Purpose – The purpose with this study is to investigate which factors that needs to be considered for sourcing decisions to ensure an optimal long-term decision, and which of these factors that can be quantified in a product costing model. To fulfill this purpose two research questions have been proposed: Which factors needs to be considered for a sourcing decision? Which of these factors that needs to be considered can be quantified in a product costing model? Method – A case study was conducted to fulfill the purpose of this study. The case study produced empirical data through interviews and document studies. The empirical data was interpreted and analyzed on the basis of the theoretical framework, created through literature studies. This process produced the result of this study. Findings – Factors to be considered for a sourcing decision have been identified and categorized in four over-arching categories: unit cost, logistical factors, capability factors and risk factors. These factors have been quantified in a product costing model. A preparatory decision model was created to further integrate some risk factors that could not be quantified. Implications – Both the make or buy decision and the manufacturing location decision have been considered in the product costing model presented in this study. The product costing model visualize and take into account hidden costs, rarely considered in sourcing decisions. This further enables optimal long-term sourcing decisions. Limitations – Risk factors remain difficult to quantify. This makes it difficult to determine the cost of risk factors, and as a result of that, to include them in a product costing model. Companies with similar conditions suites the model since the case study was conducted at only one company. Whether the product costing model is true for business in other contexts remain uncertain. / Syfte – Syftet med denna studie är att undersöka vilka faktorer som bör beaktas vid ett försörjningsbeslut för att säkerställa ett långsiktigt korrekt beslut och vilka av dessa som kan kvantifieras i en kalkylmodell. För att uppfylla syftet har följande två frågeställningar formulerats: Vilka faktorer bör beaktas vid ett försörjningsbeslut? Vilka av dessa faktorer som bör beaktas kan kvantifieras i en kalkylmodell? Metod – För att uppfylla studiens syfte genomfördes en fallstudie. Med hjälp av intervjuer och dokumentstudier har fallstudien genererat empirisk data. Utifrån det teoretiska ramverket, som skapats genom litteraturstudier, har data tolkats och analyserats. Detta har gett upphov till studiens resultat. Resultat – Faktorer som bör beaktas vid ett försörjningsbeslut har identifierats och kategoriserats i fyra övergripande kategorier: enhetskostnad, logistikfaktorer, kapabilitetsfaktorer och riskfaktorer. Dessa faktorer har kvantifierats i en kalkylmodell. För vissa riskfaktorer som är svåra att kvantifiera har en förberedande beslutsmodell skapats. Implikationer – Kalkylmodellen som presenteras i denna studie beaktar både tillverka/köp-beslutet och lokaliseringsbeslutet. Kalkylmodellen tar hänsyn till dolda kostnader som sällan beaktas vid dessa typer av beslut. Detta möjliggör ett långsiktigt korrekt försörjningsbeslut. Begränsningar – Riskfaktorer är fortsatt svåra att kvantifiera och därmed kostnadsbestämma. Detta gör det svårt att inkludera dem i en kalkylmodel. Då fallstudien genomfördes på endast ett fallföretag är kalkylmodellen lämpad för företag med liknande förutsättningar. Det är därför svårt att säga hur väl kalkylmodellen stämmer för företag i andra kontexter.

Purpose: This study aims to look deeper at how Swedish firms using offshoring have dealt with the COVID-19 pandemic regarding their supply chains and make them more resilient. Design/methodology/approach: This study is a case study that examines two Swedish companies that have outsourced their production processes to other countries. The study's main focus is on the impact of COVID-19 on global supply chains and how it has affected the operations of these companies. The objective of the study is to investigate the challenges faced by these firms and the strategies they have employed to mitigate the disruptions caused by the pandemic. Additionally, the study aims to emphasize the importance of strengthening supply chain resilience. To achieve this, a literature review of previous research on the topic of supply chain risk management and supply chain resilience is presented. Findings: The study used thematic analysis to categorize findings for answering two research questions. RQ1 identified four categories showing how external and internal factors affected operations, including a lack of internal decision support for supply chain resilience. RQ2 explored the supply chain resilience aspect and found the supply chains to be especially agile and flexible in capabilities, with supply chains reacting more than proactively due to a lack of resilience-focused decision support. Technology's positive impact on the supply chain was noted in the literature. Additionally, nearshoring gained attention for improving SCR in response to logistical challenges. Research limitations/implications: The thesis studies supply chain resilience and proposes ways to enhance it using different enablers. It examines businesses' management of COVID-19 disruption within their supply chains and supplements existing literature on the topic. The research has limitations due to time constraints and lack of accessibility to interesting cases, affecting the generalizability and validity of the findings. Practical implications: In supply chain management, supply chain resilience plays a vital role in improving performance. The thesis stresses the importance of factors that boost supply chain resilience, which in turn enhances overall efficiency. This knowledge equips practitioners with the tools to better equip their supply chains against disturbances and thus improve their resilience.

