ABSTRACT
History has repeatedly shown that in a highly competitive global environment, many manufacturers begin to either set up manufacturing facilities in lower-cost locations or outsource components and finished products from lower-cost producers on a contractual OEM (original equipment manufacture) basis. Without established sourcing plans, distribution, and service networks, it is extremely difficult to exploit both emerging technology and potential markets around the world simultaneously. As a result, the increased pace of new product introduction and reduction in innovational lead time calls for more proactive management of locational and corporate resources on a global basis. Following this trend, increased outsourcing of manufacturing activities has become a prominent part of the restructuring of firms’ supply chains since the 1990s. Many academics and consultancy firms seem to support the view of outsourcing as one of the key drivers of superior performance.
