Cycle time reduction in outsourcing process: case of an Indian aerospace industry

  • Kaushal Kumar Jha
  • Jitesh J. Thakkar
  • Shashank J. ThankiEmail author


This paper reports a case study of an Indian aerospace industry, XYZ Aeronautics Limited, with an objective to bring reduction in cycle time of outsourcing process. The focus is to identify bottleneck areas and investigate into the improvement opportunities. The paper enriches the present body of knowledge by contributing a methodology and its application for a real-life case study to understand the implications of outsourcing on operational planning. The analysis reported in this research is based on the available knowledge and extensive experience gained while working in the outsourcing department of the case organization for a long period of time. The research integrates action research, longitudinal case study research, and simulation for the detailed and scientific analysis of the problem for a case organization. The study employs a six-step analysis approach for investigating the outsourcing-related issues in case organization. The simulation study has helped to reduce the average cycle time of purchase order placement to 69 days, i.e., improvement by 33.65% over the present 104 days. This would enable the case organization to conduct “what-if” analysis and evaluate the implications of bringing improvements in select bottleneck areas for reducing cycle time of outsourcing process. The investigation is expected to help managers to negotiate on appropriate dimensions with vendors and convince them for the adoption of e-sourcing, e-contract, and e-catalog technologies.


Outsourcing Purchase order Simulation Cycle time Action research 



Aircraft Manufacturing Division


Aircraft Overhaul Division


Automatic replenishment stock


Aircraft on ground


Compound annual growth rate


Chief of production overhaul


Comparison of statement


Cycle time


Repair maintenance and service order


Local/readymade store order


Material sub-contract requirement


Material sub-contract requirement request


Part structure correction


Standard man hour



  1. 1.
    Aertsen F (1993) Contracting out the physical distribution function: a trade-off between asset specificity and performance measurement. Int J Phys Distrib Logist Manag 23(1):23–29CrossRefGoogle Scholar
  2. 2.
    Anttiroiko A, Stephen JB, Pekka V (2011) Innovative trends in public governance in Asia. IOS Press, NetherlandsGoogle Scholar
  3. 3.
    Bağan H, Gerede E (2019) Use of a nominal group technique in the exploration of safety hazards arising from the outsourcing of aircraft maintenance. Saf Sci 118:795–804CrossRefGoogle Scholar
  4. 4.
    Bettis RA, Bradley SP, Hamel G (1992) Outsourcing and industrial decline. Acad Manag Exec 6(1):7–22Google Scholar
  5. 5.
    Boulaksil Y, & Fransoo JC (2010) Implications of outsourcing on operations planning: findings from the pharmaceutical industry. International Journal of Operations & Production Management 30(10):1059–1079Google Scholar
  6. 6.
    Broedner P, Kinkel S, Lay G (2009) Productivity effects of outsourcing: new evidence on the strategic importance of vertical integration decisions. Int J Oper Prod Manag 29(2):127–150CrossRefGoogle Scholar
  7. 7.
    Canez LE, Platts KW, Probert DR (2000) Developing a framework for make-or-buy decisions. Int J Operations Manag 20:1313–1330CrossRefGoogle Scholar
  8. 8.
    Chen KS, Chen KL, Li RK (2005) Contract manufacturer selection by using the process incapability index Cpp. Int J Adv Manuf Technol 26(5–6):686–692CrossRefGoogle Scholar
  9. 9.
