For any organisation working in the defence, aerospace or marine sectors, the decision between make vs buy is common. Should an organisation build products / systems in house or outsource manufacture to a specialist? The answer isn’t always clear and making the wrong decision can result in cost in time, budget and performance.
At On-systems we work together with defence primes, tier 1 and system integrators at all stages of the supply chain lifecycle. In this article we will be looking at the factors that will help in deciding whether to make vs buy.
Why Should You Keep Electronics In House?
There are many reasons to manufacture products internally. If your organisation has proprietary knowledge in a certain technology, having production in house can protect the IP and provide a pipeline for key competencies and skills within the business.
Maintaining production capability works best when volumes are high enough to justify the overhead and when your team has the certifications, tooling and quality processes in place. Manufacture of mission and safety critical systems typically has tight compliance standards to meet and high performance and quality standards to maintain.
Where skills, capacity and priorities are all available and align with the longer term strategy, in-house manufacture makes complete sense.
Where Outsourcing Is The Best Option
For most defence programmes, partnering with specialist suppliers and maintaining internal focus on core skills typically makes more sense.
For example, if your engineering team is spending time on power system design instead of on the platform capability that lies at the foundation of your business, you could be misallocating talent. A dedicated power system manufacturer like On-systems brings focused expertise that an in house generalist team can’t match.
Alongside the specialist skills, partnering with a small, specialised supplier will provide both the design expertise (power system design) and the manufacturing agility to cope with quick launching of potentially low volumes of products, with relatively low overhead costs which can be amortised across multiple programmes and clients.
It is also worth considering the access to specialist certification and testing, which can be difficult to obtain and keep. Ruggedisation, EMC testing, environmental qualification and a full suite of defence level approvals take years to build. Outsourcing gives organisations instant access to this capability without the capital outlay.
Finally, sourcing compliant, traceable components, especially in a controlled global market, is a speciality in itself. Specialist firms have established relationships and traceability processes
as standard.
A Hybrid Approach
The decision between make or buy is not always simple. Many programmes choose to use a hybrid model to retain design authority and system integration, while outsourcing build to print manufacture and testing to a trusted partner. This keeps IP control and programme oversight without the overhead of a full production setup and the diversion of critical resources.
This model can work well during technology changes, where internal teams are developing next generation features while current generation hardware is being produced and supported externally.
Questions To Ask
Before Deciding
Before committing to production or outsourcing, it is worth asking a few practical questions:
- Does our team have the time, skills, certifications & tooling to meet the projects requirements?
- What is the true cost of in house production vs quoted supply price?
- How does each option affect risk, schedule & quality?
- Is this a core competency we want to own or a support function?
If the answers to those questions show a gap in capability, time or resource, outsourcing to a specialist is usually a more efficient and lower risk option.
On-systems designs, manufactures and supplies complex, mission critical systems for defence, aerospace and marine programmes, from the initial concept through to production and field support. If you are interested in learning more about our services, speak to our expert team today.
