Team Time

To Outsource or not to Outsource … That is the Question

Divide into two teams to represent both sides of the issue:

  1. One group thinks the company should make the component.

  2. One group thinks the company should outsource production of the component.

Scenario

The Grindstone Supply Company of New Jersey is attempting to expand its manufacturing of large wall clocks. In years past, the company has outsourced the manufacturing of clock springs to a company in Nebraska. This has been cost effective in the past, but now that demand for the springs has increased, Grindstone is considering manufacturing the springs in-house. Although the cost of producing the springs in-house is lower, it is unclear whether it will be profitable in the long run, as the manufacturing process will change greatly. New machines for the production of springs will be needed, as the factory works exclusively in wood and plastic. With the new machines comes the need for new technicians to monitor and service them. Should the Grindstone Supply Company alter its manufacturing process to include the production of clock springs, or should it continue outsourcing to Nebraska as it has in the past? What factors contribute to this decision? Will this be more profitable in the long run? How will the decision affect employee morale and relations?

Process

  1. Step 1. Record your ideas and opinions about the issue presented in the scenario. Be sure to consider the issue from your assigned perspective.

  2. Step 2. Meet as a team and review the issue from both perspectives. Discuss why the position of your group is the best decision.

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