Make-or-buy

Make-or-buy is the decision of whether a factory manufactures a part or a specific operation in-house, or instead purchases a finished part (a purchased part) or outsources a specific operation to another supplier. It's driven by factory capability, cost, capacity, and lead time, not just whether the in-house process is technically possible.

Why make-or-buy is more than a capability check

A factory technically capable of an operation may still choose to outsource it if a specialist supplier does it faster, cheaper, or with less risk, which is why make-or-buy is a business decision layered on top of a manufacturability judgment, not just a capability check.

Where make-or-buy decisions are made

Not on the drawing; it's a sourcing and process-planning decision made by a factory, informed by the part's requirements but not stated by them directly.

Common mistakes

Assuming make-or-buy is purely a capability question; cost, capacity and lead-time trade-offs often matter more than whether an operation is technically possible in-house.

Is make-or-buy the same as outsourcing?

Outsourcing is one outcome of a make-or-buy decision; the decision itself weighs making in-house against buying or outsourcing.

Why would a capable factory still choose to buy or outsource?

If a specialist supplier is faster, cheaper, or reduces risk on a specific operation, even a technically capable factory may choose not to do it in-house.

Does make-or-buy apply to whole parts or individual operations?

Both; it can apply to an entire purchased part or to outsourcing just one operation within an otherwise in-house routing.