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In the Build to Design model, as an OEM, I become dependent on a supplier far too quickly. That’s a problem for my business.
In this model, the dependency on the supplier increases, but the technical risk becomes more manageable. The supplier must be able to provide good input to the OEM’s designers regarding the manufacturability of the product. If the supplier has to develop new production methods for the product, this makes the dependency even greater.
A point for attention in this model is ensuring that the OEM remains responsible for the product design and the supplier for the production process. Risks can be mitigated as much as possible by a good partner selection and a good analysis of the Total Cost of Ownership.
In this model, OEM has ownership of the technical product documentation (e.g. drawings and software), all design documentation and any patents. Supplier has all intellectual property of production processes to the extent not prescribed by OEM. Patent worthy ideas may arise during the cooperation in the design phase. The partners will have to make agreements about this.
The partner selection tool and the Total Cost of Ownership tool can be used when choosing and possibly further developing a Build to Design partnership. These two tools are explained in Module 10. In this model, special attention is needed for the supplier’s competences to provide production input in product design phases.
In addition, this model requires an open attitude from the OEM design engineers to translate those inputs into their design.