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Total acquisition cost of overseas outsourcing/sourcing: a framework and a case study

Total acquisition cost of overseas outsourcing/sourcing: a framework and a case study Purpose – The purpose of this paper is to develop a framework of total acquisition cost of overseas outsourcing/sourcing in manufacturing industry. This framework contains categorized cost items that may occur during the overseas outsourcing/sourcing process. The framework was tested by a case study to establish both its feasibility and usability. Design/methodology/approach – First, interviews were carried out with practitioners who have the experience of overseas outsourcing/sourcing in order to obtain inputs from industry. The framework was then built up based on combined inputs from literature and from practitioners. Finally, the framework was tested by a case study in a multinational high‐tech manufacturer to establish both its feasibility and usability. Findings – A practical barrier for implementing this framework is shortage of information. The predictability of the cost items in the framework varies. How to deal with the trade off between accuracy and applicability is a problem needed to be solved in the future research. Originality/value – There are always limitations to the generalizations that can be made from just one case. However, despite these limitations, this case study is believed to have shown the general requirement of modeling the uncertainty and dealing with the dilemma between accuracy and applicability in practice. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Journal of Manufacturing Technology Management Emerald Publishing

Total acquisition cost of overseas outsourcing/sourcing: a framework and a case study

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References (41)

Publisher
Emerald Publishing
Copyright
Copyright © 2007 Emerald Group Publishing Limited. All rights reserved.
ISSN
1741-038X
DOI
10.1108/17410380710817291
Publisher site
See Article on Publisher Site

Abstract

Purpose – The purpose of this paper is to develop a framework of total acquisition cost of overseas outsourcing/sourcing in manufacturing industry. This framework contains categorized cost items that may occur during the overseas outsourcing/sourcing process. The framework was tested by a case study to establish both its feasibility and usability. Design/methodology/approach – First, interviews were carried out with practitioners who have the experience of overseas outsourcing/sourcing in order to obtain inputs from industry. The framework was then built up based on combined inputs from literature and from practitioners. Finally, the framework was tested by a case study in a multinational high‐tech manufacturer to establish both its feasibility and usability. Findings – A practical barrier for implementing this framework is shortage of information. The predictability of the cost items in the framework varies. How to deal with the trade off between accuracy and applicability is a problem needed to be solved in the future research. Originality/value – There are always limitations to the generalizations that can be made from just one case. However, despite these limitations, this case study is believed to have shown the general requirement of modeling the uncertainty and dealing with the dilemma between accuracy and applicability in practice.

Journal

Journal of Manufacturing Technology Management – Emerald Publishing

Published: Sep 11, 2007

Keywords: Modelling; Outsourcing; Purchasing; Manufacturing systems; Cost effectiveness

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