2018 was full of challenges (old and new) for product developers bringing new products to market
—62% say tariffs have increased their material/component costs
—More teams are turning to local options for prototyping and production manufacturing
—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
—61% of respondents are doing work outside of their job responsibilities
—But when it works, it’s the most satisfying job in the world
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.
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
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.
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.
More teams are also assembling end-use production parts locally:
We will have to look for more local options for quick turnaround prototypes.