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The purpose of this paper is to clarify the impact of international outsourcing on manufacturing strategy and performance of apparel manufacturing firms. The authors aim to show how managers address the effects of international outsourcing on four dimensions of manufacturing strategy – cost, quality, flexibility and delivery.

The paper utilises a qualitative exploratory approach. The authors adopted a case study method, collecting data through face‐to‐face, semi‐structured interviews with managers of six apparel manufacturing firms, selected on the basis of a number of criteria, including their use of international outsourcing.

The findings show that international outsourcing generates both positive and negative effects on the firms' competencies in four manufacturing dimensions (cost, quality, flexibility and delivery). A conceptual framework is presented that shows how firms' managerial actions carried out to address the effects of outsourcing play a crucial role in determining their manufacturing performance.

Because the sample comprised small and medium‐sized apparel firms from New Zealand, the findings may lack generalisability. Further research could expand this work to large multinational companies and service providers in international outsourcing.

The findings suggest that managers of apparel firms which engage in international outsourcing of manufacturing need to consider the impacts on their manufacturing strategy, particularly with respect to the potential trade‐offs between the manufacturing priorities.

The paper addresses a research gap in the outsourcing and manufacturing literatures by exploring the effects of international outsourcing on manufacturing strategy, and the impact of managerial responses to these effects, on firm performance.

Rising production costs in coastal China have caused the popularity of the “China plus one” strategy, and the hike in oil prices favors near‐shore outsourcing to reduce transportation costs. Taking into consideration supply chain strategy, this paper aims to investigate the impacts of these major business environment changes on manufacturing outsourcing in China.

Considering costs and lead times, a bi‐objective integer programming model is developed to determine optimal supply chain configuration decisions under various business environment scenarios. A case study with a family of footwear products is used to illustrate model application and present detailed analyses.

Impacts of factors could be non‐intuitive. Partial relocation may be better than relocating all manufacturing steps to lower‐cost regions. Coastal China is still attractive for products with short order lead times, because of its formation of industrial clusters and efficient logistics services.

Only tangible factors including costs and lead times are evaluated; however, they offer valuable insight for the strategic decision of selecting outsourcing locations.

The analyses suggest differentiated outsourcing strategies depending on product and demand characteristics. The trend of moving manufacturing away from China is exaggerated. Coastal China has established industrial clusters and efficient logistics support to enable supply chain responsiveness; while inland China maintains a low cost comparable with competing Asian countries.

Existing studies on the research phenomenon focused on cost factors alone. This paper analyzes lead times as well. The study also introduces the network perspective into the research of offshore manufacturing outsourcing.

The purpose of this paper is to examine the influence of organizational context on the relationships between outsourcing and manufacturing flexibility. In doing so, the authors study four types of manufacturing flexibility: product, mix, volume, and labor competence flexibility.

Based on transaction cost economics theory and resource-based view of competitive advantage, the authors focus on economies of scale and scope, asset specificity, organizational learning, and dynamic capabilities as contingencies affecting outsourcing-flexibility relationships. Combining theoretically developed propositions with insights from case studies of 11 manufacturing companies that outsourced some portion of their manufacturing, the authors derive grounded hypotheses.

Empirical results show that in some cases the effects of outsourcing on different types of manufacturing flexibility vary based upon some contingency factors.

Due to the qualitative nature and the geographical focus of the empirical examination, applicability of the findings to other contexts may be limited.

The authors point out specific contingencies that managers should consider when targeting manufacturing flexibility through outsourcing.

This paper presents the interrelationships among outsourcing of manufacturing activities, four types of manufacturing flexibilities, and theoretically derived contingencies. Based on evidence from the analyzed cases, the authors find indications that some contingencies moderate outsourcing-flexibility relationships. In addition, this paper introduces a new type of manufacturing flexibility: labor competence flexibility, which is defined as the ability of a company's workforce to deal with technology driven additions to and subtractions from products over time.

The purpose of this paper is to focus on the motivations for offshore outsourcing encountered by manufacturing small and medium‐sized enterprises (SMEs) and their suppliers in China. The paper explores the motivations and challenges encountered by SMEs choosing to outsource their manufacturing activities and why their suppliers engage with them.

