We have all heard the phrase "we have more computing power on our desktop than we had in the first space shuttle", or some variant of. Now, whether or not this is a true statement is up to the computer scientists to hash out, but it can be argued, and usually is during this conversation, that things are indeed more complicated these days.
Specific to Product Development, things are certainly more complicated these days, nobody will argue this. The days of maintaining a resource rich, highly skilled in-house team of experts is no longer practical or cost effective. There are just to many distinct and difference disciplines required to successfully bring a new product to market, and it is not possible to keep them all in-house.
Gone are the days when the development team can meet in a lab, completely spec a new product, design the proto type, fabricate the prototype, qualify the product and then walk out of the lab and into the production area, with documentation in hand and declare it ready. Of course, that is a very simplified flow, but it does represent the typical environment which was present up to the mid 90's, in many manufacturing companies.
Today, companies focus on their 'core' competencies and 'outsource' all other disciplines. There are many arguments for and against outsourcing. However, the merit 'for' and 'against' are not the subject of this article. 'Core' competencies can be in any area, whether it be Marketing, Research & Development, Manufacturing, Services or Operations.
Some of the first outsourcing efforts to occur were in the manufacturing world. Large and small 'contract manufacturers,' popped up and leveraged economies of scale to be successful by manufacturing many clients/brands products. The idea sounds great, keep the product manufacturing cost down by taking advantage of the above mentioned economy of scale, eliminate the cost of procuring and storing raw material and eliminate a 'non-core' competency. All these should save significant money and make the operation run smoother and more efficient, right? Well, shockingly, the answer turned out to be WRONG! The reason is, as it turns out, those pesky engineers that support manufacturing knew something that both the operations group and the contract manufacturing group didn't. That little tid bit of info was, "our product really isn't manufacturable per the current documented processes and procedures." In truth, a product is not manufacturable UNLESS you can build it without the need of any design engineering staff and only minimal support engineering staff. With the factory just a hallway away in the old days, the norm was for the engineers to go out, tweak this, make that change, clarify what the documents intent really is, etc and on went the production...chug...chug...chug! As you can imagine, move that production away from "down the hall" and you have a lot of problems and a lot of production line stops! So, the initial response was to increase production support engineering, many times provided by the company whose product is being built and always provided by the contract manufacturing group. Both of these increase the 'cost to produce'.
Today, any and all areas once found 'in-house' can be outsourced, depending on the level of comfort for the end customer. This includes product development services, such as mechanical design services, electronic circuit design services, software development and many other disciplines. Successfully transitioning these disciplines to the outsource world requires careful consideration and planning before making the final decision to execute and use an outsource developer. At the macro-level, here are the top considerations:
1) Intellectual Property: what part of your design process are you comfortable with outsourcing. Do you need to keep IP development in-house and just outsource the non-IP design?
2) Reputation of the Design Group: this should go without saying, but its very common to consider a design group by meeting them and then reading reviews by prior customers on their site and calling a few. The truth is, you also need to contact the groups manufacturing partners to really get an idea of who this design group really is. How they treat their manufacturing partners and the quality of the documentation/build package provided speaks volumes!
3) Cost of Design: need to understand the 'full' costs of design and how get good idea of how they bill out and how they handle 'change requests' due to the customer and 'change requests' due to an error of misunderstanding on their part during initial quote.
4) Documentation: review sample documentation from other projects they have done. Look for fluff versus real content. Also, look for solid Configuration Control processes that are easy to maintain.
5) Quality Training: is the group knowledgeable on how to implement and use 'design for six sigma' tools? Seek a good explanation from them on what is 'repeatable', what is 'reliable' and what is the difference. Many groups who are led by individuals, who have never spent time in a manufacturing support discipline for a large company, are simply not versed with these skills. This leads to the next item.
6) Experience in the Trenches: working for large corporations and being 'in the trenches' for many years. Yes, working in a lab designing stuff is the best part of these jobs, but the truth is, if the designer hasn't had to support the New Product Introduction and Production runs of his/her products in the past, then they are missing key experience needed to be considered a value-add outsourcing partner.
7) What happens after release? This one is a great question, but cannot be answered by the group you are considering. You must ask their customer base. Typically, a projects initial design phase represents the largest percentage of revenue, compared to the support revenue. The question to ask is, 'do you still feel like you get the same level of support?'
Certainly, the above list is not complete and should generate a lot of discussion. Discussions on certifications, etc are not discussed above. The intent is simply to bring focus on many of the key areas for consideration on outsourcing product development services. Future articles will include more detail and explanation on the Design for Six Sigma process and why typical engineering type limits have very little value. Other articles will include individual break downs of what to look for in some of the different types of development disciplines, such as Electronic Circuit Design, Software Development or Mechanical Design Services.
By ;
Mark Ford
Owner, MDG Technologies
http://www.mdgtechnologies.com
940-799-2445