When to lose control (of your data) in hardware manufacturing

Photo by Sam Holland

Creating a hardware product typically involves developing firmware, circuit board designs, and 3D models of the mechanical components. When you’re ready to solicit manufacturing quotes for your product, these files are most often shared to vendors as part of a request for quotation (RFQ) package. A good RFQ package gives the vendor enough information to accurately quote manufacturing or assembling your parts without oversharing information that may be proprietary or allow copycats to easily develop.

So how do you decide how much information to share in your files, how much control to insist on retaining, and when it’s OK to lose some of that control? The decision largely depends on what type of product you’re developing and how fast you need it manufactured. Here we give you an overview of the three most common methods of working with a manufacturer, along with the pros and cons of each.

Files to share (and not share)

Files should be shared in a “neutral” format that can be opened in any program and should only include information needed for quoting. We like to share STEP files instead of native CAD models for this reason: The file contains the final 3D model and not all of the work that went into generating the shape. This is similar to sharing a JPEG file of an image made in Photoshop instead of the full PSD document, or a PDF file instead of a Word document.

Methods of manufacturing

When you’re ready to manufacture your product, there are three common methods to working with manufacturers. Each method provides a different ratio of speed to market and control of your data.

  • New product introduction (NPI) — You hire a team to design your product from scratch, then you find a manufacturing partner to produce it. You retain the most control of your data and files. This approach typically takes the most time.
  • Joint development manufacturing (JDM) — You work with a contract manufacturer (CM) to help you design the parts you need to assemble into your final product. You lose control of your proprietary data in exchange for moving faster.
  • Whitelabeling — You find a vendor or supplier who makes what you want and ask them to customize it slightly to fit your brand. You own zero proprietary data but can go to market very quickly.

Having worked with dozens of startups over the last decade, I’ve seen all three approaches work for various clients. More often than not, however, an NPI project is the right fit, and it comes down to one word: control.

New product introduction (NPI)

If you’re looking to grow your company long-term, I strongly recommend keeping your proprietary files in-house. When it comes time to make your second or third product, having access to the older design files may be a lifesaver. Code, CAD, and schematics can be easily reused or tweaked to improve your product. Reinventing the wheel each time you want to launch a new product slows your company down and costs more.

Bottom line: Strive to own the data until 95% confidence is achieved in the design, then refine it with your manufacturing partners.

When I do mechanical engineering work, I typically don’t include ejector pins, gates, or similar features in my CAD and instead work with our vendors to finalize those details. If changes are required, I make the modifications on my end and send back an updated STEP file. If I receive a modified STEP file, I try to redo the changes on my end to better control the data and then send my version of the STEP file back to them.

At some point, this back-and-forth process might become frustrating to manage, and you might need to resign yourself to the fact that you don’t have the latest documents anymore. This is very common and it’s perfectly OK! At this point in the process, you should have files that are incredibly close to the manufactured parts with minimal changes, so if you need to change vendors, the last mile work won’t be too crazy to figure out.

You’ve retained the most control of your files.

Joint development manufacturing (JDM)

Sometimes, NPI might not be the best approach for your company, and you might want to work directly with a supplier to design your product. Certain products lend themselves to the JDM approach more than others:

  • Incredibly complex optical or mechanical assemblies using a vendor well versed in the technology
  • Dense electromechanical products using flexible circuit boards or similarly complex manufacturing and assembly
  • Simple-to-recreate plastic parts that hold no intellectual property value, such as buckets, bins, and tools

With JDM, you’re losing control of your proprietary data and instead working directly with your factory to develop the product. This may work incredibly well for you, as it can be a fast and relatively inexpensive method of developing custom products. But, it also means you’re married to that vendor for a long while.

Most JDM contracts require you to order a certain amount of product from the vendor before you get access to the design files. This may lock you into a certain vendor for years, and you’re at the mercy of their engineering team to make changes. You may need to start from scratch if you decide to switch to another vendor to reduce costs, change manufacturing locations, or due to a conflict.

You’ve lost control in exchange for speed.

If you’re working with a JDM model and need to switch factories, see if you can buy the designs from the factory. If not, you might need to invest in engineering and design resources to remodel the parts, get them ready for tooling, and work with your vendor to ensure all parts are manufacturable to your specifications. You’re essentially now in NPI territory.

White labeling

White labeling can be as simple as adding your logo to an existing product.

White labeling works best if you need to go to market insanely fast, create a variation of an existing simple product, or just find accessories to complement your hardware line. I strongly recommend white labeling power supplies, lanyards, or other simple products you’re not looking to innovate or differentiate.

You may find vendors who are willing to do more with their whitelabeling than others, including designing custom enclosures. Don’t assume you’ll have access to these files unless explicitly stated in your contact with the vendor. If you decide to customize your white-labeled product, expect to only have the ability to change the colors and labeling for most cases.

You’ve lost all control and traded customization for speed.

Making the right decision on how to design your product can be tough! Luckily, we’re here to help. We can recommend the proper approach based on your needs and company trajectory. Reach out to us to chat with one of our hardware experts today.

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Hardware Handbook
Sam Holland

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