Make or Buy Decision at Baxter Manufacturing Company
Dr. Tim Brueggemann
MBA54001OL
8 July 2011
Case: A Make or Buy Decision at Baxter Manufacturing Company
Situation
Baxter Manufacturing Company is trying to decide whether or not to buy a new software program. The problem is they are afraid to buy this new program because of their past experience. Now, they are in a dilemma because they know they have learned from the mistakes they made before so they might b successful this time. The decision will be taken after talking to their people. They are really satisfied with the work of their Management Information Systems group and they hope they can make a good decision.
Target
As any other company, the purpose of Baxter Manufacturing Company was to improve their system so they can operate at a more efficient level. “They want to continue to be the leaders in manufacturing of deep-drawn stampings” (Wainright). The big issue is that Baxter thinks they should purchase a new software package while Collins argues that BMC should continue with the process of building the manufacturing systems.
Proposal
I recommend to them to take the decision of building the sustem themselves. By building th systems themselves they would be able to learn while they are doing it, instead of learning at all at once which would happen if they buy it. Other advantage of building their own system is that they would be able to build the system with every single aspect that they need. They know what the company is missing so they can put it it onto the new system in order to for them to operate better.
Some of the reasons for a company to build the system are the following:“They know their company’s processes better than anyone else, they can develop precisely what they need , they have direct control over future development and can react quickly with modifications as the business changes , when they build it, they have a complete understanding of how it works ,since it is proprietary, they never have to worry that their competition will
MBA54001OL
8 July 2011
Case: A Make or Buy Decision at Baxter Manufacturing Company
Situation
Baxter Manufacturing Company is trying to decide whether or not to buy a new software program. The problem is they are afraid to buy this new program because of their past experience. Now, they are in a dilemma because they know they have learned from the mistakes they made before so they might b successful this time. The decision will be taken after talking to their people. They are really satisfied with the work of their Management Information Systems group and they hope they can make a good decision.
Target
As any other company, the purpose of Baxter Manufacturing Company was to improve their system so they can operate at a more efficient level. “They want to continue to be the leaders in manufacturing of deep-drawn stampings” (Wainright). The big issue is that Baxter thinks they should purchase a new software package while Collins argues that BMC should continue with the process of building the manufacturing systems.
Proposal
I recommend to them to take the decision of building the sustem themselves. By building th systems themselves they would be able to learn while they are doing it, instead of learning at all at once which would happen if they buy it. Other advantage of building their own system is that they would be able to build the system with every single aspect that they need. They know what the company is missing so they can put it it onto the new system in order to for them to operate better.
Some of the reasons for a company to build the system are the following:“They know their company’s processes better than anyone else, they can develop precisely what they need , they have direct control over future development and can react quickly with modifications as the business changes , when they build it, they have a complete understanding of how it works ,since it is proprietary, they never have to worry that their competition will
Cited: Martin, Wainright. Managin Information Technology. New York: Prentice Hall, 2004. Zizacobic, Lubo. “Corporate Software Dilemma”. Insidus Corporation. August 2004 < http://www.insidus.com/BuyorBuild.pdf>