Modelling joint outsourcing and offshoring decisions

Offshoring and outsourcing have emerged as two most essential and important strategies for the manufacturing firms globally. This has happened due to the relentless forces of competition and globalisation, which has forced modern manufacturing firms to disaggregate themselves and reach for foreign investments, technological inputs through collaboration and cooperation among markets and partners. Outsourcing and offshoring simultaneously has potential to help the firm to meet three strategic goals i.e. ‘efficiency’ through cost minimisation; ‘exploration’ through an access to the right and technologically capable firm vendors/ Suppliers/ players; and ‘exploitation’ from development of global markets. Both outsourcing and offshoring have grown to a great extent either by the number of companies involved or by the number of multiple nations are involved. Hence, addressing both offshoring and outsourcing strategies together can provides value to the supply chain in economical and efficient way. Therefore, this paper is an attempt to model joint outsourcing and offshoring decision integrated with fuzzy-MCDM approaches using fuzzy data to optimise total cost through right selection of suppliers to meet demand of global markets, thus, achieving efficiency, exploration and exploitation. The model addresses qualitative and quantitative criteria in joint decisions and is also illustrated to show the cost effectiveness.