6.1 - Knowledge Management Risk Management (GRP)
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6.1 - Knowledge Management: Risk Management (GRP)
Group 2: Tate Brock, Michael Carter, Joshua Li, Cory Rust, Erfan Zanegeh
EGMT 620
Embry-Riddle Aeronautical University
Nov 26, 2023
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Make or Buy Analysis Consensus Statement
Make or Buy analysis can be conducted to minimize total costs consisting of manufacturing, purchasing, quality, and lateness costs. Analysis models can be constructed to cover decision making processes like component allocation and process & supplier selection. Constraints may include tolerance limits, process variance, production capacity, consumer demand, and minimum supplier selection. Engineering managers should select or develop and tailor an effective make or buy analysis model to suit a multistage manufacturing process.
One potential way to reduce costs is to outsource services to private firms, non-profit organizations, or other governments that can provide the services more efficiently (Michel, 2004). Make or buy analyses can be used to determine if outsourcing the service will result in cost savings over the life of a project. It is important to understand how to effectively conduct a make or buy analysis. This includes understanding what costs should be excluded from the analysis, and what costs are often overlooked but should be considered in the analysis. Sunk cost is a cost that has already occurred. These costs should be excluded from the analysis because they will remain the same regardless of the make or buy decision. On the other hand, opportunity
cost includes the cost of using assets or resources for other purposes and should be considered in the make or buy analysis. Make or Buy Analysis Annotated Bibliography
Michel, R. G. (2004). MAKE or BUY? USING COST ANALYSIS TO DECIDE WHETHER TO OUTSOURCE PUBLIC SERVICES: [1]. Government Finance Review, 20(4), 15-
21. https://www.proquest.com/trade-journals/make-buy-using-cost-analysis-decide-
whether/docview/229689684/se-2
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Take-away: This article considers both the financial and nonfinancial effects of outsourcing, outlining a method for evaluating whether it makes financial sense to outsource a service.
Criticism: While the article focuses specifically on the costs involved in this type of decision, other factors such as cost of service, service quality, and stakeholder impact must also be considered.
Pratama, M. A., Rosyidi, C. N., & Pujiyanto, E. (2018). Two stages optimization model on make
or buy analysis and quality improvement considering learning and forgetting curve. Journal of Industrial Engineering and Management, 11(4), 794–813. https://doi.org/10.3926/jiem.2615
Take-away: One significant takeaway from this study is the integration of learning and forgetting
curves into the decision-making process, which provides a dynamic perspective on the analysis of make or buy decisions. Criticism: The model may heavily rely on assumptions or specific scenarios that might not universally apply across industries or contexts.
Rosyidi, C. N., Pratama, M. A., Jauhari, W. A., Suhardi, B., & Hamada, K. (2016). Make or buy analysis model in a multi-stage manufacturing processes. 2016 IEEE International Conference on Industrial Engineering and Engineering Management (IEEM)
, 971–976. https://doi.org/10.1109/IEEM.2016.7798022
Take-Away: This study considered process capability, manufacturing capacity, customer orders, routing process to develop a make or buy analysis model for determining optimal processes and suppliers in minimized manufacturing, purchasing, scrap, and lateness cost, and quality loss.
Criticism: Uncertainty should be factored into the model by incorporating assembly, lotting size, and scheduling problem uncertainties in results.
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Feasibility Study Consensus Statement
Feasibility studies are conducted to assess the practical expectations of a proposed project
and may use a variety of test and research methods to reasonably gauge the possibility. Relevant factors must be included in feasibility studies to accurately determine possible problems and issues. Feasibility studies may include simulations and case studies to demonstrate possible results under certain conditions. Engineering managers should conduct comprehensive feasibility
studies to aid decision making but understand that all conditions may not be easily accounted for.
Feasibility studies are conducted to determine if something should be done, and how it should be done. Some common feasibility studies include randomized pilot studies, nonrandomized pilot studies, and non-pilot studies. Each of these studies start with a question or problem and is followed by literature research (Kolenic, 2018). When conducting feasibility studies, it is important to focus on processes, resources, and management. The results from a feasibility study can be used as a first step to determine if the organization should invest in further research. Feasibility Study Annotated Bibliography
Kolenic, Anne M, DNP,A.P.R.N., A.O.C.N.S®. (2018). Feasibility Studies: What They Are, How They Are Done, and What We Can Learn From Them. Oncology Nursing Forum, 45(5), 572-574. https://doi.org/10.1188/18.ONF.572-574
Take-Away: Feasibility studies are extremely important to advance the science of nursing because they allow for the planning of subsequent larger trials.
