The Purpose of Outsourcing for Automotive Manufacturing Managers

Abstract

Automotive manufacturing managers continue outsourcing to save operating costs and remain competitive. Managers may encounter challenges when out-sourcing functions despite the estimated cost-saving of 20% to 40%. Grounded by the transaction cost economics theory, this qualitative single case study ex-plored successful strategies that automotive manufacturing managers use to partner with the appropriate organization to outsource their services. The tar-get population consisted of 4 automotive manufacturing managers from one organization in the midwestern region of the United States. Data came from semistructured interviews and public documents from the company’s website. Yin’s 5-step data analysis process was the method to analyze the data. The 5 themes that derived from the data analysis process were: use various agree-ments for deliverables and flexible contracts, assess supplier metrics before partnering, establish trust and foster relationships with suppliers, assess finan-cial factors, and assess capacity, efficiency, and reliability factors. Findings from the study may support managers who need to develop strategies to in-clude agreement terms and conditions when partnering with a supplier. The implications for positive social change included the potential to expose man-agers and workers to the latest processes and technology from outsourcing suppliers. The company may benefit by streamlining internal processes and eliminating waste from automotive scrap material. The reduction of waste could improve environmental sustainability for the community.