Product design is an indispensable component in the manufacturing process. It is especially important for a company that makes complex technical devices to have a highly professional design bureau in-house, a team responsible for designing, developing and testing new products. At the same time, debates have long been going on about the pros and cons of outsourcing versus in-house product design. In this article, we offer a comparative analysis of the advantages and disadvantages of both options using a steel tank plant as a case study.
Benefits of in-house product design
Let’s start with the advantages of having a company’s own design team.
1. Higher product quality
With our dedicated design office at the plant, we make better products. Designers have a better understanding of the manufacturing process and can make changes to the product to improve its performance.
2. Quick response to changes
By keeping the design process in-house, we can quickly respond to changes in the production process. In-house designers can quickly develop new parts and improve product design, allowing for faster release of new models.
3. More efficient production
A design office at the plant helps optimize the production process. In-house designers can improve the manufacturing process to make it more efficient and cost-effective.
4. Better understanding of market needs
An in-house design team can better understand the needs of the market. Designers can analyze customer requirements and develop products that meet their needs better.
5. Intellectual property protection
An in-house design bureau helps to protect the company’s intellectual property. Designers can develop and patent new designs to prevent the company’s products from being copied by competitors.
Disadvantages of having an in-house design bureau
1. High maintenance costs
An in-house design bureau requires high maintenance costs, including designers’ wages, equipment and materials. Financially, it may not be commensurate with the benefits.
2. Continuous professional development
Designers must constantly update their knowledge and stay on top of the market when it comes to new technologies. This requires additional expenses on professional development and training.
3. Limited experience
Designers of a company’s own design bureau will have limited experience when it comes to product and technology types, which may prevent the company from completing some projects due to lack of experience.
Benefits of outsourcing
1. Lower costs
Outsourcing design may reduce the costs of maintaining a design bureau. A company can also save money on designers’ wages and equipment.
2. Higher performance
Outsourcing design may benefit the company’s productivity as it will have access to a wider range of specialists who have extensively dealt with a variety of products and technology.
3. Project variety
By outsourcing design, a company will gain access to a wider range of projects. Designers can develop products for different industries and sectors, thus helping to scale up the company’s business.
Disadvantages of outsourcing
1. Risk of losing control
Outsourcing the design process may increase risks of losing control over the production process. It will not be possible for a company to oversee the entire process of product design and testing, which can lead to adverse consequences such as low quality or faulty design.
Outsourcing may create issues with meeting customers’ requirements. For example, the outsourcing company may use materials different from those specified in the statement of jobs, causing a disagreement between the customer and the contractor.
3. Lack of transparency
Outsourcing may reduce the transparency of the operations. The company will not be able to oversee operations in their entirety, which may lead to unexpected delays and expenses.
Which option is better?
Our company has been manufacturing steel tanks and containers for many years and at this point, we have our own design bureau for new products. We know that there are strong benefits of having an in-house design bureau when it comes to product quality, effective production and intellectual property protection.
We also realize certain disadvantages of this choice, including high maintenance costs and limited scope. Therefore, we outsource some design projects to expand the product range and improve productivity.
We strive for achieving the best compromise between having an in-house bureau and working with outsources, to ensure high quality and satisfy the market’s demands while remaining competitive and economically sound. We always try to work with time-tested and reliable outsources who are reputable members of the industry.
Our experience shows that by combining our own design experience and the expertise of outsourcing companies, we can achieve best performance and succeed in producing top-quality products.
By Vadim Adamovich, CEO of Steelar