News Archives - Harvard Solutions

Category: News

Outsourcing product design and development – when is it a good time?

In an ever increasing need to manage budgets for the development of new products, companies big and small are looking to bring development “in house”. Irrespective of the internal resources available, many companies become very quickly aware of the drains on this resource and the effect on other business processes.

That’s when they consider outsourcing product development to a specialist services company can prove invaluable. In order to make that call, we have tried to clarify why outsourcing can save money and time.

Design and development services: A definition

Not everyone understands everything that specialist firm can offer. An engineering services firm, also referred to as a product development or product design company, can help bring product ideas to life by taking a product concept and work with their client to expand a product design, working out detailed concepts design to fully demonstrate the product, and take that concept through the stages of product design analysis, design documentation, prototyping and even production.

What support services a product development company offers

Most full service companies offer several service options companies needing assistance. Working from either a “cigarette packet” or a fully worked CAD design, the expertise will ensure that all considerations around function and manufacturability is delivered while maintaining innovative ideas for the finished product.

Following on from this, clients will need a physical representation of their product. Prototypes can be a mock-up, or it can be a fully functional prototype for user-group testing. Ideally, an engineering services company will assist with the prototype testing itself.

Documentation is critical for any product design project and typically occurs during the entire timeline of any product design and development. Documentation may include 3D design files, 2D design drawings for patents, manufacturing prints, or assembly drawings, photo realistic renderings for marketing. If dealing with products that require specialist registration eg medical devices, the detailing of form and function in the appropriate way is critical.

Competent service companies will also assist with product production, by helping to develop the bill of materials and production plan or even to help source the manufacturers with the right expertise and approvals to deliver a finished product.

Why companies are using a specialist services company instead of keeping it in-house

There are many reasons why it might be time to outsource product development and design. An established, reputable solutions firm will have staff that spans design engineers, procurement experts, and manufacturing engineers that provide effective teamwork, communication and continuous project execution. Working with a full service product development firm also offers a single point of contact from design concept to manufacturing to streamline the product design process.

Service companies can operate as a consultant, providing only certain aspects of a project, or can implement a project beginning to end. More often they offer the expertise to supplement in-house efforts or can be a critical resource for project-based work that is either outside the area of expertise of the company.

If your business, big or small is considering a product development project, take the time to consider when it’s time to use an outsourced product design services for your development project.

If you need that additional expertise, then why not contact us for a free initial consultation.

When is outsourcing Asia procurement operationally right?

When considering outsourcing, many organisations start with the same question: Which activities should we outsource, and which tasks should we do in-house?

It’s a complicated question, and the answer can have a huge effect on your company’s short-term and long-term success.

Making the right decision can add significantly to your businesses bottom line in terms of cost savings and increased efficiency. Outsourcing can bring fresh ideas to your business, and it can also release time and resource for innovation and other vital tasks. However, making the wrong decision can put your business at a competitive disadvantage. Perhaps you’ll lose control of proprietary information, or receive components that don’t meet your exacting quality standards.

So, how can you ensure that you are making the right decision?

We encourage customers to consider the below questions to help see clearly which tasks, processes, or functions you should keep in-house – and which can be safely outsourced.

How strategically important is the task to your business?
What is the task’s impact on your company’s operational performance?

If you apply this specifically to Asia manufacturing, you may want to split the questions a little further and categorise the type of outsourcing you want.

Retain – projects high in strategic importance and have a big impact on operational performance. These tasks should be kept in-house so that your organisation keeps maximum control. You may employ a specialist to find and deliver the product you want.

Form a strategic alliance – projects high in strategic importance, but contribute little to operational performance. So, although you need to retain control of them to ensure they are done exactly as you want, or you get the quality you want, they are relatively insignificant in terms of cost or smooth running and so not worthy of full in-house focus.

Outsource – projects are important for successful operational performance, but are not strategically important. These tasks could safely be outsourced. They’re simply not worth spending in-house time managing.

At Harvard Solutions, we help businesses in all 3 areas. We have long standing clients for which we are an ingrained part of their development and supply team, clients who ask us from time to time to source new products or services or we help clients by being a short-term gap fill while they create the necessary in house expertise.

If you need that additional expertise, then why not contact us for a free initial consultation.

