In an increasingly competitive international context, companies need to return their focus to strategic, high-added-value business lines, while benefiting from the improved performance of their suppliers. Make or buy is a manufacturing strategy decision that requires a clear and rational strategic and financial analysis of business lines.
Context and challenges
The make-or-buy decision is central to manufacturing, because it involves the in-depth analysis of a company’s business lines and its competitive advantage levers. It also facilitates rational decision-making on the company’s strategic positioning.
The level of outsourcing should take into account several criteria, which form the basis of the make-or-buy analysis:
- Strategic nature of the business
- Competitive differential between an internal and an external solution
- Ability to subcontract and engage with partners in certain areas of the value chain
- Ability to control suppliers and integrate them into optimized flows of goods and information.
Beyond offering a simple theoretical analysis, the make-or-buy decision is a very useful way of comparing internal perception with external market reality; it provides essential perspective for management teams.
How can Argon Consulting help you?
- Breaking down activities, based on primary differentiation criteria
- Supporting the implementation (on an operational level)
- Defining the business case (to make it possible to quantify the savings to expect from the process)