Experience Creates Reliability
ZLU Consulting and Management
Make-or-buy
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A strategic question posed before any optimisation or cost reduction is: Should we in-house or outsource? The evaluation of existing (key) competencies, resources, performance and cost transparency lays the ground for this far reaching decision. Make-or-buy decisions are made in regular intervals for strategic production areas, purchase of components, logistics services and non-value-creating tasks.
Choosing a reliable strategic partner is the most important aspect. Opaque structures and processes can not be outsourced profitably. Deliberations on returning to reasonable in-sourcing surface quickly. In-sourcing is an effective alternative, if viewed in an objective way and if all effects are quantified.
Make-or-buy questions then again arise during operative business: Should this scope of work still be done in-house? Decision making rules and check lists that quantify a statement regarding the single case and its effects are necessary. Changing operative influences such as capacity utilisation and market situations for contracts and deliveries play a large role and flexibility must be ensured.
Key Questions
- Are the true costs, services and performances known?
- What are the variable factors that decision making parameters depend on?
- How can decisions be justified transparently then followed and taken into regard for coming deliberations?