Information technology outsourcing (ITO) can be defined as “the commissioning of a third party (or a number of third parties) to manage a client organization’s IT assets, people, and/or activities […] to required results” (Fitzgerald and Willcocks, 1994). It has been a pivotal topic on Chief Information Officers’ (CIO) agendas ever since Eastman Kodak’s decision to hand over their information systems function to IBM, DEC, Anderson Consulting, and Businessland in 1989. Never before had such a wellknown company that considered IT as a strategic asset handed over responsibility for it to an external partner (Applegate, 1992). The deal showed that ITO can constitute an alternative to managing complex Information Technology (IT) systems in-house (Kern and Willcocks, 2000) and subsequently led executives across different industries to follow suit and sign large contracts worth multiple hundred million dollars. The “Kodak effect” served as a starting point to what would become an important strategic matter for IT managers to consider (Caldwell, 1994). 30 years later, ITO has developed into a common practice for organizations of all sizes, industries, and geographies (Qi and Chau, 2013). Over the course of three decades, practitioners have come to appreciate ITO especially for its advantages in terms of cost, flexibility, and the possibility to capitalize on external capabilities (Martins et al., 2015; Schneider and Sunyaev, 2016). Today, virtually every Fortune 500 company2 and many large public institutions outsource a significant portion of their IT services (Patil and Wongsurawat, 2015). As a consequence, an entire global industry has evolved around ITO, with annual growth rates of around 10% and an estimated market size of around 320 billion US dollars in 2015 (Faisal and Raza, 2016). The increasing relevance of ITO in practice has also attracted considerable research that has explored various aspects of outsourcing, including common motivations, outcomes, success factors, benefits, and risks (Dibbern et al., 2004; Gonzalez et al., 2006; Lacity et al., 2009; Lacity et al., 2010; Lacity et al., 2016; Liang et al., 2015). Notwithstanding its three decades of existence, however, ITO remains a dynamic phenomenon that is subject to the ongoing rapid developments in the economic and societal environment in which it is embedded. Major developments in the field of IT, particularly the ever-progressing digitalization and the rise of IT-centered and -enabled business models (Bughin et al., 2019; Harvey Nash/KPMG, 2018; Legner et al., 2017), require adequate consideration in IT sourcing decision-making.

