The increasing importance of offshoring as a strategic tool for firms which possess substantial resources in high-cost locations is reflected in the increasing quantity and value of work being offshored. The offshoring of Automotive Product Development Processes (generically called Automotive Engineering Services) serves not only to reduce developmental costs for firms, but can also help firms develop resources in fast-growing markets, which can also act as an important source of future revenue.
The trend of offshoring Automotive Engineering Services (ES) activities to India is becoming increasingly important. Of the $15 billion offshore ES market (including automotive and other ES activities), India claimed 12% in 2005 . Experts claim that this value will increase to $40 billion by 2020, representing a market share of 25%. The increasing importance of ES offshoring is reflected in increasing investments and acquisitions of Indian firms in this business area.
The dynamic situation being faced by firms wishing to offshore ES work to India necessitates a decision support methodology, which was outlined in this work.
Introduction to Present Work
The present project aimed to provide offshoring decision support to automotive product development firms located in Germany/W. Europe by answering the following two questions:
1. Which process steps in the automotive product development process are best offshored? Which process steps should be retained in-house, onshore?
2. In case of offshore partnerships, which criteria may be used to evaluate prospective offshore partners?
Offshoreability
The offshoreability of an organizational process may be defined as the ease with which it may be offshored to another location, without losing any of its value or efficiency. Offshoreability thus depends on many factors- the main factors have been summarized within this work.
The concept of offshoreability may thus be used to make offshoring decisions regarding the processes or process steps to be offshored, to decide upon measures/upgrades that may increase offshoreability and thus the benefit from offshoring, and to decide upon factors which may be used to evaluate possible offshore partners.
Inhaltsverzeichnis (Table of Contents)
- Introduction
- State-of-the-Art Analysis
- Insourcing, Outsourcing and Offshoring
- Theories About the Offshoring Decision
- Macro Economics
- Market Forces
- Resources and Competencies
- Transactions, Contracts and Firm Boundaries
- Summary of Available Theories
- Existing Decision Tools and Models
- Financial Tools
- Strategic Tools
- Benchmarking/Certification Tools
- Summary of Existing Decision Tools and Models
- Problem Statement and Goal of Present Work
- Problem Statement
- Goals of Present Work
- Background to the Client Company and the Drivers of Offshoring
- The Company
- Identification of the Major Drivers of Offshoring
- Reducing Costs: "The Global Cost Mix"
- New Markets
- Learning and Growth: "The Global Competency Mix"
- Summary: Drivers of Offshoring
- Product Development Processes at the Client Company
- Modeling the Product Development Process
- Deriving Necessary Competencies for Each Process Step
- Identification of Cost Drivers and Success Critical Process Steps
- Analysis of the Internal-External Customer Mix: Possible Problems
- Difference of Interests
- Diffused Decision Process
- Differing Requirements
- Conclusion and Final Remarks
- Summary
- Competence-Based Decision Model for the Offshoring of Product Development Processes to India
- Goals and Success Factors for the Proposed Decision Model
- Goals of the Proposed Decision Model
- Success Criteria for the Proposed Decision Model
- Summary of Goals and Success Criteria
- Analysis of Offshoring Goals at the Client Company
- Financial Goals
- Customer Goals
- Business Process Goals
- Learning and Growth Goals
- Overview: Offshoring Goals
- Offshoreability Study and the Analysis of Expected Benefits from Offshoring
- The "Offshoreability" of Processes
- The Process Offshoreability Questionnaire
- Financial Benefits from Offshoring
- The Offshoreability Study: Conclusions
- The Offshoreability Study: Summary and Final Remarks
- Evaluation of the Offshoreability Study
- Development of the Balanced Scorecard "Magnifying Glass" for the Evaluation of Possible Offshoring Partners
- The Resource-Based View Applied to the Offshoring Decision
- Mapping Offshoring Goals to Vendor Competencies
- The Balanced Scorecard "Magnifying Glass" for Evaluating Possible Offshoring Partners
- Development and Implementation of an Evaluation Methodology for Prospective Partner Companies in India
- Development of the Evaluation Methodology
- The Competency Map
- Offshoring of product development processes
- Competence-based decision making
- Evaluation of potential offshoring partners
- Balanced scorecard methodology
- Analysis of cost drivers and success critical process steps
Zielsetzung und Themenschwerpunkte (Objectives and Key Themes)
This master's thesis focuses on developing a competence-based decision model for offshoring automotive product development processes to India. The study aims to provide a practical tool for companies considering offshoring, enabling them to make informed decisions based on a comprehensive evaluation of relevant factors.
Zusammenfassung der Kapitel (Chapter Summaries)
The thesis begins with an introduction, followed by a comprehensive state-of-the-art analysis of offshoring, examining relevant theories and existing decision models. Chapter 3 establishes the problem statement and research goals, outlining the specific challenges and objectives of the study. Chapter 4 delves into the background of the client company and the drivers motivating their potential offshoring decision, highlighting key factors such as cost reduction, access to new markets, and skill development. Chapter 5 focuses on the product development processes at the client company, modeling these processes, identifying necessary competencies for each step, and analyzing potential challenges in managing internal and external customer relationships. Chapter 6 presents the proposed competence-based decision model for offshoring, outlining goals and success factors, analyzing the client's offshoring objectives, and conducting an offshoreability study to assess the suitability of specific processes for offshoring. The chapter concludes with the development of a balanced scorecard for evaluating potential offshoring partners in India, emphasizing resource-based view principles and aligning vendor competencies with offshoring goals.
Schlüsselwörter (Keywords)
The thesis explores the concepts of offshoring, competence-based decision making, balanced scorecard methodology, automotive product development, cost drivers, success critical process steps, offshoreability assessment, and evaluation of potential offshoring partners in the Indian automotive engineering services market.
- Citation du texte
- Master of Science and MBA Sanket Bhatia (Auteur), 2006, Competence-Based Decision Support for the Offshoring of Automotive Product Development Processes to India, Munich, GRIN Verlag, https://www.grin.com/document/134022
