On October 16, Ole Frauen (Volkswagen) presented his research on Leveraging the Potential of Outsourcing and Offshoring in Complex Product Development at the Annual INFORMS Conference in Indianapolis, Indiana, USA. Co-authors of the working paper are Prof. Dr. Arnd Huchzermeier and Professor Jürgen Mihm (INSEAD).
Leveraging the potential of outsourcing and offshoring remains a major challenge in complex product development. It is a question about effectively decomposing and distributing work across geographical and organizational boundaries while providing high quality products. The decisions must clearly depend on the product’s characteristics and the emerging collaborative network. The study is based on an extensive data set involving all development projects of one of the largest car manufacturers worldwide. We demonstrate that a precise distinction between outsourcing and offshoring, as well as the introduction of a network perspective, are crucial to evaluate the effects in more detail.