Tips for Dealing with Top-End, Well-Known Industrial Design Houses? 8

[TokenStatistician]

We're a small-ish midwestern manufacturer potentially looking to issue RFQs for top-end, "name" industrial design services. We have a couple of products for which we have good functional specs, but are looking to "gussy up" the product. Other situations where we have excellent relationships with potential end user who has very high expectations for "look and feel," and we want to explore the process of doing joint development work and bidding.

We'd appreciate insight into:
1. Different ways top-end ID firms structure their fees (time & materials? fixed per project? other? negotiable? typical?), and your sense of pros and cons of each in terms of our ability to manage the effort;
2. Price premium we can expect to pay for the "name brand" companies vs. smaller houses with less track record;
3. What to look for in evaluating their proposals;
4. Success stories or cautionary tales.

Would very much appreciate any specifics regarding fees you've actually paid recently for ID services at well-known shops, especially in the Detroit-Chicago-Minneapolis arc.

 

[MikeHalloran]

I was working for a well known company that no longer exists, when 'we' contracted with some big name ID house. They sent a team. A couple of their shiny suit types wined and dined the Big Bosses, while a quieter guy in flannel came in the back door and talked to the model shop guys and the engineers. Their proposal arrived a few weeks later; it bore a very strong resemblance to what the engineers had been sketching, with an extra stripe here or there, and some bulges that added visual appeal and considerable expense. The proposal came with a very big bill attached. The product went into production almost like the ID guys drew it, except for the narrow cooling slots that couldn't be molded. We had to pay to patch the mold back to the way the I originally drew it, in order to get the part made at all. I got blamed for the delay and the cost of the patch.

Much later, I worked at a larger and more successful company that had an internal ID staff. They were a whole different animal; they worked with the project staff and actually tried to meet product performance goals while also meeting appearance goals. That company was different in another way; the owner paid a lot of attention to appearance details like shadows and pinstripes.

Were I you, I'd try to have a semi-captive ID person. Internal if there's enough work, or a tiny company under contract. Build a relationship with them on professional and personal levels, so you each know what to expect.

If you are forced at gunpoint to use a 'name' outfit, I'd expect them to try to charm you with work done by some artiste type who doesn't even work there anymore, and then once they have the contract, assign you an inexperienced person as your contact. The only way to make lemonade out of that is to be extremely helpful to the young assigned contact, especially in helping them understand the requirements that aren't spelled out in the contract, and the challenges you face that may not be documented. You will, in other words, be providing the practical experience for a new artist, who may or may not be artistically gifted, or capable of grasping even basic physical principles.

I.e., if you use the 'name' ID, the only road to success is assigning a full time experienced person to complement and guide their person. It would be cheaper in the long run to find and hire a young ID graduate and keep them after you've spent the money to train them in your business.





Mike Halloran
Pembroke Pines, FL, USA

 

[zdas04]

Mike's advice is dead on. A small, motivated company working with your people get's great results. Throwing money at big firms just enriches their partners at the expense of your project.

David Simpson, PE
MuleShoe Engineering

"Belief" is the acceptance of an hypotheses in the absence of data.
"Prejudice" is having an opinion not supported by the preponderance of the data.
"Knowledge" is only found through the accumulation and analysis of data.
The plural of anecdote is not "data"

 

[DRWeig]

High-priced CONSULTANT n. "Expert from afar". Usually applied to management, marketing, or human resources advisor. Able to flee at high speed at the first hint of trouble.

Derivation:

CON n. A person or company engaged in fraud, usually spotted with heavy wallet, colonoscope, and Armani suit.

'SULT v. [street slang, contraction] To insult, demean, debase.

ANT n. A diminutive pesky insect, usually arriving in the night to consume one's sweets and then vanishing, never to be seen again.

No offense to the many upright and excellent engineering consultants, of which I am one.

Best to you,

Goober Dave

Haven't see the forum policies? Do so now: Forum Policies

 

[TokenStatistician]

So can you give me some sense of the numbers? I.e., just how effectively do the big ID partners suck money out of their clients? Seriously, what kinds of rates do these guys charge? Any specifics you feel you can drop will help me build the Cost/Benefit case internally. I appreciate very much the guidance and the voice of experience, but it's going to come down to how much the end user client will pay for the "star power", vs. how much the star power is charging.

