What follows after the decision to offshore production? A systematic review of the literature

The purpose of this paper is to consider research that has been conducted on the offshoring of manufacturing activities, and more specifically to synthesize results regarding the question of how firms integrate and govern geographically dispersed production activities.

A set of 100 carefully selected articles on offshoring and offshore outsourcing of production published in international peer-reviewed journals during the past 15 years are systematically analyzed. The focus is on 34 articles that touch on issues of integration and governance of dispersed production facilities.

Offshoring and offshore outsourcing of production is a cross-cutting subject of research. Most research is recent and largely conceptual. Furthermore, the findings suggest that the decision to offshore is often followed by the need to build more integrated operations.

One of the major constraining factors of this research, like many literature reviews, is a limited sampling period.

The paper demonstrates the importance of both intra-firm relationships and governance in dispersed production operations. The authors suggest that new offshore plants need to learn and develop their own capabilities in new markets on one hand, while also developing governance structures to facilitate coherence within a production network on the other hand.

This is a valuable paper for researchers in offshoring and global manufacturing areas. While literature reviews in other areas such as information systems offshoring and services offshoring do exist, one specific to production offshoring was lacking. This paper should be seen as a systematic and concerted effort for research and knowledge in this area.