Modular Outsourcing: Pattern and Selection

The decomposition and integration of module are the most important processes in the outsourcing of complex products. Two typical patterns are analyzed, which are supplier integration mode and integrator integration mode. According to the contract theory, the two optimal models are set up through adding task conflicting variables to the classical incentive model. The rent of the two patterns paid by system integrating manufacturer is compared and analyzed. The conclusion indicates that the task confliction can influence outsourcing pattern selection of systems integrated manufacturer. It should choose multi-suppliers to finish the respective module task; otherwise, it should select single supplier to finish multi-module task.