> But once you have a design set in stone, outsourcing is cheaper than doing it in-house. These companies specialize in producing parts with economies of scale.
Except you need to ship the parts to your factory and still employ QA people who must check whether you got what you paid for.. If the supplier has a bad defect ratio, you must order more parts. It's not as cut-and-dry as you think.
Every time your assembly-line halts, you're paying people for twiddling their thumbs. The more external suppliers you have, the higher the risk.
Don't the fines for halting a line cover the cost of the halt for the manufacturer?
I'm currently working at a supplier for some companies in mostly the automotive sector and the line halt fines per second seem to all be in the couple grand range so I always assumed it should be enough to cover the halt.
Though the QA part is real. There's so much theatre in tricking clients into believing their QA measurements are wrong when something happens it's kinda funny.