SELECTING A PARTNER IN PRODUCTION OUTSOURCING AND SUBCONTRACTING

The main research problem of the thesis is the selection of a subcontractor when outsourcing production abroad. It is also concerned with the selection of methods for selecting the subcontractor, and the selection of the criteria to be used in the methods for selecting the subcontractor. At first the position that subcontracting has in supply chain management is considered. Make-buy questions and decisions are the basis for outsourcing in the first place. When companies want to optimize their operations, the process of analyzing includes recognizing key competencies. After having assorted the functions causing most ineffectiveness, outsourcing is an option that often enhances companies‟ operations. Outsourcing can be done in different forms. Subcontracting is generally larger scale outsourcing. When the decision to outsource has been made, an equally crucial decision is the chosen business partner. In order to ensure successful outsourcing cooperation, a careful selection process should be conducted. The thesis contains a description of a selection process that includes appropriate selection methods. Suitable selection methods are essential, along with convenient evaluation criteria. In the empirical part, two selection methods, WSM and AHP, will be used to select the best subcontracting partner for a case company. The thesis consists of a theoretical part, which is based on literature concerning supply chain management, outsourcing, subcontracting, and internationalization. The second part of the thesis is the empirical part, which deals with the theoretical part‟s subjects, but from the case company‟s, and its current situation‟s view. The case company had gone through some of the stages in the selection process, and therefore the two selection methods can be used. There are four alternative partners in that are rated with the help of the methods. By choosing the most suitable methods, the most significant criteria, and as correct evaluations as possible, the result should be reliable. The goal is to select the best business partner for the case company and its needs by processing the theoretical background, using the methods, and finally, analyzing the results. The most challenging part of the research was adapting to all the changes that happened within the case company. In the beginning of the research, the company was in the verge of making large scale changes in it. During the process, however, unexpected problems emerged, and the plans had to be changed drastically. The subject of the thesis had to be modified to some extent, but eventually a solid research could be accomplished. There were certain presumptions of what the result would be, but the outcomes and the results are achieved by thorough research, and therefore can be considered reliable.fi=Opinnäytetyö kokotekstinä PDF-muodossa.|en=Thesis fulltext in PDF format.|sv=Lärdomsprov tillgängligt som fulltext i PDF-format