Operational implications of manufacturing outsourcing for subcontractor plants: An empirical investigation

Abstract

Purpose

The objectives of this paper are: to identify the key defining elements of a subcontractor plant from an operations management perspective and examine whether there are differences between the operational contexts of such plants and original equipment manufacturer (OEM) plants; and to examine whether these differences should translate into different operational practices, addressing the specific case of process quality management practices.

Design/methodology/approach

The paper uses a multiple case study involving five plants in the electronics industry representative of the OEM and different subcontractor contexts.

Findings

Results suggest that the operational contexts of subcontractor and OEM plants are different and that, as a result, these types of plants should emphasize different sets of process quality management practices.

Research limitations/implications

Results are considered to be generalizable to most discrete goods industries. However, future research should ascertain whether these results replicate in industries other than electronics.

Practical implications

OEMs, who have a critical role in disseminating best practice within the supply chain, must recognize the differences between OEM and subcontractor environments and avoid pushing one‐size‐fits‐all best practice programs along the chain.

Originality/value

Research in outsourcing to date has focused on the outsourcing decision per se and has mainly taken the perspective of the outsourcer firm. This study contributes to a better understanding of the operational implications of outsourcing decisions for subcontractor plants. It also responds to calls for more research linking quality management and supply chain management.

Citation

Sousa, R. and Voss, C.A. (2007), "Operational implications of manufacturing outsourcing for subcontractor plants: An empirical investigation", International Journal of Operations & Production Management, Vol. 27 No. 9, pp. 974-997. https://doi.org/10.1108/01443570710775829