Title: 3Cs method for firms' make-or-buy decisions: application in a large metal mechanical company

Authors: Luciana Paula Reis; June Marques Fernandes; Sergio Evangelista Silva; Henrique Aguiar De Andrade

Addresses: Departamento de Engenharia de Produção, Instituto de Ciências Exatas e Aplicadas, Universidade Federal de Ouro Preto, Trinta e Seis Street, 115, Loanda District, João Monlevade, 35-931-008, Minas Gerais, Brazil ' Departamento de Engenharia de Produção, Instituto de Ciências Exatas e Aplicadas, Universidade Federal de Ouro Preto, Trinta e Seis Street, 115, Loanda District, João Monlevade, 35-931-008, Minas Gerais, Brazil ' Departamento de Engenharia de Produção, Instituto de Ciências Exatas e Aplicadas, Universidade Federal de Ouro Preto, Trinta e Seis Street, 115, Loanda District, João Monlevade, 35-931-008, Minas Gerais, Brazil ' OMR – Componentes automotivos LTDA, Cost Department, Ricardo Medioli Street, 100, Industrial District, Sete Lagoas, 35-702-216, Minas Gerais, Brazil

Abstract: The core competencies literature states that a company should outsource any activity that is not aligned with its core business. However, a deeper analysis of this literature expresses the need for a more comprehensive method to guide this decision. This study introduces a method for analysing the make-or-buy decision based on three constructs: cost, customer value, and competencies. This so-called 3Cs method was applied in a large company in the metal mechanical industry to assess the best way in which to perform the core activities of this firm. The main contribution of this study is presenting an integrated approach that allows a deeper understanding of make-or-buy decisions, thereby raising their efficiency.

Keywords: outsourcing; analysis method; production costs; customer value; strategic vulnerability.

DOI: 10.1504/IJBIR.2018.096370

International Journal of Business Innovation and Research, 2018 Vol.17 No.4, pp.494 - 515

Received: 20 Aug 2016
Accepted: 26 Aug 2017
Published online: 27 Nov 2018 *

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