Insourcing

Posted in Operations and Supply Chain Terms, Total Reads: 871
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Definition: Insourcing

Insourcing is the opposite of outsourcing. It is the process where the organizations start doing the different tasks internally, rather than giving them to a third party.

It is generally a strategic decision for an organization to get the earlier outsourced tasks done internally. The decision generally comes in because of cost savings, issues related to security, efficiency etc.  It is generally observed in manufacturing setup.

For example: Consider, an electrical equipment manufacture firm. Assume that the manufacturing of a part of the motor was always being done by a third party. But, now the company has come up with a new design. So to keep the new technology a secret, the company might not like to share the details with the third party. In this case, they will start manufacturing the part internally. This is called insourcing.


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