STRYKER CORPORATION: IN-SOURCING PCBs Case Solution
It can be seen that with the in-sourcing facility of PCBs, the company could enhance its overall performance with respect to meeting the demands of the customers in a timely fashion. Moreover, good quality as well as good quantity could also be ensured because of the company’s significant control over production process. With the help of this alternative, the company could significantly increase its efficiency by simultaneously reducing its cost relates to losses which might occur in the logistics.
With the help of in-house manufacturing, the company would be able to increase its flexibility in producing the required number of output quantities that depend on the frequency of orders, which could help the company in maintaining strong customer loyalty as against to its competitors. Flexibility here means that the company cannot only change the quantity of production but increases the speed of production.
It can be seen that with the help of in-sourcing, the company can easily lower its cost and achieve greater benefits which the contract manufacturers could provide. From the detailed economic study of the current as well as the future conditions of the country, it can be seen that the time on which the underlying company is focusing on in-sourcing is the ideal time, as later the cost of purchasing PCBs from outside source would significantly increase as compared to the cost of manufacturing it in-house. In case if the situation prevailed in the future, then the company could significantly succeed in reducing its cost thereby increase its overall profit.
It can be seen from the analysis of the case that with the increasing time, the demand for PCBs is also increasing. In the current scenario, if with the help of outsourcing the company would be able to meet the required demands of the customer, then the increasing demand in the future would not be met by the company with its reliance on the contract suppliers. However, the in-sourcing could resolve this very issue.
The last benefit associated with this alternative is that the company would be able to secure its internal data without any kind of leakage. It can be seen that while outsourcing, the significant customer data with the company is allowed for access in the outside market which could create some potential risk of losses because the data could be used by the competitors. The building of internal control system could vitally reduce this risk to a greater extent.
In order to successfully meet this new alternative, the biggest hurdle facing the company is the lack of skilled labor and efficient management which would make in-sourcing failure. Moreover, it can be seen that there is no reliable analysis to tell about how to employ and train a number of local staffs to use this facility cost-efficiently. Companies which are in a high-speed expansion stage often lag in human resource. In order to obtain an efficient in-sourcing, Stryker Corporation needs not only a large number of skilled labors, but also professionals who are able to manage the factory. It always takes more time and money to train the workers and searching for the professionals.
Another demerit of this alternative is the uncertainty regarding the cost saving structure of the company. It cannot be reliably estimated that the company’s overall production cost would decrease with this alternative. Canceling purchasing from contract manufacturers and going forin-sourcing instead may lead to the company incurring huge cost, be it temporary or long-lasting. As a result, the management would be in a lot of price and so the price of the products would be less competitive…………………. This is just a sample partial work. Please place the order on the website to get your own originally done case solution