A make decision means the organization will produce the good or provide the serv

Question

A make decision means the organization will produce the good or provide the service internally. A buy decision means the good or service will be procured from a supplier. Later, when internal and/or external circumstances change, make or buy decisions are reviewed and some or all may be reversed. Insourcing refers to reversing a previous buy decision. An organization chooses to bring in-house an activity, product, or service previously purchased. Outsourcing reverses a previous make decision. Thus an activity, product, or service previously done in-house will be purchased.

Above information is from the textbook Purchasing and Supply Management by Fraser Johnson. My topic is on Chipotle and I need to find information on wether chipotle used a Make or Buy decision and if they insource or outsourced

PLEASE EXPLAIN WHETHER CHIPOTLE USED A MAKE OR BUY DECISION AND IF THEY INSOURCE OR OUTSOURCED.

GIVE A FEW EXAMPLES PLEASE!

Explanation / Answer

Outsourcing is usually done in situations where a particular task is better done by an outsider. Outsourcing is preferred when the company does not have required expertise or time to develop a particular good or service in-house. The task can be done by paying them an earlier agreed price.

WhenChipotle was started all the technological support requirements were outsourced. This had helped them at that point of time to focus on their restaurant business solely and technical requirements were a support function and they have decided to outsource it to technical experts. This strategy worked initially when the number of stores were few. The external technical unit were able to solve the issues as and when they came. With growing number of stores, the issues have increased and each and everytime explaining the environment they are working in and the issues they were facing has resulted in delay in customer service. This has necessitated to look into the possibility of insourcing the technological support. During 2004 Chipotle hired a technical expert Mr. Daidon to start their in-house technical operations. Then with the help of Mr. Daidon, Chipotle started hiring people with good communication skills and have decided to teach them the technical know-how. Although it poses a lot of challenges the team has decided to get things right in their way. Over a period of time focusing on one area at a time the in-house team was able to stand on its own. Today all the IT related issues and enhancements are done internally.

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