2019 State of Hardware Report from Fictiv
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2018 was full of challenges (old and new) for product developers bringing new products to market

Agility is key in the midst of trade tensions

—62% say tariffs have increased their material/component costs

—More teams are turning to local options for prototyping and production manufacturing

Bridging the production gap is still high risk

—30% of respondents don’t stay on budget and 38% don’t stay on schedule

—43% of companies don’t have adequate resources to manage manufacturing

Teams are running lean to make success happen

—61% of respondents are doing work outside of their job responsibilities

—But when it works, it’s the most satisfying job in the world

The Future Is Agile

In 2018, escalating tensions in global trade had a major impact on product development companies. As a result, teams are leveraging tariff engineering strategies (a methodology designed to reduce import tariffs as much as possible) to mitigate risk and remain agile.

The introduction of tariffs on global trade has impacted companies across a wide variety of factors
price tag
of survey respondents say tariffs have increased their material & component costs
price tag
Re-distributed manufacturing supply
Experienced product launch delays
Forced to reduce R&D budgets
Had projects canceled
Experienced layoffs
Tariffs cost Harley more than $40M in 2018
Our expectations for the impact of recently enacted tariffs includes incremental costs of approximately $15 million to $20 million for steel and aluminum and approximately $25 million for EU tariffs
—John Olin
CFO of Harley Davidson
Source: CNBC
Hardware developers leverage tariff engineering strategies to keep costs low
We need to pay closer attention to what state of completeness products are shipped at—partially assembled products may be classified at a lower tariff than the fully assembled version, so then it makes more sense to do final assembly in the US.
We aim to have as much manufacturing and sourcing done in the US.
united states map
We account for tariffs and try and design around them. Being agile has its benefits.
We are trying to cost-reduce our products to account for [tariffs]. We are also stocking up on key parts before the 25% tariffs hit.
Q: What's the most important tool or reference guide you keep on your desk?
Top responses:
–Measuring tools
–Machinery’s handbook
Measuring Tool
–GD&T handbook
–Drill/tap size chart
Most unique responses:
–Pictures of my family
–Stress management
–My first prototype
For prototype & production manufacturing, more teams are using local options, possibly to avoid tariffs, increase speed, and control quality
Local manufacturing options

For prototyping:

use local shops as part of their prototyping portfolio
use on-demand manufacturing platforms such as Fictiv as part of their prototyping portfolio

For production:

use local contract manufacturers as part of their production portfolio

More teams are also assembling end-use production parts locally:

65% assembly locally
We will have to look for more local options for quick turnaround prototypes.
Local prototype manufacturer