July 29, 2021 Jesse Clemmer

Learn About Outsourcing Product Development At An Industrial Design Company

Any professional industrial design company will tell you that product design and development doesn’t just involve producing a new product from scratch. The design cycle has many critical steps: brainstorming, product prototyping, mass production, evaluation, marketing, and in due time commercialization strategies. 



Also, as many industrial design companies in California point out, not every new product is achieved from conception to the point of the mass production phase. Sometimes small to medium-sized companies that come to industrial design services have operational limitations such as financing, equipment, and labor shortages. A lot of times, startups and product inventors encounter the same technical problems in the middle of the product development process.  


Converting a product from an idea to a mass-produced favorable outcome is never an easy task, even if you work for a multinational company with a large workforce, numerous facilities, financial resources, and access to amazing manufacturing vendors. 


Although an industrial design company can confirm that a majority of business ventures need the highest possible efficiency when it comes to resource allocation, colossal enterprises are better equipped to manage the losses that come with the failure of a new product. 


In contrast, micro-companies can’t take the chance of taking such a risk. Small companies may want to stay more cash flow positive with their current product roster instead of risking their profits with a new product. 


In some instances, hiring staff and building an in-house product development team can dramatically increase the burn rate for a small company. In these cases, companies may choose to outsource their product development initiatives and keep lower overhead. However, as a manager at an industrial design company remarked, each approach has pros and cons to be considered.


What Is In-house Product Development?


In-house product development is defined by using the company’s available resources to conduct all activities aimed at introducing new products to try to satisfy consumer demands or market niches. Every bit of research that consists of market and profit projections is also performed by the company’s existing departments. If you have to hire new employees to deal with these relevant tasks, you have to place them on your payroll, too. Additionally, hiring a team of freelancers is regarded as outsourcing.



The company has total control of how the product development process is done. You have the independence to assign every part of the task to specific employees and to supervise their performance candidly. Due to the fact that numerous individuals probably handle the process, having an in-house product development team may improve efficiency, especially if the team includes individuals who have worked together before to complete a project successfully.



It can become a resource-demanding project that involves money and employees’ qualifications. If you don’t have any qualified professionals on your team product development, it can go pear shape very quickly, or you could experience an unavoidable disaster. In any case, both situations are not positive at all. If you don’t have any immediate plans to hire new employees to make up for the lack of competence in related fields, in-house product development should be skipped out. 


In-house product development will suck up a lot of time, effort, and money to provide the type of products that will give your company a competitive edge in your market niche. Only opt for the in-house approach if your company has the professionals, eagerness, and confidence to handle the full life cycle of releasing a new product. Also, careful hiring may be an advantageous investment because it lets your company accelerate the process for future product development initiatives.


Outsourcing Product Development


Outsourcing product development consists of hiring a 3rd party (or a team from another business entity) to deal with the product development initiative. You can outsource the whole job or only part of your project, subject to your in-house resources and technical capabilities.



Outsourcing product development involves a smaller investment compared to the in-house counterpart since it has minimum strain on your workforce and other resources. You don’t have to spend money on new equipment and facilities usually connected with the job, such as office space, CAD software, prototyping machinery, and so on. Also, outsourcing saves you from a lot of paperwork in market research and bookkeeping. The providers will use their own tools to assign the tasks to their own employees on your behalf for a charge.



Even though you still are involved in the process, you aren’t going to have complete control over how the process unfolds. The overall idea of the product is yours, but you have to get across that fact in precise detail to avoid any mistakes and misinterpretations. The biggest disadvantage is that your company will not get the learning opportunity for any future product development, but it’s a reasonable compromise to achieve rapid get quick results with less strain on your in-house resources.


You can’t really say that one approach is better than the other. Both in-house design and outsourced product development have the ability to improve your company’s efficiency. On the other hand, both may result in product failure from poor design execution. However, outsourced product development can turn out to be a money-saving approach when it comes to efficiency, particularly if you calculate the investment on a per-project basis. Overall, as your company grows, you should plan to have a team of product development professionals on your payroll to facilitate operations.


When Should You Outsource?


If you operate a small business, it doesn’t necessarily mean it has to be a challenge to keep up with larger competitors’ product development cycles. Outsourcing product development lets you concentrate on the things you do best: bringing about ideas, building a customer base, and growing your business networks in-between product generations. It sounds good, but outsourcing may not be an intelligent long-term solution. While your company develops, you’ll want to manage every part of the business venture without too much involvement from an external party. At the same time, learn to figure out your company’s limitations so you can make an educated decision whether or not to outsource.

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