Outsourcing New Product Development

In the ever-evolving landscape of modern business, companies face a myriad of challenges when they embark on a journey of creating new products. From gauging market viability to navigating the complexities of innovation, time-to-market pressures, and crafting the right pricing policy, the path can be treacherous. However, there is a guiding light in this tumultuous journey - the strategic art of outsourcing new product development.

So, why should we embark on this path of outsourcing engineering services, you ask?

Why Outsource Engineering Services?

1. The Hiring Challenge:

In today's job market, hiring top-tier talent can feel like chasing a shooting star. New product development requires an orchestra of engineers, from the creative Industrial Designers to the pragmatic Mechanical and Electrical Engineers. Sometimes, we need specialized talents, like tooling engineers or experts in optics packaging or firmware development. Finding these diverse skills in-house can feel like hunting unicorns. And often, these experts are only needed for short durations, rendering full-time hiring impractical. Outsourcing becomes the sensible choice.

2. Unlocking Innovation:

While your in-house team possesses invaluable insights into your target market and product goals, it's easy to become trapped within the confines of limited resources and access to specialized engineers. Outsourcing offers a fresh perspective, an infusion of diverse experiences, and a spark of originality. It's an opportunity to break free from the echo chamber and seek truly innovative solutions.

3. Streamlining the Process:

Sometimes, your internal processes unwittingly become stumbling blocks to innovation. A typical scenario involves crafting a Marketing Requirements Document (MRD) that often turns into a wish list. During the ideation phase, engineers are left to grapple with the impracticalities within budget constraints. Outsourcing partners offer an unbiased lens to scrutinize this wish list. Unlike in-house teams, they aren't bound by internal politics and incentives to please at any cost. They dig deeper, unveil the need for adjustments, and present alternative solutions that might deviate from the MRD but better serve market needs.

Now, let's explore the different types of product development service firms:

Types of Product Development Services

Solo engineer

There are individual engineers who offer product development services and if they have the exact experience set you are looking for, could be a fit that saves money. The challenge here is that a one-person outfit will have less access to resources like testing equipment, or a team that can not only verify, but elevate their work. You also run the risk that they could be pulled off your project by a bigger vendor with the lure of a longer-term contract, or get sick, or even get hired full-time. For these reasons, it’s typically safer to go with a firm with a team of engineers.

Engineering Design Firms

Engineering Design Firms house a diverse cadre of engineers, boasting a wide array of skills and experiences. Flexibility is their forte; they can work with you for a few hours or several years, matching your needs and timeline. The depth of experience and adaptability make them prime candidates for outsourcing. The key is to find the one that aligns with your unique needs and boasts a stellar reputation in your product field.

Narrowing the Choice: Types of Engineering Firms

Within the realm of engineering firms, there are those that specialize in industrial design, the cradle of ideation. While others focus on mechanical engineering, ensuring manufacturability and cost-efficiency. And then, there are firms that seamlessly blend both disciplines in-house.

The temptation to diversify vendors for different stages might seem prudent, but it often breeds communication issues and jeopardizes deliverability. Picture this scenario: you've established a timeline for your new product, and you've enlisted the services of an Industrial Design (ID) firm to finesse the product's aesthetics. However, the allure of perfecting its visual appeal leads to delays. These delays subsequently shortchange the Mechanical Engineering (ME) phase, compelling it to scramble in haste. As the Mechanical Engineers delve into their work, they stumble upon manufacturability issues, sending the project back to ID for rework. This back-and-forth cycle can become a relentless tug-of-war, translating into both lost time and, more critically, lost opportunities. In contrast, a single firm handling both ID and ME collaborates from the start, reducing deep dives into unworkable ideas. Continuous communication ensures a smooth handoff, saving time and money while relieving deadline stress. Sherpa Design, for example, handles both Industrial design and Mechanical Engineering inhouse.

