Strategic Framework for Make-or-Buy Decisions PPT

This PPT slide, part of the 23-slide Make-or-Buy Decision Analysis PowerPoint presentation, outlines a strategic framework for evaluating the decision to outsource products or services. It emphasizes the critical nature of understanding the strategic importance of the product or service in question, as well as the necessary processes, technologies, or skills involved in its delivery. The "Decision Rule" section clearly states that in-house capabilities should be prioritized when a product or function is deemed essential to a company's performance. This suggests a careful consideration of what constitutes a core operation.

The "Role of CPO" section highlights the responsibilities of the Chief Procurement Officer in facilitating discussions among senior management. It indicates that the CPO must assess which organizational aspects are vital enough to warrant in-house management rather than outsourcing. This involves leveraging knowledge of the supply base to evaluate potential outsourcing partners, particularly their technological capabilities and product development processes.

Furthermore, the CPO must determine if the organization possesses the necessary skills and resources to effectively manage these outsourcing relationships. The slide concludes with a note on the importance of maintaining quality and cost efficiency throughout the contract's duration. This underscores the need for ongoing evaluation to avoid subpar results from outsourcing arrangements.

Overall, the slide serves as a guide for executives to navigate the complexities of make-or-buy decisions, ensuring that strategic considerations are at the forefront of their outsourcing strategies.

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Make or Buy Decision Analysis Product Development