Get Help On Your Device Design

Best in Class vs. Vertically Integrated?


by Barry Braunstein, Vice President of Business Development/Marketing at Acorn Product Development

When looking for an outside engineering/product development firm, clients have many choices both in terms of the specific expertise they’re looking for, as well as the type of firm they’re looking to engage with. For projects that involve software, electronics, hardware, industrial design, the choices can be staggering. While I don’t have a “magic formula”, I do want to offer some things to consider.

Let’s start with a hypothetical example – you’re building a new “thing” – it has a touch screen, some buttons, electronics, battery, wireless communication, and some unique packaging/thermal challenges. You plan on selling these in volumes exceeding 5K units/year to a “professional” market – as such, look, feel, quality, and operation are critical. The device needs to be ruggedized and somewhat waterproof, and come in at an aggressive price point. You’re primarily going to be developing the software for this device, which is where you’ve hired most of your people, and don’t feel you’ll be spinning the hardware aspect of this product often enough to justify hiring an in-house design staff. Oh, and you want to get to market in a year or less. You’re thinking about manufacturing overseas eventually, but haven’t made a decision yet.

In an ideal world, you’d like to compare 3 companies who can develop and manufacture the hardware platform for you, and have all the resources under one roof, and have the specific expertise you need (eg, been there, done that) to get the job done. And, they’re local, have manufacturing both in the US and overseas, and their development style fits with yours. People like this approach for many reasons, including the belief that since all these capabilities are under one roof, there is better communication and an already established working relationship/process that works.

In the real world, this typically doesn’t exist – you may find an Industrial Design (ID) firm with mechanical engineering capability, or an EE firm that has some mechanical design capability in house, or a CM who has engineering capability, but no ID resources in house. And as you “peel back the onion”, you start to understand there are tradeoffs, however.

The ID firms’ ME capability may be somewhat limited, and they don’t necessarily have extensive DFM expertise, nor a strong connection to manufacturing. The EE firm’s expertise in developing ruggedized, medium volume plastics design isn’t very extensive. And as you explore the CM’s capabilities, you’re finding that the range of their expertise is fairly limited, and very focused on designing products that fit their engineering process.

The best in class vs. vertically integrated/one stop shopping dilemma is not just limited to product development – companies such as HP, IBM, Oracle, EMC like to sell a complete set of solutions to their clients, involving their hardware and software, acting as a systems integrator. Often times they’ll pull in partners or other 3rd parties for aspects of the solution they either cannot provide or where the client has a strong preference for a 3rd party solution vs. system’s integrators’.

Many ID and engineering consulting firms have relationships with other complementary firms where they have established how their processes will mesh, and the people already know each other. They can make recommendations on which firms to bring on for specific aspects of the program based on the client’s product and overall program requirements.

Best in class consulting firms usually have larger staffs in that discipline, have a broader ecosystem of suppliers and partners, and are more “neutral” when it comes to choosing the various solutions that make up a successful engineering program. It’s important to determine which of the firms will be the “lead” or systems integrator, unless you want to take on that role yourself. The decision as to which firm that is should be based on where you see the biggest challenges are, along with who has the most expertise in tackling projects such as yours.

So how do you determine which direction to take? Start with an open mind – if you go into the project thinking that one approach is better than another, you’re likely to wind up going in that direction. Ask tough questions, look at the experience and approach of the various firms, and determine how well they will work with your team. And look at your program requirements, rank them by order of importance, and see how the firms you talk with match up with those requirements.

In the example program above, you’d look at a solution that addresses developing products with the following characteristics:

  • User experience
  • Products with displays and buttons
  • Wireless designs
  • Rugged designs / Waterproof
  • Packaging/addressing thermal challenges
  • Lower cost/medium volume/plastics
  • Potential experience with overseas manufacturing

Finally, ask for some proposals, but not necessarily for looking at the cost – rather use that process to see how the firms respond and their approach. The methods they use to respond are often an indication of how well their development process works, and how well they will work with you.

About the author

Barry Braunstein is the Vice President of Business Development/Marketing at Acorn Product Development. He is an engineer by training, and has over 35 years of mission critical, high technology sales and marketing experience in a broad range of technologies and markets.

About Acorn Product Development

Founded in 1993, Acorn Product Development is based in Silicon Valley with additional design centers in Atlanta, Boston, and China. We provide comprehensive product engineering services—from turnkey product development, subassembly development, and engineering analysis to materials cost analysis and manufacturing cost reduction—for leading companies around the globe.

We embrace collaboration, simplify complex engineering challenges, establish supply chains, and plan for manufacturing and delivery. Our proven expertise, relationships, and processes help our clients bring innovative, reliable, and cost-effective products to market quickly while maintaining profitability throughout their life cycles.



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