What I was observing, however, was different. It was a shift to subcontracting on a permanent basis for such standard operations as turning, milling, and drilling. It allowed the firms to avoid making investments in up-to-date machine tools and was frequently the occasion for a reduction in capacity, with some existing plant being sold off. While the general type of operation subcontracted was not specialised or specific to the particular firm in question, the design and specifications of the components were. Thus it was not a case of substituting in-house production for standardized components available in the market: rather, components were being machined (turned, milled, etc.) by subcontractors according to firm-specific plans produced in the design offices of the client firm.

XREF: Connects to the make-or-buy literature and analyses of vertical disintegration in production networks.

Diego Gambetta, Trust - Making and Breaking…, loc. 2485