Information Technology, Production Process Outsourcing and Manufacturing Plant Performance
Bardhan, I., J. Whitaker, and S. Mithas. “Information Technology, Production Process Outsourcing and Manufacturing Plant Performance,” Journal of Management Information Systems (23:2) 2006, 13-40.
39 Pages Posted: 8 Jul 2019
Date Written: May 9, 2006
What is the role of information technology (IT) in enabling the outsourcing of manufacturing plant production processes? Do plant strategies influence production outsourcing? Does production process outsourcing influence plant performance? This research addresses these questions by investigating the role of IT and plant strategies as antecedents of production outsourcing, and evaluating the impact of production outsourcing and IT investments on plant cost and quality. We develop a theoretical framework for the antecedents and outcomes of production outsourcing at the plant level. We validate this theoretical framework using cross-sectional survey data from U.S. manufacturing plants. Our analyses suggests that plants with greater IT investments are more likely to outsource their production processes, and that IT spending and production outsourcing are associated with lower plant cost of goods sold and higher product quality improvement. Our research provides an integrated model for studying the effect of IT and production outsourcing on plant performance.
Keywords: IT investment, production process outsourcing, plant strategy, plant performance, manufacturing, empirical research
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