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1 – 10 of over 4000The paper presents the views of an experienced merchandiser on the changes in production locations forced upon the Hong Kong clothing industry by such factors as right labour…
Abstract
The paper presents the views of an experienced merchandiser on the changes in production locations forced upon the Hong Kong clothing industry by such factors as right labour costs. It explores the use made of the offshore production option in China by means of a questionnaire survey carried out in the Hong Kong clothing industry. The paper examines the motives for offshore production and the problems encountered in its use. It examines the responses made by Hong Kong manufacturers to these problems and draws conclusions as to the future of offshore production in the strategic plans of the industry. As such it may have lessons for all companies planning to engage in offshore activities and, in particular, for those planning to set up facilities in China. In particular, significant hidden costs are uncovered, while the cultural problems encountered even between Hong Kong entrepreneurs and mainland Chinese are surprisingly severe.
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Hayden Skiffington, Michèle E.M. Akoorie, Paresha Sinha and Glyndwr Jones
The study aims to investigate the production offshore outsourcing practices of SMEs in the New Zealand printing, publishing and packaging industries. It identifies the techniques…
Abstract
Purpose
The study aims to investigate the production offshore outsourcing practices of SMEs in the New Zealand printing, publishing and packaging industries. It identifies the techniques SMEs use to organise and manage their offshore outsourcing activities. The authors then develop a managerial framework to assist SMEs in their future offshore outsourcing ambitions.
Design/methodology/approach
The study takes a qualitative approach; obtaining data from a sample of 22 New Zealand SMEs in the printing, publishing and packaging industries that are actively offshore outsourcing production tasks. Data was gathered in the form of semi‐structured interviews with SME managers who have carried out offshore outsourcing.
Findings
To mitigate offshore outsourcing costs, SMEs use the internet to locate suppliers and use short‐term reliable contracts that are managed remotely or by intermediaries. Customer involvement was highly important during the entire offshore outsourcing process. Most SMEs developed long‐term business relationships with reliable suppliers. These findings are integrated into the SME framework, which identifies ways SMEs can overcome resource constraints and minimise risks when offshore outsourcing.
Research limitations/implications
This study is confined to a single country and reports on findings for several related industries, i.e. the printing, publishing and packaging industries in New Zealand. This limits its applicability to research in other settings and other industries. However, it identifies an area of research (offshore outsourcing activities in SMEs) that could be extended to other industries and countries by future research.
Practical implications
The SME framework presents an easily understood approach that has been verified by SME managers who have successfully offshore outsourced production tasks. The research proves that SMEs can offshore outsource within the constraints of limited physical and managerial resources.
Social implications
The study showed that the decision‐making process to outsource is supported by the transaction costs approach. Firms have to balance out total cost considerations in making their decision to offshore (including contingency costs) to ensure that the savings from outsourcing are greater than the transaction costs. The resource‐based view of the firm is also used to suggest that offshore outsourcing means that firms may be able to improve their own competences by providing (through their suppliers) access to more sophisticated and higher‐quality processes.
Originality/value
The research contributes to the growing area of SME offshore outsourcing research, providing detailed empirical evidence of SME offshore outsourcing activities occurring in New Zealand.
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Godfrey Mugurusi and Luitzen de Boer
The purpose of this paper is to consider research that has been conducted on the offshoring of manufacturing activities, and more specifically to synthesize results regarding the…
Abstract
Purpose
The purpose of this paper is to consider research that has been conducted on the offshoring of manufacturing activities, and more specifically to synthesize results regarding the question of how firms integrate and govern geographically dispersed production activities.
Design/methodology/approach
A set of 100 carefully selected articles on offshoring and offshore outsourcing of production published in international peer-reviewed journals during the past 15 years are systematically analyzed. The focus is on 34 articles that touch on issues of integration and governance of dispersed production facilities.
Findings
Offshoring and offshore outsourcing of production is a cross-cutting subject of research. Most research is recent and largely conceptual. Furthermore, the findings suggest that the decision to offshore is often followed by the need to build more integrated operations.
Research limitations/implications
One of the major constraining factors of this research, like many literature reviews, is a limited sampling period.
Practical implications
The paper demonstrates the importance of both intra-firm relationships and governance in dispersed production operations. The authors suggest that new offshore plants need to learn and develop their own capabilities in new markets on one hand, while also developing governance structures to facilitate coherence within a production network on the other hand.
