Procuropedia

Make v Buy

Definition

Make v buy, also known as the make-or-buy decision, is a strategic choice organizations face when deciding whether to produce goods or services internally (make) or to outsource them from external suppliers or vendors (buy). It involves evaluating the costs, capabilities, risks, and benefits associated with both options. The make option offers greater control and customization but requires investment in infrastructure, resources, and expertise. The buy option offers cost savings, access to specialized expertise, and flexibility, but involves reliance on external suppliers. The make v buy decision helps organizations determine the most cost-effective and efficient approach to meet their needs while considering factors such as core competencies, capacity, cost structures, and market dynamics.

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