Understanding the Make-Buy Decision Process

摘要

Having dealt with the qualitative and quantitative costs of the make-buy decision in previous columns, let's consider a final set of four factors needed to complete this process: 1. Review the capabilities of current suppliers. To determine whether current suppliers can handle projected increases in orders, review the firm's technical, financial, manufacturing, and quality-related capabilities to evaluate likely future strengths. 2. Evaluate new suppliers. Compare their capabilities to those of the best current suppliers or industry leaders. This benchmarking positions new suppliers relative to appropriate standards and indicates the real value added by lower prices for inputs.