This master thesis has been conducted for Hanza Holding AB which is a global company with production facilities grouped into local clusters in proximity to its clients. The company has experienced an increased demand from companies seeking to relocate their production back to their home countries to be closer to their end markets. Hanza’s experience of reversed offshoring, referred as backshoring in the literature, triggered the present investigation.  Offshoring is a widespread business practice among companies in developed countries that have moved production to countries with weaker environmental and social regulations to reduce operational cost. However, it has been achieved at a high environmental, social and operational cost. Backshoring is an emergent trend that has mainly been driven for improving companies’ operational performance. Despite the negative social and environmental consequences that offshoring has had at host countries, neither environmental or social aspects have been considered as the most important drivers when taking backshoring decisions.  In Sweden, companies have been active in offshoring and backshoring. China has been one of the top 3 host regions where manufacturing was moved to and from. Sweden is one of the European countries where manufacturing, especially within the automotive industry, is still of importance for the country’s economy. The country is also considered a forerunner with ambitious environmental policies. These facts made it interesting to investigate if improved sustainability in the supply chain of Swedish offshoring companies could be a backshoring driver if all pillars of sustainability are considered in the decision-making process. Consequently, the present investigation aimed to explore if Sweden provides the conditions to improve the supply chain sustainability of companies in the Swedish automotive industry if offshored manufacturing of steel parts is brought back from China to Sweden. Furthermore, based on the results of the present investigation, the second aim was to provide Hanza with recommendations for how the company could contribute to improved supply chain sustainability.  To achieve the purpose of the study, the Environmental Decision Making framework proposed by Sexton et al. (1999) was applied. The two options to be considered were analyzed by performing a partial life cycle assessment and by applying an own developed method to assess the decision criteria. Later on, the results were analyzed to recommend Hanza measures to improve supply chain sustainability.  The results showed that Sweden has all conditions needed to improve the supply chain sustainability if manufacturing was backshored from China to Sweden. Environmental sustainability could be the most important driver followed by social and economic sustainability. Furthermore, Hanza’s manufacturing cluster strategy could be concluded to improve environmental sustainability in the supply chain by reducing emissions from transport. However, the company could implement several measures to take its contribution to a higher level. / Detta examensarbete har genomförts för Hanza Holding AB som är ett globalt företag med produktionsanläggningar grupperade i lokala kluster i närheten av sina kunder. Företaget har upplevt en ökad efterfrågan från företag som vill flytta tillbaka sin produktion till sina hemländer för att komma närmare sina slutmarknader. Hanzas erfarenhet av omvänd offshoring, även kallad backshoring i litteraturen, var utgångspunkten för detta arbete. Offshoring är en utbredd affärspraxis bland företag i utvecklade länder som harflyttat produktionen till länder med svagare miljömässig och sociallagstiftning för att minska sina kostnader. Detta har dock uppnåtts till en hög miljömässig, social och operativ kostnad. Backshoring är en framväxande trend som främst har drivits på för att förbättra företags operationella prestation. Trots de negativa sociala och miljömässiga konsekvenser som offshoring har haft i värdländerna,har varken miljö eller sociala aspekter ansetts vara de viktigaste drivkrafterna vid beslut om backshoring. I Sverige har företag varit verksamma både inom offshoring och backshoring. Kina har varit en av de tre främsta regionerna där tillverkningen har flyttats till och från. Sverige är ett av de europeiska länder där tillverkning,särskilt inom fordonsindustrin, fortfarande anses vara av betydelse för landets ekonomi. Landet anses också vara en föregångare med ambitiös miljöpolitik. Dessa fakta gjorde det intressant att undersöka om förbättrad hållbarhet i leverantörskedjan skulle kunna vara en drivkraft för företag om alla tre hållbarhets pelare beaktas i beslutsprocessen. Av denna anledning var målet med denna studie att undersöka om det finns förutsättningar i Sverige för att förbättra hållbarheten i leveranskedjan hos företag inom den svenska fordonsindustrin om tillverkning av stål artiklar flyttades från Kina till Sverige. Det andra syftet var att ge Hanza rekommendationer för hur företaget skulle kunna bidra till en förbättrad hållbarhet i leverantörskedjan. Huvudmetoden för att uppnå syftet med studien var ett tillvägagångssätt för att ta miljöbeslut framtaget av Sexton et al. (1999). De två alternativ som skulle övervägas analyserades genom att utföra en partiell livscykelanalys och genom att tillämpa en egenutvecklad metod för att bedöma beslutskriterierna. Senare analyserades resultaten för att ge Hanza rekommendationer för att förbättra hållbarheten i försörjningskedjans. Resultaten visade att Sverige har alla förutsättningar som behövs för att förbättra hållbarheten i leveranskedjan om tillverkningen flyttas tillbaka till Sverige från Kina. Miljömässig hållbarhet kan vara den viktigaste drivkraften följt av social och ekonomisk hållbarhet. Därutöver, drogs slutsatsen att Hanzas lokala klusterstrategi skulle kunna förbättra miljömässig hållbarhet i leveranskedjan genom att minska utsläppen från transporter. Företaget skulle dock kunna genomföra flera åtgärder för att ta sitt bidrag till en högre nivå.

This research investigates political risk in the context of service offshoring and the corresponding impact on risk management decisions. The first stage of the study uses the Repertory Grid Technique (RGT), to explore key post-contract political risks experiences within offshore outsourcing activities. Twelve key political risks affecting offshore outsourcing decisions are identified, and the moderating effect of offshoring activity types (BPO, ITO or KPO) on political risk exposure and impact perceptions is highlighted. The research also explores the conditioning effect of industry specific exposure to political risk and enhances the explanatory ability of the Transaction Cost Economics (TCE) constructs, offering a re-operationalization of the political risk component of external uncertainty. The second stage of the research introduces a series of hypotheses between offshoring flows and political risk profiles, and applies multiple regression to analyse political risk affecting offshore activities in low cost countries across contract-based offshoring engagements and FDI. The findings highlight that political risk is a genuine business concern for offshore contract-based outsourcing modalities, and identify concerns with Intellectual Property protection, Quality of Bureaucracy and Corruption as key considerations affecting location decisions in low-cost countries. The research further suggests a positive relationship between strong country level institutional and regulatory systems and high knowledge content in offshoring engagements. From a practical perspective, the research highlights the need for managerial tools to determine diversified firm and industry specific political risk impact on global service outsourcing engagements. The key practical contribution is the development of differentiated political risk typologies that can capture the nuances of external risks in offshoring, allowing for more accurate risk assessment of offshoring decisions.

