How does the industry work with sourcing decisions? Case study at two Swedish companies

Journal of Manufacturing Technology Management - Tập 17 Số 5 - Trang 547-560 - 2006
AnetteBrannemo1
1Volvo CE Components AB, Eskilstuna, Sweden Mälardalen University, Sweden

Tóm tắt

PurposeThe objective of this paper is to present how two Swedish companies work, or plan to work, with sourcing decisions. The aim is furthermore to analyze if their decision process, or parts of it, can be used as a base for building a rightsourcing decision model. In this paper rightsourcing is defined as; “the process to actively apply in‐and outsourcing strategically to be competitive now and in the future”.Design/methodology/approachSince the business environment is dynamic and the global aspects are increasing, companies tend to focus on what they do best‐their core competence. The concept of outsourcing has, therefore, been growing rapidly during the last decade. Many companies seem to have a vague understanding about the risks and benefits of outsourcing, except from a general idea that it will reduce cost. Many companies hence experience that sourcing decisions are complex and the need for a model supporting sourcing decision exist within many corporations. This is accomplished through a literature overview and a multiple case study.FindingsThe results indicate that a model for sourcing decisions ought to include, or be based on, following aspects, e.g. the companies overall strategy, the companies core competence, both qualitative and quantitative data and risk analysis. The sourcing process also ought to be made with a process approach, avoiding functional sub‐optimization. The results also indicated that financial evaluation and documentation of the decision is important.Research limitations/implicationsThe multiple case study was conducted in one mechanical company and one engineering company from Sweden. The fact that the study only included two studies could affect the possibility to generalize the result.Originality/valueThis paper offers help to companies that consider sourcing decisions.

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Journal of Manufacturing Technology Management

Tập 17 Số 5

547-560

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