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Make vs. Buy: Weighing the Cost of the Conveyor

Conveyors are critical tools for manufacturing that need to move product efficiently. However, when the time comes to upgrade, the decision of taking a build your own approach or seeking out expert help is highly dependent on the realities of the organization.

A recent A.T. Kearney report titled Make vs. Buy Revisited offers this observation:

To come to the right make-or-buy decision, leading companies resist the temptation to 'feed the beast.' Instead of focusing only on short term gains, these leaders keep their long-term strategy and corresponding core competencies in mind. They adopt a clearly defined manufacturing strategy, and then adopt the right tactics that can lead to smart decisions and a competitive advantage.

To make an accurate evaluation, organizations should take into account the strategic value of the system to the company, in terms of profitability, sales growth, technical differentiation, etc. In addition, the organization needs to consider performance elements, such as conversion costs, manufacturing flexibility, and effectiveness.

Making the wrong decision can impact the company's bottom line and have huge implications to the production and quality of the organization's core products. The infographic below, created by Dorner, works through the key considerations when trying to measure the potential costs of making a conveyor instead of buying it.

Take a look and let us know which way the decision fell in your organization in the comments section below. 

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