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Published in Jiuping Xu, Syed Ejaz Ahmed, Zongmin Li, Big Data and Information Theory, 2022
Rosine Salman, Tugrul Daim, David Raffo, Marina Dabic
Offshoring is the outsourcing or/and in-sourcing of Information Technology (IT) work to a third party supplier located on a continent different from that of the client (Rottman & Lacity, 2008). The globalization of resources has resulted in a dramatic increase in offshoring. Although client companies have offshored manufacturing services for decades, the practice of offshoring IT services is still maturing. Offshoring is the transfer of an organizational function to another country, regardless of whether the work is outsourced to a third party company (vendor) or stays within the same company (Bhalla, Sodhi, & Son, 2008; Carmel & Agrawal, 2002b; Kakabadse & Kakabadse, 2002; Trent & Monczka, 2005), whereas Carmel defined offshoring as performing work for clients in one country using workers located in a different country, this work may be outsourced to an offshore third party provider or conducted by wholly or partially owned offshore subsidiaries of the onshore parent company (Carmel & Abbott, 2006).
A Brief History of 3D Printing
Published in Thomas Birtchnell, John Urry, A New Industrial Future?, 2016
Differences in labour conditions and incomes across the world disrupted this idea of a rapid shift from people to machines. Since the 1960s the shift of production to countries in the Global South has led to a slow transition to automation, as factories in the Global North are unable to compete with offshored manufacturing involving a vast supply of labour in Mexico, Panama, China, India, Vietnam, and elsewhere.21 So a very different scenario emerges wherein instead of machines replacing manual labour entirely, manufacturing labour is offshored to countries where manual labour is more profitable than automation in the Global North. Cost savings are the main factor that drives offshoring and it is through non-unionized labour, less regulation and lower tax rates that profits are made.22 Free trade zones within these nations became a method for states with little to no geopolitical allegiances to cash-in on offshoring. Since the 1990s a further progression is the offshoring, rather than the automation, of white-collar knowledge work to countries where ‘comparative advantages’ offer profit.
Servitization in Europe
Published in Lisa De Propris, David Bailey, Industry 4.0 and Regional Transformations, 2020
Ferran Vendrell-Herrero, Oscar F. Bustinza
As a result of a reduction in transport costs, a rise in offshoring of European and US production to developing economies in the 1990s changed the way the global economy was conceptualized during the twentieth century (Krugman and Venables, 1995). Countries like China, India, Turkey and Mexico benefited from production offshoring and other foreign direct investments from Western economies, significantly improving their manufacturing industry. Over the years, these countries have become increasingly competitive and could threaten the manufacturing leadership of Europe and the US as the latter functioned during the twentieth century (Baldwin, 2016).
Global competitiveness of European surface technology. Part 2: challenges to and future development of the surface finishing sector
Published in Transactions of the IMF, 2021
P. Leisner, C. Larson, L. P. Nielsen, S. Müller, W. Hansal, J.-C. Puippe, A. Zielonka
This paper is the second and final part of an article based on a whitepaper report on the competitiveness of the European surface finishing industry prepared by the European Academy of Surface Technology (EAST) (Leisner et al.1). Part I (Leisner et al.2) presented an analysis of the competitiveness of the European manufacturing industry in general and the surface finishing sector in particular. In that it was emphasised that surface finishing is not a stand-alone industry, but an integrated part of the manufacturing chain for products, and that the surface finishing step follows the rest of the manufacturing if offshored. The drivers for offshoring are changing, and increased automation is one of the parameters that makes offshoring less profitable. It was also concluded that the size of the European surface finishing sector approaches an annual turnover of US$ 114 Bn and 900 000 employees with an annual growth rate of 3.6%. Furthermore, surface finishing accounts for about 5% of all manufacturing of products with approximately 1/3 of the surface finishing done by sub-contractors and 2/3 in-house. The average size of European sub-contractors is small with the majority having less than 10 employees.
The magnitude of a product recall: offshore outsourcing vs. captive offshoring effects
Published in International Journal of Production Research, 2019
Manfredi Bruccoleri, Giovanni Perrone, Erica Mazzola, Robert Handfield
Over the last two decades, increased competition and a globalised economy have led firms in multiple industries to increasingly deploy offshore outsourcing and captive offshoring policies (Larsen, Manning, and Pedersen 2013; Kaur, Singh, and Majumdar 2018). Offshore outsourcing refers to the contracting-out of operations to independent suppliers that are distant from the host country where the product is sold (Bozarth, Handfield, and Das 1998; Steven, Dong, and Corsi 2014). Captive offshoring refers to the practice of relocating a portion of the operations function to a foreign country, but remaining within the boundaries of the firm’s organisational structure. Offshore outsourcing and captive offshoring are motivated by myriad factors such as reduction of production and labour costs, acquisition/development of new knowledge, consolidation of existing market segments or penetration of new ones (Mazzola and Perrone 2013). However, in the rush to source globally, the risk of product quality defects resulting in products recalls is often underestimated (Steven, Dong, and Corsi 2014). Increasing occurrences of product recalls have been attributed to higher levels of offshore outsourcing and captive offshoring of manufacturing and distribution (Lyles, Flynn, and Frohlich 2008).1
Outsourcing and offshoring decision making
Published in International Journal of Production Research, 2019
Alessio Ishizaka, Arijit Bhattacharya, Angappa Gunasekaran, Rob Dekkers, Vijay Pereira
Outsourcing and/or offshoring is one of the important and key strategic approaches in complex, dynamic and competitive global supply chains. It is one of the sustained trends of business undertaken by the firms (Adams et al. 2018). Despite having debate about the impact on the firms of outsourcing (Gylling et al. 2015; Lahiri 2016), outsourcing / offshoring is considered as a typical competitive strategic phenomenon in both the domestic and international marketplaces (Javalgi, Dixit, and Scherer 2009; Mukherjee, Gaur, and Datta 2013; Adams et al. 2018; Pereira, Munjal, and Ishizaka 2020, forthcoming). A critical review of some empirical research articles published between 1996 and 2015 suggests that ‘outsourcing can produce positive, negative, mixed, moderated or no significant impact on the firm’ (Lahiri 2016, 490). Cost saving, improved management effectiveness and flexibility, access to market, and better product/service quality are some of the benefits of outsourcing and offshoring identified in literature (Yang and Huang 2000; McCarthy and Anagnostou 2004; Lewin, Massini, and Peeters 2009; Yao et al. 2010; Dolgui and Proth 2013). Further, the outsourcing and offshoring global industry operates a unique business model that includes value creation and capture (Malik, Pereira, and Budhwar 2018), and there has been evidence of unique complexity because of the global nature of its business model leading to what Malik, Pereira, and Budhwar (2020, forthcoming) term as ‘configurations of multi-vergence’ (i.e. multiple configurations of cross-vergence).