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Global sourcing and quality recalls: An empirical study of outsourcing‐supplier concentration‐product recalls linkages
Author(s) -
Steven Adams B.,
Dong Yan,
Corsi Thomas
Publication year - 2014
Publication title -
journal of operations management
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 3.649
H-Index - 191
eISSN - 1873-1317
pISSN - 0272-6963
DOI - 10.1016/j.jom.2014.04.003
Subject(s) - offshoring , outsourcing , offshore outsourcing , business , knowledge process outsourcing , supply chain , strategic sourcing , product (mathematics) , quality (philosophy) , globalization , industrial organization , relocation , supply chain management , marketing , commerce , economics , computer science , market economy , philosophy , geometry , strategic financial management , mathematics , epistemology , strategic planning , programming language
Abstract This study investigates how supply chain sourcing strategies are associated with product quality recalls. In particular, the research examines how make‐or‐buy decisions (i.e., outsourcing), the use of foreign suppliers (i.e., offshore outsourcing), the relocation of production to offshore markets (i.e., offshoring), and decisions to consolidate supply bases (i.e., the use of few vs. myriad suppliers) are related to product recalls. Product recalls are serious quality failures in supply chains with significant, negative impacts on firm performance. Product recalls are frequently connected to the globalization of supply chains. Globalization has, at times, promoted inconsistency in quality control and standards, leading to quality problems and failures. Data across multiple industries, with widely reported recalls, have been collected and analyzed using regression techniques. Our findings indicate that offshore outsourcing has a greater impact on recalls than offshoring without outsourcing; outsourcing domestically has the least influence. Outsourcing to a smaller supplier base may lead to fewer recalls at low levels of outsourcing. However, it may exacerbate the impact of outsourcing on recalls at high levels of outsourcing.