In a recent survey report, engineering leaders said they receive design feedback from 32% of their suppliers, on average.

Not an especially notable statistic on its own. 

However, when we asked, “From what percentage of your supplier base would you want to receive feedback from?” the answer was more revealing.

Engineering teams want design feedback from 78%+ of their supplier base. In fact, the gap between how much they’re getting versus how much they want leaves an opportunity for a 2.8x improvement in supplier design engagement. 
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So,why the massive gap here between what engineers want and what they get? 

And, what does a 2.8x improvement in supplier design engagement look like post-production?

Let’s break it down.

What’s causing the gap in supplier design engagement?

Over the past 5-10 years, products have gotten more complex. This requires more specialized knowledge across nearly every part of a complex product. Add to that: teams are large, globally dispersed and have specialized knowledge locked in regional locations. And that’s just the internal company. 

Start including supplier networks and you have anywhere from 20-1000+ suppliers for every imaginable variety of part and assembly.

Meanwhile, the pressure to deliver great products on time has never been higher.

This has caused a massive collaboration bottleneck in hardware product development.
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Because while suppliers should be tapped during the critical detailed design phase for materials, manufacturability and cost-savings expertise, they’re not. Why? Because it’s too hard and too complicated to gather and sift through even more design feedback during design stages. So, engineering teams wait too late – often until a pilot build or production – to seek supplier input.

The reasons for this disconnect are nuanced, but a few core challenges with supplier design engagement span nearly every industry:

1. Disjointed communication tools lead to too much manual work

Engineering teams rely on tools like spreadsheets, PowerPoints and email chains to conduct and track supplier design reviews. These tools don’t allow for real-time collaboration and they don’t allow for automatic tracking. So, engineers must do an exorbitant amount of manual work to send CAD or drawings to suppliers, wait for and gather the feedback, track and sort that feedback, then do it all over again during the next design iteration. 

This leads to miscommunication and feedback mismanagement. In fact, engineering teams report losing 43% of all design review feedback. 
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2. Over-reliance on late-stage supplier feedback

Whether the process is too difficult or they’re operating under flawed assumptions, too many engineering teams wait until prototyping or production to seek supplier input. 

Then, that supplier review process is largely sequential. Meaning each team works on their part or assembly only when the previous team finishes. Then, they pass the assembly to the next team. This often delays tooling and production, so manufacturing teams don’t get involved until late in the product development process.

This is a recipe for late-stage rework and unbudgeted costs (a problem 18% of engineering leaders admit is the most frustrating result of supplier miscommunication). 

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3. Lack of technology and workflow integrations

Engineering teams work in their CAD and PLM systems. Suppliers work in theirs. And neither of these talk to each other or allow for real-time collaboration. Even when suppliers work with the same PLM systems to allow for continuity with their OEMs, the systems often require specialized workflows or user roles to share design feedback.

This means OEMs and suppliers lack a single source of truth for design reviews. Operating in these fragmented ecosystems leads to version control issues, missed feedback, disengaged engineers and inconsistent decision-making.

This is why the gap exists between how much design feedback engineering teams want from their supplier base vs. how much they get. 

The problem is: no one seems to know how to solve this. As much as the problem hurts timelines and costs, it’s difficult to tie these challenges back to something bigger. And then, the problem is so nuanced – involving cross-functional teams from multiple companies at varying levels of camaraderie – that it feels impossible to solve.

The cost of inaction: How the supplier design engagement gap impacts the bottom line

The first step is to break down why the problem needs to be solved. This gap in supplier design engagement doesn’t just affect early stage product development. It  affects downstream business metrics, like profitability, gross margins and COPQ.

It’s difficult but not impossible to quantify the potential savings or earnings from supplier design engagement. Let’s look at a few examples based on industry benchmarks:

1. Cost savings and reduction in COPQ:

Improved supplier collaboration can directly reduce costs associated with poor quality, such as rework, scrap, and warranty claims. In fact, companies that establish strong supplier relationships substantially reduce quality-related costs. Unilever's collaboration with its supplier led to innovations that enhanced product performance, reduced CO₂ emissions and even opened a completely new market for Unilever.

