Knowledge for sale – the benefits and effects of off-shoring knowledge-based jobs in engineering, design, and R&D – a case study

Abstract

A framework consisting of a conceptual model and a closed-loop knowledge work outsourcing decision model is developed. A process flow model of a medical device company's product development function is analysed, where this framework is applied to understand various outsourcing options for the company. The conceptual framework describes major attributes related to outsourcing decisions, parameters associated with various attributes and the relationship intensity of parameters with three knowledge work outsourcing options – in-house, near-shoring, and off-shoring. The proposed model is closed loop, emphasizing the importance of regular re-evaluation needed for an off-shored function. The modeling framework contributes to a company's decision whether or not a particular knowledge-based function should either be kept in-house, near-sourced or off-shored. The general perception of off-shoring is to reduce costs but, the proposed model takes into account additional factors such as, market accessibility, strategic partnership, reduced time to regional market, access to overseas talent pool, and governmental incentives, etc. These factors play a vital role in determining an outsourced function. The paper discusses various options and makes recommendations for tapping into technological advancements around the world, their effects on supply chain management and other competitive advantages presented by off-shoring.

Keywords:

• off-shoring
• knowledge transfer
• intellectual capital
• competitive advantage
• knowledge drift
• business intelligence

Additional information

Notes on contributors

Sameer Kumar

About the authors

Sameer Kumar is currently a professor of Operations and Supply Chain Management and holds Qwest Endowed Chair in Global Communications and Technology Management in the Opus College of Business, University of St. Thomas. His major areas of research interests include optimization concepts applied to various aspects of global supply chain management including information and knowledge management.

Arun J Deivasigamani

Arun J. Deivasigamani is a lead package engineer in General Mills, Inc. He received his B.S. in Mechanical engineering from University of Madras and also has an M.S. in Mechanical engineering from the University of Illinois, Chicago. He completed his M.B.A. from the University of St. Thomas.

Wesley W Omer

Wesley W. Omer is a process development engineer in the medical device industry. Educational background includes a B.S. in Industrial Engineering from the University of Minnesota Duluth, and an M.B.A from the University of St. Thomas.