Keeping Up: Outsourcing Hardware Capabilities to match with Software Innovation

by Chris Carpentier / February 22, 2022

The more software technology like artificial intelligence extends the boundaries of what's possible, the more Benchmark finds software-focused companies choosing to join with design and manufacturing partners. As hardware and software capabilities more tightly-converge (think self-driving vehicles, cobots, and others), software design houses can struggle to compete with large competitors who have in-house software and hardware expertise. Joining forces early on in the solution development process with an electronic manufacturing services firm can prove a wise decision because of the ability to leverage external expertise for optimal design, speed to market, and post-design manufacturability.

For example, our blog, case study featuring the nuclear research and development organization Idaho National Laboratory and IT services firm KnowledgeRelay dove deep into a nuclear power management solution created with a combination of KnowledgeRelay software solutions and Benchmark's design and manufacturing of custom sensing solutions.

KnowledgeRelay's need for collaboration was borne out of a unique situation: white-labeled original device manufacturer (ODM) products weren't up to the task, but onboarding insourced hardware design and manufacturing know-how would be too expensive or slow. Pure hardware-design houses offered an approachable solution but lacked the diverse range of complex technology realization and regulatory know-how that a more nuts-and-bolts EMS provider could offer.

IT solutions providers can leverage proven electronic manufacturing services (EMS) providers in the solution development process to address complex customer hardware needs they otherwise could not. The competitive edge this type of approach can provide is undeniable: if a software solutions provider partners up to solve problems, it couldn't alone; it can generate revenue that wasn't previously accessible.

For organizations that possess software knowledge, choosing the right type of EMS provider can be a complex problem. Here's the Benchmark guide to solving this problem and growing the total addressable market of your software solutions company:

1. Find Your Type

On the outside, EMS providers might appear to provide similar capabilities. But the truth is that EMS providers each have their "niche." Some specialize in high-volume, low-mix production. Imagine a client invites you to design the IT backend of a consumer internet of things (IoT) device, expecting hundreds of thousands of units per year. An ideal EMS provider would be attentive enough to support you through the hardware design process but large enough to support the type of volume you require once entering commercialization. They may specialize in automation lines that are inflexible but are structured in such a way they produce consumer electronics in the most cost-effective manner.

Similarly, your client may have a request for your organization to support a couple-hundred unit run of a highly complex, never-before-created industrial device, thus totally removing the option of working with mostly off-the-shelf components. Unique manufacturers with particular qualities like many onshore engineering and manufacturing capabilities would be ideal for these requirements – a lot of engineering team coordination would be needed, and significant time-zone discrepancies can make that type of work difficult.

2. Don't back down on your requirements

While intelligent software and IT companies might identify early in the process that off-the-shelf prototype components like Raspberry Pi and Arduino may not be compatible for an industrial-grade solution, a significant middle ground exists, one in which we see many companies stuck in "label limbo."

Label limbo is our term for customer organizations unable to successfully bring a product to market. They may be misled by EMS companies offering white-label solutions that may significantly reduce costs but usually require a 20% drop (or more) in the number of product requirements the solution can fulfill. No engineer wants to build a product that doesn't solve a problem, and no business manager wants to sell one, either. At Benchmark, fulfilling our "When It Matters" brand slogan means we do whatever it takes not to let our solutions fail our customers.

When we believe a custom solution needs to be created, we tell you that, no matter how it affects your margins or ours. Benchmark may sometimes suggest components of a solution use reference designs to save you cost and development time, giving an honest consult of whether the sharing of intellectual property is appropriate for your solution needs.

We suggest you find an EMS organization that doesn't try to fit your product needs into fulfillment with their white label inventory backlog. The hardware design and manufacturing process can be long and difficult; if your EMS partner doesn't put your needs first, you are unlikely to find success. 

3. Get Out Your Map

Beyond time-zone discrepancies, experienced hardware OEM procurement specialists always consider an EMS provider's map of engineering and manufacturing locations, so you should too. Here are some considerations you should have in mind: What engineering and manufacturing capabilities are housed at which locations? Is there a combination of engineering and manufacturing in a single site you might prefer? Reducing the feedback loop between design changes and production can significantly reduce the time to get your product to market.

From a global perspective, where are your potential EMS providers' locations? Depending on the nature of your customers' needs, there may be a potential for international expansion. It's also possible that your customer may need to meet specific government procurement requirements, or they may like to migrate from onshore to offshore manufacturing because of downward production cost pressures. If you work with a local provider, it could prove very difficult to transition to a low-cost, higher volume locale without completely changing your design – manufacturing providers can have very different ways of accomplishing the same task when you get down into the details.

4. Find your manufacturing partner early

If you follow the agile development process, you know it's better to deploy early and often. If that's the case, why do so many system integrators and IT service firms wait until the last moment to select a hardware manufacturing partner?

In that last sentence, pay special attention to our use of the word "hardware" together with "manufacturing." Plenty of industrial design houses are willing to design you the prettiest looking, most user-friendly product you've ever seen. But often, customers come to Benchmark with a product that fulfills customer needs but is completely unmanufacturable in real-world manufacturing lines. The necessary change in design can be quick but will come at a cost in terms of dollars and release time. The earlier you identify a hardware partner with manufacturing capabilities, the quicker you'll get your customers' products to market because you're designing with an end manufacturability goal in mind.

In conclusion, designing and manufacturing the correct type of hardware to complement a great piece of software can be more difficult than most software-centric companies are aware of. Choosing the right kind of hardware partner can help bring your product to market quicker, faster, and with less risk. Read our Idaho National Labs case study and take a critical eye to how Benchmark and KnowledgeRelay worked together to solve the complex needs of our customers.

Industrial Design & Engineering

about the author

Chris Carpentier

Chris Carpentier is the product marketing manager for Benchmark's Complex Industrial, Medical, and Semiconductor Capital Equipment markets. His industry experience spans semiconductors, the internet of things, and pharmaceuticals for companies ranging from early-stage startups to Fortune 50 firms. Born in New York, raised in Florida, and now residing near Benchmark's Global HQ in Tempe, Arizona, Chris enjoys skiing, pickleball, and giving back as an Arizona State University MBA alum.

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