International Journal of Purchasing and Materials Management

Make-or-Buy Alternatives in Plant Disposition Strategies Members Only Content

Government regulations, competitive pressures, and public opinion have forced firms to reexamine their residual disposal activities. Properly implemented, disposal programs offer the advantages of lower costs and opportunities for strategic partnerships with raw material suppliers. Responsibility for this activity is usually given to the procurement function, forcing supply managers to develop knowledge of environmental legislation, scrap markets, and disposal outlets. This article presents research about plant disposal practices, focusing on a single residual-ferrous scrap. This study explored factors that influenced scrap disposal strategies and found that volume played a dominant role. The volume-based strategies identified differed with respect to how plants structured relationships with intermediaries, resulting in a range of generator-processor dependency levels. In addition to volume, a range of both internal and external factors were found to influence plant disposal requirements. Ultimately, the development of appropriate disposition strategies required an understanding of total disposal costs. A conceptual framework is developed, highlighting the complexities associated with implementing effective and efficient disposal programs.

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