Managing Multiple Outsourcing: Service Quality and Volume Issues

Transcription

1 Prodngs of th 4 Intrntonl Confrn on Industrl Engnrng nd Oprtons Mngmnt l Indons Jnury Mngng Multpl Outsourng: Srv ulty nd Volum Issus Smr K Mukhopdhyy SungKyunKwn Unvrsty GS Jongnogu Soul Kor -745 strt Srv oprtons lk ll ntr oprtons nd usnss prosss r ng outsourd to offshor lotons us of mny oprtonl rsons nludng ost svngs Th mn trd-off s th lk of ontrol on srv ulty Whn multpl supplrs r oprtng nd srv rurmnts r llotd to on or nothr dffrntl ulty lvl s splly ng n rrtnt to th frm s ustomrs In our modl th frm uss th lloton of untty to motvt th multpl supplrs so tht th ulrum srv ulty n th mrkt ulzs ovr ll supplrs Th uyr s ustomrs r ssurd of th sm onsstnt ulty lvl rgrdlss of whh of th multpl supplrs thr lls r routd to W otn optml pols of oth th uyr nd th supplrs n two-supplr mrkt nd lso study n symmtr nformton s Kywords Offshorng Outsourng Srv ulty Multpl supplrs Introduton Outsourng of mnufturng prosss hs n usd s n oprtons strtgy for numr of dds now th mn motvtons ng mnufturng tvts to rdu lor ost fr up ptl nd mprov workr produtvty Rntly srv oprtons lk ll ntr oprtons nd usnss prosss r lso ng outsourd slly us of th sm rsons PO usnss pross outsourng s nothr populr outsourng vhl for ompns whr non-or usnss pross s outsourd Exmpls nlud prosss n nvstmnt ompns lw frms nd phrmutl ompns Srv oprtons lk dt ntry dgtzton dt prprton nd vldton r lso populr outsourng tvts Th trd-off ompns f whl outsourng pross s th lk of ontrol on th srv ulty Mny ompns hv xprnd tht th ll ntr srv ulty s not up to th mrk for mny of th offshor ompns nludng Dll hmnn rothrs nd Dlt Thus th ulty of srv s nothr mportnt ssu n outsourng On n s tht ny prolm wth th ulty n th srv wll rflt drtly to th uyr ompny nd thus th uyr s dply onrnd wth th srv ulty nd nds tools to motvt th supplr to nhn hs ulty In ll ntr oprton thr s lwys rsk n llotng ll of ts lls to on sngl ll ntr n s th offshor ompny turns out to hv lss thn dsrl ulty lvl On wy th frms n hdg th rsk s y sltng mor thn on ompny nd t th sm tm rtnng th opton of kpng som lls nshor Ths s wdsprd prt nd s lld o-shrng ksn t l 8 rsrh uston n ths ontxt s how to llot th totl ll volum mong th supplr ompns In our ppr w dvot tht ulty of srv n th ss of ths lloton of volum Th rvnu rvd y th ll ntr s thrfor dpndnt on th volum ontrtd nd n turn on th srv ulty Th ll ntr thrfor hs n nntv to nvst nto mprovng ts srv ulty Our ppr s onrnd wth fndng th optmum nvstmnt poly n srv ulty mprovmnt gm thort modl s usd to dsgn optml ontrts twn th uyr nd th srv supplr rf trtur Survy Thr r svrl rsrh rltd to strtg outsourng ry t l 8 study frm s mk-oruy strtg outsourng dson Novk nd Strn 8 study how outsourng ffts prformn dynms n mprl nlyss of offshor softwr dvlopmnt s rportd n Gopl t l 3 Klnns 4 studs th nformton thnology sttng nd fnds th rol of rltonshps n ho of ontrts typs IT outsourng s rvwd n rnt studs Knon 5 nd Kng nd Torkzdh 8 Th top of ll ntr hs n studd xtnsvly n ltrtur On wy to dl wth th ll ntr prolm s trtng t s uu rvw n found n Gns nd Zhou 7 nd Gns t l 3 In th ulty r pr nd 489

