Essay on What Happens When You Outsource Too Much?

Essay on What Happens When You Outsource Too Much?

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Journal Article Review 2
Michael Hipsman
Liberty University
BUSI613

Background
Over the past few decades one of the most important issues that has effected many companies throughout the globe is outsourcing various processes within companies. This practice has been highly debated and discussed, and many companies around the world outsource some of their production process or design processes to remain competitive within the market place. With this business practice, many researchers have conducted studies on the various issues that can arise from outsourcing within companies. Within the article “What Happens When You Outsource Too Much?”, written by Zirpoli, Francesco & Becker, Markus, 2011, researchers discuss the effects of outsourcing had on the design process within an automobile company called “Alpha”. Within the automobile company being researched, researchers found that the company had direct relationships with over 3,000 suppliers during the late 1980’s. The suppliers were mostly involved in the production of components, and had a very limited extent in the design of components. However, by the early 1990s, management began shifting increasing amounts of design and engineering work to suppliers. This trend was hastened by the proliferation of electronics and computers in cars, which at the time was beyond the traditional competence base of automotive manufacturers. (Ziropoli & Becker, 2011)
Within the article stated, the main purpose of the research conducted was to show the implications management can run into when allowing the design process, as well as manufacturing process to be outsourced during production. The research conducted found that Alpa, had implemented processes which took away the design knowle...


... middle of paper ...


...tomobile industry that saw issues arise within management and engineering due to the outsourcing of parts productions to suppliers. Ziropoli & Becker, found that by allowing their suppliers to design and produce parts simultaneously, central knowledge of the engineering process and quality control were lost. In turn, researchers were also able to suggest various processes that the organization could implement to ensure successful relationships with suppliers and outsourcing of their parts production.


References
Young, G. (2014). Designing and Managing The Supply Chain. In Supply Chain Management (p. 211). McGrawHill.
Zirpoli, F., & Becker, M. (2011). What happens when you outsource too much? MIT Sloan Management Review, 52(2), 59-64. Retrieved from http://ezproxy.liberty.edu/login?url=http://search.proquest.com.ezproxy.liberty.edu/docview/845235674?accountid=12085

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