If sufficiently intense oversight is needed at the boundary then outsourcing becomes uneconomical. This is something SpaceX found (and also because external sources were often slow and expensive.)
Are you sure that applies to commodities with extremely high capital costs like mining and refining ore?
It sort of makes sense to me with SpaceX. They’re presumably buying fairly boutique parts that likely already require custom manufacturing, so someone is spending capital either way. I can see how it might make sense for them to build a custom manufacturing line instead of paying someone else.
That seems odd for commodities like titanium, though. Even if Boeing were to do it themselves, that oversight process is already a subset of the mining and refining process. They’re going to have to build out their QA lab either way.
> If sufficiently intense oversight is needed at the boundary then outsourcing becomes uneconomical.
1. That doesn't make outsourcing "bad" before the cost benefit analysis. Commenters above are broadly blaming outsourcing.
2. As a thought experiment, specialized suppliers could be able to manage risks and costs cheaper due to absolute advantages. That's the whole point of outsourcing.
3. Mitigating the consequential and indirect damages to Boeing from this identity crisis could easily (my SWAG) justify hundreds of millions of dollars (another SWAG) in spend on better quality control audits.
