Make or Buy: an innovation lever for the company

You want to use the Make or Buy decision-making process to develop innovation in your company.

The decision to make or to have made can do much more than simply solve a problem of under-capacity, smooth out production, secure supplies or lower cost prices; it can be part of a process of innovation by the company and its subcontractors.

This sheet describes how to set up this four-step process, identifying the purpose of Make or Buy, the players to be involved and the changes required in their behavior.

The benefits of the process are manifold:

• open up new avenues of innovation for the company;

• structurally link purchasing (and the supply chain) to R&D and marketing;

• challenge production solutions and performance;

• Establish a partnership or even co-engineering relationship with suppliers;

• encourage supplier innovation;

• better understand and develop your real competitive advantages;

• establish a new relationship with its customers.