A qualitative case study method was utilized. The authors obtained perspectives of SME managers as well as the suppliers for each of the cases, conducting in‐depth interviews in order to obtain comprehensive information about their outsourcing activities. Then, cross‐case analysis was carried out using content analysis techniques to identify key themes for the motivations to undertake offshore outsourcing.

The results showed that the first rationale for offshore outsourcing relates to increasing efficiency and labor cost reduction while holding quality constant. The second rationale is to maintain flexibility in resource allocation providing both manufacturing SMEs and their suppliers with an opportunity to enter new markets. For both manufacturing firms and their suppliers building a relationship through networks and alliances was the key to the success (learning orientation) of the partnership.

The managerial implications of the findings are that first, from the perspective of client firms, the most important factor for success in manufacturing offshore outsourcing was maintaining good relationships with suppliers. The benefits of having close relationships with suppliers for outsourcing firms helped them to secure the quality of their products. The second managerial implication is from the perspective of the supplier firms. Supplier firms which were also aware of the transaction cost implications of their delivery while improving their own international image by supplying international clients. The evidence supplied suggests that supplier firms can benefit from using networks to assist them to gain international exposure.

While there are numerous studies on offshore outsourcing by multinational enterprises (MNEs) and large enterprises, there are relatively fewer studies on manufacturing offshore outsourcing by SMEs. Using the three theoretical lenses of the transaction cost approach, the core competences and the alliances, networks and internationalization approach, the paper offers insights on the reasons for and outcomes of a group of SMEs decision to undertake offshoring‐manufacturing activities in China. Also, the paper examines the manufacturing offshore outsourcing issues from the perspective of the suppliers to these SMEs.

Many manufacturing firms (e.g. Apple and Nike) now outsource some or all of their manufacturing activities to independent suppliers rather than continuing to undertake them in-house. Clearly these firms perceive this externalisation of production to be a performance-enhancing strategy, but what are the performance consequences in practice? In this chapter, we review and critique the extant academic literature on the performance consequences of manufacturing outsourcing, and note that the empirical findings have yielded mixed results. We argue that outsourcing has potential impacts upon a number of ‘performance’ outcomes, including inter alia financial performance, productivity/efficiency, sales/market share, costs of production, business performance and innovation. We further argue that many of the empirical studies have flawed designs, and make a series of methodological recommendations to guide future empirical work.

The theories of transaction‐cost economics, the resource‐based view and the core competencies approach have been used extensively to justify the rationale behind strategic decisions on outsourcing, but their validity has not been investigated yet in comparative empirical research. Additionally, no study has examined the operational effects of these decisions in‐depth. The purpose of this paper is to fill these two gaps in the academic literature.

A literature review confirms the existence of these gaps and informs hypotheses based on the three theories. Additionally, the model for continuous decision making on outsourcing is used to systematically collect data from five cases studies. The cases – all make‐to‐order or engineering‐to‐order – have been analysed on effects for operational performance and control resulting from strategic decision making on outsourcing.

From this evaluation, it appears that these companies perform weakly on the control of the outsourced activities. Furthermore, it seems that the (manufacturing) strategy is disconnected from outsourcing practices and that outsourcing hardly contributes to competitive advantage. Moreover, from some of the case studies it appears that the decision for strategic outsourcing is irreversible. Finally, traditional criteria and behaviour during decision making prevail, i.e. a cost‐driven perspective, which does not address contemporary challenges.

Despite being explorative and based on only five cases, these findings indicate that strategic decision making on outsourcing based on the three theories insufficiently accounts for operational issues that emerge later during manufacturing; it might be necessary to revise the theoretical base for outsourcing to include management of outsourced manufacturing activities.

The findings imply also that managers in companies, in any case those firms that operate on the basis of make‐to‐order or engineering‐to‐order, should be less “rushed” into strategic decision making on outsourcing that has adverse effects. Rather, outsourcing requires integral decision making in contrast to factual decision making that displayed signs of bounded rationality (particularly expressed through the focus on cost savings).

The dominant, one‐sided view of the cost perspectives contributes to the notion that the shareholders' interests for short‐term profitability conflict with long‐term organisational health (apparent through the impact on operational management of outsourcing activities).

