Table of Contents

• How can a focus on procurement benefit your product life cycle?
  • Improve time to market
  • Mitigate end-of-life risk
• What are the five rights of procurement and how do they influence design and supply chain decisions?
  • Right quality
  • Right quantity
  • Right place
  • Right time
  • Right price
• What are the most important factors to consider when selecting a DFP partner?
• How does DFP compare to other design and manufacturing methodologies?
• Conclusion

For many businesses, the procurement process is an afterthought: only once the engineering team has finalized a design does the organization move forward onto investigating how and where to acquire the necessary parts and raw materials. By finalizing a design without considering procurement implications, businesses can run into significant cost overruns and cripple production delays.

Design for Procurement (DFP) changes the paradigm, shifting the importance of procurement earlier into the electronics design process itself. The methodology welcomes supply chain experts, customer support staff and sourcing specialists into the early stages of a new product development (NPD). Instead of waiting until late in the process to learn that a key exotic material is unavailable or a supplier has a poor on-time reputation, procurement specialists consider these factors during the initial design phases. Teams then make design decisions based on the feasibility of component sourcing, assessing every aspect of the design through this procurement-focused lens. By involving this broader base of supply chain professionals from the outset, you can:

• Reduce lead time
• Improve time to market
• Mitigate end-of-life risk
• Minimize material liability

DFP considers the procurement phase to be equally important as a product’s innovative technical features or an exquisite end-user form factor. After all, without the right components, supply availability and delivery plan, a design remains only a concept. By partnering with an electronics manufacturing services (EMS) partner who brings this realm of knowledge to the table, you’ll move forward armed with a safeguarded, cost-effective roadmap towards long-term commercialization.

HOW CAN A FOCUS ON PROCUREMENT BENEFIT YOUR PRODUCT LIFE CYCLE?

Manufacturing isn’t as easy as “pressing go” on an approved design—there are many factors that ultimately lead to a profitable, on-time product delivery. Design for procurement breaks down the barriers between traditionally siloed departments, inviting more teams to collaborate on the early stages of design to ensure an efficient manufacturability strategy from day one. What are some other chief advantages of this joint effort?

Improve time to market

A top benefit of DFP is the ability to optimize your design around your desired lead time. Not every material or part can meet the demands of a tight turnaround. DFP provides you with the insight you need to make component or supplier adjustments based on delivery estimates. You will know far in advance if you need to qualify an alternate component or supplement sourcing with another supply partner.

Mitigate end-of-life risk

DFP specialists also strive to eliminate unpredicted obsolescence risks. Waiting to perform life cycle analyses in the later stages of your NPD process can lead to irreversible issues—you might find that a vendor is sourcing parts that are nearing their end-of-life. Unanticipated shortages in key parts and raw materials can disrupt production, or even worse, require a complete design overhaul. By investigating these potential issues in advance, your team can make informed decisions on whether to select a certain material or go with a different s u p p l i e r.

A close relationship between design and production paves the way for a successful product launch. By working hand-in-hand throughout the entire process, DFP can diagnose potential procurement issues as early as possible.

DFMA as your guiding design principle, you can shore up your assembly and manufacturing processes with the most cost-effective, highly efficient methods available.

WHAT ARE THE FIVE RIGHTS OF PROCUREMENT AND HOW DO THEY INFLUENCE DESIGN AND SUPPLY CHAIN DECISIONS?

Procurement experts within an EMS company champion five guiding principles when it comes to your design strategy. Also known as key procurement variables or purchasing factors, these five “rights” serve as the tenets of the DFPmethodology.

1. 1. Right quality
   Top sourcing experts will work to ensure your chosen material suits the purpose of your product. Materials must meet the exacting standards of your organization’s mission, your product specifications and the demands of your customers. Procurement experts are passionate about finding the highest quality material for the desired price. They have close relationships with leading global suppliers, they study output performance and understand how to treat the fine balance between quality and cost. Procurement experts also understand the inner workings of various partnerships and know how a lower cost might indicate a poor customer service experience.

1. 2. Right quantity
   Too much stock is just as bad as too little. With a solid understanding of quantity requirements, EMS teams focused on procurement have a solid understanding of how to deliver products now—and well into the future. They’re effective forecasters and are committed to ensuring your product’s success over the long haul. They know how to optimize order sizes, manage procurement based on available warehousing space and know the best stock replenishment system for your project. They’ll even help select materials based on their predicted future availability—there’s nothing worse than having to make a design change just because of an unavailable part. You’ll avoid expensive errors like late deliveries, idle manufacturing time and costly setbacks like complete production shutdowns.

1. 3. Right place
   By considering ‘place’ early on in the development process, procurement experts can help reduce costs by drafting a highly efficient delivery plan. This includes weighing transportation options, reviewing packaging alternatives and ensuring parts arrive on time and undamaged.

1. 4. Right time Procurement also includes a delicate balance of supply and demand. It’s important to secure parts and raw materials at the right time—too late or too early can adversely impact your bottom line. Procurement managers find the right inventory control methodology so you’re never at risk of delivery delays or unexpected costs like holding inventory.
   Procurement professionals also delve into other potential time-wasting details involved in the overall process. Suppliers known to have stubborn negotiation timelines or poor communication practices can adversely affect lead times. When assessing your design process through a DFP-inspired lens, you’ll be able to make supplier decisions that eliminate extraneous time drains like these.

