by Mark Danna, VP of business development, Owens Design

Continuing a series of columns for SST, Mark Danna from Owens Design highlights common mistakes that can cause an outsourced partnership to fail and detail a methodology for approaching an outsourcing agreement that can minimize the risk and costs involved and help ensure a successful partnership.

October 12, 2012 - One of the toughest things about getting started on a tool development design and build project is that in most cases the overall requirements for tool functionality and performance have not been focused yet. Nevertheless, the group tasked with tool development responsibility is told to get moving on the project because "we are already late." In fact, from the point of view of most of those involved, the picture of what is needed is still kind of fuzzy and none of the critical details are well-defined.

It is, however, possible to launch the project, get it off the ground, and make progress while still clarifying tool specifications and requirements. A disciplined phased approach to the program can resolve many of these open issues (technical, commercial and market-related) in the first phase of any project.

For example, at the start of most tool development projects there usually is a gap between desired tool functionality and target tool cost. The engineers want to design the tool to meet all potential market requirements and perform at the highest level. The marketing group wants a tool that meets a specific set of market requirements and can be produced at the lowest cost possible. Very early in the program a functional/cost trade-off analysis needs to be done -- and well understood -- by both parties before tool specifications and performance can be agreed upon and finalized. One of the most critical parts of finalizing the tool specification is to really understand how the functionality of the tool will be validated at the end of the program. Without an agreed-upon functionality test, tool performance cannot be validated and the specification is meaningless.

Unfortunately, not all tool functionality can be nailed down in the first phase of the tool development project. For some projects, it is standard procedure for final tool production launch to begin before the overall tool characterization has been completed. During this process, if overall tool functionality changes significantly, tool specification changes are the inevitable result and most likely will affect overall tool design. Going into this phase with a tool design that can accommodate a wide range of design parameters can minimize the risk of a total design restart. The trade-off, of course, is that this increase in functionality will most likely lead to an increase in overall tool cost. By thinking about these potential issues early on, it may be possible to minimize the impact of design-related change by having the ability to easily change the design to meet the tool requirements once overall tool functionality has been solidified.

A lack of clarity early on in design requirement can exist whether the project is handled as an in-house development project or is outsourced. If it's an outsourced project, the selection of a design-and-build partner and its ability to help clarify and focus the development effort is critical to the overall success of the program. While there is always a desire in a tight economy to keep as many costs in-house as possible, the money spent engaging the right outsource design-and-build partner at the beginning is likely to end up benefiting the project budget long-term. Where a typical equipment OEM may produce a new tool every couple of years, a good outsource partner might go through this development process 10-20 times per year. As a result, this outsource design-and-build partner will have established and proven procedures that can take that fuzzy picture at the beginning of the project and put it into focus.

Time must be committed early in the development phase of a project to bring the fuzzy parameters into focus. Tool cost vs. functionality trade-offs must be well understood by all stake holders. By leveraging either in-house or outside expertise in project planning and management, as well as design input from the very beginning, one can end up saving a lot of time, money, and aggravation.

Mark Danna is VP for new business development at Owens Design.