Strategic supply chain management: Solution approaches for make-or-buy decisions

In today's competitive environment, strategic supply chain management is more important for businesses than ever before. For many businesses, in addition to decisions regarding the supply of raw materials and semi-finished products, the decision-making processes regarding the use of internal or external resources for the realization of secondary operations involved in the production processes are also critical. The most strategic decisions are whether secondary operations such as sorting, packaging and labelling of products that are found to be defective in the quality control process will be performed in-house or outsourced, and if outsourcing is to be used, the selection of the most appropriate supplier. While making these decisions, the efficiency of the supply chain should be increased by considering criteria such as cost, quality, delivery times and flexibility, and sustainable competitive advantage should be achieved. In this study, a mathematical model is developed for the 'make or buy' decision. The mathematical model evaluates whether secondary operations should be performed in-house or outsourced and determines the most suitable suppliers for outsourcing. In outsourcing, total cost, operational sustainability, flexibility and risks are analyzed when choosing among multiple suppliers. The developed model aims to determine the best option based on cost, capacity, inventory and efficiency criteria. A two-stage solution approach and a genetic algorithm are developed for solving large-scale problems that cannot be solved with a mathematical model. The findings of the study have the potential to provide practical contributions to the strategic decision processes of enterprises. The results of the study will play an important role in reducing the costs and increasing the efficiency of enterprises by supporting the effective use of resources in supply chain management.