Knowledge Integration Challenges when Outsourcing Manufacturing
Industrial firms experience a strong tension between high demands to outsource manufacturing to low-cost regions and the need to integrate and co-locate key competencies in product development chains. The chapter explains this tension as a dynamic balance between knowledge integration (KI) requirements and capabilities. Three themes are discussed, illustrated by survey data and case studies. First, the chapter argues that parallel investments in manufacturing capability are valuable for meeting KI requirements derived from outsourcing manufacturing. Second, the analysis demonstrates how different kinds of outsourcing strategies shape the KI challenges. Third, the chapter shows how KI challenges turn up as hidden costs, performance trade-offs, or deteriorated cost reduction capability. The chapter claims that the lack of analysis of KI challenges is one explanation why previous studies on outsourcing effects have shown contradictory results. The chapter ends by suggesting the notion of manufacturing absorptive capacity for understanding KI challenges when outsourcing manufacturing.
Keywords: outsourcing, manufacturing strategy, manufacturing absorptive capacity, knowledge integration, costs of outsourcing, performance
Oxford Scholarship Online requires a subscription or purchase to access the full text of books within the service. Public users can however freely search the site and view the abstracts and keywords for each book and chapter.
Please, subscribe or login to access full text content.
If you think you should have access to this title, please contact your librarian.
To troubleshoot, please check our FAQs , and if you can't find the answer there, please contact us .