Companies spend decades outsourcing activities and then periods bringing them back. The direction reverses when the conditions that made outsourcing attractive stop holding.
Outsourcing assumes a functioning market
Buying a component or service externally is efficient where several capable suppliers compete, prices are visible and switching is possible.
Under those conditions the supplier carries the investment risk and the buyer benefits from competition without owning any of it.
Each of those assumptions can fail, and when they do the calculation changes without any strategic reconsideration having taken place.
Scarcity converts a cost decision into a supply decision
Where an input becomes hard to obtain, the question stops being what it costs and becomes whether it arrives at all.
A company that cannot deliver because a supplier failed loses revenue and customers, which is a much larger figure than any procurement saving.
Integration then looks attractive not because it is cheaper but because it converts an uncertain external dependency into a problem the company can manage internally.
Margin capture pulls in the same direction
Where one stage of a supply chain earns significantly more than the others, the companies around it have a persistent incentive to move into that stage.
This is common where a supplier holds a proprietary position or where a distributor controls access to customers, since both can raise prices without losing volume.
Integration in those cases is an attempt to relocate profit rather than to reduce cost, and it is resisted accordingly.
Owning a stage converts variable cost into fixed cost
An external supplier is paid for what is used, and an internal operation must be paid for whether it is used or not.
That works well at high and stable volume, where fixed costs spread thinly, and badly where demand fluctuates or the technology changes quickly.
Integration therefore raises the cost of being wrong about volume, which is the principal reason companies later reverse the decision.
The capability rarely transfers as expected
Doing something for one customer at internal scale is different from doing it competitively for a market, and the acquired operation loses the discipline of having to win business.
Internal customers cannot easily go elsewhere, so quality and cost pressure both weaken over time unless deliberately maintained.
Companies that integrate successfully generally keep some external benchmark, either by continuing to buy part of the volume outside or by measuring the internal operation against market prices.