You may be considering offshore product development work using a partner for development and manufacturing. Why wouldn’t you? There are many benefits to moving development and manufacturing offshore. The most obvious is the lower cost associated with offshore projects. But, is your project the right kind of project to do offshore? Are you going to get the quality required by your customers? Is the engineering going to be done a way to allow for feature expansion? Are you putting the cart before the horse, e.g. going offshore before you have all the information you need? There are many things to consider.
First, it is important to understand the failures that can come from offshore development, so you don’t repeat them. An InfoWorld article highlighted a medical industry project that was rife with typical challenges and one unexpected one. The engineer was quoted in the article as saying, “There was one..fellow no one could understand over the phone. It took us months to figure out what he was saying”
According to the article, “What the medical firm didn’t count on was that its existing configuration management tool…which worked fine locally, would be a total bust when used collaboratively between two groups 8,000 miles apart. It took the remote teams…an average of 13 hours to get updates on source code. And with a time difference of about 11 hours, the outsourcers were behind a full day’s work.”
This same article highlights a disastrous project offshoring manufacturing of a consumer product at Hewlett-Packard. Because the focus and incentives were on cost, not quality, the entire project was handed over to a Taiwanese partner, including marketing materials.
These cautionary tales highlight where things can go awry in an offshore development project.
Beyond the hurdles illustrated above, there are some questions you can consider as you make the decision to go offshore.
What is the level of complexity of the product you are developing? If the product development work you need does not include hardware or software development, then working offshore could be the right choice. We’ve seen that the more complex the final product is with regard to hardware, software, embedded systems, integration to vision or other components, the less likely an offshore development partner will be capable of supporting it.
Have you considered the hidden costs? When you decide to perform offshore product development for products that require mechanical, hardware, software and system development, you have also committed to forming a local team to monitor and audit the offshore development facility. That means additional costs and resource time. It also implies resource investment to manage time changes, languages and cultural differences between the US and the offshore development country. In addition, expect travel, program delays due to time changes, and stress to the engineers and development team that must work during off-hours with the offshore partner. With software development, in particular, significant challenges will arise with the debugging and adherence to good software development practices.
None of this means that a complex product can’t be partially executed the offshore partners. It means that certain components of the project shouldn’t be performed offshore. In many cases, the development can happen in the US, with the manufacturing being performed overseas.
At Resolution, we understand the importance of COGs, manufacturing and other costs are critical in product development. But, we also know that an offshore product development project can result in a cheaply developed product that often lacks quality, doesn’t meet regulatory products, and from what we’ve seen, doesn’t work. We work closely with customers to help balance high-quality product development with an eye toward low cost, competitive manufacturing. This delivers a product that can be manufactured overseas at the lowest possible risk.
To learn more about our product development capabilities, visit resolutiondev.com/services