Outsourcing printing services as

competitive manufacturing
strategy

Submitted by:
Unnat Churi (M15009)
Vipul Tawde
Rohit Shirgurkar
Akshar Thakur
Pournima Kale
 BMC
Leading player in Biscuit and
confectionaries market in India
11 Biscuit manufacturing units and
72 contract manufacturers
40 % share of total Biscuit market in
India
Strong Brand image and appeal
among consumers.
 BMC Chennai Plant
Manufacturers BMC Glucose, BMC
Sweet and Salt and confectionaries
3 Production and packaging lines
400 tones/month demand for Sweet
and salt
1950 tones/month demand for
Glucose Biscuits
 Printing Department
Film Printing
Lamination
Slitting
Printing batch details.
 Make or buy Dilemma
Product Per ton cost Per ton cost of printing
of printing (Outsourced)
(in-house)
Glucose $ 3229 $ 2967
Biscuit
Sweet and Salt $ 3475.97 $ 3205
Biscuit
 Printing Options
Scenario Design Procurement Printing Printing Maintenance
of Wrapper Batch
details

Backward BMC BMC BMC BMC BMC

Integration I

Backward BMC BMC BMC BMC outsourced

Integration
II
Hire & BMC outsourced outsourced BMC outsourced
Reward

Partnership Long term association with outsourced Printer

 Evaluation
Criteria Evaluating Department
Product Cost Finance, Purchase
Product Appeal Marketing
Perceived Quality Production, Purchase
of Service
Acquiring Production, Purchase
Printing
Competencies
Union Approval Employee union
Score: Backward Integration I
Criteria Weight Score Weighted
Score
Product Cost 0.25 3.5 0.875
Product Appeal 0.2 2 0.4
Perceived Quality 0.2 2 0.4
of Service
Acquiring 0.1 3 0.3
Printing
Competencies
Union Approval 0.25 5 1.25
Total 3.225
Score: Backward Integration II
Criteria Weight Score Weighted
Score
Product Cost 0.25 4 1

Product Appeal 0.2 2 0.4

Perceived Quality 0.2 3 0.6
of Service
Acquiring 0.1 3 0.3
Printing
Competencies
Union Approval 0.25 5 1.25
Total 3.55
 Hire and Reward
Criteria Weight Score Weighted
Score
Product Cost 0.25 5 1.25
Product Appeal 0.2 3 0.6
Perceived Quality 0.2 3.5 0.7
of Service
Acquiring 0.1 2 0.2
Printing
Competencies
Union Approval 0.25 1 0.25
Total 3.00
 Partnership
Criteria Weight Score Weighted
Score
Product Cost 0.25 3.5 4
Product Appeal 0.2 2 4
Perceived Quality 0.2 2 3.5
of Service
Acquiring 0.1 3 3.5
Printing
Competencies
Union Approval 0.25 5 2
Total 3.55
 Score Comparison
Strategy Score

Backward Integration I 3.225

Backward Integration II 3.55

Hire & Reward 3.00

Partnership 3.55
 Final Decision
Management chose to follow
Backward Integration II Strategy
High influence of Labor union was
instrumental in choosing the
strategy