The Role of Core and Non-Core Functions in Outsourcing Decision: A Case of the Malaysian Food Processing Industry  

Oleh:

Al-Sahri, Ahmed

Jenis: Article from Proceeding
Dalam koleksi: APCOMS 2009: The 2nd Asia-Pacific Conference on Manufacturing System: Reconfigurable Manufacturing System for Facing Turbulent Manufacturing Environment, November 4th-5th, 2009, Yogyakarta, Indonesia, page III.14-22.
Topik: Outsourcing; Food Processing Industry; Malaysia
Fulltext: APCOMS G3-3.pdf (130.98KB)

Isi artikel

Most studies that were conducted on outsourcing indicated that outsourcing is a practice that is limited only to non-core function. This general perception has been changing in last few years with the introduction of outsourcing to manufacturing processes in certain industries. However, the extent of outsourcing of core functions in the Food processing industry is yet to be seen due to the lack of such studies. This study aims to investigate the extent to which outsourcing has penetrated into the Malaysian food processing industry and whether the importance of the function to company governs its chances of being considered for outsourcing. A survey questionnaire was sent to 500 companies that were involved in food processing which yielded a response rate of 11%. The results indicated that companies outsource both core and core functions but with different criteria for each. In addition, the top five outsourced functions were packaging (60.4%), import/export management (58.3%), transportation management (58.3%), processing (56.3%), and warehousing (54.2%). Main reasons influenced the respondents to resort to outsourcing included suppliers’ compatibility (83%), lack of in-house capability (73%), and complexity of function (56%).

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