System sourcing—opportunities and problems

System sourcing is receiving increasing attention in purchasing. Previous research has dealt mainly with the opportunities provided by the approach. The aim of this paper is to explore its inherent complexity. System sourcing is analysed with regard to the system definition applied, the division of labour in development and manufacturing tasks, and the capabilities of the customer and the potential suppliers. The most important conclusion is that system sourcing strategies must consider the relationship between the partitioning of the total system in the design phase and the aggregation of the various subsystems in final assembly. The paper ends with four managerial implications.