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

Vorgehensweise MoB

Cooperation in the project

  • 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 this cost component