What is make-or-buy?
Make-or-buy is the decision to perform a service internally or source it externally for a defined product, component or process scope and planning horizon.
Cost comparison
The comparison extends beyond manufacturing cost and purchase price to investment, tooling, quality, scrap, logistics, inventory, coordination, supplier management, ramp-up, phase-out and transfer. Fixed and variable as well as one-off and recurring costs remain separate.
Strategic criteria
- differentiation and core capability
- know-how protection and development
- quality capability and traceability
- delivery response and scalability
- technology access, dependency and resilience
More than a binary decision
Dual sourcing, partnerships, licensing, an extended workbench, internal critical steps or phased transfer can be assessed alongside pure make and buy.
Further reading: manufacturing strategy and make-or-buy.
Make-or-buy in practice: Our services overview brings together the relevant planning and consulting approaches.