Outsourcing in the supply chain as a driver of vulnerability – The case of the Republic of Serbia

What the paper says

Purpose: Outsourcing is a widely used supply strategy for activities in which firms lack sufficient or appropriate competencies. While it enhances efficiency, extensive outsourcing may reduce transparency and control, thereby limiting firms’ ability to detect disruptions and increasing supply chain vulnerability. This study examines to what extent outsourcing contributes to supply chain vulnerability in the context of the Republic of Serbia. Design/methodology/approach: An empirical survey was conducted among 52 large enterprises from various sectors in Serbia, all of which were listed among the most successful based on their net profit. Hypotheses were tested using statistical methods, specifically the χ2 test, cluster analysis, analysis of variance and linear regression in SPSS. Findings/results: The survey results indicate that the proportion of outsourced activities did not significantly affect supply chain vulnerability (p = 0.695 and p = 0.556), while greater dispersion of outsourced activities (p = 0.005 and p = 0.003) and higher supply chain complexity (p = 0.014 and p = 0.007) were statistically significant. These findings suggest that although the share of outsourced activities alone does not increase vulnerability, both dispersion and complexity significantly elevate it. Practical implications: These findings do not argue against outsourcing but emphasise the importance of enhanced risk management and contingency planning. Originality/value: This pilot study provides initial empirical evidence on the impact of specific outsourcing activities on supply chain vulnerability. It also lays the foundation for future research, potentially extending to broader studies across the Western Balkans, given the similar business context and interconnections among enterprises in the region.