Outsourcing:assessing the risks and benefits for organisations, sectors and nations

Purpose - This research aims to assess the risks and benefits of outsourcing for organisations, sectors and nations. The literature on outsourcing contains little evidence of research on holistic issues of its impact at systems levels beyond the firm, notably sectors and nations. Design/methodology/approach - A Delphi study with senior strategists from private and public sectors captured perspectives and specific observations on benefits and risks of outsourcing. Emergent issues on outsourcing policy, strategy and decision-making processes were synthesised into a framework for analysing factors associated with outsourcing. Findings - The findings suggest that a more holistic view of outsourcing is needed, linking local, organisational issues with sector and national level actions and outcomes. In this way, aggregate risks and benefits can be assessed at different systems levels. Research limitations/implications - Future research might address the motivations for outsourcing; currently there is little research evidence to assess whether outsourcing is a mechanism for failing to solve internal problems, and moving responsibility and risk out of the firm. Additionally most outsourcing research to date has concentrated on an activity either being "in" or "out"; there is little research exploring the circumstances in which mixed models might be appropriate. Practical implications - The framework provides an aid to research and an aide memoire for managers considering outsourcing. Originality/value - This paper contributes to knowledge on understanding of outsourcing at different systems levels, particularly highlighting the implications of outsourcing for sectors and nations. Previously most research has focused at the level of the firm or dyadic relationship. © Emerald Group Publishing Limited.

Supply network strategy:role and competence requirements

This paper presents an argument that it is possible for an organisation to manage networks, but understanding this involves consideration of what is meant by "managing". Based on prior research and data from a major longitudinal action research study in the health sector, the paper describes six network management roles: network structuring agent; co-ordinator; advisor; information broker; relationship broker; innovation sponsor. The necessary "assets" for effective performance of these roles are identified, in particular those relating to team competence. The findings enrich and significantly develop previous work on network management roles and activities, and their influencing factors. It is concluded that, given the specific nature of the networks studied, further research is required to evaluate the generalisability of the findings, though initial indications are promising.

Understanding high-value manufacturing in Scottish SMEs

Purpose: The purpose of this paper is to investigate the use of high-value manufacturing (HVM) concepts in Scottish SMEs and define how they are being used to gain competitive advantage. Design/methodology/approach: Cross-sectional research carried out using a large-scale survey of 435 SMEs and semi-structured interviews of a subset of 50 SMEs. Findings: Findings indicate that HVM is not a homogeneous state but an umbrella term for a number of operational models adopted by manufacturers that are progressively moving from simple price-based production; companies must, as a foundation, be operationally excellent in all lifecycle phases before extending their capability by offering a more comprehensive service; HVM is not a static state but a journey that differs in nature for each manufacturer depending on the nature of its market and customer. Research limitations/implications: The approach to theory must be more integrated combining aspects of marketing, strategic and operational theory. Research must be carried out using the supply chain, rather than the firm, as the unit of analysis. Practical implications: Manufacturing efficiency has now become an order qualifier and competitive advantage should now be sought through the integration of design, production and service activities from strategic levels down to operational levels across all the functions of a business which link seamlessly to customer and supplier activities. Originality/value: This paper contains insights into Scottish SMEs and their practice of HVM; defines the activity that makes up HVM at an operational as opposed to an economic or strategic level; proposes a model that characterises the stages of HVM that SMEs transition through. © Emerald Group Publishing Limited.

Managing enterprises and ERP systems:a contingency model for the enterprization of operations

Purpose: The purpose of this paper is to investigate enterprise resource planning (ERP) systems development and emerging practices in the management of enterprises (i.e. parts of companies working with parts of other companies to deliver a complex product and/or service) and identify any apparent correlations. Suitable a priori contingency frameworks are then used and extended to explain apparent correlations. Discussion is given to provide guidance for researchers and practitioners to deliver better strategic, structural and operational competitive advantage through this approach; coined here as the "enterprization of operations". Design/methodology/approach: Theoretical induction uses a new empirical longitudinal case study from Zoomlion (a Chinese manufacturing company) built using an adapted form of template analysis to produce a new contingency framework. Findings: Three main types of enterprises and the three main types of ERP systems are defined and correlations between them are explained. Two relevant a priori frameworks are used to induct a new contingency model to support the enterprization of operations; known as the dynamic enterprise reference grid for ERP (DERG-ERP). Research limitations/implications: The findings are based on one longitudinal case study. Further case studies are currently being conducted in the UK and China. Practical implications: The new contingency model, the DERG-ERP, serves as a guide for ERP vendors, information systems management and operations managers hoping to grow and sustain their competitive advantage with respect to effective enterprise strategy, enterprise structure and ERP systems. Originality/value: This research explains how ERP systems and the effective management of enterprises should develop in order to sustain competitive advantage with respect to enterprise strategy, enterprise structure and ERP systems use. © Emerald Group Publishing Limited.

An exploratory study of ICT usage in small logistics service providers

Information and communication technology (ICT) developments have strongly affected supply chain management (SCM) in recent years. ICT has had a great impact on all supply chain processes including planning, purchasing, production management, stock management, physical distribution and related integration management. Technology has become an important dimension of third party logistics (3PL) service supply as competitive advantage increasingly depends on the ability to create value for customers through the effective application of ICT. Within this process, while large 3PLs are gaining substantial benefits from technology usage and implementation, the magnitude of changes spurred by ICT dissemination in small logistics service providers remains unclear. This is reflected by the existing gap in literature where the role and competitive developing processes of small 3PLs are seriously underestimated. This gives rise to the need to develop research and investigation in this particular area. The objective of this paper is to narrow the knowledge gap in the field of ICT adoption in small 3PLs through an empirical investigation. It presents the results of a survey on a sample of small Italian 3PLs.

