How to develop electronic products successfully in India: Traps, best practices and proven strategies


When Bengaluru based startup, Notion Ink’s tablet, Adam, failed in India due to poor engineering design and EMI/EMC issues, it was not just another failure of a promising ‘made in India’ product—it raised a number of doubts in the minds of the consumers. Can India ever produce a successful electronics product? And what aspects should manufacturers keep in mind when attempting to do so?

By Srabani Sen

SA Srinivasa Moorthy, VP, design engineering and head, India Design Centre, Sanmina-SCI Technology India Pvt Ltd

Wednesday, May 09, 2012:“Although there are success stories of Indian firms making commercially successful India relevant mass market products and innovative hi-tech products, the value added in most cases is very low—only 5-10 per cent. India has still not emerged as a favoured destination for captive R&D translating into successful product development,” says SA Srinivasa Moorthy, VP, design engineering and head, India Design Centre, Sanmina-SCI Technology India Pvt Ltd.

India is today far behind China, which, since the 1990s, has capitalised on the global trend of completely outsourcing electronics manufacturing. This left India way behind, manufacturing technology. “Experiences like C-DOT show that the success of a product depends not only on an innovative idea or on technological prowess, but also on engineering expertise to convert the design into a product that is manufacturable, safe and easy to make at a price less than the value it delivers,” states Moorthy. The success of C-DOT was largely due to the fact that the technology package addressed the end to end product lifecycle requirements that extended up to the vendors.

So let’s look at the product development challenges faced by companies in the electronics products and solutions space in India.

Product development process

The lifecycle of a typical electronics product is shown in Figure 1. The whole life of the product has five stages (from concept to disposal). Electronics product development usually follows a phased approach and the chances of the product’s success are determined by the decisions made in the first three phases:

  • The concept development phase, which determines that the right product is developed
  • The design and implementation, which helps in developing the product in the right manner
  • Engineering and new product introduction (NPI), which makes the product manufacturable.

Product development processes vary significantly between large companies and startups. Figure 2 shows the process followed by the big companies. Depending on the products’ criticality to their business, firms decide on different models of product development. For example, companies that make capital equipment tend to outsource the manufacturing, but retain the development and post sales support as these are their main revenue streams.

Another trend prevalent is of EMS companies going for backward and forward integration to support their clients and increase their revenue margins—this is apart from the manufacturing revenue (Figure 2).

Depending on the nature of the promoter/founder of a company, the approach towards product development changes significantly. Technical and non-technical founders tend to assign priorities to different activities.

“Increasing globalisation has led to the fragmentation of the electronics products value chain, as a result of which many of the activities in the process development phases are outsourced. Increasing product complexities and shortening product lifecycles have brought in better integration among the players through partnering. This trend that started with large OEMs is slowly spreading to small and medium sized companies as well,” says Moorthy.

Traps in product development phases

Having looked at the development process, let’s look at the pitfalls in the three lifecycle phases.

Traps during concept phase: Product ideas are often conceived and validated by a proof of concept during the initial stages. The following are some common mistakes that companies make:

  • Wrong priorities for the right products. (This happens when firms choose to dedicate significant resources to develop the non-critical components of products.)
  • Underestimating the dynamics of the underlying technologies. (Problems take place due to investment in technology that is still evolving.)
  • Underestimating the development lifecycle costs.
  • Taking decisions based on near-at-hand sources. (This problem is seen especially in startups and when the promoters are non-technologists.)
  • Falling in love with new technology/cool features. Large and established companies usually do not make this mistake owing to their mature practices.

Traps during product realisation phase: This phase has been a challenge for both big and small companies. Many companies outsource these operations but a lack of experience in managing outsourced services can contribute to problems in this phase. This gets accentuated when the design team is isolated from the manufacturing team. The design team’s lack of understanding about the intricacies of manufacturing complicates matters further. Proper understanding of the product development lifecycle and a sound knowledge of manufacturability considerations are important for success in this phase.

  • Deferring a reality check until very late in the lifecycle. Many assumptions are made when developing highly differentiated products or products for new markets. Often, teams don’t identify these ‘assumptions’ at the right time. Later, it becomes very expensive to address issues arising from these.
  • Trying to do every activity internally. When a product development team tries to do the engineering activities, the risk of late reworks or field returns is very high.
  • Not involving the downstream functions/partners early in the product realisation phase. When decisions such as the choice of components, RoHS requirements, etc, are made by the product designers without the involvement of the component engineering team, it can lead to reworking and delays.
  • Lack of an integration mechanism in the design team. A significant amount of interactions are carried out through emails and other means, which might not be sufficient.
  • Compromising on engineering activities to meet timelines.

