Contract design firms can help smooth the road from concept to commercialisation, but as with any form of outsourcing, along with the opportunities come some potential pitfalls.
Electronics News talked to three electronics design contract firms, Successful Endeavours, LX Design House and RTD Circuit Design, for their perspective on how companies utilising their services can maximise their value for money, and perhaps revolutionise their product in the process.
What they do
Whether it’s an innovative start-up, entrepreneurial individual inventors who need a prototype, companies needing a next-generation iteration of an existing product, or anyone in-between, at the core of every product is a seed of an idea or need. But a special set of design and engineering skills are needed to nurture the seed and grow it into a real product.
But those skills are in short supply. “A lot of clients have let their technical capability go,” says Ray Keefe, owner and managing director of Melbourne-based Successful Endeavours. “Many don’t even know how to put a product specification together anymore.”
Industry statistics are hard to come by, but according to the Andrew Pollock of the Surface Mount & Circuit Board Association (SMCBA), figures held by the association indicate there are between 150 to 200 electronics design engineering companies in Australian industry, with around 30 percent of them being small contract operations.
The rest of the country’s design engineers are employed by larger organisations like BAE,Cochlear, Black Magic Design and CSIRO. Despite this good design base, the fact remains that a lot of development work (especially for global companies) has moved overseas. The migration of in-house engineering and product development expertise, especially from the small to medium enterprises (SME), has left gaps that electronic design contractors now attempt to fill.
The type of clients seeking contract design services can vary in size, capability and work requirements. Depending on how far along a they are in the product development process (for example, some have an idea of what the product needs to do; others may already have a schematic or partly working product), clients may subcontract part or the whole of the design process, from product specification to engineering analysis, schematic design, PCB layout, prototyping, software development, and post production support and revision.
However, outsourcing, while common, is not the only way contractors get involved with projects. According to Keefe, around a third of his company’s clients ask the contractor to augment the client’s existing design teams, to provide specialty skills. In the case of Successful Endeavours, that includes analogue design, low power design and embedded software.
Simon Blyth, director of LX Design House, says his company adopts a similar approach for a number of its clients because some cannot completely outsource their projects. “With some projects, there’s so much internal knowledge that it’s hard to write a spec and outsource it,” Blyth explained. “We go on site to act as a resource to help them complete the project and provide a specialist skill set.”
Due to the diversity of the projects contract design firms have to deal with, it’s a constant challenge for companies like LX Design House to find engineers with the right skills.
“I don’t mean [just] good engineers,” Blyth told Electronics News. “I mean engineers who are exceptionally passionate and exceptionally talented, at an elite level. As a design house, I don’t think we can afford to have mediocre engineers.
“In a design house, you are expected to go into any different company, or industry or technology, and be able to perform at a very high level. You really do need high calibre engineers to make that work.”
For many first-time clients, the quote is seen as a key part of the process, and some may pick and choose design contractors according to price.
Rob Leslie, manager of RTD Circuit Design, focuses on printed circuit board (PCB) layout services. His company also provides consulting on component selection and product manufacturability.
Leslie uses a spreadsheet to work out the amount of man hours a project will take, which he then multiplies with the hourly rate. The spreadsheet takes into account the difficulty involved in laying out the PCB (for example, a long and skinny format is harder to work with than a square or circular board with the microcontroller in the middle), placement and layering specifications, as well as constraints on things like track impedances.
Successful Endeavours understands that most customers see products as an investment, on which a return is expected. The firm offers hourly rates as an option, but derives 80 percent of its business from a fixed price for fixed deliverables model. Larger projects are usually broken up into phases, with the client buying one phase at a time, and estimated costs reviewed between phases.
According to Keefe, customers are fairly intolerant of price hikes, so contract design firms tend to be very assiduous when delivering quotes and estimates. That said, the price may be revised if during the course of the project, previously unknown factors and issues arise.
LX is an award-winning electronics design company based in Sydney, Australia. LX services include full turnkey design, electronics, hardware, software and firmware design. LX specialises in embedded systems and wireless technologies design. www.lx-group.com.au