Originality/value
This is a valuable paper for researchers in offshoring and global manufacturing areas. While literature reviews in other areas such as information systems offshoring and services offshoring do exist, one specific to production offshoring was lacking. This paper should be seen as a systematic and concerted effort for research and knowledge in this area.
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Tzong‐Ru (Jiun‐Shen) Lee and Yenming J. Chen
This paper, being complementary to existing perspectives, aims to examine the behaviors and the strategies of production migration of polluting firms from an economic point of…
Abstract
Purpose
This paper, being complementary to existing perspectives, aims to examine the behaviors and the strategies of production migration of polluting firms from an economic point of view under appropriate decision conditions in terms of uncertain influence of supply chain support and green technology progress.
Design/methodology/approach
Strategic alternatives are investigated by using option pricing tools to examine the impact of various characteristics of green technology development and supply chain relations on the timing of the decision.
Findings
The theoretical and empirical results show that a polluting firm should not consider the option of relocating to offshore countries if uncertainty has been anticipated. It is suggested that, by facing green technology development uncertainty, a firm should be refrained from relocating production abroad if technology develops and offshore cost advantage disappears soon. On the other hand, a pre‐emptive migration strategy is preferable when the green technology is anticipated to be delayed.
Practical implications
A polluting firm in a supply chain faces challenges of uncertainty depending on whether it decides to produce domestically or to relocate internationally. The analysis conveys a concept that polluting firms can be more profitable by promoting clean production technology, instead of relocating to offshore or so called pollution havens.
Originality/value
The paper contributes to the existing literature on the evaluation of offshore migration option values by taking extra consideration of uncertainty in the supply chain cost, green technology progress and complementing to studies in a moral perspective.
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The purpose of this paper is to discuss the area of knowledge integration between relations based upon the assumption that if you do not integrate knowledge between the different…
Abstract
Purpose
The purpose of this paper is to discuss the area of knowledge integration between relations based upon the assumption that if you do not integrate knowledge between the different relations, the possibility of maintaining, improving or adjusting your product portfolio through your offshore working relationships will either disappear or be severely reduced.
Design/methodology/approach
The experienced journey of four small‐ and medium‐sized enterprises (SMEs) within the textile and wood industries are presented regarding how they change their direction and organisational routines due to challenges concerning knowledge integration within their respective supply relations.
Findings
Different approaches are shown of how to combine different knowledge dimensions within the supply chain and how the demands towards relations management capabilities are affected by the challenges of mainly knowledge transfer and translation created by the strategic offshore sourcing decisions.
Research limitations/implications
As the conclusions are based upon a limited number of cases studied within a limited time frame, further investigations to confirm the findings, especially with case companies that integrate more complex knowledge types, would be interesting.
Practical implications
The paper proposes that when making strategic offshore sourcing decisions, companies should consider more classic variables like cost, quality and flexibility in much more detail and the different knowledge dimensions (knowledge characteristics, learning capability, knowledge flow, cultural characteristics and stickiness) identified in the paper and thereby the longer‐term demands regarding knowledge integration in offshore supply relations.
Originality/value
The paper identifies different approaches of how to combine different knowledge dimensions within the supply chain and how relations management capabilities are affected by the knowledge integration challenges of mainly knowledge transfer and translation created by the strategic offshore sourcing decisions in SMEs in the manufacturing industry.
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Fung-yi Tam, Ka-leung Moon, Sau-fun Ng and Chi-leung Hui
This paper studies the factors that motivate small and medium-sized clothing firms in Hong Kong to shift their production offshore, and identifies the interrelationships between…
Abstract
This paper studies the factors that motivate small and medium-sized clothing firms in Hong Kong to shift their production offshore, and identifies the interrelationships between these factors and firm-related characteristics, sourcing strategies, and buyer-supplier relationships. Using a multiple case methodology to study ten firms and a two-phase approach to collecting data involving, in-depth interviews and mail questionnaires, the two most important factors motivating the sourcing of production offshore are identified, as follows: (1) cost advantage of, and (2) availability of labour in, the host country. The results also show that industrial sector and firm size are the only firm-related characteristics that have an effect on the factors motivating offshore production. Furthermore, sourcing strategies and buyer-supplier relationships are sometimes influenced by these motivational factors.
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Stephen Canham and Robert T. Hamilton
This paper aims to focus on production offshoring and “backshoring” in a representative sample of 151 New Zealand manufacturers. It identifies how and why firms offshore; why many…
Abstract
Purpose
This paper aims to focus on production offshoring and “backshoring” in a representative sample of 151 New Zealand manufacturers. It identifies how and why firms offshore; why many increase their offshoring while others “backshore”; and why most firms continue to compete internationally without offshoring.
