help the logistics executives in the decision to outsource x insource.

Combining concepts regarding the make-or-buy decision, such as Williamson’s (1981) ideas on transaction costs in conjunction with theories of supply chain management, the thesis outlines what factors should be of importance to firms when deciding to make or buy certain processes within the supply chain. Using Porter’s (1985) division of the supply chain into 5 sections we analyze the make-or-buy decisions of Catamaran Sports/Adidas sailing, finding that while many decisions taken match the theory-based predictions, a lot of processes are handled the way they are because of external constraints faced by the firm. In the case of Adidas their main reason for taking certain strategic decisions are to maintain their competitive advantage in the market, which they build on a benefit leadership strategy. This has resulted in them often choosing a production method that has a relatively high accounting cost, compared to what could have been achieved, in order to maintain flexibility, reduce lead times and provide a higher level of service.

Doctor of Philosophy / Department of Economics / Dennis L. Weisman / Mandatory network unbundling is one of the foremost topics in regulatory economics today. The concept has crucial importance in the deregulation of many previously regulated industries including telecommunications, gas, electricity and railroads. Moreover, the topic has emerged as one of the more prominent issues associated with the implementation of the 1996 Telecommunication Act in the United States. Upon initial examination, establishing the correct costing standards and/or determining the correct input prices would seem important for sending the correct price signals to the entrants for their efficient make-or-buy decisions. Sappington (AER, 2005) uses a standard Hotelling location model to show that input prices are irrelevant for an entrant’s make or buy decision. In this first essay, we show that this result is closely related to the degree of product differentiation when firms are engaged in price competition. Specifically, it is shown that input prices are irrelevant when firms produce homogeneous products, but are relevant for make-or-buy decisions when the entrant and incumbent produce differentiated products. These results suggest that, in general, it is important for regulators to set correct prices in order to not distort the entrants’ efficient make-or-buy decisions. The second essay investigates optimal access charges when the downstream markets are imperfectly competitive. Optimal access charges have been examined in the literature mainly under the condition where only the incumbent has market power. However, network industries tend to exhibit an oligopolistic market structure. Therefore, the optimal access charge under imperfect competition is an important consideration when regulators determine access charges. This essay investigates some general principles for setting optimal access charges when downstream markets are imperfectly competitive. One of the primary objectives of this essay is to show the importance of the break-even constraint when first-best access charges are not feasible. Specifically, we show that when the first-best access charges are not feasible, the imposition of the break-even constraint on only the upstream profit of the incumbent is superior to the case where break-even constraint applies to overall incumbent profit, where the latter is the most commonly used constraint in the access pricing literature. Bypass and its implications for optimal access charges and welfare are also explored. The third essay is empirical in nature and investigates two primary issues, both relating to unbundled network element (UNE) prices. First, as Crandall, Ingraham, and Singer (2004) suggested, we will empirically test the stepping stone hypothesis using a state-level data set that spans multiple years. To do this, we will explore the effect of UNE prices on facilities-based entry. Second, in light of those findings, we will investigate whether the form of regulation (e.g. price cap and rate of return regulation) endogenously affects the regulator’s behavior with respect to competitive entry. Lehman and Weisman (2000) found evidence that regulators in price cap jurisdictions tend to set more liberal terms of entry in comparison with regulators in rate-of-return jurisdictions. This paper investigates whether their result is robust to various changes in modeling, including specification and econometric techniques.

