What is Contract Engineering?
Contract Engineering is an Industry similar to Contract Manufacturing.
Contract Engineering is defined in terms of a comprehensive range of scalable, value added electronic engineering services obtained from a service provider.
Range of Services
Range refers to successive stages of electronic product development from architecture (POST-DEFINITION) to handoff to contract manufacturers (PRE-MANUFACTURING).
Scalability requires that all engineering capacity: infrastructure, personnel, computer systems and tools be adjustable at will to match the size and specificity of the task at hand.
Scope of Engineering
Scope includes all design, development and test engineering to build chips, boards, embedded software and complete electronic systems.
Value is added by the service provider, - i.e. the Contract Engineering Company - to its customers, by doing the following:
- Keeping current and up-to-date with engineering technologies, so as to provide optimized combinations of cost, quality and speed of service to its customers
- Investing in and managing an infrastructure of tools and equipment so as to reduce customers' burden of fixed costs
- Recruiting, training and managing engineering personnel so as to provide customers scalable resources while eliminating their compulsion to incur costs of idle time
- Developing robust implementation processes in order to provide customers reasonable guarantees of implementation success
- Shouldering project responsibility and delivering efficient project management to provide schedule confidence to customers' product architects.
Contract Engineering Customers
Companies that make electronic products requiring integrated circuit chips, boards, software and systems.
Why Contract Engineering?
Traditionally, companies that make electronic products have owned all stages of the value chain from concept to delivery of products, including engineering and manufacturing. Since the early 1980s, there has been observable shift in emphasis from ownership to efficiency. Manufacturing was successfully contracted out to specialist companies like Solectron (NYSE:SLR), Jabil Circuit (NYSE:JBL) and others.
Contracting out manufacturing enabled Product Companies to be more responsive to market needs as they no longer worried about the manufacturing infrastructure and processes.
Today, Contract Engineering enables better ROI* by doing for Design, Development and Test Engineering what contract manufacturing did for Manufacturing. It provides knowledgable and scalable resources and a flexible infrastructure backed by process guarantees and project management, without the requirement of having to invest in either.
With Contract Engineering product-companies can leverage what they know best:customers, markets, products, features and competition, for greater profits.
*Return on Investment