A methodology for the strategic management of international manufacturing and sourcing

Abstract

Little previous research has been carried out on the issues to be considered when choosing between manufacturing at home, offshore or sourcing from an offshore third party supplier. As a consequence, few concepts or frameworks have been developed to help determine how the manufacturing and sourcing resources of a business should be configured to create or sustain a competitive advantage. The offshore production or sourcing of manufactured products is usually organised to lower costs. However, such a strategic move can constrain an organisation’s capability to satisfy other critical market needs. Many manufacturing companies must now adopt strategies that deliver both a time-based and a price competitive advantage. There is therefore a need to develop strategic management frameworks for determining how the use of both international production and sourcing resources can enable the adoption of both least cost and differentiation competitive strategies. This was the objective of the study detailed in this paper.