It’s a common myth among Original Equipment Manufacturers (OEMs): You don’t need to involve your contract manufacturer during the product development process. Simply hand off your newly developed product and the contract manufacturer does the rest.
Unfortunately, too many OEM leaders don’t know that this manufacturing myth is false. As a result, newly developed products are passed off to your contract manufacturer without properly communication – or cost containment.
What Goes Wrong With Most Product Development Hand-Offs
When your OEM product development team designs a new product or piece of equipment, they plan for factors like quality, cost reduction and essential features. Once the design is complete, the pre-production phase begins, which bridges the gap between the end of product development and the beginning of new product manufacturing.
During the pre-production phase, your product development team works with your contract manufacturer to ensure the product is created in a fast, efficient and cost-effective manner. However, involving your contract manufacturer this late in the process hurts your new product in the following ways:
Differences between the product plan and production capabilities increase manufacturing costs and decrease your profits.
Higher prices mean more costs are passed along to your customers, reducing their overall satisfaction.
Bringing your contract manufacturer on board after product design is already complete slows down the transition from planning to production, increasing your time-to-market considerably.