The role of direct outsourcing in new product manufacturing strategy

Qiong, Chen; Özkan‐Seely, Gülru F.; Roth, Aleda V.

doi:10.1080/19488289.2017.1409299

Cited by 3 publications

(3 citation statements)

References 54 publications

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“…Our results highlight the importance of understanding the dynamics of the marketplace that the new product will enter when determining outsourcing‐mode strategy. The features and functionality of the product, as well as the degree of innovativeness (Chen et al., 2017), ultimately may drive the product's demand characteristics. The delay in time‐to‐market of the product may be especially significant in markets of rapidly evolving technologies (Meyer, 1993; Bayus, 1997; Carrillo & Franza, 2006).…”

Section: Discussionmentioning

confidence: 99%

“…As an example, since 2000, electronics manufacturer Apple Inc. has directly outsourced production of popular new products, including the iMac, iPhone, and iPad, from the manufacturer Foxconn (Xu, Ye, & Wang, 2011). Second, the buyer may make use of an external intermediary firm (hereafter intermediary, or agent, he), to determine the manufacturer on behalf of the buyer, a process referred to as “indirect outsourcing” (Campbell, Hexter, & Yin, 2004; Chen, Ozkan‐Seely, & Roth, 2017). To illustrate, automaker Ford Motor Co. outsourced a major automobile system from Japanese manufacturers indirectly through agent Sumitomo for many years (Haigh, 1992).…”

Section: Introductionmentioning

confidence: 99%

“…A key factor that drives the buyer's ultimate decision is the relative levels of outsourcing knowledge between the buyer and the agent (Quintens, Matthyssens, & Faes, 2005; Chen et al., 2017). Outsourcing knowledge of a firm encompasses their information, data, and experience with capable manufacturers in the supply market, including the firm's capabilities to evaluate, negotiate with, and identify prospective manufacturers (Campbell et al., 2004).…”

Section: Introductionmentioning

confidence: 99%

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Knowledge‐Based View of the Use of an Intermediary in New Product Manufacturing Outsourcing

et al. 2020

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In this article, we introduce a game-theoretic model to examine the impact of outsourcing knowledge, as well as firm-and market-level factors, on a buyer's decision of whether to employ a supply chain intermediary or an agent to identify a manufacturer for her new product. The buyer faces two options: identify the manufacturer directly or explore outsourcing indirectly through an agent. In the case of direct outsourcing, the buyer evaluates, negotiates with, and identifies the manufacturers in-house, whereas, under indirect outsourcing, the agent takes over these activities in exchange for a commission based on the transaction value between the buyer and the manufacturer. The model introduced in this article captures the buyer-agent incentive misalignment. Unexpectedly, we find that although attractiveness of indirect outsourcing increases as the buyer's outsourcing knowledge increases, it follows an inverse-U shape as the agent gains more outsourcing knowledge. We further demonstrate that the observability of the buyer's outsourcing knowledge is another key driver of the outsourcing-mode strategy. In addition, we show that the buyer's tendency to explore indirect outsourcing is greater if the sensitivity to the retail price or the commission rate is higher, or the base demand or cost of delayed time-to-market associated with the new product is lower. We extend our analysis to consider a contract form, whereby the agent's commission payment is driven † Corresponding author by the expected savings generated for the buyer, and to consider the setting in which the buyer's outsourcing knowledge is private information. [

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Section: Discussionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

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Knowledge‐Based View of the Use of an Intermediary in New Product Manufacturing Outsourcing

et al. 2020

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Product lifecycle management system implementation and market responsiveness: the role of partner management capability

Tai,

Tsao,

Chen

2023

Journal of Industrial and Production Engineering

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Effect of innovativeness on supply chain integration and performance

Kalyar

Shafique

Ahmad

2019

IJOEM

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Purpose The purpose of this paper is to investigate the potential role of innovativeness in determining supply chain (SC) integration and to foster the SC performance of manufacturing small and medium enterprises (SMEs). The study also proposes that the SC integration–performance relationship is contingent to the degree of environmental uncertainty (EU). Design/methodology/approach The data were collected from 321 manufacturing SMEs working in Pakistan. Respondents were owners/CEOs/managers of the firms. Considering the formative nature of indicators of SC efficiency and effectiveness, partial least square-based structural equation modeling (SEM) was used to analyze the data. Findings The results indicate that innovativeness positively influences the dimensions of SC integration which in turn affects SC efficiency and effectiveness. The results support the presence of moderation for the relationship between the dimensions of both SC integration and performance. The findings suggest that firms should endeavor to accomplish innovativeness and SC integration, as they jointly promote SC performance. Practical implications SMEs can use innovativeness as an important tool to increase SC integration and SC performance. For SMEs with a highly volatile and dynamic environment, managers should achieve SC integration and include external integration orientation at the strategic level in order to reap the greatest advantages from SC integration. Originality/value This study contributes to the SC literature by exploring the effect of the nascent determinant (innovativeness) of SC practices and performance to expand and deepen current understanding of the potential role of innovativeness in the SC context. Furthermore, considering EU as a moderator opens up new avenues of research to elucidate the SC integration–performance nexus in the emerging market context.

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The role of direct outsourcing in new product manufacturing strategy

Cited by 3 publications

References 54 publications

Knowledge‐Based View of the Use of an Intermediary in New Product Manufacturing Outsourcing

Knowledge‐Based View of the Use of an Intermediary in New Product Manufacturing Outsourcing

Product lifecycle management system implementation and market responsiveness: the role of partner management capability

Effect of innovativeness on supply chain integration and performance

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