From Gap to Gain: Insourcing Inbound Logistics in the Heavy Truck Industry

Abstract

In today’s increasingly complex and uncertain business environment, maintaining a cost- efficiency, resilient, and environmentally sustainable inbound supply chain is crucial for remaining competitive. This thesis investigates how heavy truck manufacturers can improve their inbound supply chain by identifying key challenges and exploring potential areas for improvement, with a particular focus on long-distance suppliers. The study begins by examining logistical challenges faced in the inbound supply chain of a heavy truck manufacturer, when sourcing from distant suppliers. The starting point for identifying the challenges is based on cost-efficiency, resilience, and environmental sustainability. It then explores how B2B companies can draw insights from the practices of high-performing B2C companies to manage these challenges. Finally, drawing inspiration from B2C strategies, this thesis assesses the potential of insourcing to manage the logistical challenges in long-distance inbound logistics. The findings reveal that the heavy truck manufacturer has logistical challenges with limited supply chain overview, lack of control in the supply chain, supplier dependence, and weak incentives for supplier resilience and environmental sustainability. These interrelated issues are rooted in strategic decisions. While some B2C practices are not directly transferable to a B2B context, the study finds that they nonetheless offer valuable insights, particularly the potential benefits of a more insourced approach for long-distance inbound logistics. The study finds that while insourcing can improve supply chain overview and control in the case, it does not substantially reduce supplier dependency and may even lead to new challenges. Based on the findings, the study recommends that the heavy truck manufacturer should retain its current partial outsourcing strategy while developing a more dynamic and flexible model. This allows for continuous adaptation to changing conditions. Insourcing should be considered as a strategic measure rather than a standard solution, applied selectively based on context-specific factors such as internal capacity, risk, and supplier criticality. Furthermore, by expanded benchmarking efforts and drawing inspiration from successful B2C companies, the heavy truck manufacturer can strengthen its ability to manage long- distance inbound logistics and address external challenges more effectively.