A ‘concept to product’ outsourcing model isn’t the same as the ODM model. Unlike the ODM model, the ‘concept to product’ outsourcing model allows the IP to remain with the customer. Further, today OEMs sign NDA and IPR protection with the service company as well as key architects and leads. This helps in non-proliferation and protection of IP. OEMs can pursue legal options against both the individual and company, if any violation. With respect to engineers working on a project moving to different opportunities, service providers are increasingly taking great care about knowledge transfer and knowledge protection, hence people turnover is no longer a sweat when it comes to “IP protection”.
There is no threat to product differentiation in a ‘concept to product’ outsourcing model, provided you choose the right service provider. The biggest source of product differentiation for OEM today is customer connect and market understanding which translates into product specs. This is the core part which still remains internal to the OEM in mature 'concept to product' outsourcing model. A mature service provider offering this model would allow the IP to remain with the OEM, helping you sidestep the risk of eroding your product’s differentiation.
If you are looking to out source, my company has over 30 years in Product Development and I've spent about 15 years living in Asia, We also have office in the UK. I would be interested in talking with OEM's to help with their out Sourcing. You may contact me terryl@htidistributiongroup.com or 714-662-2298. Looking forward to hearing from any intersted parties, As I do believe In Hands Free Outsourcing this allows many companies as you've stated to work on developing more products for their market. Regards, Terr Levesque
I agree completely that there is tremendous value in engaging from "Concept through Production" particularly for early stage OEMs who have not yet built an internal staff. That said, there are not many examples of EMS providers having the full range of competencies required to adequately achieve the OEMs expectations.
The model we've found that works best is one where independent best of breed design and manufacturing providers collaborate on behalf of the OEM, within a coordinated program management framework. Over time this approach leads to the creation of a Product Realization Ecosystem, which in essence is a virtual OEM working collaboratively on behalf of the brand owners requirements.
The key to making this work is the program management, communication tools, and the complementarity of the partners in the ecosystem.
-Jim DiBurro
Round Rock Consulting - The Leader in Product Realization Ecosystems
We have outsourced some of our design work for many years now but never let the "family jewel" projects go outside for fear of losing our IP. We have seen too many engineers from contract design houses work on our projects then leave the contract design house to start their own companies. This is the number one issue for us. If we can overcome this the next thing I would worry about is how to differentiate one's products if "everything" is outsourced. We see this in many products these days where many supposedly "different" products are simply rebadged copies. ODM has its place but definitely not for everyone.
Excellent analysis and a good question raised. From what I've seen, I think outsourcing should be a very hands-on model. For better or worse, the brand owner (the OEM) bears the responsibility for the product's performance, it's service, support, repair and reputation--you name it. It may be worth noting that eventually in the ODM model the brand owners simply relinquished their designs and let the EMS sell the products. True, many of them were getting out of the business, but it's also possible the brand lost a lot of its cache when so much was turned over to a second and/or third party. I think the brand owner has to be very careful about being hands-off.
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Thailand Stages a Comeback Join EBN contributor Jennifer Baljko on Thursday August 23, 2012, at 11:00 a.m. EST for a live chat on how electronic manufacturers in Thailand have shored up their supply chain to reduce the impact of future natural disasters.
Euro-Crisis: What It Means for High-Tech Firms Join EBN Editor in Chief Bolaji Ojo and Contributing Editor Jennifer Baljko on Thursday, July 12, at 10:00 a.m. EDT for a Live Chat on high-tech and Europe's economic difficulties.
Microsoft Surface: Potential Winners & Losers What are the implications for the electronics industry supply chain of Microsoft Corp.'s decision to launch its own tablet PC? Join industry veteran and EE Times' systems and OEM expert Rick Merritt on Tuesday, July 3, at 12:00 pm EDT for a Live Chat on this subject.
Join EBN contributor Jennifer Baljko on Thursday August 23, 2012, at 11:00 a.m. EST for a live chat on how electronic manufacturers in Thailand have shored up their supply chain to reduce the impact of future natural disasters.
Peter Drucker famously said "Trying to predict the future is like trying to drive down a country road at night with no lights while looking out the back window." Yet in the razor's-edge world of electronics—with a lean supply chain and just-in-time demands—the need to know the future is vital.
You've heard the saying "the No. 1 supply chain risk is your people." That hasn't always been the case. But today's complex global supply chain requires a new type of multitalented employee. It's one who understands, finance, marketing, economics, is savvy with technology, graceful with relationships and can think analytically.
Where are these people? Are universities properly preparing the next generation supply chain professionals? How do train your existing workforce for these new, demanding positions?
Brian Fuller, editor-in-chief of EBN, will lead a 60-minute Avnet Velocity panel discussion that will ask and answer these and other questions swirling around today's supply-chain talent challenges.
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