The positives and pitfalls of Asia sourcing

Companies tend to view global sourcing as a one-way street, whereby multinational manufacturers from developed countries purchase low-cost materials and products from developing countries.

Undoubtedly, one of the most common sources for products is China because of its abundant resources and cheap labour. That is why China is aptly called the “Global Factory.” Businesses commonly seek the materials and products they want without considering all the upsides and downsides of the sourcing process.

Highlighted below are just a few of the considerations needed when embarking on a global sourcing strategy:

Is this the final price? On the face of any quote, the price can look very attractive. We have often intervened in discussions between buyer and seller in respect of the final price. The next 5 points, when addressed correctly will ensure that you have the right and final price for the product to reach you as you wanted it, when you wanted it and in the right place.
Are you really buying from the factory that makes it? We often see buyers finding the product they want from the “factory” – but in reality they are just a front or reseller. This means should any faults occur, you rarely get a satisfactory resolution. Also tracking down the real factory often requires local expertise, the benefit of dealing directly with the factory is cutting out the “middle man”.
Have you understood the buying terms? The world of payment and shipping terms can be a minefield. Buyers can come unstuck when ordering products and being faced with terms that are at worst large deposit requests and also confusion between FOB, CIF and door to door.
Have you a signed a specification and bill of materials? Nobody wants the scenario of thinking you have ordered a blue widget and the container arrives and they are green – this is a basic error that thankfully we are all wise to nowadays. It’s imperative that not only the external “looks” of your product are specified but also what’s inside and that both parties have agreed the products ingredients.
Certification, approvals, testing and safety? I’m sure it never happens, but the power of photographic editing now means that documents relating to approvals, safety and certification (e.g. ISO, TUV etc.) can be manipulated. There is no substitute for face to face factory visits, but these aren’t often practical – so double checking suppliers with the appropriate governing bodies is a must.
What is your plan B? You have expertly navigated the price, terms, specification and approvals – however, the current economic climate means businesses in Asia are also at risk of financial failure. Have you considered what would happen if you came to place an order and the factory had gone?

If you are reading this and you can comfortably sit and say you have all these aspects are covered, then you will no doubt have a long and prosperous relationship with Asia. If however, this isn’t the case and you need that additional expertise, then why not contact us for a free initial consultation.

The success of Alibaba

Why has Alibaba become so successful?

Alibaba’s success is no secret. From its beginnings in Jack Ma’s apartment, the company has evolved and grown into an e-commerce empire known internationally. What exactly is it about Alibaba that has enabled it to succeed? Here are my thoughts on why it’s now a household name:

Business Model

Alibaba provides services mainly to small enterprises and individuals. This defines a unique business opportunity which provides small enterprises with an improved buying power and offers more diversified consumption choices for consumers.

Unconventional Profit Model

Presently, the Alibaba platform represents more than 0.5bn registered users, including more than 0.23bn active buyers and more than 8m active sellers, and annual orders have exceeded 11bn CNY.

Alibaba charges for services in marketing and technical support, instead of for registration or use. This contributes to a large and robust market share made up of loyal customers. Its profits therefore come mainly from advertisements and keyword bidding from the seller community.

Supplier/ Buyer Financial Trust

All sellers on the eCommerce platform are requested to pass an online certification test to verify their identity either as a business or individual. This reduces illegal transactions as sellers are supervised on the platform at all times. All transactions are recorded and can be traced back by both sellers and customers. This protects the legitimacy of each transaction and helps buyers select more reliable sellers.

Support Services for Customer

Alibaba’s service offerings provide an environment of mutual trust and positive online customer experience, leading to high user engagement. Alibaba offers a suite of support services (e.g. inspection, quality assurance and legal support) to ensure optimal customer satisfaction by helping sellers to maintain positive interaction with buyers.

Making the leap?

For the average Joe, or even the large corporate organisations, this gateway represents a new way of sourcing goods from Asia, which previously was limited to global businesses or the brave few.

Here at Harvard Solutions, we are encouraging our customers to find the products or services they want through portals such as Alibaba, China Sourcing etc.

We subsequently add value for our customers by being able to work with both parties to create the best deals, the right products first time and a seamless supply chain, limiting the risks associated with that first step.

If you interested in hearing more about what Harvard Solutions can do for you, then please contact us for a free initial consultation.