Essential Factors in Strategic Make-or-Buy Decision Making PPT

This PPT slide, part of the 25-slide Manufacturing Strategy: Make vs. Buy PowerPoint presentation, presents 3 critical attributes essential for a successful make-or-buy decision process. The first attribute, Cost Transparency, emphasizes the importance of thorough cost comparisons between internal and external manufacturing options. Organizations are urged to not only assess external quotes, but also to consider internal conversion costs, including fixed costs, logistics, testing, and quality assurance. This comprehensive cost analysis is crucial for making informed decisions.

The second attribute, Business Models, highlights how leading firms utilize business case models to gather extensive information. This information aids in preparing accurate forecasts necessary for making strategic decisions. The analysis must encompass various elements, including strategic assessments, detailed project plans, risk evaluations, and financial analyses. This structured approach ensures that decisions are grounded in solid data and strategic foresight.

The final attribute, Recurrent Review of Decisions, stresses the need for ongoing evaluations of analyses and environmental factors. Given that conditions can change rapidly, organizations must regularly reassess their make-or-buy decisions. The slide suggests that thresholds should be established for products, and if these thresholds are crossed, it should prompt a reevaluation of the decision. This proactive approach allows organizations to remain agile and responsive to shifting market dynamics.

Overall, the insights provided in this slide serve as a guide for organizations looking to refine their decision-making processes regarding manufacturing strategies. The emphasis on transparency, comprehensive analysis, and regular review is critical for achieving optimal outcomes in the make-or-buy process.

This slide is part of the Manufacturing Strategy: Make vs. Buy PowerPoint presentation.

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