Abstract
Decision about outsourcing core products is one of the subtlest and most important decisions made by a purchaser. It is a
two-edged sword decision that can be the source of huge competitive advantage, such as cutting fixed costs while improving
quality and giving access to innovation, but can also be the beginning of company disaster. Indeed, outsourcing a strategic
product to an inappropriate contract manufacturer might provoke not only huge financial losses, and corporate image
humiliation but can also lead to company bankruptcy. Therefore these decisions must be made with a high level of vigilance.
Suppliers must be selected in a way to minimise the risks such as loss of intellectual property, and ethical issues and to
maximize potential rewards. The evaluation of suppliers against qualitative and intangible as well as quantifiable criteria is
therefore essential and the use of model that facilitates this is highly desirable, leading to better informed decisions. This
paper demonstrates the practical application of such a framework in Staedtish, a company faced with the decision regarding
the outsourcing of a core product to collaborative supplier.
two-edged sword decision that can be the source of huge competitive advantage, such as cutting fixed costs while improving
quality and giving access to innovation, but can also be the beginning of company disaster. Indeed, outsourcing a strategic
product to an inappropriate contract manufacturer might provoke not only huge financial losses, and corporate image
humiliation but can also lead to company bankruptcy. Therefore these decisions must be made with a high level of vigilance.
Suppliers must be selected in a way to minimise the risks such as loss of intellectual property, and ethical issues and to
maximize potential rewards. The evaluation of suppliers against qualitative and intangible as well as quantifiable criteria is
therefore essential and the use of model that facilitates this is highly desirable, leading to better informed decisions. This
paper demonstrates the practical application of such a framework in Staedtish, a company faced with the decision regarding
the outsourcing of a core product to collaborative supplier.
| Original language | English |
|---|---|
| Title of host publication | IESM 2011 - Proceedings of the International Conference on Engineering and Systems Management |
| Editors | Lyes Benyoucef, Damien Trentesaux, Abdelhakim Artiba, Nidhal Rezg |
| Place of Publication | Metz |
| Pages | 744-753 |
| Number of pages | 10 |
| ISBN (Electronic) | 9782960053234 |
| Publication status | Published - May 2011 |
Keywords
- practitioners
- supplier selection
- outsourcing
- core product
- collaborative relationship
- purchasing framework
- framing
- decision on stages
- MCDA