Planning and Control in Industrial Networks - An Outsourcing Perspective

Within many industrial segments worldwide, a clear trend can be seen where companies outsource functional areas to specialised outside suppliers to support their internal core business areas. Typically, the companies begin by outsourcing functions of low strategic importance, e.g. cleaning, canteen working and administration. After having learnt from this experience they gradually move towards outsourcing more complex and critical functions of high strategic importance, e.g. computer services, manufacturing and engineering. In consequence of this tendency to incorporate outsourcing in the strategic planning process, the knowledge contribution from suppliers has increased, and the company-supplier relationships have become more close and intimate. In order to make use of the full-scale advantages of outsourcing and to mitigate the related risks, companies therefore need to integrate the decision-making processes throughout the network of suppliers, i.e. proactively involve suppliers that possess complementary competencies. In this paper it will be elaborated how this integration can be facilitated and what levels of integration exist – from simple rules to advanced information systems. The underlying assumption is that companies by integrating suppliers into their working operations are moving away from the supply chain perspective and towards an extended network perspective. This change puts higher demands on the companies’ ability to plan and control the collaboration and information exchange with their supplier base.