2 ulty omptton n dffrnttd dmnd nvronmnts r studd n Kouvls nd Mukhopdhyy 999 Ths pprs us gm thory Yu t l 6 to dsuss ulty undr full nformton Informton symmtry ss lk morl hzrd on sd or th othr my dlrtly shrk or dgrd ulty to rdu ost nd dvrs slton ulty my n nnt hrtrst or ts lvl of on prty s unknown to th othr r dlt wth n Ho nd Zhng 4 nd Ds t l omprhnsv nlyss of th onpt nd modls rltd to outsourng s gvn n Dolgu nd Proth Our rsrh fouss on outsourng t th strtg lvl W wll dsuss th usnss modl whr uyr outsours from two supplrs Multpl Outsourng MO Our modl ontruts to xstng ltrtur n th followng rspts Frst w ssum tht th supplrs n hv dffrnt lvls of ffny of thr nvstmnt to mprov srv ulty Most supplr slton ltrturs gnor ths ft of dffrntl ost ffny Sond our modl pturs th ntrply of mjor ftors lk outsourng ontrt ulty nd untty Thrd our modl n ppld to mny usnss outsourng snros from mnufturng to srvs to PO 3 Th Modl Snro Th outsourng modl w onsdr n ths ppr onssts of uyr nd two supplrs to whom th uyr n outsour ll or prt of hr srv work lk ll ntr jos Th volum llotd to supplr s dpndnt on hs ulty lvl Th hghr th srv ulty lvl of th supplr mor s th volum llotd to hm Ths ppr s onrnd wth dvlopng supply ontrt whh n usd for motvtng supplr to mprov hs srv ulty 3 Cost of ulty Th supplr nurs rtn mount of ost to rng up hs ulty of srv to ompttv lvl Ths ost whh s fxd wth rspt to th untty suppld nluds th ost of trnng of mploys provson of ndwdth nstllton of omputr systms nd dtss nd numr nd ulty of phon lns s s xtnsvly usd n ltrtur s Mukhopdhyy t l 8 w ssum tht ths fxd ost s nrsng nd onvx n th lvl of ulty offrd W ssum th funtonl form s fxd ost prmtr s msur of th supplr s ulty ost ffny n th sns tht f s low for supplr h wll nd lss fund to ttn gvn lvl of ulty Thus plys n mportnt rol on dtrmnng th lvl of srv ulty 3 Srv Volum Funton Th uyr outsours unts of srv pr prod to supplr Supplr offrs srv of ths unts t ulty lvl whh s dson vrl for th supplr Th untty llotd to supplr thn s drsng funton of pr p nd n nrsng funton of Th untty llotd to supplr s gvn s ~ ~ ~ p = ddng th two untts for th two supplrs th totl outsourd untty wll ~ ~ ~ p ftr nvrtng ths volum funton th nvrs volum funton n wrttn s: p Hr nd r th snstvty prmtrs of sls volum nd ulty rsptvly From not tht th synrgst fft of ulty mprovmnt rrd out y ll supplrs n mrkt hlps th mrkt s whol y mprovng th pr poston from th suppls pont of vw W mnton hr tht w ssum no pty onstrnts t th supplrs flts 33 Proft Funtons Th supplr s ojtv funton s: Mx S p { } whr s th vrl ost of srvng on ll Hr w mk th mthmtlly onvnnt ssumpton tht th vrl ost s sm for oth supplrs Th uyr s ojtv funton s: 49

3 Mx p 3 { } Th uyr s ojtv funton s ssntlly hr svngs y outsourng Th ost for th uyr to fnsh th work y hrslf s pr unt Thn -p s th dollr mount svd for h unt outsourd Th uyr dds th untts nd to outsourd to h of th two supplrs supplr dds th optml lvl of hs own ulty h mxmzng hs own proft funton Thn -p s th dollr mount svd for h unt outsourd Th uyr dds th untts nd to outsourd to h of th two supplrs supplr dds th optml lvl of hs own ulty h mxmzng hs own proft funton Not tht th pr s utomtlly dtrmnd v on th untty nd ulty lvls r known 4 Th Gm Ths outsourng prolm ssntlly turns nto gm whh s typlly plyd n two stgs It s rlst to ssum tht th uyr would t s ldr nd th supplrs s followrs Ths gvs rs to Stklrg gm In stg on of th two-stg gm th uyr mks th dson on th outsourng untty llotd to supplr wth th knowldg of h supplr s st rspons funton In stg two th supplr wll dd th ulty lvl Th two supplrs ompt gnst h othr y ndvdully hoosng ulty lvl For ths Stklrg gm w gnrt th su-gm prft Nsh ulrum usng kwrd nduton sugm prft Nsh ulrum s n ulrum suh tht th plyrs strtgs onsttut Nsh ulrum n vry sugm of th orgnl gm It my found y kwrd nduton n trtv pross for solvng fnt suntl gms Supplr s st rspons funtons n gvn y = Not from ov tht th supplr s dson vrl s funton of only nd Nxt th uyr susttuts ths st rspons funtons nto hr proft funton nd otn th followng optmzton prolm: Mx p { } s t S 4 Multpl outsourng supplrs MO snro Th soluton produr for ths formulton strts y susttutng p from mkng t funton of lon Tkng grngn funtons Th optml vlus of th dson vrls nd nd thry of nd r gvn n th nxt two propostons ll proofs r gvn n th ppndx Proposton For th MO s: Whn th ulrum untty ulty nd pr r gvn y: p Th orrspondng profts of uyr supplr nd supplr t ulrum r gvn s: 4 S S 49