And does anyone know, is this a national market where top Chicago firms charge the same as NYC or SF? Or are the coasts much higher, or what?

 

[urgross]

I've had a lot of experience in public and private sector, and Mike says it best. If you don't clearly spell out expectations or deliverables, and then have no way of measuring and verifying results, I don't think the contract vehicle or firm will matter much. If you can't define it, it's doubtful you can monitor it.

If you know what you are looking for, then you don't need to preclude one or the other; perhaps having several firms give presentations on how they would specifically address your goals, to include costs and schedule. Have the firms compete for your business, based upon past specific performance and the presentation. If this isn't going to be a golf course deal, then having a tech eval and financial board may be helpful.

Bait and switch is a frequent tactic, so you may consider having position descriptions and salary rates with that description. If going for salary rates, I would ask for full loaded rates. It sucks paying for a senior level engineer time and getting a history major.

If the firm does not meet expectations, then you can go to the runner up.

T&M would be the worst way, unless you do not have clearly defined goals. That would mean go back to step 1 and hire (internal) an ID to define goals and monitor the contract. If you have loaded rates, then each project or task could be negotiated. If you have measurable performance goals, then a carrot and stick approach could also be used. If goals are exceeded, then an incentive, or higher profit rate may apply. If goals aren't consistently met, then it would be time to talk to the runner up.

Along with an internal ID, a good contracting person may be helpful.

Had a similar experience with "brand name" consultant in the steel industry. I think the "brand name" was Ex Lax, because all they let was a steamy pile.

 

[TheTick]

You are going to pay too much. The reason for that is that you don't seem to value design. You can pay somebody to take a few whacks with the "glamour hammer", but if you don't value it, you will leave feeling like you paid too much.

Don't get too enamored with a firm's name. It all comes to the individuals working on your project. There is plenty of ID talent out there to be had. Most of it is anonymous. Meet your project team before you commit to a contract.

 

[MDGroup]

A few additional comments:

1) Pretty pictures are nice and make for great presentations, but make sure whoever you work with is considering how the part will actually be manufactured / assembled. As Mike briefly mentioned, it is very easy for a company to provide you with pictures that look great, but sometimes the designs can't actually be made, or just aren't practical or cost efficient. After you see any proposal, ask them how it will be made. This way you can see if they took the time to consider that very important part of any project.

2) At a previous company, we similarly had to consider the large company vs. a one-man show. We broke the project down into phases. Phase I was just to create some conceptual renderings of several different options for the design. We hired both companies to do this first phase. This way we could evaluate both of their work without committing to the full project up front. After receiving their presentations, it was very clear that the solo designer put a lot more thought into the designs, addressed more of the items we were looking for, and had much more feasible designs. He was way cheaper, did an incredible job, and was great to work with. But, YMMV.

In the end, I am sure many large designs companies can do a great job for you, but many can also screw it up. I am also sure there are many small companies that can do a great job for you, but many can also screw it up. So, I recommend not putting as much value in the 'name', but you must do your due diligence to qualify whoever you are considering for your specific project.

-Lou

 

[IRstuff]

"but are looking to "gussy up" the product."

I think that says volumes. ID is not intended to "gussy up" products; the products need to be designed from the get-go to achieve its ID requirements.

TTFN
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[KENAT]

thread732-254646

Definitely making sure the requirements are clearly stated and that they have all the information they require are critical (thought that's not limited to ID contractors).

Just giving them the CAD model and asking them to 'gussy it up' will not work.

Posting guidelines faq731-376

http://eng-tips.com/market.cfm?

(probably not aimed specifically at you)
What is Engineering anyway: faq1088-1484​

 

[zdas04]

I work in a different field and if I ever proposed an ID for an Oil & Gas project I'd never work in this field again. On the other hand big vs. small comes up in every field.

