Decision models for outsourcing and core competencies in manufacturing

The manufacturing strategy, based either on specialization or diŒerentiation, leads to managing the total value chain and therefore puts emphasis on outsourcing. Eventually, such a strategy should result in cost reduction and shorter lead-times. To achieve so, companies should concentrate on their own capabilities and use outsourcing as a means for e cient exploitation of available resources. Based on requests by industrial companies to assist in developing methods for improving the procurement processes and addressing strategic manufacturing management, research developed into methods for outsourcing. The primary objective of the research aims at developing a tool to support decision-making on outsourcing and linking it to a manufacturing strategy. This tool should assist management in strategic decision-making, support the phases of development and engineering, and improve production planning. This paper describes the underlying method necessary for developing such a tool.