Make or Buy
Outsourcing, Make or buy (Outsourcing in personal computing industry Dell, Acer, HP) What can outsouce? What can produce? Why are they doing it?
Outsourcing is a task or the process that the employee within the business could able to perform it however, the organization itself is contracted to third party to perform that function internally or certain period of time without purchasing it as a service. For example, Dell has been outsourced some of the production units to China and India to cut cost and satisfy the customers need as well as to accommodate lower cost. Some organizations do outsourcing just because they are hard pressed for time, or because they believe outsourcing can save them money. Careful planning and assessment of one’s requirements are needed for any organization before it goes for outsourcing.
Make or buy is a decision that evaluate the costs and benefits of manufacturing a product or services against purchasing it. If the purchase price is higher the cost the firm to make it, or if the firm has excess capacity that could be used for that product, or the manufacturer's suppliers are unreliable, then the manufacturer may choose to make the product. This assumes the firm has the skills and necessary equipment, access to raw materials, and the ability to meet its own product standards.
A firm can manufacture a product by itself. It may also receive an offer from an outside supplier to supply that product. Such problem of make or buy can be found in companies which manufactures the goods assembling various sort of components parts like Television, Motor car, Watch, Computer etc. The decision to make or buy may be motivated by cost leadership and/or differentiation strategies. Making instead of buying or buying instead of making may be one way of reducing the cost of producing the main product.
Alternatively, choosing to make or buy may be a way of increasing the quality of the component and thus increasing the overall quality of
Outsourcing is a task or the process that the employee within the business could able to perform it however, the organization itself is contracted to third party to perform that function internally or certain period of time without purchasing it as a service. For example, Dell has been outsourced some of the production units to China and India to cut cost and satisfy the customers need as well as to accommodate lower cost. Some organizations do outsourcing just because they are hard pressed for time, or because they believe outsourcing can save them money. Careful planning and assessment of one’s requirements are needed for any organization before it goes for outsourcing.
Make or buy is a decision that evaluate the costs and benefits of manufacturing a product or services against purchasing it. If the purchase price is higher the cost the firm to make it, or if the firm has excess capacity that could be used for that product, or the manufacturer's suppliers are unreliable, then the manufacturer may choose to make the product. This assumes the firm has the skills and necessary equipment, access to raw materials, and the ability to meet its own product standards.
A firm can manufacture a product by itself. It may also receive an offer from an outside supplier to supply that product. Such problem of make or buy can be found in companies which manufactures the goods assembling various sort of components parts like Television, Motor car, Watch, Computer etc. The decision to make or buy may be motivated by cost leadership and/or differentiation strategies. Making instead of buying or buying instead of making may be one way of reducing the cost of producing the main product.
Alternatively, choosing to make or buy may be a way of increasing the quality of the component and thus increasing the overall quality of