The relationship development aspect of production transfer

Abstract

Production transfers are a result of outsourcing and offshoring decisions. Because of the strategic focus of the outsourcing literature, the operational issues of relationship development between sender and receiver and its impact on the transfer progress have not been fully depicted. The purpose of the present paper is to explore relationship development during production transfer. To fulfil this purpose, we studied three different production transfers and derived four propositions for further testing. Our main conclusions included that dependence and power gradually shift between the sender and the receiver and that the relationship between them sets the arena for what types of relationships can be developed between the receiver and the suppliers. Furthermore, short social distances can bridge cultural and technological distances to some extent, because it motivates the actors to bring their relationship into a more developed state. Finally, we noticed that the headquarters' involvement can work both as an inhibitor as well as a converter.

What is Offshoring Management Capability and How Do Organizations Develop It? A Study of Dutch IT Service Providers

“…We add to previous insights that coordination capability is important for creating value through offshoring (Mukherjee et al 2017;Whitaker et al 2010), by uncovering that firms can stimulate coordination by establishing communication routines, mechanisms for information exchange and integration, and arranging personnel exchange. Also, we advance previous research proposing the importance of building relationships with offshoring affiliates for production transfer (e.g., Aaboen and Fredriksson 2016) by uncovering the mechanisms for relationship development-developing trust and cultural reconciliation.…”

The impact of knowledge properties on international manufacturing transfer performance

“…a new workforce, equipment or new sub-suppliers) that contribute to an increased risk of capacity and quality problems, which ultimately may cause events such as supply disruptions (e.g. Aaboen and Fredriksson 2016). These problematic events will require action in order to reestablish the ability to deliver, and for this reason, there is a high risk that the budget will be exceeded and expected benefits of the decision to transfer will not be reached (Almgren 1999;Terwiesch and Bohn 2001).…”

“…Low independency requires effective coordination (Nassimbeni 1998) and reciprocal knowledge transfer between the sending and receiving units (Kohlbacher and Kr€ ahe 2007). Low independency, in which the transferred activity needs considerable input from several sending unit sources, has been found to diminish transfer performance (Zander and Kogut 1995), and may increase start-up time (Aaboen and Fredriksson 2016) and create cost overruns (Hui, Davis-Blake, and Broschak 2008). Therefore:…”

“…This may lead to a more complicated relationship, which can result in unexpected challenges during start-up and have a negative effect on performance after reaching steady state. These are highlighted as challenges related to the relocation of manufacturing activities in case studies for example by Vejrum Waehrens, Slepniov, and Johansen (2015) and Aaboen and Fredriksson (2016). However, as this is one of the first studies to include independency, further studies are needed to better understand the impact of independency on manufacturing transfers.…”

Technical Aspects of Relocation of Production and Assembly Lines in Automotive Industry

“…To reach a success, i.e. a successful relocation, it is necessary to plan the entire process precisely, to gather a responsible and experienced team whose task would be identifying and considering several factors that could stand in the way to the successful transfer project [9,10].…”