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/:itemId.
• 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:

1. No BOM / no manufacturing capability → BUY ("Item does not have a BOM or manufacturing capability").
2. Components are short and buying is cost-competitive → BUY ("N components are short; buying is cost-effective").
3. Material cost difference — if making is meaningfully cheaper → MAKE; if buying is meaningfully cheaper → BUY.
4. Lead time — if only one option meets the required date, that option wins ("Making meets the deadline; buying would be late", or vice versa).
5. 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.

Related Features

• Shortages & Impact
• Creating Purchase Orders
• Work Orders
• Bill of Materials (BOM)