Many Hands Make Light Work of Product Design22 Jul, 2010 By: Cyrena Respini-Irwin
Redpoint Engineering makes a case for refining outsourcing by moving design tasks from the one-stop shop to a nimble network of specialists.
"Outsourcing" is a dirty word to many in this country, especially those who've seen their jobs shipped elsewhere by budget-slashing employers. And consumers know all too well that when finding the cheapest labor is a company's primary goal, quality suffers. But outsourcing isn't always a reckless bid to cut costs. One U.S. outsourcing firm argues that it's simply more efficient and effective to send product design tasks to whomever can do them best — and that this method of distributing work is the way of the future.
California-based Redpoint Engineering is a mechanical engineering and design firm that creates everything from credit card readers to medical sensors for its clients. "We're pretty far-ranging in the kinds of products we can do," said President Larry Gach. "The skills we've developed translate very well across industry lines." The projects Redpoint tackles are those that require multidisciplinary teams — the combined efforts of a mechanical engineer, industrial designer, and software expert, for example.
Redpoint's clients often choose outsourcing because maintaining that varied engineering expertise on staff is a challenge. "There are many companies — big companies, in fact — out there that are very thin in mechanical engineering," said Gach.
He explained that choosing the appropriate number of staff members is difficult for companies, especially when the amount of work fluctuates. "There's no such thing as a person-year; if you have one engineer, he or she is going to be either under-utilized or over-utilized" — resulting in degraded quality and missed schedules on the one hand, or wasted wages on the other. "That's a bad model," Gach opined. "Companies that don't subscribe to that model will be more effective."
Yet another difficulty with performing design in-house is keeping the right kind of expertise on hand for every project. "I don't know a single mechanical engineer that's really good at everything," said Gach. "Nobody is outstanding at all the specialties."
And in a difficult economic climate, some companies — especially smaller firms and startups — simply can't afford to do all of their engineering in-house. Instead, explained Gach, they may choose to focus only on their core competencies, and outsource the remaining tasks. He's observed an evolution as companies have moved from keeping everything in-house, to relying on a one-stop outsourcing shop for non-critical engineering functions, to routing their outsourced work to a flexible network of specialists through firms like Redpoint.
The Team Trend
According to Gach, this slimmed-down operational process has become a trend in product and industrial design. Although this trend might appear to be born of dire economic straits, Gach asserts that it has benefits beyond reduced personnel costs, providing access to talent that ultimately yields a superior quality product.
Building a network of specialists is not a quick or easy task, however. As Gach phrased it, "How do you get such a team together and work efficiently and be on a championship team instead of a run-of-the-mill team?" He explained that it took Redpoint years to build up relationships with skilled engineering contacts: "When we first started out, it wasn't easy; we had to do quite a bit of searching."
There's also the challenge of location. Redpoint handles all its projects domestically, except for injection-molding in China. "All of our engineering partners are local — it's only the manufacturing that goes offshore," Gach explained. He cited language conflicts as a source of difficulty for firms that outsource farther afield, and also noted the value of being able to meet with team members and get to know them. "There are always problems — that's the nature of engineering — but if you work with people you know and trust, there are fewer problems."
David and Goliath
Gach maintains that the network-of-specialists approach to outsourcing is superior to a one-stop shop because the latter companies started out with a particular specialty — circuit design, for example — and ended up being "very mediocre" in the areas they added on to that core strength. In addition, assembling a team customized for the project at hand ensures that the client pays only for the resources they need.
The smaller size of a specialist team (Redpoint's groups are typically no bigger than half a dozen) is also an advantage. "We don't waste a lot of time in meetings," Gach explained. "Our decision-making process more streamlined [because there are] not a lot of voices to be heard."
That nimble structure allows for more flexibility in setting up jobs, too. Any one of network members might be approached by a client and become the lead for that project; each member then puts together their own proposal with time and materials estimates.
According to Gach, there are only two scenarios when Redpoint's methodology doesn't work well. The first is "companies led by 'Type A' personalities, people who want to manage all the details, who want to hire everybody in house," he said. The second is cases that require an intimate, specific knowledge of a particular field. For example, one would-be client developing a spinal fusion device for back surgeries sought engineers who were knowledgeable about the spine itself, not just the engineering aspects of it. "The only thing we lack is a day-in, day-out understanding of [our clients'] business," Gach said.
For those firms considering a move to outsourcing, Gach recommended starting with a straightforward project — "one you're not really worried about" — as a test. It's essential, he stressed, that clients define their needs and communicate them clearly at the beginning of the project, or they will be disappointed. And finally, he shared this rule of thumb: "You never want to hire one mechanical engineer. If you have enough work for two or three, hire two and outsource the last one."