Recently I imposed myself into a Front End Engineering Design (FEED) for a pilot project. My client had budgeted $6 million for the FEED. I talked them into letting me write the pre-FEED or boundary document (which cost $85k). They liked it. They asked what it would cost for me to write the FEED as well. I told them that I couldn't do the Electrical, Instrumentation, or Civil parts, but the remaining 95% would cost them about $300k. They went to a big firm for the 5% and left the rest with me. The big firm estimated $900 k. At the end of the project the big firm had charged $1.3 million, and their work was unusable, I had to re-write every page. Including the re-writes and billing every second that I could ethically cram in I billed them $285 k. The difference is "layers". Everything I got from them was written by a team of junior Engineers. Reviewed with a large group of intermediate Engineers (I think to give the 5-year guys experience in going to meetings). Then the 10-15 year guys (about one per junior guy) reviewed it on their desks for a billable week. Then the new guys, the 5 year guys, and the 10 year guys had a 3-day off-site meeting to review a 5 page document. The result was sent to a "project management committee" (I wish I was kidding)who each billed a couple of weeks for their independent review. Then they got together for a couple of days to pee on the prose. The result was modified by the junior guys and entered into the document control process for formal review. Finally I got it (after all that it was still marked "draft" and it was mostly too big, to expensive, and too cumbersome to ever build). The part I did averaged $300/page (including research and off-line calculations). The other 5% cost $2600/page and I rewrote almost every word.

The only real problem with my method is finding someone to replace me when I die. I don't have a staff of 5-year guys learning how to go to meetings. Funding the next generation is not free.

David Simpson, PE
MuleShoe Engineering

"Belief" is the acceptance of an hypotheses in the absence of data.
"Prejudice" is having an opinion not supported by the preponderance of the data.
"Knowledge" is only found through the accumulation and analysis of data.
The plural of anecdote is not "data"

 

[MikeHalloran]

Star for David.
That story is too gruesome to be even slightly false.


Mike Halloran
Pembroke Pines, FL, USA

 

[TokenStatistician]

Very much appreciate zdas04 point about "layers" in the bigger firms -- that really rings true -- and am accepting the point regarding demand for "gussying." Thanks for the reality check.

 

[zcp]

David,
It is time to find someone to come in and learn. We owe it to teach the next group to replace us. There are fewer and fewer of us each day. Got to grow our own!

Bring them in as interns, co-ops, jr engineers, whatever to help with costs. Just start passing along some of these experiences or teaching some classes. They will eventually be able to do the work and allow you to handle the 'thinking' stuff.

Just a thought.....

ZCP

http://www.phoenix-engineer.com

 

[zdas04]

That is exactly what my attorney told me last month. He was actually pissed that when I finally give up, the company is dead with no residual value. I just can't accept how much that would complicate my life.

David Simpson, PE
MuleShoe Engineering

"Belief" is the acceptance of an hypotheses in the absence of data.
"Prejudice" is having an opinion not supported by the preponderance of the data.
"Knowledge" is only found through the accumulation and analysis of data.
The plural of anecdote is not "data"

 

[hendersdc]

I work for a contract engineering company that includes industrial design in our offerings. I agree with what Lou was saying in that we have worked on a lot of projects where the customer comes to us with sketches/renderings done by big name ID firms that had no though put in to realistic size/form factor to acheive the intended function of the device or how it could be made. Sure looked great though.

I would say you are looking for more of a product re-design of a legacy product with a heavy ID emphasis rather than just slapping some swoopy plastic parts on the outside. It doesn't really work in practice to go back at the end and make things look good, there has to be a lot of give and take between the design engineers and the industrial designers from the begining to make sure you meet all of the goals of the product (ergonomics, functional, manufacturable, assembly, cost, etc). You can do this with heavy interaction with outside ID firms using your engineers, just don't expect to throw your requirments over the wall and get something back from them that is workable without putting your own time in along the way.

From a contract/proposal viewpoint, here are a few things to consider:
- Clearly define the scope of work in your RFP and make sure their proposal reflects that scope
- Clearly define the deliverable and make sure their proposal reflects those
- Clearly define how many sketch/feedback/downselect cycles and model/feedback/downselect cycles you want as well as how many different concepts should be included at each level
- Provide the ID firm with your product requirments and prefereably samples of your product and make sure they have sufficent time to review them before your proposal due date
- Time and materials proposals are prefered from my companies point of view. With fixed cost you get a buffer added that could be significant depending on the risk/complexity You will also end up haggling over scope creep and need to issue multiple POs to cover changes.

Hope this helps

Doug