Buying
Make or buy analysis
Globalization of markets makes it necessary, due to fierce worldwide competition, to carry out a radical analysis of make-or-buy for each single phase of the manufacturing process in order to make a company’s products truly desirable and ensure a viable price/performance ratio.
Concepts such as competitiveness, development, make-or-buy, and internationalization of buying have always been considered the exclusive prerogative of medium-to-large companies that have offices in which many languages are spoken and unlimited, or at least extensive, financial and human resources.
To the contrary, we are of the opinion that flexible working methods enable small and medium-size companies especially, that is, companies that have greater need of instruments of analysis and operative parameters in place from the start, to achieve rapid and healthy growth.
A strategic analysis, even more than an economic (cost/benefit) analysis, to build a lasting, defendable competitive advantage, opens two possible paths for company organization: make or buy.
On one hand the choice of internal production imposes vertical integration on a company. The company adopts a rigid, hierarchical organizational chart which, however, allows it to benefit from a greater ability to differentiate and personalize its products and services.
Less flexibility comes with higher costs (not in all sectors) due to a less efficient productive process which is often the highest price to pay.
However, such a company has exclusive control of its technology, which is personalized according to what type of business the company engages in.
On the other hand there is the option to specialize. A company concentrates on its core business, that is, it outsources and turns to the pure market for all those activities that are connected to but not part of, the company’s core business and that do not create value for the company.
The company therefore has a streamlined organization that can adapt to market turmoil and is ready to deal with negative situations more efficiently.
The Web plays a decidedly important role, making market intelligence easily available to entrepreneurs, who can find the best buy opportunities on the market in order to reduce transaction costs.
However, the Buy solution, although allowing for potential access to innovation, allows a company little leeway to differentiate, since it is subject to market standards.
We can define the best strategy for a company to adopt and, whichever solution it chooses, we can help an entrepreneur to manage the effects of that decision. The outlook for success will in any event be decidedly favorable if the potential of Asian markets is taken into consideration; they offer a wide range of semi-finished and finished products at extremely advantageous price/quality ratios, and they also provide continually upgraded technologies to manufacture batches of goods according to technical specifications provided by the ordering company.
Internationalizion of buying in Asia
It is now possible and desirable to buy supplies of raw materials, parts, components and semi-finished goods on the global market quickly and unhesitatingly. Succi & Partners can establish a procedure to INTERNATIONALIZE PURCHASES in a reasonably short time that will be very satisfactory for the entrepreneur and maximise our “made in Italy” concept, not as just the “physical” source of products, but mainly as a synonym for quality and excellence during all phases of the manufacturing process, use of the best materials and constant, continuous effort to offer “the best” at competitive prices.
Succi & Partners can guide the entrepreneur during the delicate “scouting” phase to analyze and select suppliers who can best satisfy a company’s requirements. We can manage the entire process ourselves or assist company staff in the task (see Purchasing Office).
There are companies that because of the complexity of the commodity sectors they operate in, need to seriously consider the option of DELOCALIZING MANUFACTURING; companies whose transport costs affect the price of the product so much that it becomes unfeasible to export over certain distances; or other companies that manufacture perishable products; or companies that have limited production capacity and therefore decide to attack certain markets by opening a manufacturing plant directly in a market.