When assessing the potential to insource, what should companies primarily evaluate?

When considering the possibility of insourcing, the primary focus should be on the quality and performance of current suppliers. This evaluation is crucial because it allows companies to assess whether their existing suppliers are meeting specific benchmarks regarding delivery, reliability, and overall product performance. If current suppliers are falling short, it can indicate a need for companies to bring certain functions or processes in-house to enhance control over quality, reduce dependency on external partners, and ultimately improve their supply chain efficiency.

In contrast, while the trend in market prices might provide context for financial decisions, it does not directly address the operational capabilities and performance quality necessary for effective insourcing. Similarly, future expansion opportunities could guide a company's strategic direction, but they do not necessarily inform the decision regarding current supplier capabilities. The potential for automation is also relevant but more geared towards increasing efficiency rather than evaluating the current state of supply chain partnerships. Thus, assessing existing supplier quality and performance serves as a foundational step in determining whether insourcing is a viable and beneficial option for the company.