The objective of this case is to explore the considerations involved in a real-world software make-or-buy decision.
Question:
The objective of this case is to explore the considerations involved in a real-world software make-or-buy decision. It also illustrates some of the problems that small to medium-sized manufacturing companies have in managing IT.
Overview
Baxter Manufacturing Company (BMC) is a very successful specialized metal stamping shop that produces deep-drawn parts for the automotive and appliance industries. BMC is family owned and managed, and has around 400 employees. Manufacturing Vice President Lucas Moore has proposed that BMC purchase a manufacturing software package from Effective Management Systems (EMS). The new IS director has had good success in building applications software and BMC has had a history of failure in two past attempts to purchase and use such software, so this proposal raises some questions. This case explores the perceived advantages and disadvantages of Moore’s proposal and poses the question: What should BMC do about this proposal?
Questions for Discussion
1. What are the arguments in favor of Manufacturing Vice President Moore’s proposal to purchase the manufacturing software from EMS? What are the arguments in favor of developing the needed systems internally?
2. How should BMC obtain the needed manufacturing software?
3. What problems in managing IT does a small company like BMC have as compared to a Fortune 500 company?
Operations management in the supply chain decisions and cases
ISBN: 978-0077835439
7th edition
Authors: Roger G Schroeder, M. Johnny Rungtusanatham, Susan Meyer Goldstein