The Execution of Outsourcing

As indicated in Stage 4 of the last section, different methods of outsourcing exist. Following the core competence/competitive advantage discussion (see previous section), the outsourcing organization depends to a large extent on the sensitivity of the outsourced activity, as weU as on the capability of the supplier (Mikkola 2003). 

In order to explain the diverse options of outsourcing parts and the impacts on the buyer-supplier relationship, an operationalized concept is depicted in Fig. 4.6 (cf. Mikkola 2003). 

Component Commodity Parts high Detail-Controlled Supplier Black Box Parts Proprietary Parts Co-Developed 1 Parts 1 1 low 

In addition to the proposed buyer-supplier relationships that are relevant in case one company purchases items from another, a further relationship is possible that goes beyond the hierarchical concepts hitherto presented the co-development of parts. Here, buyer and supplier act as partners in a strategic alliance, be it of longterm (e.g., joint venture) or short-term (e.g., R D agreement) duration. 

In conclusion, a graph is presented (Fig. 4.6). The dimension of component modularity has not been the subject of discussion however, as it has been treated before and is a vital aspect of the entire chapter, this dimension is also included in the graph. 

---