Outsourcing is becoming more and more popular. Outsourced activities continue to climb up the value chain. Even the outsourcing of engineering activities has become a common practice. However, literature, which proposes frameworks for outsourcing engineering activities, is still limited. Outsourcing can offer myriad opportunities for firms. Even so, if not well thought through outsourcing can cause considerable damage. Organisations expend a great deal of effort to optimise their production process. Administrative processes however, are often not analysed in detail.
This thesis provides the theoretical background for designing an outsourcing process for engineering activities. A case study from the automotive industry shows, how a standardized outsourcing process including a risk analysis can be developed. At the case company there were no process maps outlining the process for outsourcing engineering activities. Process participants had only limited knowledge about tasks outside of their area. Within this thesis flowcharts are used to display the as-is situation and identify frustration and problem areas. Several unnecessary and avoidable process steps are detected. Measures to improve the process are stated and a to-be process is created. In order to generate this to-be process, the as-is process is restructured in an effective and efficient way. Furthermore, tools that assist in the process are proposed. Input, output and responsibilities are clearly set for the to-be process.
This thesis helped the case company to reduce the cycle time of the outsourcing process. This allowed the firm to act more flexibly and reduce costs. The findings can help to prevent the failure of engineering outsourcing initiatives.
Table of Contents
1 Introduction
1.1 About the Case Company
1.2 Problem Definition and Objectives
1.3 Approach
2 Outsourcing
2.1 Definition of Outsourcing
2.2 Opportunities and Risks of Outsourcing
2.2.1 Opportunities of Outsourcing
2.2.2 Risks of Outsourcing
2.3 External vs. Internal Outsourcing
2.3.1 External Outsourcing
2.3.2 Internal Outsourcing
2.4 Outsourcing of Engineering Activities
2.4.1 Empirical Findings Within the Literature
2.4.2 The Impact of Modularization on Outsourcing Development
2.5 Frameworks for Outsourcing Engineering
2.5.1 Conceptual Framework for Outsourcing Prototyping
2.5.2 Model for Outsourcing the Development of a Complete Vehicle
2.5.3 Comparison of the Frameworks
2.6 Conclusion
3 Process Analysis and Improvement
3.1 The Processes
3.1.1 Definition of Processes
3.1.2 Classification of Processes
3.1.3 Levels of Abstraction
3.2 Process Management
3.3 Roles Within Process Management and Processes
3.3.1 Process Owner
3.3.2 Process Manager
3.3.3 Process Team Member
3.3.4 Process Participant
3.4 Process Modelling
3.4.1 Event-Driven Process Chain
3.4.2 Business Process Modelling Notation
3.4.3 Flow Chart
3.4.4 Responsibility Charts
3.5 As-Is Situation
3.5.1 Preparation of As-Is Modelling
3.5.2 Gathering Information
3.5.3 As-Is Modelling
3.5.4 As-Is Process Analysis
3.6 Process Improvement
3.7 Conclusion
4 Outsourcing Engineering Activities at the Case Company
4.1 The Functional Department Body & Trim
4.1.1 The Body & Trim Departments
4.1.2 Functions and Roles in the Body & Trim Department
4.2 The Suppliers
4.2.1 Engineering Centers
4.2.2 External Suppliers
4.3 Reason for Outsourcing
4.4 Forms of Outsourcing
4.4.1 Work Order for External Services
4.4.2 Fixed Price Work Packages
4.4.3 Experience with Outsourcing Engineering
4.5 Classification of the Outsourcing Process
4.6 Documentation of the As-Is Situation
4.6.1 The Process for Work Orders
4.6.2 The Process for Work Packages
4.7 Request for Quotation
4.7.1 The Content of the Request for Quotation Document
4.7.2 Attachments of the Request for Quotation
4.7.3 The Interface Agreement
4.8 Analysis of the As-Is Situation
4.8.1 Frustration Lens
4.8.2 Time and Cost Lens
4.8.3 Findings for Work Orders
4.8.4 Findings for Work Packages
4.9 Developing the To-Be Process
4.9.1 Measures Used to Create the To-Be Process
4.9.2 Assisting Tools
4.9.3 IT-System for Outsourcing Engineering Activities
4.10 To-Be Process
4.10.1 The Process for Work Orders
4.10.2 Explanatory Notes for the Work Order Processes
4.10.3 The Process for Work Packages
4.10.4 Explanatory Notes for the Work Order Processes
4.10.5 Remarks for the Implementation
4.11 Conclusion
5 Conclusion and Outlook
Objectives and Research Focus
The primary goal of this thesis is to document and improve the outsourcing process for engineering activities within the Body & Trim department of the case company, MAGNA STEYR Fahrzeugtechnik. The research aims to identify existing process bottlenecks, reduce cycle times, and develop a standardized, efficient "to-be" process model to mitigate risks and improve the overall outsourcing performance.
