Final answer:
Polaris Industries outsources component manufacturing due to specialization and cost efficiency but keeps final assembly in-house for better quality control, logistics, and leveraging skilled labor. The assembly process benefits from just-in-time delivery and close proximity to suppliers.
Step-by-step explanation:
In the Polaris Industries case study, Polaris chooses to outsource the manufacture of most components but in-source final assembly. This business strategy could be attributed to several factors such as specialization, cost efficiency, quality control, and logistics. No single company or country can excel in making every part of complex manufactured products, which is apparent given global supply chains like those of Apple. Hence, sourcing components from various countries makes sense.
Moreover, similar to the just-in-time delivery model used by companies like Honda, Polaris may benefit from higher quality control and reduced warehousing by having components delivered as needed. This also indicates that suppliers must be within reasonable proximity to the final assembly plant to ensure timely delivery, which is crucial for assembly operations. Additionally, in-sourcing final assembly allows Polaris to maintain direct control over the final phase of production, where the integration of all parts takes place, ensuring products meet the required standards before they reach consumers.
Also, considering cost and labor dynamics, outsourcing manufacturing can decrease costs due to lower wages and operational expenses in other nations. However, the final assembly in-sourced allows for the leveraging of advanced manufacturing facilities within the home country and keeps a certain level of high-skill labor force directly employed by the company, sometimes in a unionized setting—ensuring the availability of skilled workers and minimizing disruptions.