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make or buy desions within dyson

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Make-or-Buy? An important question to many organisations, but what is make-or-buy? "Make-or-buy is a business decision that compares the costs and benefits of manufacturing a product or product component against purchasing it. If the purchase price is higher than what it would cost the manufacturer to make it, or if the manufacturer has excess capacity that could be used for that product, or the manufacturer's suppliers are unreliable, then the manufacturer may choose to make the product. This assumes the manufacturer has the skills and equipment necessary, access to raw materials, and the ability to meet its own product standards" (www.answers.com). For this assignment I'll be analysing whether or not a chosen company (Dyson ltd) should outsource or internally manufacture one of its operations. In addition to that I'll be looking at what complications such decision might have, as well as analysing how the purchasing team can make the best possible decision by using sources of information and departments within the organisation. The purchasing function is of growing importance in virtually every firm. Firms across all industries are concentrating attention and resources on their core competencies and shedding functions that are not central to their mission. As the number of outsourced components, services, and technologies increases, so does the importance of procurement. ...read more.


Dyson ltd though a very well established business should understand the various types of goods available in the market and for the procurement of these goods, it should analyse all the possibilities before making the final decision. To make life easy and successful Dyson ltd should consult other functions within the organisation to come to decision. Interrelated functional units along the value chain form business organizations. The relationships among these functional units vary from one organization to another, but are usually well defined in organizational charts. These interrelationships, in turn, create dependence among the functional units. In the context of customer service, the interrelationships among functional units are viewed as processes. The roles performed by a functional group along the value chain for others, can be regarded as "outputs" of the former. The functional group receiving the output is considered the "internal customer." To better serve internal customers, the functional groups providing outputs must first identify their internal customers, their corporate needs, and their expectations. Typically, internal customers for any organisation include production, financial officers, marketing personnel, and Human resources personnel, purchasing etc. Organisational control is the process whereby an organisation ensures that it is pursuing strategies and actions, which will enable it to achieve its goals. ...read more.


The relationship with the supplier is important for Dyson ltd not only because it has impact on the customer relationship, but also because it can affect the very competitiveness of a business. Bonding with the existing suppliers is very important. It will be beneficial for Dyson ltd to have long-term supplier relationship for a long time. Some of the benefits of having long-term relationships are: * Top level commitment * Flexibility * Total quality management * Proactive purchasing * Openness and trust * Working together Companies that create relationships quickly with the best suppliers have the potential to belong to more powerful demand chains than their competitors, and possibly even exclude them from the chains. Increasingly, competition will be between chains of relationships rather than among individual companies. The winners will be those companies that opened up to integrate their capabilities with the best suppliers and did so before their competitors. Supplier Appraisal Supplier appraisal is of particular importance where: * Potential suppliers do not hold ISO certificate * The items to be purchased are of critical importance * It is intended to adopt a policy of single sourcing based on partnership purchasing. Supplier appraisal is done to evaluate the performance of suppliers in respect to one or more factors such as, price, quality, and delivery etc. ...read more.

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