Specialization Matters:

Specialization is a critical factor to ponder, both in terms of industry and application. Let's say you operate in the aerospace or automotive realm; in this case, it's prudent to align with a firm seasoned in those domains. Some firms specialize exclusively within specific industries, focusing on product development within those sectors. However, an even more pivotal consideration lies in their experience pertaining to the very applications you're venturing into. Take, for instance, optics for an infrared camera—this technology finds utility across various industries, spanning from medical to defense. Nevertheless, the true linchpin of success resides in the firm's specialization in optics. Most engineering design firms readily divulge their industry and application specializations on their websites, serving as a valuable compass in your selection journey.

So, how do you find your ideal vendor among the myriad of choices?

WHAT TO LOOK FOR IN A PARTNER

Company Website - Case Studies and Logos

Perusing their case studies and spotting customer logos or testimonials can provide initial clues. However, it's essential to recognize that case studies offer only a partial glimpse of their capabilities. Design firms often grapple with nondisclosure agreements, which restrict them from divulging extensive details about their work. The same applies to logos; you may spot a prestigious company name among them, but their involvement might have been minimal or occurred decades ago. To unearth the complete narrative, engaging in a face-to-face meeting with the firm is the ultimate key to unveiling these nuances.

Certifications

Consider the certifications vital to your project. ITAR certification may be crucial if you're in the defense industry, while other qualifications like various ISO certifications could hold varying levels of importance. Most company websites list their certifications.

Employee Experience and Satisfaction

Investigate the number and types of engineers in their team, ensuring they align with your project's needs. Platforms like LinkedIn can shed light on their experience in the field.

A company's culture, as reflected in their mission, vision, and values, should align with your own. You can usually find this on the company’s website.

Happy employees often reflect a company's strength. LinkedIn can also provide insights into employee tenure, with firms fostering positive workplace cultures often retaining talent for longer periods.

Management Structure

Opt for firms with flat structures, where your team leaders can engage directly with engineers. Avoid those with too many managers or gatekeepers, as they may slow projects down and introduce cost and communication barriers.

Vendor Meeting:

Meeting with prospective vendors is essential. Come ready with questions about their abilities and past work that aligns with your project's needs. During these meetings engineering firms often reveal valuable insights they are unable to share publicly, giving you a better sense of their expertise. These discussions are vital not only for understanding if a vendor can meet your needs, but also for assessing how well you'd work together. Since you'll be closely collaborating with them for a while, finding a flexible and easy-to-work-with firm is crucial.

Supplying Equipment and Personnel

Determine if the firm possesses everything needed for your project in-house, or if they'll need to outsource or hire external resources. This knowledge can impact costs, as external hiring often leads to markup fees.

Ask for References

Don't shy away from requesting references when considering a firm. Reach out to their references and delve into their experiences. Were they accurate in their estimates? Did they meet deadlines? What were their challenges?

Working with an Outsourced Development Team:

Once you've chosen a vendor and had them sign an NDA, you can share project details for them to develop a proposal. Typically, firms initiate with a scope exploration phase before delving into project work. This phased approach safeguards both parties as they collaboratively navigate the project's intricacies.

Development Stages:

The journey of new product development commences with a Marketing Requirements Document (MRD). This document outlines your product requirements. The firm's engineers will then craft ideas based on these requirements, resulting in a Product Requirements Document. This phase often involves revisions to align expectations with budget constraints. Eventually, this process leads to prototypes.

Prototyping - Machine Shop or 3D Printing:

In the design process, you'll encounter the prototyping stage. While you might collaborate with another vendor for this stage, some design firms offer in-house prototyping services, including CNC machining and additive manufacturing. These applications can be very useful to have on hand and streamline the process as you already have a relationship with the vendor. This will result in a shorter time to develop a working prototype because the shop can collaborate with the engineer directly.

Conclusion

Choosing the right outsourcing partner can be a challenge, but if you consider their industry, experience, engineer capabilities, references, and certifications, and you make sure to meet with them in advance, you’ll be well on your way. As you embark on this new product development journey, remember that the right partner can be your guiding star, illuminating the path to success.

If you have any thoughts or suggestions, feel free to share below. Wishing you the best of luck with your latest new product endeavors!