Introduction
The concepts of cost, technology and the workforce type when totally focused on representing the ideal aspects that favor the incorporation of make or buy decision. This factor forms a basis on which the company can be able to advance or not or where the company can transform to a more advanced state from its past experiences. Competencies’ capabilities and resources can be revived and respective entailed to present the above attributes.
Pricing and product cost
The concept of pricing and the cost greatly plays a key role in the implication of the decision entailed by make and buy. The best assessment of discussed purchases can be obtained through the implementation of the various sources that have been entailed in the selection approach. In most types of acquisitions, the cost or price may differ. For example, in acquisitions where the necessity is clearly defined and the risk of fruitless agreement presentation is negligible, the cost may be considered in the application of the source selection.
The transaction process is appropriate when it meets the company’s interest where the lowest price offer is considered instead of the highest offer. The transaction process applies when the following are considered. The process allows transactions amongst selling value and non-selling factors which allows the company to admit another proposal than lower-priced ones. Alleged payback of the proposals that are higher priced takes advantage of the extra expenses and the transaction justified must be documented in a file. In this case, the lowest price is considered in principle satisfactory where the process of source selection is appropriate and its value considered the best. The following applies when using the process of the technically accepted lowest price. Factors of assessment that set up necessities of acceptance are set into view to soliciting. It should be specific that the award is prepared to base price evaluation on a proposal that meets or exceeds accepted standards for factors that are not cost-related. The propel is assessed to be acceptable and not rated based on price and non-price factors.
Technology
Acting on the make-or-buy decision entails the incorporation of various technologies and potential. Among the factors to consider when undertaking a make or buy decision is technology. It is the practical application of scientific principles. It is putting science into reality, i.e. the product of science. The item or equipment to be either bought or made and its technological links should be in line with the environmental elements in that neither its purchase nor the technology involved in its manufacture should be an environmental degradation activity.
Economically the equipment or the technology either bought or involved in its making should be the company’s financial muscle. It also should be within both the international and country’s standards as well as within the rules and regulations of the existing laws, similarly, it must be acceptable within the social and cultural measures.
The technology involves the methods or skills that combined lead to the final product. The skills to be performed, during the manufacturing process is very essential. In terms of labor, there are the highly skilled which can be taken to mean highly experienced professionals, the skilled manpower and the unskilled laborers. Considering the skills to perform the process would determine the quantity of personnel and the environment to set up the plant in that where the company can access skilled laborers. Those with the that are within the company’s reach.
The issue of the need for technical skill as an after-sale service if you buy, in order to make the item operational or the need of operators in the process of making the commodity. If there is any need for support skills and how far this technical skill can be accessed and who is the person offering this technology. Some technologies are foreign and that technical servicing requires expatriates and therefore requires their importation. This favors most of the time buying the commodities. However, there is a situation where only their advice is required and can be accessed through other means without necessarily having him or her in person. The company can also take the option of training its own staff and therefore making it convenient to make the commodity rather than purchasing it.
Ownership of the technology, as well as the process, is also essential since it is subject to manipulation and changes that would lead to its improvement to the required standards. If the technology company is owned or can be easily adapted then it is worth engaging in production. If not then buying the commodity becomes the best option. Once the company owns the technology it makes it possible to avoid an illegal transfer that leads to the production of counterfeits that affects it in terms of sales.
Technology is characterized by changes and advancements every now and then. As time goes by there is always that urge to improve on the existing items in order to catch up with the increasing demands and standards. Putting this in mind the company should consider the ability of the commodity to cope with the changes. It should put into account whether the technology be used to make the commodity can stand the taste of time or it is flexible to suit the demands of the market, or if the item to be bought was designed by technology to make it long-lasting.
The quality of the commodity is also important. The company can only engage in the manufacture of an item if the quality is assured and is high and that in any way it does not pose any threat to the users or to the environment so that the maximum benefits can be accrued and minimized negative effects. Any item to be bought should be of high quality exceeding that of any company can think of to be in a better position to make it.
Insourcing and outsourcing
Whereas outsourcing can be considered as a factor to be considered in a company’s progression, insourcing also greatly enhances the ability to focus on the making and decisions, since the central issues can be based on the employee and their motivation to the type of work being guaranteed. Insourcing entails the concept that brings forth back the outsourced functions to the business or company. Through this process, the company is able to clearly incorporate a make and buy aspects so as to ensure that all the required essential process is able to be undertaken smoothly. A better and more streamlined process ought to be streamlined in case some loopholes start to emerge.
This concept frequently engages the idea of bringing in professionals to occupy the provisional requirements that are onsite. Insourcing can occur when a business venture acquires new paraphernalia or coaches its member on how to perform tasks that would in this case be given to others specializing in outsourcing.
In some cases, the outsourcing company might end up attaining unprofitable accounts in the event that the company being outsourced fails to coupe up with the agreements. On the other hand, insourcing paves a great setback since bringing the factions that were outsourced back in-house has very many processes that are involved. First, the concept has to be instilled in the leaders and workforce so that they can really understand its implications and ensure that the right professional to, tackle the work is chosen. When this concept is understood, the process will go on smoothly, therefore, having a resultant impact on the organization.
Conclusion
For effective transactions that involve bringing back inside the outsourced process, the human resource executives have to have communicative strategies that will be able to support the shift.in this instant, the right resource will also be maintained in the team so as to facilitate improved service provision. In many instances, the repatriation of the human resource outsourcer may depend on whether there was a split in the business models overhauls, the relative changes that are experienced and the natural expiration of an agreement. Collaboration people management and communication are the principal factors that ought to be considered during sourcing for cost-effectiveness. Therefore for any decision to be totally fostered the impacts have to be entailed so as to ensure that there is equitable distribution of the laid procedures that foster effective service and product use
Bibliography
Patel Vijay (2006) Management of services within the company setup: Focusing on the strategic market plans.Longman publishers (2) 12 -17.