In-house vs. Outsourced Design

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Overview

There are various pros and cons to designing products in-house vs. using the products of another enterprise and specializing in distribution. Nearly 80% of the enterprises we surveyed design their products themselves, rather than using the products of another organization. While some enterprises are particularly specialized in technological innovation, and have invented unique products which could not be sourced from others, many have their own designs for products other enterprises are also producing. Most enterprises selling lanterns said that the differences between their products were not large, and were more a matter of small decisions (whether a lamp had a panel attached or not, whether a lamp offers directed light for tasks or ambient light for lighting rooms, etc.).  They said their key differentiators usually related more to business model than product.

In-house vs. Outsourced design

In-House Design

One of the advantages to in-house design is that needs not being addressed by available products can be addressed with a new design. Husk Power Systems developed its biomass gasifier because no models were available for sale that had a low enough cost/kilowatt. Village Tech Solutions, International Development Enterprises India, and the Center for Rice Husk Energy Technology specifically focus on creating new products to fill specific needs. Some enterprises design products available from others, but strive to make better versions (ex. Envirofit International). Other enterprises, especially some producing lanterns, stressed that business model, rather than product design, was the real differentiator between them and others with similar  products. However, because it is easy to assemble a lantern, they saw the benefits of being able to customize their products to fit their business model and price point (rechargeable or non, ambient light or directed light for tasks, presence or absence of a phone charger) and cutting out a middleman as a reason to produce their own model.

Outsourcing Design

Enterprises operating on too small a scale to make it worth producing their own products see benefits when outsourcing their product design. Enterprises sometimes choose to specialize in distribution rather than product design or production. This consolidation of products benefits the sector as a whole.

 

Case Studies

Envirofit

Envirofit International develops and commercializes a range of products for underserved customers, primarily energy efficient clean stoves.

Envirofit also develops stove accessories such as pressure cookers, double pot fittings, LPG attachments, direct injection retrofits to make engines run cleaner, and solar lights. Many other enterprises also produce stoves and solar lights, but Envirofit sets itself apart based on its rigorous engineering standards and partnership with Colorado State University’s Engines & Energy Conversion Lab, advertised as the most advanced cookstove emissions testing laboratory in the world. Envirofit markets itself on the idea that ‘Not all stoves are created equal’, and strives to use its design capacities to drive new standards in product development for target markets.

Enterprises