    Chen K, Zhao H, Xiao T (2019) Outsourcing contracts and ordering decisions of a supply chain under multi-dimensional uncertainties. Comput Ind Eng (In-press). CrossRefGoogle Scholar
  10. 10.
    Cooper MC, Ellram LM (1993) Characteristics of supply chain management and the implications for purchasing and logistics strategy. Int J Logist Manag 4:13–24CrossRefGoogle Scholar
  11. 11.
    Coghlan D, Brannick T (2001) Doing Action Research in Your Own Organisation. Sage, LondonGoogle Scholar
  12. 12.
    Coughlan P, Coghlan D (2002) Action research for operations management. Int J Oper Prod Manag 22(2):220–240CrossRefGoogle Scholar
  13. 13.
    Dekkers R (2011) Impact of strategic decision making for outsourcing on managing manufacturing. Int J Oper Prod Manag 31(9):935–965CrossRefGoogle Scholar
  14. 14.
    Fontana ME, Aragão JPS, Morais DC (2019) Decision support system for outsourcing strategies. Prod Eng Res Devel 13:547–555. CrossRefGoogle Scholar
  15. 15.
    Fredriksson A, Wänström C, Johansson MI, Medbo L (2015) A structured procedure for materials planning during production transfer. Prod Plan Control 26(9):738–752CrossRefGoogle Scholar
  16. 16.
    Govindan K, Sarkis J, Palaniappan M (2013) An analytic network process-based multicriteria decision making model for a reverse supply chain. Int J Adv Manuf Technol 68(1-4):863–880CrossRefGoogle Scholar
  17. 17.
    Gunasekaran A, Irani Z, Choy K, Filippi L, Papadopoulos T (2015) Performance measures and metrics in outsourcing decisions: a review for research and applications. Int J Prod Econ 161:153–166CrossRefGoogle Scholar
  18. 18.
    Hassanain MA, Assaf S, Al-Hammad AM, Al-Nehmi A (2015) A multi-criteria decision making model for outsourcing maintenance services. Facilities 33(3/4):229–244CrossRefGoogle Scholar
  19. 19.
    Kafuku JM, Saman MZM, Yusof SRM, Mahmood S (2016) A holistic framework for evaluation and selection of remanufacturing operations: an approach. Int J Adv Manuf Technol 87(5–8):1571–1584CrossRefGoogle Scholar
  20. 20.
    Kitcher B, McCarthy IP, Turner S, Ridgway K (2013) Understanding the effects of outsourcing: unpacking the total factor productivity variable. Prod Plan Control 24:4–5CrossRefGoogle Scholar
  21. 21.
    Kremic T, Tukel OI, Rom WO (2006) Outsourcing decision support: a survey of benefits, risks, and decision factors. Supply Chain Manag: Int J 11(6):467–482CrossRefGoogle Scholar
  22. 22.
    Kumar R, Singh H, Dureja JS (2012) An approach to analyze logistic outsourcing problem in medium-scale organization by CFPR and VIKOR. J Manuf Technol Manag 23(7):885–898CrossRefGoogle Scholar
  23. 23.
    Law AM, Kelton WD (1991) Simulation Modeling and Analysis, 2nd edn, McGraw-Hill, New YorkGoogle Scholar
  24. 24.
    Law AM, Kelton WD (2000) Simulation Modeling and Analysis, 3rd edn, McGraw-Hill, New YorkGoogle Scholar
  25. 25.
    Lu Q, Meng F, Mark Goh M (2014) Choice of supply chain governance: self-managing or outsourcing? Int J Prod Econ 154:32–38CrossRefGoogle Scholar
  26. 26.
    Mazzola E, Bruccoleri M, Perrone G (2019) The curvilinear effect of manufacturing outsourcing and captive-offshoring on firms' innovation: the role of temporal endurance. Int J Prod Econ 211:197–210CrossRefGoogle Scholar
  27. 27.
    McDonald, Jacobs (2005) Brand name “India”: the rise of outsourcing. Manag Sci 25(9):831–850Google Scholar
  28. 28.
    McIvor R (2000) A practical framework for understanding the outsourcing process. Supply Chain Manag: Int J 5(1):22–36CrossRefGoogle Scholar
  29. 29.
    Meixell MJ, Kenyon GN, Westfall P (2014) The effects of production outsourcing on factory cost performance: an empirical study. J Manuf Technol Manag 25(6):750–774CrossRefGoogle Scholar
  30. 30.
