Posted on 01 Feb, 2018 by Russell Poppe
Many Original Electronics Manufacturers (OEMs) choose to outsource manufacturing to an Electronics Manufacturing Service (EMS) provider.
While handing over part or all of your manufacturing to a third party can be daunting, it offers a host of benefits. It frees you up to focus on what you do best - whether that’s designing, marketing or selling. It reduces your operating costs, and you gain from the range and depth of expertise than an EMS can provide.
For OEMs already outsourcing their manufacturing, going to a third party for other services, like product design, could well be the next logical step.
But should OEMs be outsourcing product design? Or is it best to keep it in-house?
The in-house argument
Managing your own team of designers enables you to build, fine-tune and retain specialist knowledge in-house. No one knows your products better than you, and your design department will have built up an invaluable bank of expertise specifically applicable to your projects. This in-house knowledge can also be extremely useful for providing your field service engineers with knowledge to handle the maintenance, upgrading or repair of products.
Keeping everything in-house means you’ll have greater transparency over the design process. You’ll know where, when and how your money is being spent. And you can be sure that your product is being given the dedicated care and attention it deserves.
With manufacturers prone to theft of Intellectual Property (IP) through counterfeiting, copying or stolen designs, keeping close control of your design process means you can also maintain better control of your IP assets.
Why outsource product design?
Despite the benefits of keeping product design in-house, there are downsides too.
Here we highlight some of the key motivators that might drive an OEM to decide to outsource their product design.
Outsourcing product design frees you up to focus on what you’re great at. Maybe it’s developing new product concepts or price points. Or perhaps you want to direct your energy to selling. Wherever your priorities lie, you’ll be able to focus on them without the day-to-day hassle of trying to make sketches come to life and then turning these into tangible products your customers want to buy.
Technology is constantly on the move, and to get the best from your design efforts you need to make sure they have a hold on the latest developments. But committing to regular training for your designers can be a strain on budget and resources. You may find it simpler, more cost-effective, and more time-efficient to hand over the increasingly complicated technicalities of design to a company with the resources to keep pace.
The bottom line
To be able to manage design in-house you need the necessary skills, infrastructure, equipment and personnel on-hand. Choosing to keep your own designers permanently on payroll relies on having the budget to accommodate them. But if you’re not maintaining an ongoing schedule of design activities, it might be more cost-effective to outsource.
Although you may know your products best, a fresh pair of eyes can be a good idea. By outsourcing, you can leverage the expertise, networks, and resources of design specialists. By their very nature, they will have an extensive knowledge and a more detailed understanding of the challenges of the design process. They’ll be able to draw on lessons learned from previous projects. And they’ll have an appreciation of the unique characteristics of each design project.
How does outsourcing design fit into your current strategy? Perhaps your in-house design team are already working to capacity and you need outside support. You may have a specific project that requires specialist knowledge outside the expertise of existing designers. Or maybe you’re looking to outsource product design as part of a longer-term plan.
So what are the options for outsourcing? You could choose to bring in a contractor or sole trader. That way you get the outside expertise and a fresh perspective but still maintain much of the control. Alternatively, you may decide to outsource to an EMS provider with design services in-house. If you have an existing relationship with an EMS partner, they’ll already understand your business and will be invested in maintaining your relationship. Or, you could choose to employ a design house with specialist skills.
There’s no right or wrong answer when it comes to whether or not to outsource your product design. But if you are considering outsourcing, one thing to bear in mind is to involve those responsible for manufacturing from the outset. Design and manufacturing go hand-in-hand. If your own production team, or your EMS partner, struggles to efficiently build your new design on-time and to your budget, your costs will spiral out of control and your customers will be left disappointed.
To find out more about your options for outsourcing product design, download our eBook below.