Furthermore, addressing poor quality can be costly. McKinsey notes that poor supplier performance can result in increased total costs of up to 20%. Assuming most enterprise product development projects cost upwards of 9 figures, a conservative 10% means 8 figures in savings just in COPQ.

2. Increase in profitability and gross margins

Effective supplier collaboration not only reduces costs but also enhances profitability. Early design engagement means fewer errors, less rework and faster time-to-market. This opens up opportunities to increase profitability and gross margins.

In fact, a leading retailer improved gross margins by 16% by expanding their supplier base and applying VA/VE principles. If we make a more conservative bet that expanding supplier access earlier in product development would improve gross margins by 2%, this would mean up to 8-9 figures straight to the bottom line.

3. Better operational efficiency

Engaging suppliers early in the design process leads to better alignment on quality standards and production processes. This reduces the likelihood of defects and production delays. Minimizing internal failures and associated costs like this contributes to overall operational efficiency. ​

While difficult to draw this line from the design phase of a single NPD project all the way through operational efficiency, it’s a story we hear often.

When suppliers get into designs early, products get to production faster with fewer errors. Ford Pro shared conversion van designs with their converter partners years sooner (during design rather than post-production) and has estimated their savings in the millions.

Closing the supplier design engagement gap

As we’ve explored throughout this article, this problem is nuanced. Because the OEM-supplier relationship is also nuanced. For OEMs, getting suppliers into design means giving some suppliers a competitive advantage. Then, we have supplier quality and procurement departments who own the supplier relationship. It’s often difficult for engineering teams to bridge this gap. Suppliers are also not always incentivized to offer expertise before winning a contract. 

Despite these nuanced realities, the answer is still clear: engineering teams want more input from their supplier base. And, if the incentives are aligned, suppliers have valuable expertise to give – especially before a product reaches the production floor. 

The answer is two-fold:

1. Start slow with a small pilot.

Engineering teams who’ve successfully achieved early supplier design engagement find the “selling” was easiest when selecting a single supplier and a single project. Mike Shipulski, former Director of Engineering at Hypertherm, conducted a DFMA project with a key regional supplier and brokered a deal that was advantageous for both the supplier and Hypotherm. 

It resulted in massive profitability for both parties when the product took off thanks to faster time-to-market and applying design-to-cost principles led by the supplier during the design phase. This opened the door for the engineering team to explore more strategic supplier partnerships.

2. Implement modern collaboration tools.

To bridge the supplier engagement gap, manufacturers need more than just better email tracking or more meetings. They need a Design Engagement System (DES): a purpose-built platform where engineers and suppliers can collaborate on CAD together in real-time. 

CoLab, a cloud-based DES lets engineers and suppliers:

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1. Share design files with anyone.

It should be easy to share design files with the people you need feedback from—without compromising your IP security or downloading half a dozen CAD viewers. And with CoLab, it is easy. Securely push drawings or models to CoLab and set the appropriate permissions. Then use a simple link that lets anyone open and view files, right in their web browser.

2. Reference the right files, feedback, and design history every time you make a decision.

Assembling engineering files for a design review can take hours. Sometimes, key files are left out of a package. Not to mention design history, which may be buried in old emails, slide decks, or spreadsheets. 

By doing your work in CoLab, you’ll automatically create a centralized database of reviews and feedback across every revision of every file. Need to bring a new SME up to speed? Reviewers can quickly toggle between files and see all relevant feedback in the context of the model.
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3. Replace sequential workflows with engaging reviews.

Reviews are often sequential, with one person creating markups, then sending them to the next person. This can lead to duplicate feedback, comments that contradict one another, and even late stage errors. 

With CoLab, you can review files together and see other people’s feedback populate in real-time. Instead of sending static markups back and forth, reviewers can interact with each other via discussion threads.
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4. Automate the design review admin

Documenting feedback during a design review is manual and time consuming. And the more context you capture, the more admin work it takes. It’s no wonder that 43% of all feedback from design reviews is never documented at all. 

That’s why CoLab automatically tracks and organizes design feedback, as you do the work. Leaving feedback during a review creates a unique object that is automatically organized into a database and assigned its own URL.
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Now, what?

If you’re ready to start closing the supplier design engineering gap and get more feedback from a greater percentage of your supplier base, learn more about CoLab here.