We often get calls asking if we can design a prototype, or, have you ever worked with the XYZ technology/IC/Software/etc. After a few probing questions, what we learn is that this company really needs a product developed, not a prototype designed—at least not yet.
Developing a product is not the same as designing or building a prototype; further, deciding what technology to use in a new product can mean the difference between success and failure. If this decision is flawed, a lot of time and money can be wasted very quickly.
It is important to understand the steps in product development and make sure these steps are followed in the right order. Doing the wrong thing really well is worth nothing.
The processes you follow is slightly different depending on who you are. If you’re a large, established company, you likely are not reading this email, and even if you are, you likely do not need help. If you’re a small company in a niche market, then this email is for you. If you’re a small company or a startup, then pay attention to next week’s email, as the process is somewhat different.
Niche market companies must pay close attention to development budgets. Because they sell a relatively small number of units per year, the development dollars spent to make up a significant part of the unit cost. In fact, lessening the development cost can be much more important than a lower manufacturing cost.
Engineering services are a worldwide commodity. An hour of engineering time is going to cost the same regardless of who, where, and how you purchase this hour. Trying to lower the development cost by finding low-cost engineers is not likely to be an effective strategy.
The number of engineering hours needed to develop a product is primarily driven by the choice of conceptual design. Any given set of product requirements has an almost infinite variety of ways (concepts) that can accomplish these requirements. Some concepts will take significantly more engineering hours to develop than others. Moving forward with detail design (“design a prototype”) with the first concept someone thinks of is almost certainly going to be very expensive.
Creating the correct concept is key to niche market product development. Spending a few pennies ensuring that the correct concept is chosen will save dollars in detail design.
Here are some tips:
Make sure the requirements are complete, accurate, and understood by the team. If you would like a good requirements document, request our template here.
Diversify the Team:
The more engineers, and the greater the diversity in their backgrounds, the more likely innovative ideas will be generated. We often see a single idea cut development cost by 50% or more.
Create Several Concepts:
As a rule, at least three different concepts should be developed.
It’s imperative that the team understand which requirements are more important to exceed than others. Ranking their importance guides decision making when comparing different conceptual choices.
Generate a matrix with ranked requirements down the left side, and concepts across the top. Each cell then becomes a place to judge that concept’s ability to exceed the requirement. This forces the team to focus on a single issue at a time: how this concept scores on that requirement. Simple math determines the best concept.
Use Reference Designs:
Reference designs can have a major impact on development. Using something that is already designed means fewer engineering hours are needed—you start the race halfway done.
Use a Specialist:
Although a specialist may charge a higher hourly rate, this extra charge is often worth the money as their productivity generally pays for itself. One word of caution: if you’re a hammer, everything looks like a nail, so don’t let technical specialists dictate the conceptual design.
Management is Important:
Managing the process is critical. If product development is not something your company does on a regular basis, then you will need to identify a resource to rely on. You can download ourROM (great for determining product development cost) – Project Estimation SpreadSheet.