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Hands-Free Outsourcing Makes Its Debut

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_hm
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Supply Network Guru
Added hidden costs and time to market
_hm   8/14/2011 1:19:44 PM
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How satisfied are customers for added hidden cost and lost time to market? How do customer mitigate these risks?

Prasad Bhatt
User Rank
Blogger
Re: IP worry
Prasad Bhatt   6/13/2011 11:03:24 PM
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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.

terryl2
User Rank
Stock Keeper
Sourcing
terryl2   6/3/2011 10:02:24 AM
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Hi,

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

Jim_DiBurro
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Stock Keeper
The Key is Program Management of the Ecosystem
Jim_DiBurro   6/2/2011 10:54:42 AM
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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

FLYINGSCOT
User Rank
Supply Network Guru
IP worry
FLYINGSCOT   6/2/2011 6:37:49 AM
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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.

Barbara Jorgensen
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Blogger
Hands-free outsourcing
Barbara Jorgensen   6/1/2011 12:50:47 PM
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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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