I believe that's when there aren't too many middlemen in the way or too many people driving up the cost of your materials when you can source them better at a different stage in the processing route. Logistics companies are middlemen. Vendors are middlemen.

Space X for example has a high degree of vertical integration, maybe not to the point of smelting their own raw materials but much higher than ULA. In the past it may have made sense given the environment.