4 Proposton Whn th ulrum untty ulty nd pr r gvn y: p whr = 3 Th orrspondng profts of uyr supplr nd supplr t ulrum r gvn s: 3 S S Dsussons Propostons nd gv th optml pols nd proft for ll thr prts undr two dffrnt ss For th purpos of dsusson lt us ssum tht Supplr s mor ffnt thn Supplr n ttnng rtn ulty lvl Th optmum rsults dvd th domn of nto two ss: Cs s whr nd Cs s whr Proposton gvs th rsults of Cs Hr w s tht th ffnt Supplr nnot gt ny outsourng work from th uyr nd nffnt supplr gts ll of t Supplr s slly drvn out of th mrkt s rvld y our rsult th ffnt supplr s unl to gt hgh nough pr for th outsourng work to wrrnt hs hgh ulty Thrfor th ffnt supplr wll xt th mrkt wthout dong ny outsourng work Ths s prdoxl s of th d drvng out th good n th outsourng mrkt Cs for th ondton gvs n ntrstng snro In ths s th optml outsourng ulty s xtly th sm for oth supplrs Tht mns tht no mttr wht thr ffns r thy hv to rng thr ulty to th sm lvl In othr words thr s sngl ulty lvl n th mrkt Ths shows th powr of omptton n ths mrkt Th outsourng volum s llotd ordng to thr ffns In Prt w otn losd form xprsson for th uyr s optml proft oth th supplrs profts m out s zro Ths mns tht oth supplrs wll rv th mnmum rsrvton lvl of proft Ths rvls tht du to ompttv prssur th supplrs would nrs thr ulty to suh hgh lvl tht th nvstmnt ost s s hgh s thr rsptv rvnu Th uyr tks th whol systm proft s hr proft W n wrt th uyr s proft s: Th uyr s svng from outsourng s dtrmnd y th dffrn of hr osts nd th Supplr nd Supplr s osts nludng oth vrl osts nd fxd osts vry mportnt gudln mrgs from our nlyss From th uyr s pont of vw th only rtron of mportn s th lvl of srv ulty rvd from th two supplrs Th uyr s not onrnd out th supplrs ntrnl ost of nvstmnt for mprovng ulty From ths pont of vw sh n ply th omptton gm n vry proftl to hr wy Sh pys th sm pr to oth supplrs nd llots hghr volum to th lss ost ffnt supplr s rsult th optml ulty lvl for th lss ffnt supplr s s hgh s th othr supplr Ths wy th uyr s ssurd of th sm lvl of ulty no mttr whh supplr th ll gos to Ths s on of th mn ontrutons of our ppr Proposton 3 In th two supplr s undr Cs Th optml ulty lvl offrd y th supplr s nrsng n nd nd drsng n nd ; 49

5 Th untty outsourd s nrsng n nd nd drsng n nd th othr supplr s ost ffny Th nsght hr s tht th uyr n sur of rvng hghr srv ulty whn sh rfully slts th supplrs wth hghr ost ffny W lso s tht f th uyr n us mrktng strtgy vrls to nrs th totl mrkt potntl or th ulty snstvty of th mrkt thn sh wll njoy hghr optml ulty From th supplr s pont of vw ths nrsd nd would nft hm too y nrsng hs srv volum On ountr-ntutv fndng s tht supplr s outsourng untty wll nrs f th othr supplr or th ompttor oms mor ost ffnt 4 Multpl supplrs MO snro undr symmtr Informton Hr th uyr dos not know th xt vlu of th supplrs ost ffny prmtr Sh only knows th pror dnsty funton f nd umultv dstruton F dfnd on th rng W found tht losd form soluton for th gnrl s dos not xst Thus w otnd losd form soluton for spl s usng th ssumpton of N whr s N th ut-off vlu of for ontrt to sgnd y th supplr dnotng tht th supplr wll lwys sgn t lst on ontrt Th rsults r shown n th nxt four propostons Proposton 4 Whn th ulrum untty ulty nd pr r gvn y: S_ S S _ S f d N F N S_ S S_ S _ S ps d N S _ S Th orrspondng profts of uyr supplr nd supplr t ulrum r gvn s: _ S ps S _ S S_ S _ S S S _ S S _ S Whn Supplr ost ffnt supplr dd not gt ny outsourng ontrt Supplr s ost ffny lvl wll th only p of symmtr nformton n th gm to fft th optml vlus of outsourng ulty untty pr nd profts Proposton 5 S _ S Th optml ulty lvl offrd y Supplr s s nrsng n nd nd drsng n nd ; Th optml untty lvl offrd y Supplr s S _ S s nrsng n nd nd drsng n 493

