As component obsolescence becomes more and more of a problem, procurement professionals must determine whether re-engineering makes sense. While a redesign can result in both cost savings and increased functionality while your product achieves or exceeds its life cycle, it is neither simple nor inexpensive to carry out.
Here’s how to successfully participate in the re-engineering process.
Why do you want to redesign?
Sometimes re-engineering is driven by a lack of internal documentation and the inability to continue manufacturing a part. Sometimes cost reduction becomes more crucial as parts’ prices increase. No matter why you’re considering re-engineering, there’s a process to be followed before you greenlight a project.
How to begin the re-engineering process
If obsolete components are posing challenges that result in compromised schedules and strained margins, it’s time to look at all the issues involved with re-engineering. Those include business, technical, and functionality issues.
Begin by defining the scope of work. It’s crucial to determine what’s most important: reducing the cost of the part, replacing an obsolete component, meeting new industry standards to ensure compliance, solving fundamental yield problems or adding functionality.
Often when engineers are focused on new product development there isn’t enough bandwidth within an organization to tackle both new development and the sustaining of already developed, mature products. But it makes sense to extend the life of viable products whenever possible, and dealing with obsolete components and old technology makes that difficult. Outsourcing redesign to experts makes sense in this situation.
Be prepared to provide an existing product sample. Does the shape have to shrink? Does it have to be smaller and/or weigh less? What are the physical requirements that are now becoming part of your redesign effort? Have any new compliance requirements come into effect since the product was originally designed?
What are your re-engineering objectives? If it’s cost reduction, what’s the cost-reduction objective? If it’s obsolescence abatement, how long is the product is going to be in circulation?
Qualify the ROI you hope to achieve
Consider both the time and the money aspects of any re-engineering project, and don’t undervalue the time component. Pulling together the documentation required for a successful redesign is a huge component of success. Make sure you have the time available to support the interaction required. Take a long, hard look at the life expectancy of the product you want redesigned. Is there sufficient sales volume to recoup the investment you’re going to need to make?
Documentation related to the existing product is needed upfront so the firm doing your re-engineering understands the complexity of the design and the requirement. Adding features during the design process constitutes scope creep, and will adversely affect both the cost and the timeline of your component’s redesign.
You’ll also need to provide a user’s manual with user interface information so the redesign is informed by how you’re going to be touching this product as part of the re-engineering strategy.
Do you have IP ownership, the right to actually modify the elements of the design that you’re looking to re-engineer? You need to know this at the outset, or it will become a roadblock during the re-engineering process.
Are there any reference designs from a third party that would negate your efforts? You have to make sure you own what you’re redesigning. Do the reference designs or programmable devices contain any protections that would prevent copying?
As the design process for re-engineering begins, you’ll need to look at your BOMs and search for any additional pending obsolescence issues. Knowing your current actual unit costs is crucial. If you’re outsourcing assembly, those numbers may be easy to acquire. But if you build internally, you’re going to have to do some homework. You’ll then need to develop cost targets and projected product volumes to define the approach the re-engineering will take.
A long hard look at the existing manufacturing process is also required. Do you have a functional specification available that defines all the modes of operation, including environmental, operational, and storage conditions, and agency certifications?
The good news about re-engineering
Sometimes when products have long life cycles and have been in circulation for more than five years, new technologies can be leveraged. Any time you can remove a layer from a printed circuit board, for instance, you’re going to significantly drive costs down.
Reduction in size of component parts means devices can either be made smaller or stay the same size but with dramatically increased functionality. While shaving a penny or two off component costs may make a significant difference on high volume products, if it requires another processing step, the savings won’t be as great.
Investigating new technologies that can be implemented to reduce cost, improve performance or make material improvements is part of the process.
Has the demand for the product changed dramatically? Perhaps when first designed it was a thousand unit per year product, but as the market matured, you may be looking at a 10,000 unit a year product. The packaging and manufacturing approaches need to be fine-tuned to volume.
A final step before redesign begins is deciding who will be conducting validation and the scope of the final approval process. That’s typically a joint effort between the re-engineering team and procurement.
Perhaps the biggest benefit of re-engineering is participating in the process itself. By having an independent third-party expert take a look at all your designs, you’ll be able to decide when you can extend a mature product’s life cycle and when it makes sense to introduce a new product instead.
