Future work should attempt to address the above deficiencies, however researchers should not underestimate the difficulties involved in getting access to carry out detailed costing within companies, and should be wary of self reported costs as the basis for such costs may not be easily validated. Future research might also investigate how the total cost of outsourcing varies with:
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different transaction volumes;
experience of adopting outsourcing practices; relationship with the outsourcing vendor; industrial practice; and
different product types.
Despite the limitations, we believe that this research, as the first effort to study both the true total costs and companies’ perceptions of the total cost of sourcing from China, revealed that companies generally do not comprehensively measure the costs of global sourcing, and significantly underestimate the true costs incurred. It confirms our earlier findings of the benefit of a comprehensive cost framework, such as that presented in Table I, as a checklist that will prompt companies to think about all the possible sources of cost when sourcing globally. This should both guide their decision-making, and also act to identify possible cost reduction activities. Although this study was based on companies that outsourced to China, we believe that the findings might be equally applicable to other overseas outsourcing, for example, India, Thailand or Vietnam.