The role of outsourcing in Lean Manufacturing

In this article a longitudinal study performed at a medium-sized producer of electronics is reported during which we studied the company’s manufacturing change process. Based on theories of outsourcing, reengineering and explorative case research a series of findings is identified which demonstrates that strategic sourcing is a powerful tool in Lean Manufacturing with the achievement of marked improvements of performance, e.g. increased cost efficiency, higher flexibility and more management efficiency.

One of the essential results was the verification that a company having evolved to a high degree of complexity by introducing many new product lines, without phasing out very many of the old products could be changed into a far less complex organisation through reengineering and outsourcing. This again opened up for the application of the tool kit in Lean Manufacturing, and through this further productivity improvements could be achieved.