Outsourcing Product Design and Development

Nine critical checks for OEMs to avoiding bottlenecks.
by Asmin Perviz

Established OEMs with ambitious growth goals often hit a wall as they expand their product ranges. Internal design and development (D&D) teams become overloaded while juggling updates to legacy products, managing lifecycles and integrating new features. Meanwhile, mounting pressure to innovate and accelerate time-to-market for new products adds to the challenges.

For many, the answer is clear: outsource D&D. But choosing the right partner is anything but straightforward. This is the tipping point. OEMs often need to work fast to choose a D&D partner or face a vicious cycle of competing demands and delays that impact revenue (Figure 1).

Time and budget pressures can lead to costly mistakes. At this stage, the drive for budget-friendly solutions may be pressing. The pressure to launch products quickly or accelerate complex life-science development cycles can be extreme.

But not all D&D outsourcing solutions deliver scalable, production-ready outcomes that you can build upon. Choosing the wrong partner can cost time, quality and credibility in the marketplace.

Outsourcing design and development doesn’t just reduce internal workload, it accelerates innovation without compromising quality, control or time-to-market. To make the right decision, OEMs must look beyond surface-level promises.

Here are nine critical areas to scrutinize when evaluating a potential D&D partner.

1. Proven sector experience. A capable D&D partner should understand the unique technical, regulatory and operational challenges of your industry. Whether it’s medical, industrial, automotive or IoT, they must have a track record of delivering similar product types.

Look for verifiable case studies, published project outcomes and references from customers operating in the same sectors. This experience ensures they can anticipate common pitfalls, recommend best practices and deliver faster because they’ve done it before.

For example, when the team behind the cutting-edge fertility tracker breathe ilo was looking for an outsourcing D&D partner, they needed reassurance that their complex device could be redesigned for manufacturing and scaled fast without compromising ISO 13485, FDA or GMP compliance.

“We spoke to a lot of companies. But it became clear that very few had the DfX skills, as well as the international manufacturing capabilities and staff to match all our future needs,” noted Lisa Krapinger-Rüther, co-CEO of breathe ilo.

2. Transparent, in-house design capabilities. Many EMS companies claim to offer full design services, but the reality often involves significant outsourcing or superficial capabilities.

Insist on full transparency. Do they have engineering teams with visible, real-world experience? Can you find design staff on LinkedIn or technical leaders contributing to proposals? Do they offer clearly defined design for excellence (DfX) packages and examples of IP they’ve helped develop?

In-house D&D means better collaboration, shorter feedback loops and accountability across the product lifecycle.

3. Can they help with every stage of the prototyping process? A strong prototype isn’t just about proving an idea works; it’s about making sure it will thrive in the real world. Your D&D partner should bring multiple prototyping perspectives to the table from day one:

• Manufacturing view: Can it be built at scale, cost-effectively?
• User view: Is it intuitive and seamless to operate?
• Compliance view: Does it comply with every relevant regulation from the start?
• Supply-chain view: Can it be sourced, assembled and delivered reliably?

Partners who integrate these viewpoints early in the process can anticipate challenges before they become expensive setbacks. Look for evidence that they run prototypes as real-world trial runs; testing manufacturability, regulatory readiness and usability simultaneously, rather than in disconnected phases.

This whole-picture approach ensures that when your product moves from prototype to production, there are no unwelcome surprises – just a smooth transition to market.

4. Breadth of technical capability. Modern product development spans multiple disciplines. A strong outsourcing partner must be technically equipped across three essential pillars:

• Engineering disciplines, including software development, embedded systems, electronic design and mechanical engineering.
• Manufacturing readiness, covering PCBA, box-build, mechatronics, microelectronics and prototyping.
• Advanced technology integration, such as AI, IoT, edge processing, sensor fusion (lidar, TOF) and other complex features.

5. Global footprint with local support. Today’s OEMs often need a global production strategy but with local access for design, collaboration or validation. The ideal D&D partner should support agile development in your region (e.g., Europe or North America) while offering cost-efficient manufacturing options in Asia or Eastern Europe. Look for facilities that comply with local and international standards, possess regional certifications, and have demonstrated experience with cross-border logistics, customs, and regulatory frameworks. Flexibility here ensures that your product can scale globally without requiring redesign for different regions.

6. Be clear who owns the IP when D&D is outsourced. Confirm who owns the IP, code and design files upon project completion. Verifying this upfront avoids nasty surprises later, especially during critical handover from design to production.

For OEMs, retaining control of your product’s intellectual property – including full design documentation and the bill of materials – isn’t just good practice, it’s essential for long-term flexibility and business continuity.

Without it, you risk losing the ability to manufacture, modify or even service your own product without costly delays and re-engineering work.

“We’ve seen many OEMs discover too late that their previous partner wouldn’t release the bill of materials or design files from the D&D phase. To take over production, we had to fully dismantle and reverse-engineer the product – rebuilding every detail of its design from the ground up,” said Neil Sharp, director, corporate marketing, Escatec.

7. Ensure pricing transparency – with flexibility. Budget predictability is vital, especially in early-stage engagements. Look for partners offering fixed-price design for excellence (DfX) packages that define scope and deliverables up front, ideal for initial feasibility or concept work. For larger, evolving projects, a time & materials (T&M) model ensures flexibility while keeping costs transparent and controllable.

Visibility is key: Will the partner provide live budget tracking, issue burn-down reports and proactively flag scope creep? A transparent pricing model builds trust and helps you plan with confidence.

8. A disciplined shortlisting process. Don’t jump at the first proposal. Start broad – identify eight to 10 potential partners using referrals, industry networks and online research. From there, narrow the list based on clear criteria: technical capability, cultural fit, regional presence, and responsiveness. Create a shortlist of three to five serious contenders. Conduct interviews, review sample documentation and, if possible, organize facility tours. Most importantly, meet the engineers, not just the salespeople. Great technology partnerships begin with human relationships, not just pricing spreadsheets.

9. Avoid common pitfalls. The most common outsourcing mistakes stem from unrealistic expectations and poorly defined scopes. Don’t assume physical prototypes are coming when you’ve paid only for design files. Don’t fall for slick marketing that hides a lack of technical depth. Be cautious of timelines driven by trade show dates or executive pressure. Rushing can lead to shortcuts.

And never choose a partner based solely on price; low cost often means low capability, poor scalability or hidden rework costs down the line. The right partner adds value at every stage – not just a low number on a quote.

The D&D partner shouldn’t just be a vendor. It should be a strategic extension of your team. Established OEM teams that succeed in product development often build long-term partnerships with trusted external teams – relationships based on transparency, mutual accountability and shared expertise.

You don’t want to emerge from the end of a D&D process only to discover the IP of the product your partner has helped you develop belongs to them, or that they simply won’t release the designs to you.

Equally, you don’t want to end up with a set of plans that are not designed for manufacturability, with components that are not easily available or on the point of obsolescence.

Asmin Perviz is manager, design & development (D&D) at Escatec (escatec.com); asmin.perviz@escatec.com.