Traps during transition to manufacturing phase: The problems in this phase are predominantly faced by small companies and startups as they lack the experience and resources to understand the manufacturing process.

  • The design team’s lack of understanding regarding what drives manufacturing costs.
  • Compromising on the time allocated to the transition from the design phase to the manufacturing line.
  • Not designing for foreseeable eventualities.

Product costs, reliability and manufacturability

The product’s cost is an important consideration, so are product reliability and manufacturability. Meeting cost targets depends on the cost of components, as this can account for up to 80 per cent of the overall cost of the product. Many product companies engaged in volume production outsource either the entire or part of the production, and get the benefit of the best component prices available to contract/volume manufacturers.

On the reliability front, the field experience of the firm is very valuable, though firms do conduct reliability analysis as a part of the design analysis process. This stems from the inability of the OEMs to predict and anticipate all possible scenarios that the product could be used in. The following case of a network equipment manufacturer is a good example. The firm was experiencing an unusually high rate of product failure in the field during the monsoon season and preliminary investigations showed that this was due to the failure of the power supply. It was also revealed that the underground cables develop potential during heavy rains, which affect the grounding, eventually leading to the failure of the power supply. For a company, such field issues can put an intense pressure on cash flows.

The biggest component of a product’s cost is the material cost, and the class A BOM (bill of materials) is arrived at based on the product’s high level architecture/functional block diagram. Though this is not 100 per cent accurate, it is usually within ± 20 per cent of the final BOM cost.

Additional cost advantages are sought by minimising labour costs and the NRE costs of product assembly and testing. In the case of incremental/enhanced versions of products, the product is designed such that it utilises the infrastructure created for earlier products developed by the company. This not only reduces the costs but also reduces the time required to develop and validate fixtures and test equipment.

Hence, we can see that many decisions need to be taken at the early stage of product development. From the manufacturing team’s perspective, the issues of higher product costs and lower yields are the result of inherent product design limitations. The head of manufacturing at a leading EMS company observed that designers do not consider the skill levels that shop floor employees require to assemble the product, thereby leading to higher labour costs. A product that follows a complicated assembly process not only increases the overheads of training shop floor personnel but also increases the risk of field problems.

Strategy for success

According to Moorthy, a set of remedies based on analysing industry data and the best practices followed by successful companies can address the pitfalls that affect product development. These remedies are derived from two key factors that need to be addressed:

  • A thorough understanding of the product lifecycle. The development process harmonised with the product lifecycle is the best solution, especially when the amount of outsourcing is high.
  • Involving partners in the decision to develop a product. Partners need to be included from the beginning, immaterial of which part of the product development lifecycle they will be engaged in.

Remedy 1: Get the priorities right: Getting product priorities and organisation priorities right is essential. Product teams need to evaluate the product’s performance/functional requirements. Getting the priorities right helps define the role of technology in the overall development road map.

Remedy 2: Defer the development of non-critical components when reasonable alternatives exist: Otherwise, it can result in a heavy burden on capital and dilute the focus required for critical components of the product. Using tried and tested alternatives will also minimise the risk of product failure in the field.

Remedy 3: Invest in brand building: There is a need for Indian electronics product firms to invest in brand building for both the Indian market and the global markets.

Remedy 4: Involve partners/vendors early in the lifecycle: This will not only help to validate assumptions about downstream processes but also address manufacturability and testability requirements that help keep costs low.

Remedy 5: Involve downstream teams early in the design process: Early involvement of downstream teams such as manufacturing, supply chain management, component engineering and testing helps product development teams make design decisions based on product lifecycle considerations rather than on just design convenience.

Remedy 6: Establish mechanisms to foster better collaboration among design teams: Electronics product development requires collaboration of multiple design teams and any lack of coordination between them can impact costs or schedules.

Remedy 7: Identify and acquire skills critical to the product’s success: Deficiencies in engineering and product marketing skills will again lead to the failure of a product.

Remedy 8: Develop cross-functional skills among design teams: Many problems in product development, including that of integration, arise due to a lack of cross-disciplinary skills among design team members. Firms need to identify such skill requirements. For example, an electrical designer’s knowledge of manufacturability requirements and a firmware engineer’s awareness of electrical design considerations will help a great deal in successful product development.

Hence, we can come to the conclusion that to ensure the success of products, the development team should be able to view the big picture, that is, look at the product as a whole. In the development cycle, even though the activities are sequential, it is absolutely essential to take on board all the partners who will be involved in the product’s design and manufacturing, right from the planning process.


The ideas and views expressed in this article constitute SA Srinivasa Moorthy’s personal opinions and are not representative of Sanmina-SCI’s corporate stance.

Electronics Bazaar, South Asia’s No.1 Electronics B2B magazine


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