1. 5. Right price A low-cost supplier might look like a good decision at face value, but procurement experts are intense skeptics. They’ll continuously evaluate acquisition costs, inventory holding or transport costs, supplier costs—even opportunity costs—to ensure you’re always getting the most fair, affordable and competitive pricing.

Ignoring the five rights of procurement in the early stages of your design process can lead to costly pitfalls down the line. Instead of waiting for a finalized design before considering the role of procurement, DFP infuses your product design choices with the knowledge you need to ensure its long-term success.

WHAT ARE THE MOST IMPORTANT FACTORS TO CONSIDER WHEN SELECTING AN EMS PARTNER WITH DFP EXPERIENCE?

A DFP-minded EMS team serves as a steward of your vision: they should be as excited and passionate about your product as you are. You want a team that can predict your needs, dedicate their focus to each and every moving part of the procurement process—and most importantly, offer best-in-class customer service. What should you look for when evaluating whether an EMS firm is the right fit?

• Professional and open: A key ingredient to a successful EMS relationship is trust. A dependable EMS team is enthusiastic about sharing facts and data about their business structure, so don’t hesitate to ask questions. Ask about their history in your industry, request a list of references and audit their capabilities and procedures. A rock-solid manufacturing group will offer more than empty promises, but back up their claims with concrete facts and figures.
• Open-book cost structure: Hidden or surprise costs can extinguish a vision before it ever sees the light of day as a commercialized product. The right partner is fully transparent when it comes to their cost structure. They’ll walk you through the important details and resolve any concerns, not with vague estimates, but firm numbers. You should receive an iron-clad cost agreement absent of lurking fees.
• Iron-clad feasibility analysis: Evaluating a project’s viability through a DFP lens requires significant in-depth analysis. Often, answers are not available instantaneously. Be wary of teams that seem overeager to answer your questions with an immediate “yes!” They should first conduct a detailed project feasibility study to evaluate the real-world practicality of your game plan. In this study, they’ll perform a deep dive into a realistic delivery timeline, supplier availability, cost analysis and more. A diligent team will not only show you what they can do but are also forthcoming with what they cannot do.
• Customer-centric communication: A highly engaged EMS partner is an extension of your team—they should be just as accessible as a co-worker in the next office. Are they readily accessible by phone or email? Does it take weeks to get a response to a pressing question? There is an endless list of moving parts when it comes to design for procurement, so your EMS partner should anticipate customer needs and provide you with timely updates.

• The right culture fit: As important as it is to evaluate the tangible metrics, there are also several qualitative considerations. Finding a team that meshes well with your organization’s internal values is critical to the relationship’s success. Communication style and core values are just as important as cost transparency and quality of supplier relationships. The right ‘culture fit’ can make or break a partnership, so remain especially vigilant of any red flags that do not mesh well with how your organization does business.
• High respect for customer Intellectual Property (IP): A qualified EMS partner should respect your intellectual property as if it were their own. When you’re working with a DFP-minded team that’s dissecting each step of your development and manufacturing process, you need to make sure they tirelessly safeguard every inch of your IP. It’s more than a non-disclosure agreement: make sure they’re outfitted with the best practices in computer and on-site security. Look for certifications like ISO 9001:2015, an international standard enacted by EMS firms that consistently provide products and services that meet customer, quality and regulatory requirements.

A successful DFP strategy is all about communication and trust. Slight missteps or misunderstandings can sink your product’s long-term success. When your EMS partner is on the ball, the relationship is effortless: communication is open, collaboration is tight, problems are quickly addressed and challenges are predicted before they snowball into delays or cost overruns. By finding a team that shares your style and set of expectations, you’ll foster a hand-in-hand relationship between design and production that boosts profitability and accelerates time to market.

HOW DOES DFP COMPARE TO OTHER DESIGN AND MANUFACTURING METHODOLOGIES?

Design for procurement is one of the foremost design methodologies adopted by product development groups. Businesses often weigh their unique objectives against the expectations of their chosen target market to identify what mindset best suits their goals. Design for X (DFX)—with X representing the chosen goal—helps organizations put a name on their overarching development strategy. ‘Procurement’ is one of the top variables EMS teams adopt as their guiding framework but there are many that come together to form a best-in-class hybrid approach:

• Design for Manufacturing and Assembly (DFMA): This philosophy examines the entire production process through the lens of manufacturing and assembly ease. For example, engineers might recommend design changes that make a product easier for a manual assembler to handle or find a material that works more seamlessly with a selected manufacturing process.
• Design for Testing/Testability (DFT): Sometimes, products undergo several testing phases during the manufacturing process. Engineers often add elements like test points to efficiently perform these critical tests without delaying the overall process.

Leading EMS partners do not view these methodologies in a vacuum but blend them together into one holistic ethos. Teams should have diverse ways of thinking and ought to align the very best of each methodology with the objectives of your product development strategy. The right EMS team knows how to use these cross-disciplinary methodologies side by side to create a system most suited to your unique needs.

CONCLUSION

The procurement stage is one of the most important stages of a successful product launch, but too many projects are missing this key ingredient. Saving sourcing decisions until after you’ve finalized a design is a costly misstep leading OEMs cannot afford to make.

Instead, engage with an electronic manufacturing service that helps design with procurement in mind. An armada of supply chain experts, sourcing specialists and product sustainability professionals will dissect every step of your design to ensure it’s streamlined for procurement. By ushering this important step to the early phases of your design process, you’ll ensure that quality materials are available on time and at the right price. By building a lasting relationship with an EMS with intimate DFP knowledge, you’ll bolster your product vision with a rock-solid plan for long-term commercialization.