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Student’s Name
Professor’s Name
Course
Date
Make or Buy
During
this semester, the concept of make or buy was predominant in the
"Introduction to Supply Chain Management Strategies." More often than
not, firms find themselves in a dilemma when acquiring organizational suppliers
either for enhancing manufacturing activities or for internal consumption.
During the procurement process, an organization can make or buy its materials
as long as the selected method has a considerable benefit over the other available
alternatives. However, making can primarily attribute the ability of a firm to
manufacture due to the endowment machinery and expertise to produce what they
want to use instead of buying from suppliers. Make or purchase concept is
import in production planning and supply chain, in general, since it enables
firms to enhance quality, reduce acquisition cost, and solve the challenges of
delayed deliveries and stock out.
First,
reasons for making-decision varies from one industry to another, and the area of
operation within the market will determine the viability of selecting this
decision. For example, considering other competitors, if a firm can make at a
lower cost than other players, the choice is deemed to be appropriate.
Promoting a make-decision approach in an organization can be a blueprint
towards placing the firm is a competitive position owing to convenience gained
from such practice. According to Tadelis
(435), competitive performance of a company relies on the convenience which
entails getting material at the right time, at the right cost, and in the best
quality to ensure operation plans are not halted.
However, in case a firm lack financial capacity, technological know-how to effectively implement a make-decision, they opt to buy from the competent suppliers in the market. In such instances, the sourcing process plays a vital role in enabling the buyer to get the best quality from the existing sources. Most retailers use this method in buying suppliers which have gained popularity to the extent of global sourcing. Businesses have an increased inclination towards buying goods from international markets due to availability to a wide variety,...