Outsourcing and Offshoring represent modern management tools used to increase the competitive advantage of the enterprise by a better focus on its core business, lower costs, higher flexibility or better quality of its processes. These benefits are basically achieved either by transferring some of company's non-core processes on an external provider or on a Daughter Company based abroad. The basic objective of this work is to provide management or scholars with a comprehensive view on above mentioned tools from the phase of adopting decisions about their application up to their final evaluation. To be highly objective and complete there are presented also the tax optimization models within Offshoring by using so called "Tax heavens". For better understanding what procedures and tools are available to managers to comply with current legislation when using these methods, there is added the transfer price issue as one of the possible tools for a tax optimization. Within the practical part of the thesis I tried to create a country evaluation model for international outsourcing based on multi-criteria analysis of localization factors. Doing so the biggest emphasis was laid on minimization of risk of failure from the side of process provider. The model was also enriched by commonly not often used ethic factors. The result of carried out analysis of chosen countries shows that even significantly lower labor costs can not weight on other localization factors in case they are of considerably worse levels. The last part of my work demonstrates the application of both examined methods in the Czech textile industry with a view to bring evidence that they are capable to lead to an improvement of its competitive position on foreign markets. Due to my vocational interests there was chosen Russian market as a sample. Objectives of this doctoral thesis have been achieved by extensive research of various information sources, incl. statistical data and available surveys carried out by reputable institutions and accompanied by personal expert experience from real practice.

There are three essays on the economics of information technology innovation in my dissertation: 1. Procurement contracting strategies in a hierarchical supply network; 2. R and D offshoring and technology learning in emerging economies firm level evidence from the information technology industry; 3. Software design strategies in markets with open source competitors. The first essay addresses the impact of an information technology enabled hierarchical supply structure on a firm s procurement strategies. The second essay investigates information technology hardware innovation. I examine R and D offshoring of information technology hardware firms and its impact on R and D effort of firms in host countries. The third essay focuses on software innovation. I investigate open source software and its impact on the design of proprietary software in terms of number of features bundled in the software.

Univ, Diss.--Oldenburg, 2007.

