Primary approach of the article

Primary Approach of the Article
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Primary Approach of the Article
Overview
The primary approach of the article is to formulate a simulation model founded on the previous studies to analyze problems. The goal is to offer sustainable alternatives for proving how firms can outsource manufacturing with no control loss. The simulation model assessment has three procedures. The first and second steps deal with the planning, execution, and management activities or priorities in outsourcing while the third step aims at selecting the best model for enhancing safe procurement. The Turnkey approach is the most preferred model for critical danger areas in procurement.
The Simulation Model Steps
The first step refers to the procurement activities for potential outsourcing. This step stresses the areas in which a CM’s intention, means, and opportunity join most forcefully, reflecting the weakness and simplifying the inference of the opportunity and means of the CM. The first point of OEM’s priorities is the planning, which entails strong purpose of future demands. The physical subset of planning of the simulation model focuses on the finding out of the materials and capacity required to support production (Amaral, Billington & Tsay, 2004). The informational subset of planning deals with working together on demand forecasts and possible supply constrictions. The financial activities intend to choose suppliers and negotiate contract terms, policy, and conditions.

The execution priority addresses the dependable and reactive achievement of current mechanisms. Under this subset, the physical activities include receiving commodities, evaluating quality, and tracking the stock. Further, the informational activities of the execution of the simulation model aim at placing purchasing orders and implementing order changes like timing and quantity modifications (Amaral, Billington & Tsay, 2004). Finally, the financial component of execution concentrates on the payment to suppliers, accepting reimbursements or refunds, and upholding transaction history.
The last subset of the procurement activities of the simulation model is the management. Management focuses on the settlement of concerns and continuous performance improvement. The physical part of the management should appropriately reestablish inventory across divisions and use accelerated transport modes from suppliers (Amaral, Billington & Tsay, 2004). The informational activities focus on OEM finding the variation from the plan and calling for corrective and contingent actions. Besides, financial activities involving the CM checking asset utilization and costs and investing more in reinforcing supply size.
Subsequently, concerning the safeguard options for procurement outsourcing, OEM can carry out steps to ensure a safe and efficient procurement outsourcing. Concerning the planning activities, OEM can audit and track purchases by supplier and part, monitor and assist in minimizing errors in forecasting, and acquire warranties from CMs safeguarding against patent infringements or poor quality (Amaral, Billington & Tsay, 2004). Also, the execution step requires OEM to audit and track part utilizations and amounts and audit transactions for transparency and accuracy. The management subset requires OEM to share roles of facilitating costs to guarantee an improved incentive alignment and check and audit the contract terms and conditions (Amaral, Billington & Tsay, 2004).
Conclusion: Alternative Procurement Models
It is important to consider a comparison of the alternative procurement models for key danger areas. In this regard, the Turnkey approach should be considered as the best model for the means-motive-opportunity concepts. This approach’s strength is the application of the CM’s procurement leverage at the lowest cost. However, other optional approaches include the Turnkey with audits, supplier reimbursements, buy-sell, consignment, and in-house.

References
Amaral, J., Billington, C. A., & Tsay, A. A. (2004). Outsourcing production without losing control. Supply Chain Management Review, V. 8, No. 8 (Nov./Dec. 2004), p. 44-52: ILL, 8(8).