Outsourcing of xbox production by microsoft

Get Full Essay Get access to this section to get all help you need with your essay and educational issues. They quickly decided that it would be in their best interest to outsource the manufacturing of this product since they lacked the manufacturing and logistics capabilities needed. Case study, After review of several potential suppliers, it decided to outsource assembly and significant logistics functions to Flextronics, a Singapore-based contract manufacturer.

Outsourcing of xbox production by microsoft

Case Discussion Questions- 1.

Microsoft-outsourcing xbox production What was the strategic advantage to Microsoft of outsourcing Xbox production to Flextronics? What were the risks associated with outsourcing to Flextronics?
Outsourcing of Xbox Production by Microsoft and Flextronics Sample Essay Example | Graduateway They rapidly decided that it would be in their best involvement to outsource the fabrication of this merchandise since they lacked the fabrication and logistics capablenesss needed.
Outsourcing of Xbox Production by Microsoft and Flextronics | Essay Example Case Discussion Questions- 1.

What was the strategic advantage to Microsoft of outsourcing Xbox production to Flextronics? What were the risks associated with outsourcing to Flextronics?

Outsourcing of xbox production by microsoft Microsoft mitigate these risks? Do you think Microsoft would have been better off making the Xbox itself? How important are Web-based information systems to the relationship between Microsoft and Flextronics? Microsoft-Outsourcing Xbox Production When Microsoft decided to enter the video game market with its Xbox gaming console it faced a crucial strategic decision: Should it manufacture the Xbox or outsource manufacturing to a third party, and if it chose outsourcing, to whom?

Although Microsoft is primarily known as a software company, it has long had a small but important hardware business selling computer mice, keyboards, and joysticks under the Microsoft brand name. However, Xbox was different. This was not a simple computer peripheral; it was a fully functional specialized computer, with multiple components including microprocessors, memory chips, graphics chips, and an internal hard drive.

Outsourcing of xbox production by microsoft

Microsoft quickly decided that it lacked the manufacturing and logistics capabilities to make the Xbox itself and manage a global supply chain. After reviewing potential suppliers, it decided to outsource assembly and significant logistics functions to Flextronics, a Singapore-based contract manufacturer.

The company manufactures products for these companies in 28 countries. Its largest concentration of activities is in China, where it has 35, employees. Microsoft had already contracted out the manufacture of computer mice to Flextronics, so it knew something about how the company operated and was happy with the cost and quality of Flextronics products.

In looking for a supplier, Microsoft wanted a partner that could manufacture the Xbox at a low cost, maintain very high product quality, respond quickly to shifts in demand, and share detailed information on production schedules, product quality, and inventory with Microsoft on a real-time basis.

Flextronics seemed to fit the bill for a number of reasons. First, Flextronics had been pursuing an "industrial park" strategy that enabled the company to tightly manage its own supply chain, reduce the chances of supply disruptions, and lower costs, which could then be passed on to Microsoft in the form of lower prices for the Xbox.

In addition to a Flextronics factory, each park contains manufacturers of printed circuit boards, components, cables, plastics, and metal parts needed for assembly of a product such as Xbox. The co-location of Flextronics and its suppliers at an industrial park minimizes logistics costs by facilitating just-in-time inventory systems and reducing transportation costs.

Co-location also minimizes supply problems that might arise from a breakdown in globally dispersed supply chains-as occurred after September 11,and again in due to the SARS epidemic.

Outsourcing of xbox production by microsoft

Within a year, however, Flextronics shifted production from Hungary to China, where labor costs were a fraction of those in Hungary. Init also moved Xbox production from Mexico to China, for the same reason. Today all Xbox production is in China.

Microsoft-outsourcing xbox production

Flextronics can execute production shifts very quickly-the company says within three weeks-since all of the relevant manufacturing data are stored in centralized information systems.

Thus, if China proves to be a suboptimal location for Xbox production in the future, Flextronics can shift production elsewhere. Third, using Web-based information systems, Flextronics and Microsoft have the ability to share information in real time with each other.

Microsoft feeds information on demand conditions to Flextronics, which enables Flextronics to configure its own production schedules to minimize inventory and closely match supply with demand.

In addition, Microsoft has access to real-time information from Flextronics regarding production schedules, inventory, and product quality.

This is crucially important because Microsoft handles the overall management of about 40 strategic suppliers for Xbox, including the manufacturers of microprocessors, graphics chips, hard drives, and flash memory Flextronics handles the supply of commodity-like inputs, such as circuit boards and plastic molding.

The information exchange between Microsoft and Flextronics ensures that production schedules between all of the players in the supply chain are tightly coordinated so that inventory is minimized, shortages are avoided, and demand and supply are balanced.1.

What was the strategic advantage to Microsoft of outsourcing Xbox production to Flextronics? 2. What were the risks associated with outsourcing to Flextronics?

Did Microsoft mitigate these risks? Do you think Microsoft would have been better off making the Xbox itself? /5(K). Assignment Help >> Other Subject. Case Discussion Questions What was the strategic advantage to Microsoft of outsourcing Xbox production to Flextronics?

2. What were the risks associated with outsourcing to Flextronics? GM CASE ANALYSIS: MICROSOFT OUTSOURCING XBOX PRODUCTION. 1.

What was the strategic advantage to Microsoft of outsourcing Xbox production to Flextronics? Microsoft lacked the manufacturing and logistic advantage for Microsoft was that they outsource assembly and significant logistics functions to Flextronics.

This was a good strategic for Microsoft because Flextronics 50%(2). Outsourcing of Xbox Production by Microsoft and Flextronics Essay Sample. In summary the following case was about Microsoft’s quest to enter the video game market with its Xbox gaming console.

Microsoft 1 MicArosoft Outsourcing Xbox Production Geovanna Garcia BUS – International Business Environment Professor Adkins September Microsoft 2 Microsoft – Outsourcing Xbox Production When Microsoft decided to enter the video game market with its Xbox gaming console executives had to make a strategic decision whether to manufacture the Xbox or .

Microsoft Outsourcing Xbox Flextronics and Microsoft have the ability to share information in real time with each other. Microsoft has access to information about Flextronics regarding production schedules, inventory, and product quality.

Outsourcing of Xbox Production by Microsoft and Flextronics Essay Sample | Essay Example