    Mishra A (2012) China business process outsourcing (BPO) market 2011 & cities outsourcing analysis. Renub Research, RoswellGoogle Scholar
  31. 31.
    Momme J (2002) Framework for outsourcing manufacturing: strategic and operational implications. Comput Ind 49:59–75CrossRefGoogle Scholar
  32. 32.
    Oke A, Onwuegbuzie H (2013) Outsourcing, subcontracting-in and radical innovativeness. J Manuf Technol Manag 24(4):511–535CrossRefGoogle Scholar
  33. 33.
    Olhager J, Persson F (2006) Simulating production and inventory control systems: a learning approach to operational excellence. Prod Plan Control 17(2):113–127CrossRefGoogle Scholar
  34. 34.
    Padhi SS, Mohapatra PKJ (2009) Contractor selection in government procurement auctions: a case study. Eur J Indust Eng 3(2):170–186CrossRefGoogle Scholar
  35. 35.
    Pawar K, Rogers H (2013) Contextualising the holistic cost of uncertainty in outsourcing manufacturing supply chains. Prod Plan Control 24(7):607–620CrossRefGoogle Scholar
  36. 36.
    Poudeh HD, Cheshmberah M, Torabi H, Gavareshki MHK, Hosnavi R (2019) Determining and prioritizing the factors influencing the outsourcing of complex product systems R&D projects employing ANP and grey-DEMATEL method (case study: aviation industries organization Iran). Technol Soc 56:57–68CrossRefGoogle Scholar
  37. 37.
    Quelin B, Duhamel F (2003) Bringing together strategic outsourcing and corporate strategy: outsourcing motives and risks. Eur Manag J 21(5):647–661CrossRefGoogle Scholar
  38. 38.
    Rehme J, Nordigården D, Brege S, Chicksand D (2013) Outsourcing to a non-developed supplier market: the importance of operational aspects in outsourcing. J Purch Supply Manag 19:227–237CrossRefGoogle Scholar
  39. 39.
    Saad N, Kadirkamanathan V (2006) A DES approach for the contextual load modeling of supply chain system for instability analysis. Simulat Model Pract Theory 14(5):541–563CrossRefGoogle Scholar
  40. 40.
    Sabri EH, Gupta AP, Beitler MA (2006) Purchase order management best practices: process, technology, and change management J. Ross Publishing, RichmondGoogle Scholar
  41. 41.
    Sanchez-Rodri C, Hemsworth D, Martinez-Lorente AR (2004) Quality management practices in purchasing and its effect on purchasing’s operational performance and internal customer satisfaction. Int J Log Res Appl 7(4):325–344CrossRefGoogle Scholar
  42. 42.
    Schlosser F, Wagner HT (2011) Applying importance-performance analysis to IT outsourcing: a survey among financial institutions. PACIS 2011 Proceedings. Paper 168.
  43. 43.
    Sislian E, Satir A (2000) Strategic sourcing: a framework and a case study. J Supply Chain Manag 36(3):4–11CrossRefGoogle Scholar
  44. 44.
    Venkatesan R (1992) Strategic sourcing: to make or not to make. Harv Bus Rev 70(6):98–107Google Scholar
  45. 45.
    Voss C, Tsikriktsis N, Frohlich M (2002) Case research in operations management. Int J Oper Prod Manag 22(2):195–219CrossRefGoogle Scholar
  46. 46.
    Westphal P, Sohal AS (2013) Taxonomy of outsourcing decision models. Prod Plan Control 24(4):347–358CrossRefGoogle Scholar
  47. 47.
    Yin RK (1994) Case study research: Design and methods. Sage Publications, Newbury ParkGoogle Scholar
  48. 48.
    Zhang M, Pawar KS, Shah J, Mehta P (2013) Evaluating outsourcing partners' capability: a case study from the pharmaceutical supply chain. J Manuf Technol Manag 24(8):1080–1101CrossRefGoogle Scholar

Copyright information

© Springer-Verlag London Ltd., part of Springer Nature 2020

Authors and Affiliations

  1. 1.Department of Industrial & Systems EngineeringIndian Institute of TechnologyKharagpurIndia
  2. 2.Institute of ManagementNirma UniversityAhmedabadIndia

Personalised recommendations