Motivations for servitization:the impact of product complexity

Purpose – The purpose of this paper is to identify the commonalities and differences in manufacturers’ motivations to servitise. Design/methodology/approach – UK study based on interviews with 40 managers in 25 companies in 12 sectors. Using the concept of product complexity, sectors were grouped using the Complex Products and Systems (CoPS) typology: non-complex products, complex products and systems. Findings – Motivations to servitise were categorised as competitive, demand based (i.e. derived from the customer) or economic. Motivations to servitise vary according to product complexity, although cost savings and improved service quality appear important demand-based motivations for all manufacturers. Non-complex product manufacturers also focus on services to help product differentiation. For CoPS manufacturers, both risk reduction and developing a new revenue stream were important motivations. For uniquely complex product manufacturers, stabilising revenue and increased profitability were strong motivations. For uniquely systems manufacturers, customers sought business transformation, whilst new service business models were also identified. Research limitations/implications – Using the CoPS typology, this study delineates motivations to servitise by sector. The findings show varying motivations to servitise as product complexity increases, although some motivational commonality existed across all groups. Manufacturers may have products of differing complexity within their portfolio. To overcome this limitation the unit of analysis was the strategic business unit. Practical implications – Managers can reflect on and benchmark their motivation for, and opportunities from, servitisation, by considering product complexity. Originality/value – The first study to categorise servitisation motivations by product complexity. Identifying that some customers of systems manufacturers seek business transformation through outsourcing.

Interactively developed capabilities:evidence from dyadic servitization relationships

Purpose – The paper challenges the focal firm perspective of much resource/capability research, identifying how a dyadic perspective facilitates identification of capabilities required for servitization. Design/methodology/approach – Exploratory study consisting of seven dyadic relationships in five sectors. Findings – An additional dimension of capabilities should be recognised; whether they are developed independently or interactively (with another actor). The following examples of interactively developed capabilities are identified: knowledge development, where partners interactively communicate to understand capabilities; service enablement, manufacturers work with suppliers and customers to support delivery of new services; service development, partners interact to optimise performance of existing services; risk management, customers work with manufacturers to manage risks of product acquisition/operation. Six propositions were developed to articulate these findings. Research implications/limitations – Interactively developed capabilities are created when two or more actors interact to create value. Interactively developed capabilities do not just reside within one firm and, therefore, cannot be a source of competitive advantage for one firm alone. Many of the capabilities required for servitization are interactive, yet have received little research attention. The study does not provide an exhaustive list of interactively developed capabilities, but demonstrates their existence in manufacturer/supplier and manufacturer/customer dyads. Practical implications – Manufacturers need to understand how to develop capabilities interactively to create competitive advantage and value and identify other actors with whom these capabilities can be developed. Originality/value – Previous research has focused on relational capabilities within a focal firm. This study extends existing theories to include interactively developed capabilities. The paper proposes that interactivity is a key dimension of actors’ complementary capabilities.

Servitization:revisiting the state-of-the-art and research priorities

Purpose – This paper consolidates the servitization knowledge base from an organisational change perspective, identifying developed, developing and undeveloped topics to provide a platform that directs future research. Design/methodology/approach – This paper addresses three objectives : a) it comprehensively examines organisational change management literature for selection of a theoretical framework, b) it classifies extant studies within the framework through a systemic literature review, and (c) it analyses 232 selected papers and proposes a research agenda. Findings – Analysis suggests increasing global awareness of the importance of services to manufacturers. However, some topics, especially related to servitization transformation, remain undeveloped. Research limitations/implications – Although the authors tried to include all publications relevant to servitization, some might not have been captured. Evaluation and interpretation relied on the research team and subsequent research workshops. Practical implications - One of the most significant challenges for practitioners of servitization is how to transform a manufacturing organisation to exploit the opportunity. This paper consolidates literature regarding servitization, identifying progress concerning key research topics and contributing a platform for future research. The goal is to inform research to result eventually in a roadmap for practitioners seeking to servitize. Originality/value - Although extant reviews of servitization identify themes that are examined well, they struggle to identify unanswered questions. This paper addresses this gap by focusing on servitization as a process of organisational change.

Insights into factors affecting production and operations management (POM) journal evaluation

The paper extends the current literature on peer review journal evaluations by providing a number of insights based on the diversity of Production and Operations Management (POM) research. We provide peer review evaluations for POM research outlets, based on a sampling frame that includes a large number of POM researchers worldwide. More specifically, the paper develops and tests various hypotheses as to whether the perceived quality and relevance of a journal is affected by such factors as: (i) nature of research work (empiricists versus modelers), (ii) society membership, (iii) research productivity, (iv) geographical location, and (v) seniority. Our findings suggest that caution must be exercised when utilizing existing POM journal rankings, as some factors, particularly the difference between empiricists and modelers, may influence journal evaluation. These must be considered when addressing issues such as faculty promotions, tenure, and salary. © 2006 Elsevier B.V. All rights reserved.

Role conflicts of management accountants in the context of their structural relationship to production

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