The main purpose of this thesis is to develop a new model which helps the decision maker to rationalize outsourcing decisions based on Life Cycle Cost (LCC) analysis and select the appropriate supplier. The model developed consists of four main phases, as well as a pre-evaluating step, which investigate the organization needs and circumstances. Phase I is an evaluation and calculation phase, it assess whether outsourcing is the right policy to be adopted as a competitive advantage from two perspectives; the strategic evaluation of the outsourcing decision, and the cost savings through the life time of the outsourcing process using LCC. Phase II is supplier's selection; it aims to select the preferred supplier using Multiple Criteria Decision Making (MCDM), as well as identifies performance measures to monitor supplier performance. Phase III is maintain and monitor phase, it aims to keep the process and the supplier under continuous revision and assessment. Phase IV is review phase, it aims to identify if a specified monitored parameter is out of control or at critical levels, and identify the causes. This model contribute in covering the lack in the literature by considering LCC in the outsourcing decision making, as well as providing a structured model that concern about the whole process starting by understanding the organizations need and ends by monitoring and review the outsourcing process. The model was validated at one Swedish company, i.e. Kalmar Industries in Ljungby assembly unit, in particular, within the maintenance department. The results of the model validation shows that using LCCA, and risk benefits associated, the preferred alternative is to outsource all the maintenance activities related to ventilation system, these activates involve maintenance personnel, spare parts, and third party to monitor and report the process to authorities. Furthermore, based on LCCA and other suggested criteria and using MCDM, ABB Supplier got the lowest score in MCDM i.e. 36.70% (the lowest LCC along with fulfillment of the qualitative criteria). The main result is that; it is possible to employ LCCA in the maintenance outsourcing process to achieve a strategic model valid for decisions taking over the life length of the process. Consequently, the main recommendation for the case company is to outsource these activities and to transfer it to ABB service supplier.
| Identifer | oai:union.ndltd.org:UPSALLA1/oai:DiVA.org:vxu-2200 |
| Date | January 2008 |
| Creators | Fakhoury, Bashar, Alhamed, Heba |
| Publisher | Växjö universitet, Institutionen för teknik och design, Växjö universitet, Institutionen för teknik och design |
| Source Sets | DiVA Archive at Upsalla University |
| Language | English |
| Detected Language | English |
| Type | Student thesis, info:eu-repo/semantics/bachelorThesis, text |
| Format | application/pdf |
| Rights | info:eu-repo/semantics/openAccess |
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