Multi-stage, multi-criteria framework supporting supplier selection and outsourcing decisions of core product to collaborative supplier

Fink, Miloslawa and Belton, Valerie and Widmer, Marino (2011) Multi-stage, multi-criteria framework supporting supplier selection and outsourcing decisions of core product to collaborative supplier. In: IESM 2011 - Proceedings of the International Conference on Engineering and Systems Management. International Institute for Innovation, Industrial Engineering and Entrepreneurship, Metz, pp. 744-753. ISBN 9782960053234

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    Abstract

    Decision about outsourcing core products is one of the subtlest and most important decisions made by a purchaser. It is a two-edged sword decision that can be the source of huge competitive advantage, such as cutting fixed costs while improving quality and giving access to innovation, but can also be the beginning of company disaster. Indeed, outsourcing a strategic product to an inappropriate contract manufacturer might provoke not only huge financial losses, and corporate image humiliation but can also lead to company bankruptcy. Therefore these decisions must be made with a high level of vigilance. Suppliers must be selected in a way to minimise the risks such as loss of intellectual property, and ethical issues and to maximize potential rewards. The evaluation of suppliers against qualitative and intangible as well as quantifiable criteria is therefore essential and the use of model that facilitates this is highly desirable, leading to better informed decisions. This paper demonstrates the practical application of such a framework in Staedtish, a company faced with the decision regarding the outsourcing of a core product to collaborative supplier.