Make vs Buy

The Make vs Buy analysis helps you decide, for a manufacturable item, whether to produce it in-house (a work order) or purchase it (a purchase order). It weighs cost, lead time, component availability, and capacity, then gives a clear recommendation with the reason behind it.

Where to Access

Make vs Buy — /sdi/makevsbuy/:id.
Reached from a Shortage Impact page's Make vs Buy Analysis button (shown for assembly items).

The analysis evaluates a representative quantity by a required date (defaulting to a sample quantity ~30 days out) so you can compare the two paths on equal footing.

The two options, side by side

MAKE (Work Order)

Unit Cost and Total Cost — rolled up from the item's BOM component costs.
Lead Time and Ready Date — when production could finish.
Capacity Available — whether the item can actually be built (a missing BOM means it can't be made, forcing BUY).
Component Status — each BOM component marked:
- Available (green) — enough on hand
- Partial (yellow) — some on hand, not enough
- Short (red) — none available with quantity available / quantity required and a count of how many components are short.
Create Work Order — jump straight to building it.

BUY (Purchase Order)

Unit Cost and Total Cost — from the item's purchase cost.
Lead Time and Ready Date — based on the item's purchasing lead time.
Preferred Vendor and Minimum Order Qty (MOQ).
Cost Premium vs Make — how much more (if anything) buying costs.
Create Purchase Order — jump to the Multi-PO Creator.

The recommendation

The system returns MAKE, BUY, or EITHER, with a plain-language reason. The logic, in order:

No BOM / no manufacturing capability → BUY ("Item does not have a BOM or manufacturing capability").
Components are short and buying is cost-competitive → BUY ("N components are short; buying is cost-effective").
Material cost difference — if making is meaningfully cheaper → MAKE; if buying is meaningfully cheaper → BUY.
Lead time — if only one option meets the required date, that option wins ("Making meets the deadline; buying would be late", or vice versa).
Otherwise → EITHER ("Both options are viable with similar cost and lead time").

The recommended side is badged Recommended so it's obvious at a glance.

How to read it

Component Status is often the deciding factor — if key components are Short, making may be slower or impossible even when it's cheaper on paper.
Cost Premium vs Make quantifies the trade-off when you choose to buy for speed.
Ready Date vs the required date tells you whether either path actually hits the deadline.

Tips

Keep item purchase cost, lead time, MOQ, and preferred vendor current — the BUY side depends on them entirely.
Keep BOM component costs current — the MAKE side rolls these up for its cost estimate.
Use Make vs Buy when resolving an assembly shortage: it tells you whether to fire a work order or simply purchase the finished part this time.