Title: Evaluating the role and integration of contract manufacturing strategy in supply chain management: an empirical study

Authors: Liang-Chieh (Victor) Cheng

Addresses: Department of Information and Logistics Technology, College of Technology, University of Houston, Houston, 230E Technology Building, Texas 77204-6020, USA

Abstract: Recently, the US manufacturers have been facing strong competition domestically and globally for cost reduction and product customisation. A key response to these competitive pressures is the outsourcing strategy. While sporadic case studies have investigated outsourcing|s cost implication, empirical analyses examining outsourcing|s financial and operational performance are lacking. This paper investigates the impacts of outsourcing in the US manufacturing sector and hypothesises that higher level of outsourcing will lead to higher performance. Using the US Economic Census as the data sources, the paper finds that outsourcing is positively associated with ROA and ROI but is negatively associated with product specialisation.

Keywords: contract manufacturing; ROI; return on investment; ROA; return on asset; product specialisation; capacity utilisation; outsourcing performance; supply chain management; financial performance; operational performance; manufacturing industry; USA; United States.

DOI: 10.1504/IJMTM.2010.029449

International Journal of Manufacturing Technology and Management, 2010 Vol.19 No.1/2, pp.27 - 46

Published online: 30 Nov 2009 *

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