FUTRONICS, INC.
Executive Summary
[Should Central Stores be a thing of the past]

Contact Information
Steve HastellPurchasing ManagerFutronics, INC.
Corporate Area
Central Stores Year founded mid 1950sNumber of Employees affected
4Annual Operating Costs
$200,000Annual throughput of warehouse
$900,000Proposed Savings
$54,000 (6% average savings)$200,000(overhead)Total: $254,000 Bidding Companies
LittonBoise-CascadeL.E. MuranBay State OfficeNew England Supply Contract proposal
3 Year w/ Options | PURPOSE/OBJECTIVE: As part of the corporate overhead reduction program, Futronics has been undertaking cost cutting measures throughout the company during the last two years. This program of cost reductions stems from the flattening sales and decreasing profits we are experiencing in the face of fierce competition. Reversing this trend is crucial to the future of Futronics. In an effort to do just that, I have been reviewing opportunities for outsourcing some of our in-house services. One area that has shown promise is the idea of outsourcing our business processes that are currently being accomplished by our Central Stores division. This summary will explore the pros and cons of outsourcing our central store business unit and provide a recommendation based on our research.PROBLEM/OPPORTUNITY: As I have stated, it is imperative that we make some very important decisions that will ensure we become more competitive in the current market. While exploring our options, I was approached by two outsides firms who informed me that they could do the job of our Central stores division more efficiently and at less cost. We have moved forward investigating this opportunity and have assembled the data so that we may make an informed “make or buy” decision about outsourcing this process.WHY OUTSOURCING:Business Process Outsourcing is becoming more and more