Over the last few decades, production processes have become increasingly fragmented: they are divided into ever smaller parts considered as separate activities, which are then spread over various locations in different countries. In other words, value chains for many products are becoming global. This implies that inputs into the production process are sourced from both local and foreign suppliers. The latter mode of sourcing is commonly referred to as offshoring. Expressed as the share of imported in total intermediates, offshoring has grown relatively fast in the recent past. Moreover, its scope has been extended as it increasingly encompasses not only manufacturing but also service activities. A typical example for the former is the sourcing from abroad of parts and components for car assembly. While offshoring of manufacturing activities has been occurring since long and has been largely facilitated by trade liberalisation, the offshoring of service activities such as the provision of accounting or call centre services is a more recent phenomenon that has been fostered by the increased tradability of such services.<p>With the increasing scale and scope of offshoring, it becomes crucial to get a grasp of its drivers as well as the gains and threats associated with it. The latter are the focal point of the public and academic discussion around offshoring, in particular the potential threats for workers in developed economies. Typical questions that are being raised are whether offshoring leads to job losses in developed countries and whether it favours certain categories of workers and is to the disadvantage of others. These threats are directly linked to the motivations for engaging into offshoring. In this respect, wage costs play a prominent role. But other factors may also influence offshoring decisions, e.g. regulations, in particular those regarding the environment. Last but not least, offshoring may also entail gains for developed economies through the improvements in the efficiency of production. In this PhD thesis, several causes and consequences of offshoring are examined empirically for Belgium.<p>The first issue that is investigated is whether offshoring of materials and business services affects industry-level employment. An improved offshoring intensity measure is introduced. It is a volume measure of the share of imported intermediates in output split into materials and business services and according to the country of origin of imports, i.e. high-wage and low-wage countries. Estimations of static and dynamic industry-level labour demand equations augmented by offshoring intensities do not reveal a significant impact of either materials or business services offshoring on total employment for Belgium. This result holds for both the manufacturing sector and the service sector and it proves robust to splitting the manufacturing sector into high-technology and low-technology industries.<p>These results raise the question whether there are actually productivity gains from offshoring. Therefore, estimates of the impact of materials and business services offshoring on industry-level productivity in Belgium are presented. Two features of the analysis are new compared to the existing literature on this subject: the issue is examined separately for manufacturing and market services industries and the possibility of forward and backward spillovers from offshoring, i.e. that productivity gains from offshoring feed through to upstream and downstream industries, is investigated. Results show that materials offshoring has no effect on productivity, while business services offshoring leads to productivity gains in manufacturing. Furthermore, there is no evidence of either forward or backward spillovers from offshoring.<p>Despite the absence of an industry-level total employment effect, offshoring may alter the within-industry composition of employment. In this respect, a major concern is the worsening of the labour market position of low-skilled workers. This issue is addressed by providing evidence on the impact of offshoring on the skill structure of manufacturing employment in Belgium between 1995 and 2007. Offshoring is found to significantly lower the employment share of low-skilled workers. Its contribution to the fall in the employment share of low-skilled workers amounts to 35%. This is mainly driven by offshoring to Central and Eastern European countries. Business services offshoring also contributes significantly to the fall in the low-skilled employment share. As a complement to the existing literature, the widely used current price measure of offshoring is compared with a constant price measure that is based on a deflation with separate price indices for domestic output and imports. This reveals that the former underestimate the extent of offshoring and its impact on low-skilled employment. Finally, further results show that the impact of offshoring on low-skilled employment is significantly smaller in industries with a higher ICT capital intensity.<p>Furthermore, attention is drawn to environmental effects of offshoring by asking whether offshoring contributes to reducing air emissions from manufacturing. Indeed, since the mid-90’s, production-related air emissions in Belgian manufacturing have been reduced substantially. It can be shown that the pace of the reduction has been fastest for domestic intermediates. The issue of whether offshoring has played a role in this reduction by replacing domestic intermediates by imported intermediates is widely debated. Here, a decomposition analysis is developed to measure the contribution of offshoring – the share of imported intermediates in total intermediates – to the fall in air emissions for domestic intermediates. Based on the results from this decomposition analysis, it is possible to calculate that 17% of the fall in greenhouse gas emissions, 6% of the fall in acidifying emissions and 7% of the fall in tropospheric precursor emissions in Belgian manufacturing between 1995 and 2007 can be attributed to offshoring.<p>Finally, emission intensities are also considered as a potential determinant of offshoring. An econometric approach for testing the pollution haven effect for imported intermediate materials is developed. The approach is new with respect to the existing literature on pollution havens through its specific focus on imports of intermediates. The test is embedded in a cost function framework from which a system of cost share equations for variable input factors is derived. The set of potential determinants of the demand for imported intermediate materials includes emission intensities for three types of air pollutants. Their impact constitutes a test of the pollution haven effect. The system of cost share equations is estimated by a within ISUR using data for the Belgian manufacturing sector. Results show some albeit relatively weak evidence of a pollution haven effect for imported intermediate materials.<p> / Doctorat en Sciences économiques et de gestion / info:eu-repo/semantics/nonPublished

This research investigates political risk in the context of service offshoring and the corresponding impact on risk management decisions. The first stage of the study uses the Repertory Grid Technique (RGT), to explore key post-contract political risks experiences within offshore outsourcing activities. Twelve key political risks affecting offshore outsourcing decisions are identified, and the moderating effect of offshoring activity types (BPO, ITO or KPO) on political risk exposure and impact perceptions is highlighted. The research also explores the conditioning effect of industry specific exposure to political risk and enhances the explanatory ability of the Transaction Cost Economics (TCE) constructs, offering a re-operationalization of the political risk component of external uncertainty. The second stage of the research introduces a series of hypotheses between offshoring flows and political risk profiles, and applies multiple regression to analyse political risk affecting offshore activities in low cost countries across contract-based offshoring engagements and FDI. The findings highlight that political risk is a genuine business concern for offshore contract-based outsourcing modalities, and identify concerns with Intellectual Property protection, Quality of Bureaucracy and Corruption as key considerations affecting location decisions in low-cost countries. The research further suggests a positive relationship between strong country level institutional and regulatory systems and high knowledge content in offshoring engagements. From a practical perspective, the research highlights the need for managerial tools to determine diversified firm and industry specific political risk impact on global service outsourcing engagements. The key practical contribution is the development of differentiated political risk typologies that can capture the nuances of external risks in offshoring, allowing for more accurate risk assessment of offshoring decisions.