The modern landscape for manufacturers is changing, and is changing big in terms of shrinking profit margins and ever-increasing customer demands. The cost-effectiveness of the product being developed remains a deciding factor that allows manufacturers to gain benefits from the trending market.
Unlike past, manufacturers today are forced to keep updating their products in the market, and that too at a faster rate. The message from the market is clear: get it done quicker.
Under such pressures, manufacturers are required to adopt innovative product development strategies that synchronize well with the competitive landscape.
Companies that manage to leverage their capabilities to improve the productivity are expected to enjoy good benefits against their peers, as the ultimate efficiency of any organization depends on the amount of output delivered.
Partnering with Offshore Service Providers and Associated Challenges
Apart from implementing lean manufacturing techniques for cost savings, the primary requirement is to reduce the cost and time involved in the product design stage. Since high labor costs in the developed countries remain a prominent problem for product developers, the only alternative remains is to partner with offshore service providers located in low-cost regions.
With numerous service providers in developing regions of the globe, engineering projects can be executed at a fraction of cost, which can help in increasing the productivity of the organization dramatically.
Additionally, one has the access to a vast global talent pool, working cost-effectively to provide innovative product development ideas.
Opting for an offshore partner is indeed a great idea, but it brings along certain roadblocks that also needs to be addressed. In a tough competitive scenario, nobody wants to loose control over product development processes. There are several quality concerns as well while choosing an outsourcing partner, which requires determining the reputation and past domain specific experience of the consulting agency.
Fueling innovation through collaborative approach requires first determining core Vs non-core business activities before giving away all the critical information to third-party. Engineering outsourcing market is entirely filled up with providers that offer end-to-end solutions, and it is the manufacturer’s responsibility to identify business modules or activities that can be outsourced.
As an example, an automotive manufacturer would require conceptualizing and developing a virtual design before proceeding for its production. It is possible for the firm to cut the designing part, which usually involves developing digital drawings and 3D models that goes further as a part of shop floor requirements.
In this case, partnering with an offshore provider for CAD related work can significantly reduce the burden on in-house design engineers as well as the associated costs. However, one cannot rely on outside consultant while conceptualizing the design as it again raises concerns about copyright. Such critical activities are required to be retained back in the organization.
It is also important to realize how well documented the partnership is; a well established outsourcing partner always agrees to sign a non-disclosure agreement to avoid chances of any information leak. Additionally, evaluating the capability and domain expertise of the firm is essential to ensure a qualitative and innovative outcome. Collaborating with engineering service providers can prove beneficial only when the workforce is well-experienced in the domain under consideration.
One of the advantages of shedding non-core activities to offshore partners is the ability to shrink the product development process. While the service provider takes care of all the design related processes, organizations can focus on core activities such as physical testing and mass production.
With the assistance from a global talent pool, collaboration in obtaining a better product design can be practiced. Most service providers offer virtual simulation solutions as well, which can further shorten the development time by reducing the number of physical test trials.
Manufacturing firms can increase their capabilities without investing in any additional infrastructure or resource, which helps in bringing down the product development cost to a great extent.
About the Author: Prahlad Parmar is an Engineering Specialist working at Mechanical 3D Modelling for the past 4 years. He caters critical engineering challenges with ease and performs exhaustive procedures to develop robust, well-engineered and high performance designs.