How can we establish the benefits and drawbacks of ‘make’ versus ‘buy’ manufacturing?

Our client asked:

Our client was developing a Micro Electromechanical Systems (MEMS) sensor device – currently at the prototype phase – and wanted to start scaling up production using in-house resource, rather than a third-party manufacturer.

Understanding the economics of such as decision – in particular, which machines would be most cost-effective for producing different volumes of devices – was vital.

Our client also wanted to understand the capital and operating costs of the required machines, and the levels of output which diverse types of machines could deliver.

The project story:

We started the project by holding a workshop with the client to understand their requirements.

We then developed a cost model in Excel based on these requirements, populated with data derived from a variety of sources – including supplier interviews, third party data sources and in-house experience from our sister company Frontier Smart Technologies.

We focused on two scenarios in the model. Scenario 1 was a ‘pilot’ scenario, producing 500 wafers per week, while Scenario 2 involved ‘high-volume’ production of 5,000 wafers per week.

Results: deliverables and outcomes

Our client was able to understand the costs associated with a range of MEMS manufacturing options – ‘make’, ‘buy’, and a hybrid of ‘buy’ and ‘make’ – as they began to scale up production.

The key output from this work was a cost model – which we handed over to the client – that could be used as a tool to support decision making about its future manufacturing options.

This deliverable was designed to help our client understand how the choice of manufacturing process – and associated costs – evolve as different volume thresholds are achieved, using both ‘pilot’ and ‘high-volume’ production.