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What Could Go Wrong When Outsourcing Product Development?

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bobjengr
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OUTSOURCING PRODUCT DEVELOPMENT
bobjengr   4/14/2014 6:39:39 PM
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Brian--Excellent post.  I own a consulting engineering firm developing work cells to automate manufacturing processes.  The GREATEST problem we have is understanding what the client wants and needs.  What is the desired end result?  Early communication to develop specifications is absolutely critical to any project including product development projects.  Time spent developing these specs can save a great deal of agony.  I am constantly amazed that some (maybe not most) clients really do not know what they want and certainly do not know how to express needs even if they know them.  I can't tell you the times we have "changed horses in mid-stream."  Very time consuming, costly and generally causes significant delays in schedule.   I might add--always get the specifications in writing with the client signing a document approving the specifications. DON'T BEGIN UNLESS YOU HAVE PROPER-SIGNED DOCUMENTS STATING WHAT IS NEEDED. 

Pubudu
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Re: What could go wrong? A series of fatal errors could be made
Pubudu   4/14/2014 1:44:25 AM
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Brian great article with a lot of insight. Actually, this can be used as a guideline for outsourcing the production.

William K.
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Platinum
Re: What could go wrong? A series of fatal errors could be made
William K.   4/10/2014 9:03:12 PM
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D.H. I hope that some others can avoid a lot of grief by noting the failures that we had. It is certainly vital that the description of the results be defined exactly before turning any design contactors loose. That includes an exact description of outputs as well.

Of course, a real part of the problem was that it was our core area that was being sent out. Atleast it was my core area, which since I was the new engineer the rest did not fully understand my ablities. And who is willing to tell a boss "no" when he claims that you have more important things to do?

William K.
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Re: What could go wrong? A series of fatal errors could be made
William K.   4/10/2014 9:03:04 PM
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D.H. I hope that some others can avoid a lot of grief by noting the failures that we had. It is certainly vital that the description of the results be defined exactly before turning any design contactors loose. That includes an exact description of outputs as well.

Of course, a real part of the problem was that it was our core area that was being sent out. Atleast it was my core area, which since I was the new engineer the rest did not fully understand my ablities. And who is willing to tell a boss "no" when he claims that you have more important things to do?

Debera Harward
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Silver
Re: What could go wrong? A series of fatal errors could be made
Debera Harward   4/10/2014 4:22:18 PM
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No doubt outsourcing has benefits as well like it helps the organisation to be in good financial position by eliminating the assets from the balance sheet and have more stable cash flow , resources can be redirected to core operations , Organisation can think innovtely without having the hassel of production and so on .

Debera Harward
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Silver
Re: What could go wrong? A series of fatal errors could be made
Debera Harward   4/10/2014 4:05:33 PM
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William, the issues that you mentioned usually can occur while outsourcing product development and it is no doubt one of the most crucial step. Organisations should give clear guide lines about the product , raw material and each and every detail of the product instead of asking the outsourcing team to enter directly into development .

William K.
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Platinum
Re: What could go wrong? A series of fatal errors could be made
William K.   4/9/2014 3:41:13 PM
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Brian, if we had been smart enough to avoid all of those mistakes we would have been smart enough to understand that the job should have been done in house. Another mistake that was part of the same project was purchasing a really junk laser diode package from Digikey, when a pre-aligned laser package that included the driver circuit was available from another company, for $2 per unit less money. Plus, purchasing the bore-sited units cut almost two hours out of the setup time.

Brian Terhune
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Blogger
Re: What could go wrong? A series of fatal errors could be made
Brian Terhune   4/9/2014 11:38:08 AM
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I'm sorry to hear about your past outsourcing experience. Many of the items listed in your comment are classic mistakes.  Unfortunately, they aren't uncommon in the industry, however not all outsourced projects end up this way.  Well defined processes protect against these pitfalls, and when employed lead to a successful development outcome.  Hopefully, if the need arises again, your next outsourcing experience will be greatly improved.  Best of luck.

Ceylon0
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Silver
What me worry?
Ceylon0   4/8/2014 1:58:59 PM
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What could go wrong..... just ask the customer service people at most of the companies that outsourced their development!

William K.
User Rank
Platinum
What could go wrong? A series of fatal errors could be made
William K.   4/8/2014 10:10:32 AM
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I used to work for a company that decided that instead of developing a new product in house, we should have it designed and developed by an outside organization. We made a fatal error in not adequately understanding exactly what the product had to deliver. The outside supplier made a fatal error in selecting components that were not only more expensive but much harder to calibrate. We made another fatal error by submitting this product to our potential customer, who committed the most deadly of the fatal errors by not adequately testing the prototype, and then telling us that it did meet their requirements. We made another fatal error by believeing him, and going into production, and winding up with a production run of devices that were very difficult to calibrate, and impossible to calibrate adequately. \

The only good side is that we learned quite a bit, and that the replacement product that was designed and built in house met all of the customers requirements and was a success. 

Unfortunately the company died a terrible death at the hands of the bankers. Not even bankruptcy, since the company assets were worth far less than the amount the bank was owed.

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