Market Updates

Digital Transformation driving the Product Engineering Services Market

August, 2018

Evolution of Product Engineering Services

In the last 5 years, Product engineering services have witnessed the shift from in-house to outsourcing of various development activities in hardware, embedded, software, and IT services from designing to testing of the products. There are different phases of product engineering from product conceptualization, designing, development, testing to re-engineering. There are different models to deliver product engineering services for the services vendor such as onsite or near-shore delivery, hybrid delivery, offshore delivery, and Offshore Delivery Centre (ODC).  Outsourcing product engineering services is a strategic way to reduce costs and implement emerging technologies for manufacturing companies. It also helps the company to modernize their legacy services and concentrate on their core product development activities.

Key functions addressed by the product development vendors:

Digital Manufacturing and product lifecycle services: Product lifecycle service providers offer end-to-end product value chain processes. The services are offered keeping in mind the various value proposition that help design better and effective manufacturing processes. Choosing the right product engineering service provider is important and it is essential the partner understands the client’s market and protect IP related rights. The impact of digital transformation has led manufacturing units to adopt integrated solutions as well as 3D visualization, analytics and collaboration tools to become competitive in the market.

Connected Manufacturing: Connected manufacturing addresses the fluctuating customer demand, shorter product cycles, customization, and many more. It helps in building an efficient supply chain and better information flow and manage complex production processes.  The connected manufacturing solutions provide better and integrated visualization of processes with better materials requirement planning and procurement.

Major industry focusses of Product Engineering Service Providers

Medical equipment: Product engineering service vendors offer healthcare industries with innovative solutions to improve their product offerings. They help in product development of cost-effective patient care in a connected healthcare system. The vendors help in imaging medical devices, healthcare IT products and life sciences product development management.

Automotive:   Many automotive OEMs, tier-1 suppliers and technology providers outsource product development for entertainment systems, powertrain, body electronics, drive control and safety systems. Automobile manufacturers leverage the production of vehicles partnering with various product engineering service providers with technological advancements saving time. They help the sector in achieving high productivity, efficient monitoring and manage the fluctuation in energy demand.

Energy and Utilities:   The energy and utilities sector is witnessing transformations with alternative energy, power generation plants, smart energy, renewable energy sources. The product engineering service providers help in development process of metering, asset management, control systems, energy extraction among others.

There are other industries who are benefiting from product engineering services and outsource various development aspects to technically equipped vendors with IP rights protection. The partnership of ISVs with product engineering services providers to build products that are technically advanced as well as reduced production cost are going to profoundly impact the success of the product in long run.

– Swarup Bhowal,
Research Analyst - ICT,
Infoholic Research.