When it's time to produce the electronic portion of your product, do you go to a design firm or an independent contractor? Both are good solutions, but they meet different needs. If you need your lawn mowed, you hire the kid next door. But if you want someone who knows what fertilizer to use and when to trim the trees, you hire a landscaper.
Outsourcing began as a cost-effective manufacturing solution. In the 1990s, it expanded to include full-service product design. Today, many companies are less likely to have in-house electronic engineering capabilities and are more likely to outsource. They hire an independent engineer with a specific expertise or go to a design firm that can be their "virtual" electronic engineering department.
COST MAY NOT BE THE DIFFERENTIATOR Firms go to independent contractors for budgetary reasons as well as for their expertise. With no overhead, a "freelancer" will typically charge less by the hour than a firm will. But, at closer look, the two resources could very well cost the same. Contractors may charge the same rate for engineering as they do for, say, testing. A design firm may charge lower rates for some tasks.
Consider your project's needs and the resources available for your best value. With a design firm, the hours you pay for are roughly equivalent to those of a contractor's and may even be lower when the value of a firm's engineering support services are taken into account.
IS YOUR PROJECT SIMPLE OR COMPLEX? You have an in-house product development team but have a specific task beyond your resources that needs to be executed. It makes sense to find an independent contractor who specializes in that discipline. Contractors are usually very good in a particular area, whether it's mechanical, software, or hardware engineering. But when you need expertise in more than a single discipline, your best choice is a design firm, where the team includes experts in all areas required by your project.
SEE THE BIG PICTURE One distinct advantage a firm offers over a contractor is that different aspects of the development project can be managed simultaneously. The mechanical design can be developed at the same time as the electronic design, while another team member designs the software.
This cohesive team can readily consult with each other, which saves time and helps avoid costly "do-overs." And while a job may be sidelined with a consultant, a firm has some degree of redundancy so if one expert is out, another can take on the task. If time is money, you certainly don't want to lose any.
WHO'S THE MANAGER? If you're the project manager on a design job, then working with one or various contractors could be a good option. On the other hand, you may just want to hand over that headache to someone else because working with multiple contractors can be problematic—too many chefs in the kitchen.
With a design firm, team members are working together with an established communication system under local management, so the development process can run smoother. You benefit from easy access to expert contractors in concert with a single contact point for project management.
TIME TO MANUFACTURE Before outsourcing internationally for very large production volume, you'll want to stay close to home for prototypes and smaller production runs. Some design firms now offer in-house manufacturing capabilities. Manufacturing at the same design firm with ongoing engineering consultation has ensured that client projects can be manufactured with a shortened product time-to-market.
A design firm that claims to have manufacturing capabilities may sub this out and increase your costs, so do your homework. Also, if you've used an independent consultant and need to outsource your manufacturing, choose carefully and try to go with one that's been referred. The further into the design process you have to make a change, the more expensive it is.
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Meier Chen -May 05, 2008
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