Stakeholders involved in strategic decision making might use this research to evaluate fundamentally decisions that cover outsourcing. At the same time, for consultants and practitioners it offers insight that is complementary to the often one‐sided strategic decision making with its focus on cost reductions. Furthermore, this paper demonstrates the limited validity of current theories that underpin strategic decision making on outsourcing and provides an impetus for academics to develop more appropriate theory.

The authors aim to develop and test hypotheses that link outsourcing and subcontracting-in activities of small high-tech firms to their radical innovativeness. In addition, they seek to investigate how a firm's strategy moderates the associations between their outsourcing and subcontracting-in activities and radical innovativeness.

The authors utilized regression analytical technique and categorical moderation analytical technique to test their hypotheses on survey data of 579 firms.

Results show that outsourcing has a positive association with radical innovativeness. In contrast, subcontracting-in shows a negative association with radical innovativeness. Finally, the influence of both outsourcing and subcontracting-in activities on radical innovativeness are contingent upon a firm's manufacturing strategy.

There are potential limitations relating to the authors' use of secondary data. There is a need to investigate the processes through which outsourcing and subcontracting-in relate to innovation performance.

An implication of this study is that in order to develop radical innovativeness, firms need to consider their strategic or competitive inclination when evaluating their outsourcing and subcontracting-in decisions and activities.

There are also social implications since outsourcing and subcontracting-in activities involve social relationships.

Linking boundary spanning activities of firms to innovation performance represents a contribution to the literature. Further, establishing that the effectiveness of such boundary activities depends on a firm's specific manufacturing strategy represents a contribution.

The paper sheds light on the changing economics of foreign outsourcing, and the risks being run by companies that engage in the practice.

The author surveys the history of foreign outsourcing over the last several decades and the disastrous impact that it has had on manufacturing in the USA. The paper also reviews more recent developments reported in the press.

Given rapidly rising costs and risks in host countries, the “outsourcing dividend” is now questionable. At the same time, firms can take advantage of new opportunities in digital fabrication.

Further research is needed on methodologies for accounting for the full costs and risks of foreign outsourcing.

Firms should think long and hard before launching foreign outsourcing. Firms should also re‐examine the root cause of the practice, i.e. pursuit of short‐term profits rather than delighting customers through continuous innovation. Some firms will need to consider retrieving manufacture that was previously outsourced in a foreign country. Firms should also be exploring the new opportunities represented by digital fabrication.

The paper summarizes what is known about the economics of foreign outsourcing and questions the continuance of this widespread business practice, which has devastated manufacturing in many developed countries. It presents a further reason why firms need to shift from traditional management to radical management.

Both postponement and outsourcing have been identified as important characteristics of modern and competitive supply chains. The implementation of postponement may require extensive (spatial) reconfiguration of the supply chain. Presents findings from interviews with managers of food, electronics, automotive and clothing manufacturers in The Netherlands, Belgium and Germany. Findings reveal that in food supply chains both postponement and outsourcing are applied to a lesser extent than in other industries. Reasons, which refer to the industry‐specific characteristics, are given. Ways for food companies to assure competitiveness are then described on the dimensions of postponement, outsourcing and spatial reconfiguration. A framework is developed to position chains in terms of degree of outsourcing, level of postponement and spatial configuration. The framework can help managers diagnosing and repositioning their organizations, along the dimensions mentioned.

The objectives of this paper are: to identify the key defining elements of a subcontractor plant from an operations management perspective and examine whether there are differences between the operational contexts of such plants and original equipment manufacturer (OEM) plants; and to examine whether these differences should translate into different operational practices, addressing the specific case of process quality management practices.

The paper uses a multiple case study involving five plants in the electronics industry representative of the OEM and different subcontractor contexts.

Results suggest that the operational contexts of subcontractor and OEM plants are different and that, as a result, these types of plants should emphasize different sets of process quality management practices.

Results are considered to be generalizable to most discrete goods industries. However, future research should ascertain whether these results replicate in industries other than electronics.

OEMs, who have a critical role in disseminating best practice within the supply chain, must recognize the differences between OEM and subcontractor environments and avoid pushing one‐size‐fits‐all best practice programs along the chain.

Research in outsourcing to date has focused on the outsourcing decision per se and has mainly taken the perspective of the outsourcer firm. This study contributes to a better understanding of the operational implications of outsourcing decisions for subcontractor plants. It also responds to calls for more research linking quality management and supply chain management.