What Is Supply Chain Management Term Paper Example | Topics and Well Written Essays - 1000 words

What Is Supply Chain Management - Term Paper Example The make-buy decision: Today, Managers have to make a lot of decisions for the smooth running and cost efficiency in an organization. The make-buy decision is one of the decisions they have to deal with on a regular basis, especially in this time of cutthroat competition. The make-buy decision refers to the decision that a manager needs to make in terms of producing a certain part required for the final product in-house, or purchasing it from an external source, that is outsourcing. The main factors that play a role in making this decision are cost efficiency and the capability of production of the required material. Some of the reasons why organizations prefer to make their required products are Better cost efficiency, higher quality control, lack of competent suppliers for the product, a necessity to maintain confidentiality and guarantee of continuous supply of the said material. Sometimes, however, a manager might prefer to outsource the products due to reasons such as lack of ex pertise for the making of the product, inability to produce the required quantity, specific brand preference for better output, cost-effectiveness when it comes to purchasing the product, etc. Sourcing strategies and supply chain configurations While outsourcing products, the decision makers at organizations, must think of the various aspects that will affect the organization, not just in the manufacturing of the product, but also the image of the organization. An outsourcing strategy must be simple. It must take into account the various factors that have resulted in coming to the buying decision over the making decision. For instance, the strategy must involve a deep reflection on the cost factor. By comparing the technological differences between the various optional outsourcing countries, a decision can be reached as to which alternative can be picked to ensure the greatest cost efficiency. Thought and research must also be put into the marketing strategy of the company. That is, outsourcing the manufacturing of a product to a low-cost country may work wonders if the product is sold overseas but may completely backfire if it needs to be sold in the immediate vicinity of the manufacturing plant, for the simple reason that the costs will not match.