of 3 - Center for Global Outsourcings

giving weight to the sub criteria, defining the scoring system used for the criteria and sub
criteria, and visiting site of supplier.
The sixth stage is negotiations & making contracts. There are different pricing methods used in
outsourcing contracts such as: Fixed price, unit pricing, cost-Plus pricing (based on the cost
price), variable pricing, risk and reward sharing, and performance based pricing (based on the
incentives). In this stage, the time and conditions of using each of these methods are important.
The seventh stage is monitoring and controlling. Since the suppliers are outside the
administrative and managerial circle of the organization, it is necessary to control and manage
the relations with them using different appropriate methods and mechanisms in a way that the
organization’s expectations are fulfilled in regard to the outsourced activity or service. For so
doing, controlling five factors namely time, costs, quality, changes, and information leak is of
great importance. There are different controlling methods used in outsourcing contracts such as;
market-based controlling model, bureaucracy-based controlling model, and trust-based
controlling model. For each type of mentioned models, should be determined which and how we
can control each supplier about these factors; cost, quality, time, information leak and changes.
The last stage is reviewing and revising. This stage includes methods and criteria used for
gathering and analyzing the information related to the measurement and grading of the
supplier’s actual performance in a continuous time span. In this stage, the buyer organization
must answer to two important following questions: what should be measured? And how often
should measurements be carried out and reports be prepared?
Research Design and Approach
We measured “outsourcing score” by designed decision making model (AHP method) for 32
activities (which have already been outsourced) in four Iranian automobile and automobile parts
producer companies (information about these companies is in. We designed and distributed
questionnaires about outsourcing satisfaction (by Likret method) in these four companies.
We implemented designed framework in IHDM (Iran heavy dies manufacturing) company in
order to make dies and fixtures for TIBA automobile (TIBA is an Iranian automobile that
designed and produced by SAIPA Company). This project consisted of 10 activities/processes
which can outsource or make in house. We measured the rate of outsourcing satisfaction by
designed questionnaire for this project. And we measured the rate of satisfaction for the
previous project in IHDM (making dies and fixtures of SAIPA 132 automobile) too. We should
remind both of these projects in IHDM had same activities. But there was difference about
decision making to outsource/insource activities and how to implement outsourcing. Finally we
measured the customer’s complaint and the rate of outsourcing satisfaction for suppliers
companies in both project by another designed questionnaire.
Results
The relationship between outsourcing scores and the rate of outsourcing satisfaction:
There was direct relationship between model’s scores and the percentage of outsourcing
satisfaction. The relationship between outsourcing’s score and the percentage of outsourcing
satisfaction will be determined through regression method (chart 1).The result of regression was
below forecasting formula:
The percentage of satisfaction with the outsourcing = the score in the model *1.085
Tenth Annual International Daejeon, South Korea P a g e | 23
Smart Sourcing Conference June 28-29, 2012