Newport News Shipbuilding has been decreasing its level of vertical integration in recent years. Today, more than two thirds of components for NNS's ships are outsourced. Desiring to invest in strategic, business-enhancing capabilities such as advanced product modeling, research and development for next-generation carriers and submarines, a one-of-a-kind carrier refueling facility, a new technology center for advanced shipbuilding and carrier integration, a corporate-wide Shared Data Environment and advanced robotics for steel fabrication, the company has reduced its investment in more "traditional" component manufacturing shops. Major facilities the company operated in Asheville, North Carolina and Greenville, Tennessee have been closed, as have several shops in or near the company's huge yard in Newport News, Virginia. To a greater degree than ever, the shipyard depends on an integrated supply chain of prime suppliers and sub-tier suppliers for its success. It is exploring further opportunities to realize a greater return on the company's investment capital. By looking at strategies on how to best integrate their manufacturing processes with suppliers who have invested their capital and resources to specialize in products and services that can reduce manufacturing costs, shipyards can retain capital for strategic investment opportunities that promote future business growth. The key to making good outsourcing decisions that will enhance a company's return on assets is a strategic approach to "Make versus Buy" decisions. The downside of outsourcing that is frequently cited by those who have worked in or depended on internal shops throughout their careers is a reduction in self-sufficiency and flexibility. Other important considerations are labor and community relations. This paper describes the process of developing an improved "Make versus Buy" process, the implementation of that process, and then measuring the results to develop a set of best practices applicable to the shipbuilding industry.