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Article
Publication date: 14 May 2020

Nouhayla Hafidi, Abdellah El Barkany, Abderrahman EL Mhamedi and Morad Mahmoudi

The purpose of this paper is to consider various possible constraints of the problem of production and maintenance planning control for a multi-machine under subcontracting

Abstract

Purpose

The purpose of this paper is to consider various possible constraints of the problem of production and maintenance planning control for a multi-machine under subcontracting constraint, in order to bring the manufacturer industry closer to real mode. In this paper, we present an efficient and feasible optimal solution, by comparing optimization procedures.

Design/methodology/approach

Our manufacturing system is composed of parallel machines producing a single product, to satisfy a random demand under a given service level. In fact, the demand is greater than the total capacity of the set of machines; hence there rises a necessity of subcontracting to complete the missing demand. In addition, we consider that the unit cost of subcontracting is a variable depending on the quantity subcontracted. As a result, we have developed a stochastic optimal control model. Then, to solve the problem we compared three optimization methods: (exact/approximate), the genetic algorithm (GA), the Pattern Search (PS) and finally fmincon. Thus, we validate our approach via a numerical example and a sensitivity analysis.

Findings

This paper defines an internal production plan, a subcontracting plan and an optimal maintenance strategy. The optimal solution presented in this paper significantly improves the ability of the decision maker to consider larger instances of the integrated model. In addition, the decision maker can answer the following question: Which is the most optimal subcontractor to choose?

Practical implications

The approach developed deals with the case of the real-mode manufacturing industry, taking into consideration different constraints and determining decision variables which allow it to expand the profits of the manufacturing industry in different domains such as automotive, aeronautics, textile and pharmacies.

Originality/value

This paper is one of the few documents dealing with the integrated maintenance in subcontracting constraint production which considers the complex aspect of the multi-machine manufacturing industry. We also dealt with the stochastic aspect of demand and failures. Then, we covered the impact of the unit cost variation of subcontracting on the total cost. Finally, we shed light on a comparison between three optimization methods in order to arrive at the most optimal solution.

Details

Journal of Quality in Maintenance Engineering, vol. 27 no. 1
Type: Research Article
ISSN: 1355-2511

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Article
Publication date: 11 March 2020

KonShik Kim

The purpose of this study is to determine the extent to which R&D subsidy can affect the innovation process of manufacturing venture firms by examining the output…

Abstract

Purpose

The purpose of this study is to determine the extent to which R&D subsidy can affect the innovation process of manufacturing venture firms by examining the output additionality measured as both proximal indicators of innovation and distal indicators of growth. Further, the differences in output additionality between the clusters in the subcontracting regime were examined to investigate whether the effect of R&D subsidy can vary depending on subcontracting practices and structure among large enterprises and venture firms.

Design/methodology/approach

This study uses survey data of the Korea Venture Business Association conducted in 2012, 2013, 2014, 2015, and 2016 respectively, which selects a random sample from venture firms by stratified random sampling method based on the industry sector, size and location for each survey year. This study analyzed the data using an endogenous treatment effects model to estimate the average treatment effect of R&D subsidy, yielding more accurate estimates than a traditional treatment effects model by controlling the unobserved endogenous components.

Findings

This research found that R&D subsidy may not facilitate the process of transformation of innovation into financial growth even though R&D subsidy can facilitate the innovation process and contribute to producing new and improved products. This research also reveals that the relationship between R&D subsidy and innovation performance for firms heavily dependent on subcontracting is generally much weaker than those for independent subcontractors. Further, the present study exhibits that public R&D subsidy for independently subcontracting venture firms is more effective for the growth in both employment and sales than those for subcontracting with large enterprises or other subcontractors.

Research limitations/implications

R&D subsidy for venture firms does not relieve the burden of liability of newness and smallness of venture firms, especially the disadvantage in market penetration and competition. In addition, venture firms subcontracting with large enterprises or other prime subcontractors tend to achieve incremental innovation with the help of the technology and competence of large companies and run stable businesses through a predetermined market.

Practical implications

R&D subsidy for venture firms does not relieve the burden of liability of newness and smallness of venture firms, especially the disadvantage in market penetration and competition. Further policy measures should be implemented so as to identify and eliminate barriers to market acceptance for new products of venture firms.

Originality/value

This research verifies that the effect of R&D subsidy may harmful to the sales growth of venture firms and the output additionality differs with the degree of dependency on subcontracting practices and structure.

Details

European Journal of Innovation Management, vol. 24 no. 2
Type: Research Article
ISSN: 1460-1060

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Article
Publication date: 1 March 2013

Max V. Kidalov

U.S. and E.U. public and defense procurement rules require large prime contractors to promote subcontracts to small businesses, a.k.a. small and medium enterprises (SMEs)…

Abstract

U.S. and E.U. public and defense procurement rules require large prime contractors to promote subcontracts to small businesses, a.k.a. small and medium enterprises (SMEs). Under the U.S. Small Business Act, large firms encourage subcontracting through publicity, subcontracting plans, and “good faith” efforts to achieve subcontracting goals. However, processoriented measures failed to guarantee definitive results. In contrast, E.U. and member governments can hold large firms accountable to stricter subcontracting standards (often sweetened by incentives). With the Small Business Jobs Act of 2010, the U.S. is trying accountability measures now. Therefore, large contractors must plan for definitive subcontracting commitments in both markets.

