The question of make or buy is of crucial importance to industrial manufacturers. It demands an in-depth analysis of the company’s strategic activities and its competitive levers.

The level of the outsourcing of manufacturing operations is decided according to a series of criteria, including:

• the strategic character of the activity,
• the ability to subcontract and, where appropriate, to form alliances with partners for certain links of the value chain,
• the competitive difference between in-house and external solutions,
• the capacity to control suppliers and integrate them into optimized physical and data flows.

Key consequences include the reduction of costs, the reduction of capital outlay requirements and the reduction of the need to acquire or maintain skills.

ARGON Consulting helps its customers in:

• the analysis of the stakes of a make or buy approach: breakdown of activities according to key differentiating criteria (volumes, comparison between internal and external costs, critical importance of maintaining skills in the company, availability of internal and external resources, etc.),
• identification of activities that could potentially be outsourced,
• the definition of target subcontracting levels that are compatible with the company’s targets: arbitration between “do or have done”, availability of subcontractors capable of reliably and durably taking on the outsourced tasks, purchasing and control processes, terms and conditions of the contract and reciprocal commitments (bonus / malus clauses and criteria),
• the definition of the business case that provides an objective view of the gains to be made through the initiative,
• the impact of the target on processes and internal needs for skills: in particular on the control of subcontracting and on information flows (forecasts, plans, etc.),
• implementation support,
• tracking of quantitative and qualitative gains using a scorecard to measure changes in performance compared with the objectives set for the initiative,
• transfer of skills and know-how to the customers’ teams.