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To Buy or Make?

Sub Ass

Any company that designs and manufactures a product will run up against the decision to buy-in or build sub-assemblies or possibly the finished item and merely badge the product. It can be a complex question with no obvious answer. It depends on a number of factors but it is essential that there is a conscious decision based on all the facts.

Electronic and computer products in particular demonstrate this dilemma.   This isn’t a new question but it keeps re-surfacing. Sure, an in-house designed and manufactured component may appear more cost effective but there are a number of hidden costs which may not be apparent at the outset. The whole of life cost needs to be considered.

soldering ironHow many electronics engineer have looked at a printed circuit board, counted up the cost of components and questioned why it costs so much to buy. Overly simple perhaps and very dependent on volumes, but lesser informed managers can be carried along in the belief that here is a significant cost saving. After all, you are employing these clever engineers for their knowledge and expertise of engineering, not necessarily for their financial appreciation in relationship to the business as a whole. 

From the engineer’s point of view, it’s the “engineer toy” principal that can be the driving force, not to mention a means to embellish the CV.  In wanting to develop a project, involving the latest tech, he can, with the best of intentions, present the numbers in a way that looks commercially very attractive. I urge all senior managers, who may not be highly technical in the specialist area, to ask a few questions before making the buy or build decision: –

  1. Do I have the spare resource to design, build and support the project.
  2. My engineers are employed for their skills in the company’s mainstream business, do I have the surplus resource to get involved in other specialist skill areas? And is this the best use of scarce engineering resource?
  3. If it’s one particular engineer that will be involved in this project, will he be able to hold the company to ransom? Is he in it for the long term?
  4. Will the in-house approach mean making compromises on the latest technology updates due to lack of resource or information flow in the future?

The same questions apply in many industries. At BVM we are involved in the design and manufacture of customised PCs, PC sub-assemblies and computer boards. We are specialist in our field but we service many industries. We don’t need to have an in-depth knowledge of the latest radar image manipulation algorithms or how best to use the data collected from those IoT devices distributed around the country, but we do need to have a detailed understanding of how the hardware works and how it interfaces with the operating system software to allow the above to happen. We need skills in mechanical construction, power management, system cooling, EMC control and obsolescence management.

A typical example was the customer who brought his prototype system to us asking if we could manufacture more like it.

 “Oh, and by the way, it keeps crashing and it sometimes can get rather hot.” 

In this case the engineer had been planning to use an assembly house to “manufacture” the sub-assembly. He had a working system and had somehow convinced himself that the system crashes and overheating would not continue into production units. After a little explanation and education, we got the task of designing for manufacture followed by ongoing production.

buy or makeAnother example was the company who declined to use our disk controller but instead decided to reproduce our product. Fine, if you want to design the circuit, layout the PCB create the test procedures and build it all from scratch. Twelve months later as they began to start production, they discovered that the main IC was end of life and had passed its last time buy date. For BVM, as it’s our business, we had purchased buffer stocks and had a redesigned board ready to use the replacement IC. The engineer involved in this particular project suddenly moved jobs.

BVM’s customers operate in many divergent fields ranging from security, production control, audio visual systems, oil and gas production to name but a few. We don’t claim to fully understand all the nuances of these industries but we are experts in our field and can advise on what is required for a custom PC assembly or sub-assembly and how to produce a cost-effect solution complete with an embedded operating system and an on-going support plan.

At BVM we have many years’ experience of building rugged and reliable embedded PC systems that are in use around the world under a variety of manufacturers badges. For more details click here.

Quite often, we’re the manufacturer behind the solutions you know

Whether we’re utilising our own manufacturing & production facilities here in Southampton – or our ecosystem of partners in Asia, BVM can cope with any size or complexity of batch manufacturing. Our production team are highly motivated with a flexible “can do” attitude ensuring consistent quality and on-time delivery.