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  • Tim Kannegieter

Keeping costs down: The benefits of outsourcing product design

Updated: Mar 18

One of the big myths in product development is that contract designers cost a lot of money when the exact opposite is true. The technical expertise needed for in-house electronics and mechanical design can translate to significant costs for your business, particularly when opting for a small team of one or two technical resources to do everything needed. Here are some of the critical factors that make the case for outsourcing your product design compelling.


The cost benefits of outsourcing product design

Reduce overhead costs in product design

The overheads for establishing an in-house team can be significant, including:


Hiring/skills: Building an in-house electronics and mechanical design team requires recruiting, onboarding, and package benefits that are fixed costs not incurred with outsourcing. Recruiting is a highly uncertain process, and there needs to be assurance that a small team will have the right skills and aptitudes to deliver, which may require significant unforeseen supervision. Generally speaking, small teams will never have the range of skills needed to cover the wide range of technical fields required for modern Internet of Things devices. When essential resources go on leave or depart the company, the impact on the development roadmap can be highly damaging.

 

Infrastructure: Product design involves significant investment in specialised software and hardware. A typical project requires a range of tools like oscilloscopes, signal generators, logic analysers, and a plethora of software tools with expensive licences such as PCB design software (e.g. Altium) and 3D CAD software (e.g. Solidworks). On top of that 3D printers, EMC testing equipment, environmental test chambers, battery characterisation test rig, and infrastructure establishment costs are significant.



 

Quality systems: High-reliability products are primarily a function of quality management systems (QMS) that ensure best practice processes are followed during design and development. If you are designing everything in-house, you will need a functioning QMS with all the Standard Operating Procedures in place, as well as templates for required documentation and certification by an independent auditor. The cost of establishing all this runs into the hundreds of thousands of dollars. By outsourcing to a partner with a QMS (certified for design and development) already in place, you can minimise the scope and operating burden of your own QMS. Genesys has an ISO 13485 QMS for medical device design and similar highly-regulated products. And don't worry, if your product does not require quality design controls then you pay a lower rate and you won't pay for QMS documentation that is not required.


Outsourcing means you don't have to pay directly for any of the above overheads, as they are incorporated into the contractor's hourly rate. Instead, the costs of maintaining an expert team are shared across multiple clients, and you only pay for the time you use your outsourcing team.

 

Optimising design efficiency in product design

Expertise on demand: Outsourced designers are specialists with diverse experience and knowledge in areas that are usually a non-core activity for product developers. A key benefit of outsourcing is having this expertise on tap for use only when you need it. You can turn on the tap at any time, slow it down, pause it, or accelerate it as needed. With an in-house team, the cost tap remains fully on through slow periods and between product iterations.

 

Leveraging experience: There are many technical elements common to virtually all design projects, and contract designers will have developed libraries of code and hardware designs for everything from I/O drivers and sensor connection to middleware for managing communications, run-time monitoring, power management and much more. To re-create all this "under-the-hood" enabling technology in-house, from scratch, is a laborious and wasteful task that will delay your project. Open-source technologies help with this, but in-house designers should not underestimate the integration challenge for even moderately complex products.


Quality control: With small internal teams, staff generally need to review their own work, which is a recipe for costly errors. It is tough to spot your own mistakes, and developers of regulated products need someone to verify their outputs independently. At Genesys, another team member of equal or better experience who was not involved in the development independently reviews the outputs. There is a saying that the later an error is detected, the more costly it is to fix. The savings from this approach, only available with larger more experienced teams, are hard to quantify but can save you from an error that potentially sinks a project.


Genesys is certified to design medical devices

 

Time is money: Contract designers such as Genesys have developed processes and invested in advanced time-saving tools to be as efficient as possible, leading to faster and more efficient project completion. For example, Genesys is an advanced user of Atlassian's Jira, the leading platform for planning and project management. The impact of missing deadlines associated with funding milestones, tradeshows and other go-to-market plans can have devastating financial consequences. Outsourcing allows for negotiating fixed deadlines and clear identification of the resources needed to meet them.

 

Design for manufacture: Leverage the professional designer's expertise to minimise the manufacturing costs of the product. Tips that inexperienced individuals often miss include to design a PCB to minimise assembly costs, facilitate testing, allow for component substitution flexibility, and deliver a design transfer data pack that streamlines manufacturing. The same applies to mechanical aspects and enclosure design to minimise final product assembly costs.

 

Making the right outsourcing choice

By outsourcing design, you free up internal resources to focus on your core competencies. Outsourcing allows for better resource allocation and ensures the internal focus is on customer needs and strategic growth.


The right contractor will be one with whom you want to develop a long-term partnership where the design house comes to understand your business intimately over successive projects. A long-term relationship will make product upgrades and iterations much easier and more cost-effective as they are not starting from a zero-knowledge base. A collaborative approach to planning and project management will minimise scope creep and effectively handle variations when required. With a trusted outsourcing partner, contractual arrangements ensure no billing surprises and allow flexible payment options to suit any particular kind of project.


Having mounted the case for outsourcing, Genesys welcomes and recommends that its clients have at least one technical resource in-house. In-house expertise is a key enabler for productive interaction at a technical level and facilitates effective project management from the client end. This person may even be responsible for some deliverables that align with their expertise and the company's core value proposition. However, their primary role is to manage the outsourcing partner pro-actively. So, look for a design partner that will work well with your internal technical resources.


Find out more about the ideal balance of in-house and outsourced resourcing in our article on co-sourcing.

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