Research On Vendor Selection In Outsourcing

Traditional integrative companies are witnessing huge challenge during economicglobalization and the rapid development of information technology and electronic business.Cooperation with external companies becomes an important issue, and outsourcing is one ofthe strategies to tackle the problem. Vendor selection, a key factor, is increasingly concernedin the area of management research.The main purpose of this paper is to analyze the mechanism of corporate outsourcingbusiness, thereby discuss the process and methodology of outsourcing vendor selection.First, the definition and classification of outsourcing is elucidated based on a summaryof past research of outsourcing vendor selection. Further, according to corporate competitiveadvantage and strategy, the motive of outsourcing is classified into four categories, which isthen regarded as the four major criteria of outsourcing vendor selection with others regardedas minor ones.Next, the paper introduces the protocol of outsourcing vendor selection, especially byapplying the Grey Relating Method in:ⅰ) analysis of the partition of the factors in the vendorselection;ⅱ) the Grey relating Decision-Making in vendor selection; andⅲ) the GreyRelating Control after the selection.Finally, a practical case is presented to exemplify the application of the Grey Relatingtheory in outsourcing vendor selection and summarize its advantages.