Effectively managing vertical supply relationships-a risk management model for outsourcing.pdf


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Effectively managing Introduction
Having studied the structure of their supply
vertical supply chains, managers may decide that they wish to
relationships: a risk outsource certain activities that are currently
undertaken by internal staff. Outsourcing is
management model for defined as the transfer of previously in-house
outsourcing activities to a third party. Over the past
decade, there has been a marked increase in
Chris Lonsdale the use of this practice, anisations
outsourcing activities ranging from cleaning
and catering services to the IT function,
which can often account for a spend running
into tens of millions of pounds.
It has been noticeable, however, that most
of the research undertaken into outsourcing
The author has revealed that a majority of managers are
Chris Lonsdale is Programme Director of the MBA in dissatisfied with the e of their deci-
Strategy and Procurement Management and a Research sions. For example, a recent study showed
Fellow at Birmingham Business School, The University of that only 5 per cent of managers felt that the
Birmingham, UK. arrangement had met its objectives, with the
majority reporting a mediocre e (PA
Keywords Consulting Group, 1996).
The view of the author is that such statistics
Outsourcing, Supply chain management, are not due to there being any inherent flaw in
Risk management, Resource manag

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