We have all heard the phrase "we have more computing power on our desktop than we had in the first space shuttle", or some variant of it. Now, whether or not this is a true statement is up to the computer scientists to hash out, but it can be argued, and usually is during this conversation, that things are indeed more complicated these days.
Specific to Product Development, things are certainly more complicated these days, nobody will argue this. The days of maintaining a resource-rich, highly skilled in-house team of experts are no longer practical or cost-effective. There are just too many distinct and different disciplines required to successfully bring a new product to market, and it is not possible to keep them all in-house.
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Gone are the days when the development team can meet in a lab, completely spec a new product, design the prototype, fabricate the prototype, qualify the product and then walk out of the lab and into the production area, with documentation in hand and declare it ready.
Of course, that is a very simplified flow, but it does represent the typical environment that was present up to the mid-'90s, in many manufacturing companies.
Today, companies focus on their 'core competencies and 'outsource' all other disciplines. There are many arguments for and against outsourcing. However, the merit 'for' and 'against' is not the subject of this article. 'Core' competencies can be in any area, whether it be Marketing, Research & Development, Manufacturing, Services, or Operations.
Some of the first outsourcing efforts to occur were in the manufacturing world. Large and small 'contract manufacturers,' popped up and leveraged economies of scale to be successful by manufacturing many clients/brands' products.