Baxter will need to spend an additional

production Company (BMC) is in a quandary, they’re seeking to decide to purchase
new software program or if they can build a new system on their very own. They
may be a bit unsure to buy an upgrade system because they were let down in the
past. I could be talking to some of the head human beings in price and spot
what mind they’ve and where we’re more likely to move on. Whether we are
required to buy a new software or if they can build a new system on their own. They
are a little uncertain to buy a new system because they were let down in the
past. I will be talking to some of the head people in charge and see what thoughts
they have and where we are more likely to move on.

            Baxter is using Out-dated technology for their current system,
many of Baxter’s competitor have passed them, and Company fears of losing
reputation as world class manufacturer. This is what Lucas perspective was. He
sees the time frame, and by outsourcing this will reduce the turnaround time,
not to mention it will be more effective, an estimate of $220,000 instead of
$400,000 for in-house system. Baxter’s’ clients are not concerned with current
internal systems; this doesn’t affect company’s reputation until company
provide them quality parts. Being part of the company, have always been
innovative and have changed with time. Vendors can be set in their ways and possibly
not want to deal with a whole new system, undoubtedly Baxter needs to keep this
in mind before we go off and spend all this money.

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            We have shown that we can successfully develop a system
in-house. Developing a new system will take two years and cost $420,000, this
is about the same for an upgrade system, the cost is $220,000 and, we will need
to spend an additional $200,000 to have an outside company train our employees.
Once we finish the in-house system out team will be working hand to hand with
the ones using it and it’s a clever idea to get their feedback, so once it’s up
and running we won’t need a lot of training since we designed it around us and
our vendors.

            This may take longer to develop but once we are done we
can hit the ground running and not have to wait to be trained. For us to move
forward on our in-house system we should review some of the project we have
going through to see where we can deduct costs. Our Company need to look at
some of our high-cost activities and relocate them to lower-cost geographical
areas. Moreover, we also need to look at our activities and see if we must do
all the work, which means we are carrying all the cost or, if we can outsource
them for a lower price. We need to start cutting cost on other actives, so it
can run the over price of our in-house system down. If we purchase a new system
that is the price, this way we still have control of our overhead. Baxter need
to tighten our belts, and consider our existing activities and see where we can
utilize affordable cost technology and innovate around our design. In addition,
our overall goal is to make up difference by achieving savings in backward or
forward portions of the system, many purchased systems will not allow us to
modify the system to fit company’s needs. We mentioned the cost of training,
that is something that needs to be added when we purchase outside system, we
will also have cost associated with data conversion and changeover. We may get
the new system within 6 months but, once we factor in all the unknowns our goal
can still be two years out just like with the in-house system.

Sue Barkley standpoint, we must spend some time and consider these two systems and
see what else is out there that maybe more compatible with us and our needs and
let’s narrow it down to three or four most best fit systems to work with. Then,
we will invite each of them to submit proposals, so we can evaluate them and
pick the best one that works for our company. Once we have made our selection we
will then compare it to our plans for our in-house system. We need to start
taking steps now that can take approx. 9 to 12 months and can cost us anywhere
from $50,000 to $90,000. Of course, once we get a price that it not the end to negotiate
more favorable price and terms. No matter what, our reputation will need to
stay on top of our in-house system costs always. We will need to cut costs
whenever possible by, it will be best to integrate backwards into the business
of prohibitive cost suppliers to gain control over cost of purchased items.


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