Thoughts on outsourced manufacturing...inspired by the 2010 World Cup soccer ball

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I was fascinated by the video in Marc’s recent post about the official soccer ball of the 2010 World Cup.

What struck me was the highly optimized combination of handwork and custom tooling involved in the manufacture of a high-quality commodity product. For example, the inner shell panels are die-cut from sheet (tooling), then sewn by hand into a sphere (a manual process), then manually inverted on a simple-but-still-custom fixture, and then inflated and molded to a perfect sphere in purpose-built spherical molding stations. This kind of high-volume custom-tooled manufacturing is evidence of years of manufacturing investment and optimization around a stable product design, and demonstrates one end of a spectrum. At the other end of the spectrum is lower-volume design-intensive and rapidly changing products (e.g. networking equipment) that use “generic” manufacturing processes like metal stamping, injection molding and PCB assembly.

I think mid-market manufacturers who are considering outsourcing should keep this spectrum in mind – if your product is more like soccer balls, in which the bulk of your intellectual property lies in your tooling and process rather than your product, then traditional outsourcing with a large contract manufacturer such as Solectron, Flextronics or Celestica is probably not going to make sense. You might still consider offshore manufacturing to reduce tooling and labor costs, but success requires that you “own” your manufacturing facility, at least emotionally if not legally. On the other hand, to succeed in making wireless routers you need to “own” your product design. With careful vendor selection and management, though, you can safely rely on a trusted third party to do your manufacturing using generic manufacturing processes and tooling. In many cases – especially with industrial products – a product combines design-intensive and commodity-tooled elements with a custom-tooled “special sauce.” For example, an optical assembly may require highly specialized manufacturing processes but produce an image that is then captured with an image sensor that is part of a custom—but easily manufactured—PCBA. A company manufacturing this kind of product might want to pursue a hybrid manufacturing model, using outsourcing for the electronic subassemblies but keeping the more specialized and tooling-intensive manufacturing steps in-house.

Take a look at this video showing an assembly line for the Xbox 360. Compare it to the soccer ball production video from Marc’s post and you’ll get a feel for the extreme ends of the manufacturing spectrum.

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About the Author

Eric Larkin
Eric is co-founder and chief technology officer of Arena Solutions, overseeing product strategy, design, development and operations. He first realized the importance of managing product information well in the early ... Read More 

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