Make-or-Buy Analysis
Baseline situation
- Falling sales in one of the leading business units based on non-competitive hourly machine rates
- The current high proportion of personnel costs within the machine hour rate is viewed very critically by the management
- The in-house production program in the field of mechanical processing is called into question due to a lack of competitiveness
Project order
- Cost structure analysis of the current production, incl. identification of cost drivers and development of a scenario tool for the evaluation of changes
- Simulation and evaluation of the costs of an alternative manufacturing concept and its effect on the machine hourly rates
- Preparation and evaluation of a cost and logistics concept for a complete relocation of production
Outcome
- The commercial advantages of the alternative production concept hardly lead to desired effects to increase competitiveness
- The tender results show complete feasibility of the desired technologies for the relocation
- Identification of production overheads as main cost drivers, inefficient production and definition of measures to reduce these cost components
Method
