Completing a design for a product intended for volume production includes many trade-offs not necessarily considered for prototype development or low volume development projects. Not to be confused with Design for Manufacturability (DFM) which concerns component productivity and ease of manufacture or assembly, design for volume production is primarily focused on Cost of Goods Sold (COGS).
There are multiple design solutions for obtaining a given function. These can vary as widely as purchasing a commercially available modular subassembly, to creating the same functionality from a custom and unique “from scratch” design. A commercial solution can be quickly obtained, integrated, and utilized, which helps time to market considerations and helps keep development (engineering) costs down, but typically carries a higher component cost. This higher component cost versus development cost can be alluring as customers strive for functionality and time to market, but can be detrimental as supply chain pressure for cost of the component will only yield so much once in volume production. The issue quickly turns into a margin problem as the demand for the product may be high, but the cost can’t be driven down any further by typical supply chain management. This issue will remain for the life of the product or until a redesign effort is expended to replace these higher cost commercial solutions. If you can choose a commercial component that is used across multiple industries and is produced in very large quantities, the issue will be diminished and should be part of the trade-off analysis.
An alternative to commercial solutions are custom designs. A good example would be purchasing a commercially available motor controller versus a developing a custom printed circuit board design. Custom component design will be more expensive up front and generally takes longer to implement than a commercial solution, but often gives customers a margin advantage due to lower Cost of Goods once in volume production. A custom design can also allow the development team to provide the exact functionality required, where a commercial solution may have additional features built-in that are not needed in a particular application.
When faced with a product development project to be produced in medium to high volume, a discussion of product cost targets, time to market goals, development cost objectives, and performance is required before proceeding with the design. Properly set expectations between the customer and the development team are paramount to being successful. Trade-offs between market needs and development costs early in the development may be the deciding factor to a long term win.
Bill Johnson – Vice President of Programs and Operations for DCI Engineering Services Email: email@example.com