Outsourcing Fundamentals: The Supply Chain Analysis of Manufacturing Outsourcing Relationship

Yuwen Chen (), Jiayuan Zhang () and Gulver Karamemis ()
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Yuwen Chen: University of Rhode Island
Jiayuan Zhang: University of Wisconsin at Whitewater
Gulver Karamemis: Georgia Southern University

A chapter in Outsourcing Using Operations Research and Management Science Methods, 2025, pp 31-69 from Springer

Abstract: Abstract This chapter presents a comprehensive review of key dynamics in manufacturing outsourcing research, focusing on the relationship between an original equipment manufacturer (OEM) and a contract manufacturer (CM). The cooperation and coopetition relationships, along with modeling frameworks for various supply chain scenarios, are discussed. We provide a seven-step analytical framework including echelons of the supply chain, players involved, outsourcing decisions, and decision sequences for outsourcing decision analysis. Demonstrations of deriving the optimal outsourcing strategies (in-house, turnkey, or consignment) are provided, identifying conditions for win-win or win-win-win outcomes. Furthermore, we include three dynamic variations, including multi-vendor and multi-client outsourcing, private information, and product differentiation, to enrich outsourcing implications. Each variation is supported by relevant articles summarizing major focuses and modeling frameworks. The chapter concludes with a general discussion of outsourcing relationships and highlights potential research areas that arise from new challenges in the changing business environments.

Keywords: Manufacturing outsourcing; Turnkey; Consignment; Cooperation; Coopetition (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:spr:isochp:978-3-031-91845-2_2

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DOI: 10.1007/978-3-031-91845-2_2

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