Make or buy
Are you unsure whether you have the right degree of vertical integration in your company? Are you limited in terms of your flexibility due to being bound to your own production capacity? Do you believe that you could produce parts that are currently being provided by third parties, on your own, at lower costs?
The definition of an ideal degree of vertical integration is crucial in order to be able to withstand the ever-growing cost pressure.
To establish an optimal degree of vertical integration, parts have to be determined as “Make”, “Make or Buy” or “Buy “ objects in consideration of qualitative and quantitative aspects.
Core competencies and technology analysis as well as strategy workshops help to build up this classification. The result is a clear and transparent list of parts which have to be produced exclusively in-house or which have to be purchased from third parties. The remaining “Make or Buy”-parts are case-specific, therefore the parts have to be evaluated separately.
A three-step-method provides a basis for decisions by considering quantitative and qualitative aspects. Factors from different strategic criteria groups like quality, sales quantity, risk and capacity & flexibility are integrated into this approach. The company strategy which is used to determine parts in Make or Buy categories is also used for this evaluation of parts.
Due to the case-neutral basis, single cases can be generate und evaluated easily. A comparison of different scenarios inside a case creates a detailed and comprehensible foundation for Make or Buy decisions.
For further information or if you have any questions please do not hesitate to contact us.
Dipl.-Ing. Bastian Fränken
Cluster Produktionstechnik 3A 452
Tel.: +49 241 80-20618
Fax: +49 241 80-22293