SpaceX gets cited as proof that building everything yourself wins. Look closer and the lesson is narrower, and more useful for anyone running a sourcing strategy.
The Headline Number Hides the Real Model
One research firm puts it at about 80% of SpaceX's manufacturing done in-house [1]. But Robert Pakalski, who worked on procurement at SpaceX and now runs procurement software firm Datum Source, told Aviation Week that SpaceX is "entirely vertically integrated as a subassembly integrator," while "the majority" of individual components are outsourced. He says the company outsources tens of thousands of parts to suppliers [2].
So SpaceX designs most of its parts and owns final assembly. A wide shop network still makes many of the pieces [2].
Where SpaceX Keeps Work Inside
Per the same report, SpaceX's in-house machine shop exists "to take on the high-[intellectual property] parts and the very critical parts" [2]. That is the rule worth copying. Keep in-house the work that protects your edge or that you cannot afford to have fail. Buy the rest from shops that do it well.
Three Questions for Your Next Make-or-Buy Review
- Is this part where our know-how lives? If yes, owning the design, and maybe the build, protects it.
- What does a failure here cost us? Critical parts earn closer control than commodity ones.
- Do we own the design even when we buy the part? You can outsource the making and still control the spec, the way SpaceX does [2].
The Takeaway
"Build it all" is not the SpaceX lesson. Own design, integration, and the critical few. Run a strong supplier base for everything else.
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