Details

Journal of Public Procurement, vol. 13 no. 1
Type: Research Article
ISSN: 1535-0118

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Article
Publication date: 1 September 1997

M. Webster, C. Alder and A.P. Muhlemann

Discusses issues associated with the subcontracting of manufacturing activity within the supply chain for electronics assembly products. The principal focus of the work is…

Abstract

Discusses issues associated with the subcontracting of manufacturing activity within the supply chain for electronics assembly products. The principal focus of the work is the operational issues surrounding the organization, management and control of the subcontract process, but related issues and research streams are also considered. Some of the operational issues are placed within the context of current practice by presenting case studies of two small to medium‐sized manufacturing enterprises (SMMEs) in the electronics assembly sector which use subcontract manufacture. The approaches of the two companies to the management and control of the process are compared and contrasted, and mapped onto generic models. This work is considered timely because of the increasing importance of the subcontracting of manufacture within the supply chain, and because of the lack of supporting theoretical and practical work. It identifies key issues which need to be addressed by academic researchers and by industry practitioners in the pursuit of world class manufacturing ideals, as part of a process of concentrating on core competencies and expertise.

Details

International Journal of Operations & Production Management, vol. 17 no. 9
Type: Research Article
ISSN: 0144-3577

Keywords

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Article
Publication date: 7 September 2015

Lars-Henrik Kvist Nielsen, Abiola Akanmu and Chimay J. Anumba

“Back-to-back” contracts are widely used in the engineering and construction industry and are recently spreading into the telecommunication industry. In back-to-back…

Abstract

Purpose

“Back-to-back” contracts are widely used in the engineering and construction industry and are recently spreading into the telecommunication industry. In back-to-back contracts, the principals require the main contractors to assume majority of the liability in delivering a project and in turn, the main contractors try to allocate most of that liability to their subcontractors. The successful delivery of the projects hinges on how the contracts are drafted and risks are allocated between the parties involved. The purpose of this paper is to undertake a comparative analysis of “back-to-back” subcontracts in the telecommunication and construction industries.

Design/methodology/approach

By examining contracting practices and texts from contract documents for the telecommunication and construction industries, this paper reveals how certain aspects of “back-to-back” contracts lose their meaning when seen out of context. Using comparative research method, this paper discusses reasons why the adoption of “back-to-back” contracts should be a matter of degree, based on the business strategy and relevance to the intended transactions rather than on the typical model of “back-to-back” contracts.

Findings

Good contracting practices should be such as to enable parties negotiate the contract terms to ensure clarity and common understanding before commencing the project. Construction universally adopts back-to-back even for minor straightforward works, an approach supported by readily available industry model contracts as well as the traditional tender process (design before construction). In telecoms, back-to-back is mainly desired where the subcontractor has a major part of the scope, whereas minor subcontractor scope is considered “leverage commodity” where suppliers are engaged using in-house contract templates, often in a frame contract arrangement, to satisfy corporate strategies for supplier management and pricing.

Originality/value

This paper provides value by presenting an insightful review of the nature of back-to-back contracting practices in the telecommunication and construction industries. The paper outlines advantages, disadvantages and opportunities for improving “back-to-back” contracting practices in the telecommunication and construction industries.

Details

Built Environment Project and Asset Management, vol. 5 no. 4
Type: Research Article
ISSN: 2044-124X

Keywords

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Article
Publication date: 11 January 2008

M.H. Bala Subrahmanya

This paper aims to trace the evolution of industrial subcontracting in Japan, over a period of time. Subsequently, the transition in the spread and depth of subcontracting

Abstract

Purpose

This paper aims to trace the evolution of industrial subcontracting in Japan, over a period of time. Subsequently, the transition in the spread and depth of subcontracting along with relative performance of small and medium enterprises (SMEs) in Japanese industry over a period of time are to be analyzed.

Design/methodology/approach

First, a historical over view of the evolution of industrial subcontracting in Japan is discussed based on literature and discussion with experts. Secondly, based on secondary data, the industry‐wise trends of subcontracting and performance of small, medium and large enterprises are analyzed.

Findings

Japanese industrial subcontracting and structure evolved over the period, particularly after World War II, represents integration and mutual coordination among small, medium and large enterprises across industries. Along with the growth of multi‐layered subcontracting, labour productivities of SMEs have improved as that of large though value added/value of output has remained more or less at the same level. Overall, there is reason to argue that SMEs have benefited from the system of subcontracting in Japanese manufacturing towards its overall competitiveness.

Practical implications

It would be worthwhile to promote multi‐layered industrial subcontracting, particularly with locally based/newly entered TNCs at the helm of the pyramid, in industrializing countries like India, to enhance the competitiveness of local SMEs.

