The magnitude of a product recall: offshore outsourcing vs. captive offshoring effects

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4 Citazioni (Scopus)

Abstract

The escalation in product recalls in recent years is attributed to the rise of globalisation and associated challenges of offshoring. Extant SCM research suggests that product recalls have a significant negative impact on financial performance, but gaps exist relative to the managerial actions to minimise their impact. Recall response strategies have become more important in the press, given that a single recall may result in the mandatory withdrawal of millions of products from the market, with firms incurring enormous logistics costs and brand damage. In this study, we address this gap in the research, and using a measure of product recall defined as the volume of products withdrawn from the market due to product quality failure. We explore the scale of the recall in the context of pharmaceutical sector global sourcing strategies, exploring whether the variation in global sourcing decisions not only increases the likelihood of a recall, but also influences the capability to minimise the total cost of recall. Our results suggest that offshore outsourcing and captive offshoring have opposite effects in terms of their influence on the magnitude of product recall. We summarise the implications through a compelling set of insights for future global sourcing strategy research themes.
Lingua originaleEnglish
pagine (da-a)4211-4227
Numero di pagine17
RivistaInternational Journal of Production Research
Volume57
Stato di pubblicazionePublished - 2019

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Outsourcing
Drug products
Logistics
Costs
Product recall
Offshoring
Offshore outsourcing
Global sourcing
Sourcing strategy

All Science Journal Classification (ASJC) codes

  • Strategy and Management
  • Management Science and Operations Research
  • Industrial and Manufacturing Engineering

Cita questo

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title = "The magnitude of a product recall: offshore outsourcing vs. captive offshoring effects",
abstract = "The escalation in product recalls in recent years is attributed to the rise of globalisation and associated challenges of offshoring. Extant SCM research suggests that product recalls have a significant negative impact on financial performance, but gaps exist relative to the managerial actions to minimise their impact. Recall response strategies have become more important in the press, given that a single recall may result in the mandatory withdrawal of millions of products from the market, with firms incurring enormous logistics costs and brand damage. In this study, we address this gap in the research, and using a measure of product recall defined as the volume of products withdrawn from the market due to product quality failure. We explore the scale of the recall in the context of pharmaceutical sector global sourcing strategies, exploring whether the variation in global sourcing decisions not only increases the likelihood of a recall, but also influences the capability to minimise the total cost of recall. Our results suggest that offshore outsourcing and captive offshoring have opposite effects in terms of their influence on the magnitude of product recall. We summarise the implications through a compelling set of insights for future global sourcing strategy research themes.",
keywords = "Leisure and Hospitality Management; Management Science and Operations Research; Industrial and Manufacturing Engineering, agency theory; captive offshoring; country distance; offshore outsourcing; product recalls; Strategy and Management1409 Tourism",
author = "Manfredi Bruccoleri and Erica Mazzola and Giovanni Perrone and Robert Handfield",
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language = "English",
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journal = "International Journal of Production Research",
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TY - JOUR

T1 - The magnitude of a product recall: offshore outsourcing vs. captive offshoring effects

AU - Bruccoleri, Manfredi

AU - Mazzola, Erica

AU - Perrone, Giovanni

AU - Handfield, Robert

PY - 2019

Y1 - 2019

N2 - The escalation in product recalls in recent years is attributed to the rise of globalisation and associated challenges of offshoring. Extant SCM research suggests that product recalls have a significant negative impact on financial performance, but gaps exist relative to the managerial actions to minimise their impact. Recall response strategies have become more important in the press, given that a single recall may result in the mandatory withdrawal of millions of products from the market, with firms incurring enormous logistics costs and brand damage. In this study, we address this gap in the research, and using a measure of product recall defined as the volume of products withdrawn from the market due to product quality failure. We explore the scale of the recall in the context of pharmaceutical sector global sourcing strategies, exploring whether the variation in global sourcing decisions not only increases the likelihood of a recall, but also influences the capability to minimise the total cost of recall. Our results suggest that offshore outsourcing and captive offshoring have opposite effects in terms of their influence on the magnitude of product recall. We summarise the implications through a compelling set of insights for future global sourcing strategy research themes.

AB - The escalation in product recalls in recent years is attributed to the rise of globalisation and associated challenges of offshoring. Extant SCM research suggests that product recalls have a significant negative impact on financial performance, but gaps exist relative to the managerial actions to minimise their impact. Recall response strategies have become more important in the press, given that a single recall may result in the mandatory withdrawal of millions of products from the market, with firms incurring enormous logistics costs and brand damage. In this study, we address this gap in the research, and using a measure of product recall defined as the volume of products withdrawn from the market due to product quality failure. We explore the scale of the recall in the context of pharmaceutical sector global sourcing strategies, exploring whether the variation in global sourcing decisions not only increases the likelihood of a recall, but also influences the capability to minimise the total cost of recall. Our results suggest that offshore outsourcing and captive offshoring have opposite effects in terms of their influence on the magnitude of product recall. We summarise the implications through a compelling set of insights for future global sourcing strategy research themes.

KW - Leisure and Hospitality Management; Management Science and Operations Research; Industrial and Manufacturing Engineering

KW - agency theory; captive offshoring; country distance; offshore outsourcing; product recalls; Strategy and Management1409 Tourism

UR - http://hdl.handle.net/10447/342972

UR - http://www.tandfonline.com/toc/tprs20/current

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VL - 57

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EP - 4227

JO - International Journal of Production Research

JF - International Journal of Production Research

SN - 0020-7543

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