SOURCING STRATEGY- A CASE STUDY IN A TWO WHEELER COMPANY

Abstract

The purpose of this paper is to explore the dimensions of “Make” or “Buy” decision of sourcing determines its relationship with organizational supply chain agility and performance. The aim is to analyze if the decision process, or parts of it, can be used as a base for building a right long term sourcing strategy model. In this paper sourcing strategy is defined as; “the system which gives the “Make” or “Buy” solution is the long term strategic sourcing to be competitive now “. Our analysis of the literature points to a few areas of research pertaining to “Make” or “Buy” decision in sourcing strategy. There is need for studying different aspects related to “Make” or “Buy “to take appropriate decision in the given situation. The concept of outsourcing has, therefore, been growing rapidly during the last decade. Despite many old companies seem to have a vague understanding about the risks and benefits of outsourcing, except from a general idea that it will reduce cost and inventory. Many companies hence experience that sourcing decisions are complex and the need for a model supporting sourcing decision exist within many corporations sourcing strategy.The results indicate that a model for sourcing strategy ought to include, or be based on, following aspects, e.g. the company’s overall sourcing strategy, the company’s core competence. The sourcing process also ought to be made with a process approach, avoiding functional sub-optimization. The results of the measure of performance parameter’s are tabulated also indicated that financial evaluation benefits. This research was conducted on particular assembly of a niche market two wheeler Company. The company was working in a conservative culture and technology of more than 50 years old and struggling to grow in the market due to non adoption of the latest systems. Most of the noncore productions are done at in house. Costing more to the company with higher inventory. As a first steps the noncore production out sourcing done successfully. The fact that the study was done on a specific area and situation cannot be applicable to all industry.