A Comprehensive Outsourcing Framework for Auto Industry

Outsourcing in the auto industry is currently a necessity and yet a challenging issue for which a comprehensive framework sounds imperative، in order to facilitate managerial decisions. By addressing four main related questions of “What”، “Who”، “To whom”، and “How”، from perspective of automakers، this research aims at providing a comprehensive framework comprising of key influential factors and their interactions. Given the fact that design phase has a different nature from production phase، a separate outsourcing model is provided for each of the mentioned phases; both validated through a quantitative survey research method. Data collection was through questionnaires distributed amongst managers and senior business analysts of the two main Iranian automakers; Iran Khodro and Saipa. Validation of the models was accomplished by structural equation modeling. Among other findings، as one of the key results، it was observed that modularity is the sole differentiating factor of the two phases of design and production. Furthermore، it was unexpectedly observed that modularity has no significant impact on the level of partnership between automaker and supplier. This، however، can be explained by considering dissimilar supply chain structures of the current state of the industry and the norm. This observation can be viewed، to some extent، as one of the potential drivers of inefficiencies in the Iranian auto industry، which can be subject of future researches.