The contents of this book are based on the results of research, application and development carried out in collaboration between university and industry. The idea was to provide a soundly based practical approach that would enable people in manufacturing businesses to develop a make or buy strategy tailored to the requirements of their own company. The intention from the start of the project was to produce a book giving a fuller account of the issues involved in make or buy considerations, including other contributions to the subject from the perspectives of manufacturing engineering, economics, accounting and other relevant disciplines. However, most importantly, the book should contain a practical guide to devising your own make or buy strategy, which could be applied by managers facing these issues for real in their own company. This book is the result of that intention and the author hopes that it enables teams of people in manufacturing industry to work together in understanding and exploiting the possibilities that face them in a competitive world.

There are four main phases to the strategic review of manufacturing operations that is the basis of the formulation of a new make or buy strategy: phase 1: initial business appraisal; phase 2: internal and external analysis; phase 3: generation and evaluation of strategic options; and phase 4: choosing the optimal strategy. The review is a team based activity, with the project team reporting directly to senior management. Individuals are selected to take part in the team on a combination of personal skills and knowledge of the business. More details of the team establishment and project setup are given in Chapter 5.

The chapter discusses the phased approach to the strategic review, which is the basis of the formulation of a new make or buy strategy. The importance of the phases is that they provide the means to divide the work into managed stages, with review points at the end of each stage. These reviews, conducted as a project, will usually take the form of a management workshop, at which findings and proposals are presented. This provides the opportunity to achieve management validation of the data and reasoning, and most importantly, ownership of the conclusions and actions, with commitments to move on to the next stage.

There are many aspects of the work of the project team devising the new make or buy strategy that will require considerable thought and analysis. It has been found helpful for the team to have a range of analytical tools and techniques at its disposal. These can assist in sharpening the issues for discussion, present data and information in a way which facilitates decision making or simply act as vehicles whereby the team can work together and share conclusions. A range of these techniques will be described, although this list is by no means exclusive and there may be many more which are equally appropriate and useful.