A Structured Outsourcing Procedure

Abstract

Outsourcing of production entails a vast amount of activities and decisions. Although it has many acknowledged benefits, it is associated with substantial risk, and may lead to increased costs and loss of business if it is not carried out carefully and in a systematic manner. The identified outsourcing literature mainly focuses on specific parts of the outsourcing process and often provides limited practical guidance. Therefore, the purpose of this paper is to synthesize existing research on outsourcing processes into one structured outsourcing procedure. This can guide companies in carrying out outsourcing activities in a systematic manner. The suggested procedure is discussed in light of a case study of two production transfers between a Norwegian supplier of advanced maritime monitoring systems and one of its strategic suppliers.