Today, doing business is like a Formula One race -- it's all about teamwork and collaboration. Drivers Sebastian Vettel and Lewis Hamilton don't win races on their own. They rely on the backing of their racing teams and on the power of their cars' engines (Red Bull Racing / Renault and McLaren Racing / Mercedes-Benz, respectively).
Similarly, an electronics system product company cannot flourish on its own; it needs a well-organized supplier network to win and cope with the business dynamics of time-to-market and time-to-volume. But the current fragmented supply chain, with multi-location and multi-disciplinary suppliers, makes it extremely difficult for system companies to reach the finish line fast, and in a cost-effective way.
So how should system companies make their supply chains more efficient and effective? An apt motto to follow is: If it's not your core priority, outsource it to someone doing things right in that area! With some leading R&D service providers ready to take charge of managing the manufacturing supply chain, along with design, it's a wish fulfilled for system companies that want to focus more on product innovation and addressing dynamic market needs.
But can third party R&D service providers really walk the talk? The answer is yes. Some leading R&D service providers have excelled in capitalizing on their wide networks of electronic manufacturing services (EMS) partners and component suppliers, and in delivering on the manufacturing promise to system companies. (See: Hands-Free Outsourcing Makes Its Debut, where I wrote about "concept-to-product outsourcing" offerings by third party service providers.)
Doing one's due diligence when selecting the service provider would hold system companies in good stead, help overcome supply chain hiccups, and bring long-term benefits.
Here is a checklist to help you make the right choice:
- Expertise is key: Ensure that the service provider you choose has extensive expertise in translating market needs to product architecture, design solution, integrated design implementation, test and engineering services, supplier quality engineering, component engineering, environmental compliance engineering, and failure analysis at the system level. This is crucial since you want the R&D service provider to have the capability to resolve any system-level issues that may crop up at the later stages of the product development cycle. You should be able to hold them accountable to the task.
- Extensive support base is critical: The service provider must have an extensive network of electronic manufacturing service (EMS) partners to help in the flawless execution of manufacturing. They should be able to utilize this partnership for even low-to-medium volume high-complexity products.
- IP is sacred ground: IP is always very dear to a system company. Do not compromise on IP while outsourcing the manufacturing supply chain management to the service provider.
- Check the track record: Today, product designs require a higher degree of connectivity and customized end-user experience. As a result, there is a growing convergence of multiple technologies leading to design complexities. Ensure that the solution provider you choose has design pedigree in developing high-complexity products in areas of communication, computing, and video.