Originality/value

This paper provides the reader with an understanding of evolution of industrial subcontracting in Japan since World War I and its recent trends and throws light on how SMEs have improved their performance over a period of time.

Details

Journal of Management History, vol. 14 no. 1
Type: Research Article
ISSN: 1751-1348

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Article
Publication date: 1 March 1995

Michelle Watts and Brian H. Kleiner

Subcontracting is “the procurement of an item or service which is normally capable of economic production in the prime contractor's own facilities and which requires the…

Abstract

Subcontracting is “the procurement of an item or service which is normally capable of economic production in the prime contractor's own facilities and which requires the prime contractor to make specifications available to the supplier”. Subcontracting plays an extremely important role in an industry (p.6). It is extensively used in manufacturing industries where manufacturing technologies are flexible. Subcontracting is an important option among strategies for aggregate production and capacity planning. “Subcontracting is a means of reallocating production requirements among firms to achieve production smoothing. Subcontracting usually lowers total production costs, and hence, increases producers' profits” (p.1362). Subcontracting is traditionally regarded as an opportunity to pay a fixed‐cost or premium for items produced by an outside supplier. This leads us to the topic of when to subcontract.

Details

Management Research News, vol. 18 no. 3/4/5
Type: Research Article
ISSN: 0140-9174

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Article
Publication date: 29 April 2013

Adegoke Oke and Henrietta Onwuegbuzie

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…

Abstract

Purpose

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.

Design/methodology/approach

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

Findings

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.

Research limitations/implications

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.

Practical implications

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.

Social implications

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

Originality/value

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.

Details

Journal of Manufacturing Technology Management, vol. 24 no. 4
Type: Research Article
ISSN: 1741-038X

Keywords

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Article
Publication date: 1 October 2000

Margaret Webster, Alan P. Muhlemann and Chris Alder

Presents work that addresses the issue of decision support for the operational management of subcontract manufacture. Theoretical study has been combined with empirical…

Abstract

Presents work that addresses the issue of decision support for the operational management of subcontract manufacture. Theoretical study has been combined with empirical research and practical industrial investigation with regard to distributed manufacturing systems which incorporate subcontract manufacturing arrangements. There has been a particular focus on the study of resource planning and scheduling for subcontract manufacture in SMEs in the UK electronics assembly industry. This work led to the analysis, modelling, implementation and test of an object‐oriented advisory system to assist with scheduling for this domain which demonstrated the utility of a proposed concept of captivity‐based scheduling. Contemporary research in this area and existing commercial decision support solutions for manufacturing planning, scheduling and control in SMEs have been explored. Concludes that current commercial software systems for subcontract manufacture are underdeveloped. Further argues that software development tools and platforms are increasingly available to facilitate the creation of practical decision support systems for distributed organizational forms of manufacture.

Details

International Journal of Operations & Production Management, vol. 20 no. 10
Type: Research Article
ISSN: 0144-3577

Keywords

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Article
Publication date: 23 August 2019

Victor Chukwunweike Nwokocha and Christopher Nwankwo

Despite the potential of SMEs in economic development, their activities have remained largely unsustainable in Nigeria. These enterprises are constrained by a number of…

Abstract

Purpose

Despite the potential of SMEs in economic development, their activities have remained largely unsustainable in Nigeria. These enterprises are constrained by a number of challenges- high cost of production, poor power supply, high infrastructural deficit etc. which have made there operations largely unproductive. The purpose of this paper is to examine the effects of production subcontracting forms on the sustenance of small and medium enterprises as a panacea for achieving the targets of goal 8 of sustainable development goals (SDGs) in Enugu State, Nigeria.

Design/methodology/approach

The paper adopted a number of methods comprising of field observations, a reference to relevant literature and a questionnaire survey of 96 SMEs. The paper also adopted a quantitative approach comprising of simple descriptive statistics of mean and standard deviation as well as regression analysis to analyze the data.

Findings

This paper found that the three forms of production subcontracting (supplier, specialized and capacity subcontracting) identified in the paper were used by SMEs to achieve sustenance (cost reduction, risk reduction and access to resources) in their operations. The paper suggests that the sustenance of SMEs through the utilisation of the different forms of subcontracting can become a strategy towards achieving the targets of SDG 8 in Nigeria.

Practical implications

This paper has shown that the prevalent high cost of production and ever-increasing production risks, which are the common features of SMEs in Nigeria, can be mitigated through the various forms of production subcontracting analysed in this paper. SMEs, through seminars, workshops, entrepreneurship and business fares, can be encouraged to take up this strategy, considering its ability to address their various operational bottlenecks.

Originality/value

This study adds to the limited available evidence concerning the effects of subcontracting forms on the sustenance of SMEs in Nigeria. This study is the first to consider subcontracting forms and how they have led to sustenance SMEs in Nigeria.

Details

World Journal of Entrepreneurship, Management and Sustainable Development, vol. 15 no. 4
Type: Research Article
ISSN: 2042-5961

Keywords

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