Question

harrison electric corp. previously outsourced all the component parts it needed for its lighting products but now produces those parts in-house to use in the manufacture of these items. what concept did harrison electric corp. adopt?

Answer 1

Harrison Electric Corp. adopted the concept of vertical integration by producing parts in-house for its lighting products, reducing reliance on external suppliers and potentially increasing control over costs, quality, and supply.

Step-by-step explanation:

Harrison Electric Corp. adopted the concept of vertical integration by starting to produce component parts in-house rather than outsourcing. Vertical integration is the process by which a company takes control of its supply chain, producing components or acquiring suppliers to manufacture its products. This approach is in contrast to relying solely on external suppliers for parts and materials.

By integrating the production of components in-house, Harrison Electric Corp. may seek better control over the cost, quality, and supply of the parts it needs for its lighting products. Electric lighting production, which dates back to innovations by Thomas Edison and George Westinghouse, has evolved with companies continuously seeking to improve efficiency and the reliability of supply. Vertical integration is one such strategy companies use to achieve these goals, helping to ensure that production is not disrupted due to issues with external suppliers, as could happen with a just-in-time delivery system.

In-house production can also foster innovation, as the company may be better positioned to tailor parts to specific product requirements or to streamline processes to improve productivity within the factory setting.

Answer 2

Harrison Electric Corp. has adopted vertical integration, specifically backward integration, to improve efficiency and self-reliance by producing component parts in-house.

Step-by-step explanation:

Harrison Electric Corp. has adopted the concept of vertical integration. This strategic approach means that a company expands its business operations into different steps on the same production path, such as when a manufacturer owns its supplier and/or distributor. Vertical integration can help companies reduce costs and improve efficiencies by decreasing reliance on suppliers, and it allows for more control over the production process.

In Harrison Electric's case, by producing the component parts in-house instead of outsourcing, they are engaging in what is known as backward integration, because they acquire control over a previous step in their production process. This could potentially lead to streamlined processes, better quality control, and cost savings in the long term. It's a strategic move that aligns with historical shifts in manufacturing practices associated with the use of electricity and assembly lines, as efficiency and self-reliance in production have been key factors in business success.