Invest to perform internally versus outsourcing of metal additive manufacturing : An exploratory case study

Abstract: Firms often stand before decisions on whether to make or buy components. Various well-established theories that have been applied and developed to understand make or buy decisions have also been critiqued for not generating a well-based decision basis. Research indicates that make or buy decisions are more complex than most theories suggest and that theories within make or buy don’t seem to account for situations when the production technology does not exist in-house. In instances of new technology, in this case metal AM, there is a need to understand and account for the case specific attributes to determine the best course of action. This study explores the decision situation of invest to perform internally versus outsourcing of metal additive manufacturing. The aim is to investigate and identify what factors affect the decision. The research design is a qualitative exploratory case study including 10 interviews and a cost analysis of two products, to answer how metal additive manufacturing affects these decisions. The cost analysis is included, as economic performance is a factor of importance, which makes it meaningful to understand in such situations. The most prominent factors in the result are found to be competency, control, economy, interaction, organization and strategy. The results of the study indicate overlapping similarities of the results through existing theories and suggest that these decisions are more complex than the individual application of single theories. However, the cost analysis shows that the currently held outsourcing alternative is more expensive and this might indicate a non-rational decision in regards to the financial perspective. The main contribution of this study is to the field of decision-making with the conclusion of that individual theories are not sufficient to explain the phenomenon of invest to perform internally versus outsourcing. To evaluate these decisions, the results indicate the necessity to have a multi-criteria approach and include several theoretical perspectives.