What Happens When You Outsource Too Much?

By: Material type: ArticleArticleLanguage: ENG Series: ; 52Publication details: Winter 2011 0Edition: 2Description: 59-64 PpSubject(s): DDC classification:
  •  Zir
Online resources: Summary: The article discusses how companies can determine which activities and competencies they can safely outsource. A brief background on the outsourcing practice is given. It provides details of a multiyear research project examining supply strategy relating to new product development at an automotive company in Europe. Some key issues that may hinder a company's ability to manage new product development effectively are discussed, including difficulty to integrate systems without having in-depth knowledge about the technologies and dealing with major trade-offs. It explores the balance between having sufficient architectural and component-specific knowledge internally to produce products and outsourcing such knowledge.
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The article discusses how companies can determine which activities and competencies they can safely outsource. A brief background on the outsourcing practice is given. It provides details of a multiyear research project examining supply strategy relating to new product development at an automotive company in Europe. Some key issues that may hinder a company's ability to manage new product development effectively are discussed, including difficulty to integrate systems without having in-depth knowledge about the technologies and dealing with major trade-offs. It explores the balance between having sufficient architectural and component-specific knowledge internally to produce products and outsourcing such knowledge.

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