The development of a generic outsourcing decision model with validation through automotive industry case studies.

Abstract

Aims and Objectives of Research. 1. To develop a ¿one stop¿ generic decision making matrix (Outsourcing Decision Model) that provides the necessary clarity into defining whether an organisation should proceed with an outsourcing initiative or not. This would be based upon a distillation of existing models and reviewed literature. With the recognition that there may be subsequent advantages following the process, the model will include not only these but a means of evaluation in order to ascertain whether or not an outsourcing initiative may be or was successful or not. This latter aspect must logically be viewed as very important as an outsourcer must be aware of the benefits and also whether or not they were achieved. In addition, the model would include sufficient guidance with potential supporting metrics and their application. 2. To validate the Outsourcing Model through specific case studies using a triangulated approach in comparing the selected automotive OEM with some of its major competitors. Within the context of the case study, the research would also attempt to understand how the subject outsourcing organisation compares to its major competitors in equivalent comparable products and whether or not this reflects in the success of these companies. This case study not only provides a means of reinforcing the remaining case studies by using a triangulated method of application to the research developed outsourcing decision model but also provides a deeper understanding of the context of the supplier and competitors within the industry. 3. To test, via case studies the effect of specificity relating to the outsourced end product rather than the outsourced entity. This aspect provides the deepest application to the researched outsourcing decision model and therefore the most comprehensive validation. In addition, because the case studies are retrospective, they have the benefit of providing data to establish the level of success. This would be very important, particularly as it would enable a focus on particular criteria that failed to highlight a particular outcome and therefore provide a chance to make amendments. Low specificity is a well established criterion in defining an outsourced entity which is reflected within the body of the research. The further extension of this theory towards the outsourcing of and outsourced entity related to an established previously outsourced commodity is a new concept with no identifiable literature or evidence relating to its importance. The fact that it provides an element within the research that is potentially unique and carries no extra task burden it has been captured as an added element within the two important validation case studies: 4. To evaluate if outsourcing performance can be enhanced through the introduction of a second supplier into a single supplier sourcing situation. Subsequent to outsourcing, this aim and objective focuses upon the possibility of enhancing performance through the introduction of a second supplier. Particularly in cases whereby expertise may have been lost from an outsourcer, ultimate results relating to the outsourced entity may be compromised through either opportunism or diminished supplier performance. Whether these aspects are deliberate or unintended, an outsourcer should have some means of mitigating this risk. This mitigation may potentially be enabled through the use of a second supplier in order to provide a degree of competition. 5. To identify a link between Specificity, Commonality and Platform Sharing. The Author's professional role was very heavily based around the modern practices within the Automotive Industry. Outsourcing, platform sharing and commonality are well publicised strategies that have been adopted by various car manufacturers in order to gain efficiencies. Research was carried out in order to provide a better understanding of these strategies and to establish if there is any link between them. A confirmation of any linkages may then provide potential for establishing greater synergies between them.