6 Not tht th pr undr th symmtr nformton dpnd on not only nd s n th full nformton s ut lso on othr prmtrs lk nd th dstruton of Ths s n mportnt nsght for nformton symmtry Proposton 6 Whn th ulrum untty ulty nd pr r gvn y: S_ S S_ S S _ S S _ S F _ N S S S _ S 3 F N N f d N f d ps S_ S S _ S Th orrspondng profts of uyr supplr nd supplr t ulrum r gvn s: _ S ps S_ S S _ S S_ S ps S_ S S_ S S _ S ps S _ S S _ S In ths s Supplr nd Supplr wll offr th sm lvl of ulty Th symmtr nformton of ost ffny of Supplr nd Supplr oth η nd η wll dd th untty lvl ulty pr nd profts Proposton 7 Th optml ulty lvl offrd y th supplr s nrsng n nd nd drsng n ; Th untty outsourd s nrsng n nd η nd drsng n ; Supplr gts lss ontrt untty thn Supplr S_ S S _ S Comprng wth th multpl outsourng supplrs snro undr th full nformton Cs w s tht undr th symmtr nformton of th supplrs ost ffny th uyr s nhmrk ost wll fft th outsourng ulty untty from Proposton 7 prts nd pr nd profts Our xplnton s tht us th uyr hs no urt nformton out th supplrs ost ffny lvl on of th thoughts whn sh dds th outsourng untty would out hr own ost lvl So sh nluds hr ost lvl s th nhmrk to st up th untty lvl W lso rrd out xtnsv numrl nlyss to gn mor nsghts nto th prolm Th rsults r omttd from ths ppr 5 Conlusons Th mn nsght from ths ppr whh s lso n mportnt ontruton to ltrtur s s follows Th uyr s onrnd out how to nflun th srv ulty Our nlyss m up wth th non-ntutv strtgy of usng th volum lloton strtgy to mng ulty Th uyr n us dffrntl volum lloton to for th non-ffnt supplr to mprov hs ulty so tht oth th supplrs hv th sm ulrum ulty lvl n th mrkt Our study showd tht th tul vlus of th dson vrl n th 494

