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Performance measures and metrics in outsourcing decisions: a review for research and applications

journal contribution
posted on 2023-06-08, 19:58 authored by Angappa Gunasekaran, Zahir Irani, King-Lun Choy, Lionel Filippi, Athanasios Papadopoulos
Outsourcing, an operations strategy that influences the performance of a supply chain, has become an important component of global operations management. An effective global sourcing strategy helps companies to manage the flow of parts and finished products in meeting the needs of overseas and domestic markets. Outsourcing reduces the cost of assets, facilitates core competencies to reduce production costs, leads to strategic flexibility and reduces administrative and overhead costs. Some of the reasons why companies are against outsourcing include integration challenges, sacrificing their competitive base, opportunistic behaviour, rising transaction and coordination costs, limited innovation, and higher procurement costs. Despite these shortcomings, outsourcing will continue to play an important role in enhancing organizational competitiveness. Therefore, an attempt has been made to review the literature on outsourcing with particular reference to Performance Measures and Metrics (PMMs) used in arriving at outsourcing decisions. The main objective of this paper is to present a taxonomy (classification) of PMMs in outsourcing decisions at the pre-outsourcing, during-outsourcing, and post-outsourcing stages. Also, based on the literature review and analysis, an attempt is made to determine a list of specific tools and techniques for PMMs in outsourcing. Finally, the limitations of the paper and future research directions are presented.

History

Publication status

  • Published

Journal

International Journal of Production Economics

ISSN

0925-5273

Publisher

Elsevier

Volume

161

Page range

153-166

Department affiliated with

  • Business and Management Publications

Full text available

  • No

Peer reviewed?

  • Yes

Legacy Posted Date

2015-02-06

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