Silos changing: Global sourcing is a trade-off says Cambashi expert

Our expert blogger from Cambashi considers the challenge of maintaining product differentiation while optimising time-to-market and cost through global sourcing.

Experts at industry analyst and market consulting firm, Cambashi, contribute a regular blog for TM. The ‘Silos changing’ series explores how developing software applications are enabling manufacturers to implement business initiatives in the new economy. This week’s entry is from Cambashi’s director of research, Mike Evans.

Mike Evans, research director , Cambashi

Over the last two decades, engineers have come to understand that it is generally better to source an existing part from a supplier rather than develop a new part.  This is a trade-off since using existing parts does constrain the design and they can cost more than in-house manufacture.  If your design comprises an assembly of parts available to everybody else it could also make it more difficult to maintain product differentiation.

However, the advantage of time to market often outweighs issues of cost.  Even if only one part is engineered in-house then product uniqueness can be preserved.

The advent of ‘smart’ products and devices has increased the opportunity to maintain product uniqueness, even when all the mechanical, electrical and silicon artefacts are sourced externally.  The software that provides the customer experience differentiating the product can be unique.

Historically, software for each product was written from scratch, heavily optimised to minimise the hardware needed. Today, faster processors and a host of software components are available. That’s just as well as to provide the ‘smart’ in smart products and devices, a typical embedded software development project will need several hundred thousand lines of code.

Including software components in the product introduces new opportunities to provide functionality quickly but also introduces new challenges. Some software components are expensive, adding dollars to every unit of the Smart Product shipped, others involve specific prerequisites. It can be very difficult to understand the full implications of the software licence, even when it is open source.

Black Duck Software supplies software that facilitates engineers to source, manage and control open source code they use in software development, including embedded software projects.  One business line, the Black Duck® Suite, analyses the code as developed to identify open source portions, informs the developer of the licensing arrangements, automates approvals to use the code, then tracks and monitors the components over the product lifecycle.

Peter Vescuso, EVP of marketing and business development at Black Duck Software, confirms that developers increasingly adopt open source components to build the embedded software in Smart Products.  He quotes the typical user as saying “we only write new software when we can’t download it.”  Companies need to ensure these downloads don’t introduce hidden problems.  One Black Duck customer is Intel, and, according to Andre Terrisse, Software Legal Compliance Program Manager, “Black Duck has helped Intel ensure licensed software is used appropriately.”

Cambashi sees industry standards as the biggest barrier to more rapid development of the market for software components – we’re not yet at the level of the App Store on mobiles.  Peter Vescuso agrees and sees “super-communities” forming who will develop ad-hoc solutions.  He points out that the automotive industry is embracing open source and has formed the GENIVI http://www.genivi.org/ Alliance to leverage the community development model.  Members include Jaguar/Rover, BMW, GM, Hyundai, Renault and 160 others.

In the longer term, Cambashi sees industry by industry standards developing further.  This might even enable embedded software to be synthesized from the systems engineering model, much in the way that Electronics Design Automation synthesizes an integrated circuit from machine readable requirements models.

In future blogs we will go on to talk about other potential deployments that support other business initiatives.  We will start with a review of the possible responses to the demands of more savvy consumers.