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Discuss what kinds of products or services should be procured from outside the organization Answer

Discuss what kinds of products or services should be procured from outside the organization. Also discuss what contract type(s) you might use and why.

 

The decision to make or buy depends on several factors.  According to the text (p. 844), an analysis should be done as outlined below. While this method can be utilized for just about anything, I know that my organization uses this method for manufacturing of handsets, which in tern the same parts are used for repair operations.  The repair operations have been outsourced but the decision to do so and where certain products are allocated is done by a different method.  I don’t know or understand all of the detail around that part. Make Decision:

  • Less Costly
  • Easy integration of operations
  • Utilize existing capacity that is idle
  • Maintain direct control
  • Maintain design/production secrecy
  • Avoid unreliable supplier base
  • Stabilize existing workforce

Buy Decision:

  • Less Costly
  • Utilize skills of suppliers
  • Small volume requirement
  • having limited capacity or capacity
  • Augment existing labor force
  • Maintain multiple sources (qualified vendor list)
  • Indirect control
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