- Documentation of the current "as-is" engineering outsourcing processes.
- Analysis of process inefficiencies using frustration, time, cost, and quality lenses.
- Development of a structured "to-be" process model for work orders and work packages.
- Integration of IT-based process management and risk assessment tools.
- Standardization of request for quotation (RFQ) and interface agreement procedures.
Excerpt from the Book
Definition of Outsourcing
The term outsourcing has its origin in American management practice. The word is a synthesis of the words outside, resource and using. In that sense, outsourcing simply means the use of external resources. (Hermes & Schwarz, 2005, p. 15) For a long time, the term outsourcing was only used when activities were performed internally and then sourced somewhere else. This is no longer the case for modern definitions of outsourcing. (Zahn, Ströder, & Unsöld, 2007, p. 4) Power et al. define outsourcing as “transferring the work to an external party” (Power, Desouza, & Bonifazi, 2006, p. 3). The literature surveyed does not agree on what the “outside” in the term outsourcing means, due to the fact that the boundaries between organisations and the environment are becoming more and more blurred.
Some authors claim that there must be strict separation (i.e. legal and financial) between the outsourcing entity and the vendor. Others also use the term outsourcing when activities are transferred between independent internal organisational units. (Barth, 2003, pp. 8-10) In this thesis the latter, wider definition will be used.
Nowadays, outsourcing is used as a synonym for sourcing and hence an umbrella term for numerous concepts (Jouanne-Diedrich, 2004, p. 127). As a result, the term outsourcing is used in several different contexts and the meaning in a particular case is, therefore, often unclear (Zahn et al., 2007, p. 4).
Summary of Chapters
1 Introduction: Provides an overview of the automotive industry's shift toward outsourcing and defines the research scope at MAGNA STEYR.
2 Outsourcing: Examines theoretical foundations, definitions, and frameworks of outsourcing in engineering, including risk and opportunity assessment.
3 Process Analysis and Improvement: Covers the theoretical basis of process modelling, management, and the methodologies used to analyze and redesign business processes.
4 Outsourcing Engineering Activities at the Case Company: Details the practical analysis of the Body & Trim department, identifies "as-is" inefficiencies, and proposes the "to-be" process model.
5 Conclusion and Outlook: Summarizes the research findings, the impact of process improvements, and future recommendations for the case company.
Keywords
Outsourcing, Engineering Activities, Process Management, Business Process Modelling, Automotive Industry, Process Improvement, Work Orders, Work Packages, As-Is Analysis, To-Be Process, Risk Management, Supply Chain, MAGNA STEYR, Value Creation, Workflow Optimization.
Frequently Asked Questions
What is the core focus of this thesis?
The thesis focuses on analyzing and optimizing the outsourcing processes for engineering activities within the Body & Trim department of a large automotive supplier (MAGNA STEYR).
What are the primary thematic areas covered?
Key themes include outsourcing theory, business process management (BPM), process modelling, performance analysis, and the implementation of standardized "to-be" workflows.
What is the main objective of the research?
The main objective is to identify current process bottlenecks and develop an efficient, standardized outsourcing model that reduces administrative effort and process cycle times.
Which scientific methods are employed?
The methodology includes extensive literature research, expert interviews with process participants, the creation of "as-is" flow charts, and the systematic analysis of processes using frustration, time, cost, and quality lenses.
What does the main part of the thesis entail?
The main part documents the practical workflow for work orders and work packages, analyzes these flows to detect weaknesses, and proposes concrete improvements integrated into a redesigned "to-be" model.
Which keywords characterize this work?
Core keywords include Outsourcing, Process Management, Automotive Engineering, Process Optimization, and Business Process Modelling.
How does the author define the distinction between work orders and work packages?
Work orders are generally used for smaller, hourly-based tasks, while work packages represent larger, defined scopes of work with fixed deliverables and milestones.
What role does Freeflow play in the existing process?
Freeflow is an existing automated workflow application used by the company for releasing work orders, though the thesis notes it lacks database functionality for effective tracking and reporting.
How is the "to-be" process expected to impact the organization?
The proposed "to-be" process is expected to significantly reduce administrative workload, lower cycle times through automation and standardized RFQ procedures, and improve overall process quality.
- Quote paper
- Bernd Kleindienst (Author), 2012, Outsourcing Engineering Activities. Analysis and Improvement of the Process, Munich, GRIN Verlag, https://www.grin.com/document/340372
