Reference no: EM133180143

Your friend Ben Strong just got a job he was seeking as a production manager for a small manufacturing firm. The company has about 200 employees and produces about $5 million worth of goods a year.

Ben has learned that the previous production manager was let go because of problems managing the supply chain. Some suppliers are delivering late, and some others are having quality problems. Ben is trying to decide whether to continue buying the materials and parts he needs from outside suppliers or to recommend that the firm integrate vertically and supply the materials it needs and produce its own parts.

Ben knows you have been studying production management and respects your advice. Prepare a paper of at least two pages for Ben that addresses the questions below.

What are at least two reasons to continue with a supply chain of external suppliers, and what is at least one disadvantage?

What are at least two reasons to vertically integrate and be your own supply chain, and what is at least one disadvantage?

How would you go about making the decision if you were Ben? Include a recommendation if you have one. Explain your reasoning.