The make-or-buy decision refers to the choice between internal production and external procurement of products, components or services. Companies are often faced with the challenge of making this decision. It is important that the choice is in line with the company or project objectives.

 In internal production, the company's resources are used to fulfil the required tasks or manufacture products and services. In contrast, external production involves purchasing from an external supplier, such as the WECUBEX Group. This raises a fundamental question: do I want to integrate production into my core business or should I consider outsourcing in order to concentrate on my main areas of business?
 

In the following, we would like to provide an overview of the advantages and disadvantages of in-house production and external procurement.
Advantages of the make decision:

• Greater control: In-house production enables complete control over the entire manufacturing process.
• Protection of sensitive information: In some cases, in-house production may be necessary to protect certain technologies or confidential information that must not be disclosed to third parties.
• Long-term cost savings: If a certain product is required in very large quantities in the long term, internal production costs could be lower in the long term.

Disadvantages of the make decision:

• Higher investment costs: In-house production often requires a considerable investment in machinery, equipment and personnel at the beginning. This can lead to financial bottlenecks
• Time delays: In-house manufacturing can take longer than buying products from a specialised supplier. This can lead to longer lead times.
• Expertise and skills: In-house production requires specialised skills and expertise that may not be available within the company. In such a case, it would be necessary to provide additional resources for the training of existing employees or the recruitment of new specialists.

Disadvantages of the buy decision:

• Dependence on suppliers: In external procurement, the company depends on the performance and reliability of the supplier.
• Less control: The company has less control over the manufacturing process and the quality of the products or services.
• Cost development: Purchasing from external suppliers can lead to higher costs in the long term, especially if prices rise.

Advantages of the buy decision:

• Time and cost savings: Purchasing products or services via WECUBEX, for example, can save time, as our company does not have to set up the manufacturing process from scratch. In addition, WECUBEX enables flexible coverage of short-term needs so that you can react quickly to changes.
• More opportunities & possibilities: The specialisation of service providers such as WECUBEX means that there is a wider range of technologies and services to choose from. This focus on technology and services can lead to improved product quality or optimised costs. In addition, with a great deal of experience, the design can be reconsidered by means of value analysis or designed to be more suitable for production.
• Skills shortage: By purchasing from specialised service providers such as WECUBEX, the company's own specialists can be focused on its core competencies. In times of a shortage of skilled labour, this is a not insignificant aspect.

Conclusion:

Whether products or services are manufactured in-house or purchased from a service provider is not an easy decision. Many factors come into play, with cost being just one of them. It is equally important to consider whether in-house production will also contribute to business success in the long term and how high the risks are.

While it is still relatively easy to compare the costs of in-house production or purchasing using the make or buy formula, it is somewhat more difficult to assess the risks and opportunities. Here, all pros and cons must be carefully weighed up against each other in order to reach the right decision.

The WECUBEX Group is available as an innovative, reliable and experienced partner to support a "make-or-buy" approach as a buy partner.
Please feel free to contact us directly or send us your enquiry directly.