Why you should ditch that off-the-shelf enclosure
I recently visited a manufacturing company in the Midlands who produced electronic control systems for the utilities sector. My understanding of such control systems is limited but it was clear that the company had developed a unique product that was proving very popular with their customers.
I was fortunate to be given a tour of their facility and walked through the various stages of manufacture. When we reached the last production cell, Simon (the MD) explained the process of assembling the electronics in to the plastic moulded enclosure. As a Product Design Engineer, I was surprised to see the company was using an ‘off-the-shelf’ box from RS Components. I myself have used similar lid and base enclosures when developing new designs and testing concepts. They are particularly useful if ingress protection (IP) is needed from dust and water. I’m aware that this is not uncommon practice for lower volume products but the company were building 5,000 units per year!
An alternative perspective helps bring fresh ideas
My immediate question to Simon was – “why are you using that box”? His response was “well, since we launched the product we always have done” and then it occurred to me! This company was fantastic at what they did, they were accomplished Electronic and Electrical Engineers but it was evident that a wider business opportunity was being missed here. It was actually understandable; they had launched a product that experienced rapid growth over a relatively short period of time and rather than looking for opportunities to maximise their profits, they focussed on delivering in the way they knew how.
The next obvious question that sprung to mind was “how much are you paying for those?” Simon reluctantly wheezed “£40 a pop”. He could see the cogs turning in my head as the realisation also crept across his face. We started to get deeper in to discussion and found that the benefits for designing a custom enclosure for this product was overwhelming.
Delivering a return-on-investment within 3 months
A two part enclosure of a similar size and complexity should cost no more than around £15 per unit to manufacture – offering a potential saving of £25. Without properly assessing the design of the enclosure, it wasn’t possible to give an exact production tool cost but it was unlikely to exceed £30,000. Meaning that after achieving sales of 1,200 units the company would break-even on their investment and if sales continued at the current rate, this would take no longer than 3 months to achieve.
Less obvious cost savings through reduced assembly time
It was also evident that compromises were being made during the assembly process. The product required a number of IP rated glands to be fitted at the rear so that cables could enter the enclosure. The unit did have several ‘push-through’ entry points but they were positioned along the length. This meant that the operator had to manually measure and drill holes in the correct position so that glands could be fitted. In addition, there were 8 equally spaced plastic moulded screw points inside the case. When the electronic circuit board was loaded in to the enclosure these bosses would interfere with the board, which meant that the operator had to cut these out before screwing the board in place. The operator had become adept at both of these operations, which would take him no more than 3 minutes per unit. However, he was assembling nearly 15 complete systems per day – these activities were consuming an hour longer than necessary.
The hidden value of product branding and identity
As we continued to talk, Simon recalled two instances where competitors had tried to ‘rip-off’ their design; he explained that this was probably due to the product looking like it was made entirely from standard components and easy to copy. This was not the case but the external aesthetic certainly gave this impression.
Before this moment, the company had always placed little value on the way the product looked from the outside. It was a feat of electronic engineering that was never seen by anyone other than a Service Engineer when out in the field, so why would they? However, if designed correctly the visual appearance could convey so many messages to the customer at the point of purchase – such as robustness, quality, durability and value for money. Any opportunity to help influence the decision makers to buy their product over the competition should be taken, this is business after all.
So, why wouldn’t you ditch that ‘off-the-shelf’ enclosure?
It was evident that in this instance a custom designed enclosure would offer huge financial returns for the company, not only through direct unit cost savings but through opportunities to simplify the existing assembly process – as well as securing market share by deterring competitors from entering so whimsically.
The broader business opportunity that presented itself for the company was that they could develop a product (or entire family of associated products) that was more recognisable than ever before, enabling a successful future to be secured for the company!