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Criticism: While this article provides a conceptual understanding of feasibility studies, it focuses on scientific research specific to the nursing rather than management practices. Sharp, M. E., Hedberg, T. D., Bernstein, W. Z., & Kwon, S. (2021). Feasibility study for an automated engineering change process. International Journal of Production Research, 59(16), 4995–5010. https://doi.org/10.1080/00207543.2021.1893900
Take-Away: The feasibility study focused on parametric-based design models like 3D CAD to digitally render enacting semi-autonomous computer-aided search algorithms for finding suitable
configurations for fulfilling arbitrary design requirements.
Criticism: This study could be refined by exploring how to address non-parametric concepts like material selection, free-form surface design, manufacturability, assemblability and measurability.
Sorajja, P., Moat, N., Badhwar, V., Walters, D., Paone, G., Bethea, B., Bae, R., Dahle, G., Mumtaz, M., Grayburn, P., Kapadia, S., Babaliaros, V., Guerrero, M., Satler, L., Thourani, V., Bedogni, F., Rizik, D., Denti, P., Dumonteil, N., … Muller, D. (2019). Initial Feasibility Study of a New Transcatheter Mitral Prosthesis: The First 100 Patients. Journal of the American College of Cardiology, 73(11), 1250–1260. https://doi.org/10.1016/j.jacc.2018.12.066
Take-Away: One significant takeaway from this research is the emphasis on evaluating the feasibility and safety of an innovative medical device through a structured study involving a considerable patient cohort. Criticism: Generalizing the findings to a broader population might be challenging due to the limited sample.
Legal, Operational, & Financial Feasibility Consensus Statement
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Technical, legal, operational, financial are all types of feasibility studies that focus on evaluating the possibilities and implications of a project in respective scope. Each feasibility study concentrates on its type’s relevant factors, considerations, and performance indicators. However, engineering managers should conduct holistic decision making by incorporating diverse types of feasibility studies. Realistically, decision-making is influenced by many major subjects and managers must assess the importance and extent of each aspect on the project.
Feasibility studies can be used to determine if projects should be cancelled due to legal, operational, or financial concerns. These studies prevent organizations from investing excessive efforts and funding in the early stages of program development. Cancelled projects are often viewed as failures, however, they can also bee considered a great success. If an organization can cancel dead end projects during the first 10 to 20 percent of completion instead of 80 to 90 percent, they can invest those savings in other projects (McConnell, 1998). Utilization of these studies allows organizations to focus efforts on projects that will be more profitable in to long run. Legal, Operational, & Financial Feasibility Annotated Bibliography
Arvanitis, S., & Estevez, L. (2018). Feasibility Analysis and Study. In The Emerald Handbook of
Entrepreneurship in Tourism, Travel and Hospitality (pp. 109-129). Emerald Publishing Limited. Take-Away: One significant takeaway from this chapter is its comprehensive exploration of feasibility analysis methodologies and their application in assessing the viability of entrepreneurial initiatives within the tourism, travel, and hospitality sectors.
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Criticism: Focus more on theoretical aspects of feasibility analysis while potentially lacking practical guidance on how entrepreneurs can effectively conduct feasibility studies and translate the findings into actionable strategies for launching successful ventures.
Liu, H.-L., Wu, I.-C., & Caneday, L. (2018). Using a Feasibility Study as a Management Tool: A
Case Study of Oklahoma State Park Lodges. Journal of Park and Recreation Administration, 36(3), 174–190. https://doi.org/10.18666/JPRA-2018-V36-I3-8488
Take-Away: This study demonstrated feasibility analysis can be used as a management tool to determine values, challenges, and impacts of operations in a legal system with financial consideration. Collaborative teamwork and established professional relationships are important for creating an effective and efficient feasibility study. Criticism: Feasibility study is counterintuitive if it is not time and cost efficient or realistic.
McConnell, S. (1998). Feasibility studies. IEEE Software, 15(3), 120-120,119. https://doi.org/10.1109/52.676989
Take-Away: It is important for managers to maintain a holistic approach when conducting feasibility studies for accurate decision making. Criticism: This article does a great job at describing the importance of feasibility studies that consider multiple business concerns.