Purpose – The purpose with this study is to investigate which factors that needs to be considered for sourcing decisions to ensure an optimal long-term decision, and which of these factors that can be quantified in a product costing model. To fulfill this purpose two research questions have been proposed: Which factors needs to be considered for a sourcing decision? Which of these factors that needs to be considered can be quantified in a product costing model? Method – A case study was conducted to fulfill the purpose of this study. The case study produced empirical data through interviews and document studies. The empirical data was interpreted and analyzed on the basis of the theoretical framework, created through literature studies. This process produced the result of this study. Findings – Factors to be considered for a sourcing decision have been identified and categorized in four over-arching categories: unit cost, logistical factors, capability factors and risk factors. These factors have been quantified in a product costing model. A preparatory decision model was created to further integrate some risk factors that could not be quantified. Implications – Both the make or buy decision and the manufacturing location decision have been considered in the product costing model presented in this study. The product costing model visualize and take into account hidden costs, rarely considered in sourcing decisions. This further enables optimal long-term sourcing decisions. Limitations – Risk factors remain difficult to quantify. This makes it difficult to determine the cost of risk factors, and as a result of that, to include them in a product costing model. Companies with similar conditions suites the model since the case study was conducted at only one company. Whether the product costing model is true for business in other contexts remain uncertain. / Syfte – Syftet med denna studie är att undersöka vilka faktorer som bör beaktas vid ett försörjningsbeslut för att säkerställa ett långsiktigt korrekt beslut och vilka av dessa som kan kvantifieras i en kalkylmodell. För att uppfylla syftet har följande två frågeställningar formulerats: Vilka faktorer bör beaktas vid ett försörjningsbeslut? Vilka av dessa faktorer som bör beaktas kan kvantifieras i en kalkylmodell? Metod – För att uppfylla studiens syfte genomfördes en fallstudie. Med hjälp av intervjuer och dokumentstudier har fallstudien genererat empirisk data. Utifrån det teoretiska ramverket, som skapats genom litteraturstudier, har data tolkats och analyserats. Detta har gett upphov till studiens resultat. Resultat – Faktorer som bör beaktas vid ett försörjningsbeslut har identifierats och kategoriserats i fyra övergripande kategorier: enhetskostnad, logistikfaktorer, kapabilitetsfaktorer och riskfaktorer. Dessa faktorer har kvantifierats i en kalkylmodell. För vissa riskfaktorer som är svåra att kvantifiera har en förberedande beslutsmodell skapats. Implikationer – Kalkylmodellen som presenteras i denna studie beaktar både tillverka/köp-beslutet och lokaliseringsbeslutet. Kalkylmodellen tar hänsyn till dolda kostnader som sällan beaktas vid dessa typer av beslut. Detta möjliggör ett långsiktigt korrekt försörjningsbeslut. Begränsningar – Riskfaktorer är fortsatt svåra att kvantifiera och därmed kostnadsbestämma. Detta gör det svårt att inkludera dem i en kalkylmodel. Då fallstudien genomfördes på endast ett fallföretag är kalkylmodellen lämpad för företag med liknande förutsättningar. Det är därför svårt att säga hur väl kalkylmodellen stämmer för företag i andra kontexter.

The IT sector is in constant change and new IT emerges constantly. This enables organizations to adopt new IT at a correspondingly rapid pace. Nonetheless, it is not certain that the adoption of new IT contributes positively to the organization’s existing application portfolio. Hence, the purpose of this study is to provide insights to how organizations adopt IT and the factors that are important to ensure positive effects from adopting new IT. A case study, consisting of semi-structured interviews, was conducted on a Norwegian governmental organization. The majority of current literature on the field are describing IT adoption for commercial for-profit organizations. Since the case-organization is a governmental organization, this study will also aspire to investigate how that influence IT adoption. The empirical findings of this study show that there is a purpose of having a strategy for adopting new IT to an existing application portfolio. A framework describing the adoption process and factors of importance for successfully adopting new IT is provided. Also, the empirical findings show that being a governmental organization does not influence the adoption of IT significantly. However, the findings show that other aspects of each individual organization can have more significant influence on the adoption process. / IT-sektorn är i ständig förändring och ny IT blir ständigt tillgänglig. Detta gör det möjligt för organisationer att ta sig an ny IT i motsvarande snabba takt. Det är dock inte säkert att implementering av ny IT bidrar positivt till organisationens befintliga applikationsportfölj. Därför är syftet med denna studie att ge insikt om hur organisationer tar sig an IT och de faktorer som är viktiga för att säkerställa positiva effekter från adoption av ny IT. En fallstudie, bestående av semi-strukturerade intervjuer genomfördes på en norsk statlig organisation. Majoriteten av befintlig litteratur inom fältet beskriver IT-adoption för kommersiella vinstdrivande organisationer. Eftersom fallstudieorganisationen är en statlig organisation kommer denna studie också att undersöka hur det påverkar IT-adoption i organisationen. De empiriska resultaten från denna studie visar att det finns ett syfte med en strategi för att adoptera ny IT till en befintlig applikationsportfölj. Ett ramverk som beskriver adoptionsprocessen och faktorer som är viktiga för en framgångsrik adoptionsprocess av ny IT finns framtaget. De empiriska resultaten visar också att det att vara en statlig organisation inte påverkar adoption av IT i särskilt hög grad. Resultaten visar dock att andra aspekter av varje enskild organisation kan ha mer inflytande på adoptionsprocessen.