Design/methodology/approach
Data collection used a two-wave postal questionnaire survey of 676 firms, with a usable response rate of 22.3 per cent and no indication of non-response bias.
Findings
Most exporters manufactured only from their New Zealand base, but 44 per cent had outsourced some production offshore in the period 2001 to 2011. Among the 67 offshored firms, 11 had then “backshored” to New Zealand. The main reasons for offshoring were lower labour costs and capacity constraints in New Zealand. “Backshoring” occurs when lower labour costs become offset by impaired capabilities in flexibility/delivery; quality; and the value of the Made in New Zealand brand especially among consumer goods producers. Stay at home firms reported fears of lowered quality; country loyalty; and their Made in New Zealand country of origin brand.
Practical implications
Offshoring begins tentatively but many firms then increase their offshoring to reap the benefit of lower labour costs. These reasons for “backshoring” mirror those given for keeping production in New Zealand and must be given careful consideration by firms considering offshoring.
Originality/value
There are few studies of offshoring by smaller manufacturers and none that have elucidated this as a process, one that is still avoided by many and can end in costly “backshoring” for others.
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Dmitrij Slepniov and Brian Vejrum Waehrens
This paper is concerned with the realisation process of offshore outsourcing activities. The authors seek to understand the dynamic effects facing companies launching offshore…
Abstract
Purpose
This paper is concerned with the realisation process of offshore outsourcing activities. The authors seek to understand the dynamic effects facing companies launching offshore outsourcing initiatives and to identify different types of mitigating efforts, which companies instigate to deal with these.
Design/methodology/approach
Two exploratory case studies are developed based on interviews, documents, and site visits.
Findings
The paper builds an understanding of patterns emerging from offshore outsourcing paths developments and discusses their organisational implications. It is proposed that the decision to dispatch standardised production tasks to parties overseas has implications over and beyond the initial intentions, which challenge the strategic scope and operationalisation of inter‐unit roles and responsibilities.
Practical implications
The paper suggests that the process, and particularly the mitigation‐oriented agency that take place as the process unfolds throughout the company, deserves a more significant space in future research of how companies learn to deal with outsourcing relationships. From this key lessons for practitioners are outlined, which prompt managers to work with the emerging realities of outsourcing relationships.
Originality/value
The study of the offshore outsourcing process is based on two in‐depth case studies providing rich illustrations of the process dynamics and how companies may start to work with these.
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Despite the ability of small and medium enterprise (SME) to successfully outsource production to low‐cost labour markets, some SMEs continue to produce in the domestic market. A…
Abstract
Purpose
Despite the ability of small and medium enterprise (SME) to successfully outsource production to low‐cost labour markets, some SMEs continue to produce in the domestic market. A sharp decline in the number of New Zealand manufacturers of consumer goods has been observed in the last five years. This raises questions regarding the viability of a domestic manufacturing strategy in a global marketplace. The purpose of this paper is to explore the performance of New Zealand manufacturers who continue to pursue a domestic manufacturing strategy.
Design/methodology/approach
The contextual background for the research is discussed first followed by the development of seven hypotheses. An overview of the methodology is presented before the results of statistical tests. A discussion of findings and implications precede concluding remarks.
Practical implications
This reasearch suggests that SMEs need not succumb to pressures to shift manufacturing offshore in order to remain competitive in the local market.
Findings
Findings suggest that company size, export strategy, and importance placed on non‐financial goals influence the viability of a domestic manufacturing strategy.
Originality/value
This paper is unique in that it does not argue domestic manufacturing as an optimal strategy, rather it considers the viability of a domestic manufacturing strategy in the consumer goods market. Furthermore, the paper adds insight on manufacturing strategy when faced with a small domestic market.
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Jennivine Kwok and Richard Jones
The aim of this paper is to demonstrate how an imaginative sourcing policy can be used to provide a competitive advantage for clothing manufacturers based in high‐cost countries…
Abstract
The aim of this paper is to demonstrate how an imaginative sourcing policy can be used to provide a competitive advantage for clothing manufacturers based in high‐cost countries. The paper shows how Chorus Line Corporation implemented their sourcing mix, through a combination of production in different regions, to maintain and develop their competitive position in the womenswear market in the USA. The company's basic data and decisions are outlined as an example of how one privately owned company views the sourcing and production decision. In this way the paper will help firms to develop their own global production strategies with balanced sources to meet their business and market strategies.
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