MAKE-OR-BUY STRATEGY FOR CUSTOMS CLEARANCE SERVICE

Abstract

The customs clearance process is a function of supply chain management that deals with cargo at the port or airport.  In addition to its usual range of services many third party logistics services providers (3PLP) expand their range of services by including customs clearance services internally in order to be a one stop service provider.  Because of increased demand, the focus 3PLP firm in this study faces problems in providing  effective, efficient and sufficient services in Thailand to its customers as the firm’s manpower policy is to limit the number of employees, and if there are insufficient resources it will outsource some service to subcontractors yet without considering any adverse consequences.  This study compares the advantages and disadvantages of Make and Buy Strategies for the customs services, so that the firm can decide which to select.  Make strategy refers to the whole process of the customs clearance tasks being operated internally, while the Buy Strategy means outsourcing services to a 3PLP.  There are three selection criteria: on-time delivery, number of error and costs.  The decision was to adopt the ‘make’ strategy, keeping all services in-house.