Supply Chain Management relies on certain process tools to evaluate resource flow between suppliers and the transformed operation management systems. A such tools are focused.
Make or buy decision – the operation manager must decide whether to make a given product internally or buy it from a supplier. Make or buy analysis includes a number of steps that produce a final decision.
Assess the relationship of the product to the firms ore competencies
Evaluate the suitability of product characteristics for outsourcing
i) Lower production cost ii) Unsuitable suppliers iii) Assure adequate supply (quality or delivery)
iv) Utilise surplus labour and make a marginal contribution v) Obtain desired quality vi) Remove supplier collusion vii) Obtain unique item that would entail a prohibitive commitment for a supplier< viii) Maintain organizational talent and to avoid lay-off of personnel. ix) Protect proprietary design of quality x) Increase or maintain size of the company
i) Lower acquisition cost ii) Preserve supplier commitment iii) Obtain technical or management ability iv) Inadequate capacity for inhouse manufacture v) Reduce inventory costs vi) Ensure alternate sources of supply vii) Inadequate technical or managerial resources viii) Reciprocity ix) Item is protected by a patent or trade secret x) Free management to focus on its primary business.
Supplier scheduling – this controls release of order and continuing communications of priorities, needs of quantities between suppliers and the buying organization operations management system.
Value analysis – it is a structural process that seeks to improve a product sig while maintaining its functional characteristics and marketing appeal to customers. There are various profits obtained by this
Participants