7 optmum poly lk rltv untty llotd nd th mrkt ulty dpnd on th mrkt prmtrs lk th s dmnd th snstvnss of pr nd ulty W nlyzd th fft on th optml pols of ny hng n th vlus of ths prmtrs y ondutng xtnsv snstvty nlyss oth nlytlly nd numrlly nd produd gudlns for th mngrs s n llustrtv xmpl w n suggst tht ompny lk Dll n slt two ll ntrs n two ountrs sy n Ind nd n Phlppns nd stll ssurd of th sm ulty lvl du to th mplmntton of th pols drvd n ths ppr Our modl n ppld to dffrnt outsourng snros lk mnufturng ll ntr nd PO snros Th only hng would th wy th vrls or prmtrs r ntrprtd For xmpl pr p n th mount hrgd y supplr for h produt h ll nd so on Our modl n xtndd n mny dffrnt drtons W ould nlud onus nd pnlty for th hgh nd low ulty n th ontrt usng non-lnr prng shms W n xtnd our modl y nludng rsrvton ulty lvl whh s th mnmum rurmnt for th ulty of outsourng In som snros th uyng ompny nssts on mnmum ulty lvl nothr vnu for futur rsrh wll om from llowng h supplr to st hs own pr thr n th frst stg of th gm or ltr It wll ntrstng to study th uyr s rspons Th durton of th outsourng grmnt s not nludd n th urrnt study whh n nothr ln of furthr rsrh long wth snstvty nlyss of th dson prmtrs ooprtv lrnng fft n th outsourng pross n usd to dtrmn th optml durton of ontrt for supplr nd uyr Rfrns kşn O d Vérourt F nd F Krsmn 8 Cll ntr outsourng ontrt nlyss nd ho Mngmnt Sn vol 54 no pp ry Mttndorf nd D Sppngton 8 Th mk-or-uy dson n th prsn of rvl: strtg outsourng to ommon supplr Mngmnt Sn vol 54 no pp Ds Hndfld R Clnton R nd S Ghosh ontngnt vw of ulty mngmnt - th mpt of ntrntonl omptton on ulty Dson Sns vol 3 pp Dolgu nd JM Proth Supply Chn Engnrrng: Usful mthods nd thnus Sprngr Gns N nd Y Zhou 7 Cll-routng shms for ll-ntr outsourng Mnufturng & Srv Oprtons Mngmnt vol 9 pp 33-5 Gns N Kool G nd Mndlum 3 Tlphon ll ntrs: tutorl rvw nd rsrh prospts Mnufturng & Srv Oprtons Mngmnt vol 5 pp 79-4 Gopl Svrmkrshnn K Krshnn M nd T Mukhopdhyy 3 Contrts n offshor softwr dvlopmnt: n mprl nlyss Mngmnt Sn vol 49 pp Ho T nd Y Zhng 4 Sttng ustomr xptton n srv dlvry: n ntgrtd mrktngoprtons prsptv Mngmnt Sn vol 5 pp Klnns 4 Rltonshps nd hyrd ontrts: n nlyss of ontrt ho n nformton thnology Journl of w Eonoms nd Orgnzton vol pp 7-9 Knon C 5 Optml pr dsgn for vrl pty outsourng ontrt Journl of Rvnu nd Prng Mngmnt vol 4 pp 4-55 Kng W nd G Torkzdh 8 Informton systms offshorng: rsrh sttus nd ssus Mngmnt Informton Systms urtrly Vol 3 no pp 5-5 Kouvls P nd S Mukhopdhyy 999 Modlng th dsgn ulty omptton for durl produts IIE Trnstons on Oprtons Engnrng vol 3 pp Mukhopdhyy S Zhu X nd X Yu 8 Optml ontrt dsgn for mxd hnnls undr nformton symmtry Produton nd Oprtons Mngmnt vol 7 pp Novk S nd S Strn 8 How dos outsourng fft prformn dynms? Evdn from th utomol ndustry Mngmnt Sn vol 54 no pp Yu X Mukhopdhyy S nd X Zhu 6 rtrnd modl of prng of omplmntry goods undr nformton symmtry Journl of usnss Rsrh vol 59 pp 8-9 ogrphy Smr K Mukhopdhyy s Profssor of Dson Sns t th Grdut Shool of usnss t Sungkyunkwn Unvrsty n Soul H rvd hs MS n mhnl ngnrng from Crnfld Unvrsty UK nd PhD n Oprtons Mngmnt from Unvrsty of Txs t ustn Pror to jonng dm h workd n hgh-prson ndustry for svrl yrs H hs prvously tught n Unvrsty of Wsonsn- 495

8 496 Mlwuk Hong Kong Unvrsty of Sn nd Thnology Chn Europ Intrntonl usnss Shool Shngh nd othr nsttutons H hs pulshd mor thn 45 sholrly rtls n top tr journls lk Oprtons Rsrh J of Oprtons Mngmnt Produton nd Oprtons Mngmnt Europn J of Oprtonl Rs nd Nvl Rsrh ogsts Hs urrnt rsrh ntrsts nlud supply hn mngmnt nd nw produt dvlopmnt H hs n snor dtor of Produton nd Oprtons Mngmnt nd s on th Edtorl Rvw ords of IEEE Trnstons nd Intrntonl Journl of usnss nlyts ppndx Proof of / Susttutng Euton nto Euton gnrts: S Th frst ordr ondton FOC of h supplr s proft mxmzton wth rspt to rurs: S Ths mpls tht Proof of Propostons nd St up grng Funton: } { } { Kuhn-Tukr ondtons rur: mx t w r

9 497 } { mn } { mn mx t w r t w r t w r W gt th rsults n Propostons 3 nd 4 y solvng th ov twlv nults nd utons Proof of Propostons 3 From Proposton w hv 3 It s sy to s tht d d d d d d nd 3 3 d d Smlrly w hv 3 It s sy to s tht j d d d d d d d d nd