A Joint Location and Outsourcing Sustainability Analysis for a Strategic Offshoring Decision

With economic globalization and the emergence of extended enterprises derived from interrelationship among organizations, there has been a steady increase in offshoring outsourcing activities. Subsequently, the strategic importance of offshoring decisions is important. Traditional offshoring decisions mainly emphasize outsource (supplier) selection problems, with their focus upon economic factors. Sustainability, which has recently been seen as a competitive necessity in most industry, rarely enters into the modeling or discussion. Furthermore, additional and integrated facility location factors need to be involved into the offshoring decision process. To help integrate these factors and concerns, this paper constructs a model for evaluation and selection of various offshoring alternatives by simultaneously considering facility location factors, supplier selection metrics, and sustainability factors. The model allows for input from a variety of managerial decision making levels and involves the dynamic perspectives of the competitive environment in evaluating process. An empirical case illustration is applied to demonstrate the efficacy of the model. The paper closes with a discussion of managerial implications and an outlook on aspects for further research.