MOB - Make-or-Buy
The term Make-or-Buy describes a company's decision on whether achievements are to be provided internally or externally by using an external manufacturer, supplier or service provider.
Brief description
With the decision to manufacture in-house or outsource, the company decides whether individual parts or services will be performed in-house or whether it is better to source from external suppliers. Factors that have a significant impact on this strategic decision are:
- The amount and regularity of demand,
- autonomy and strength in the market or, for example, sudden dependence on suppliers,
- quantitative and qualitative considerations,
- loss or retention of core competencies in the company,
- supplier offerings,
- corporate image and strategic aspects.
A trend is becoming apparent that companies are increasingly focusing on their core activities and transferring non-value-building activity to third parties. This trend results in a decrease in in-house production and an increase in outsourcing activity. The MOB decision is not made on a one-time basis, but every branch of business, every product, even every single part should be considered regularly.