System on Module: MAKE OR BUY Idea

BANGALORE, India - Aug. 5, 2014 - PRLog -- A typical Product Development life Cycle comprises of the stages as illustrated below. For the sake of simplicity let’s categorize the various phases of product development broadly into two, namely engineering cycle and Business. Idea Validation, Design, Prototype product and product testing constitutes the engineering cycle and business planning, pilot production, manufacturing, commercialization constitutes the business aspect.

Make or buy: An Engineering perspective

The engineering team is often presented with the challenge of delivering a solution/product within pressing timelines coupled by numerous new additional requirements, leading to plausible risks. Also it is very difficult and almost impossible for product companies to keep pace with the changing technology and new CPU launches every quarter.  Deciding to buy a qualified and well tested off the shelf module therefore is one way of hedging the dynamic changes in the semiconductor industry.

Typically to build a module would take about 120,000 to 150,000 USD and anywhere between six to nine months of effort. Another 60,000USD for maintenance and BSP upgrades. Totaling 210,000 USD for NRE (Non-recurring Engineering cost). Of course one would have to pay a fraction more on per unit cost if they decide to BUY the module. For example, let’s say the additional cost per unit is 10 USD, in such a case the breakeven would be at 21000 Units.

Quite obviously at lower volumes (up to 1000 annual quantity), buying off the shelf modules is the ideal and easy choice, while at larger volumes, things get a little interesting and tricky; lot of companies fall for the temptation to build on their own, not realizing the possible pitfalls associated with this traditional approach. However rather than building a custom module, opting for a standard module like Qseven, presents a choice to select from various offerings available in the market. More often than not, the prime deciding factor is not the cost, but factors like time to market, complexity involved with designing in-house and associated maintenance/support cost. And if one eventually decides to buy an off the shelf module; stands to benefit from a very quick time to market, and can reap price benefits from the economies of scale that the ‘System On Modules’ approach offers.

Make or buy: A business perspective

Choosing to use off the shelf module, i.e. deciding to buy the module presents the following business benefits:

·         Cuts down on the development life cycle and saves engineering costs.

·         Allows ease of scalability and reduced maintenance cost once the product gets into mass/series production.

In some applications (which involve low complexity and lesser PCB layers for application hardware) the two board approach can save PCB cost too, by virtue of having the complex hardware with higher PCB layer requirements moved to module.

An analogy can be drawn between System on Module (SOM) and the Engine platform used in automotive industry. As in the automotive industry where the same engine and hardware platforms are used across product lines targeted across different market segments, in a similar fashion the SOM can be used which makes it scalable across different solutions. For example in automotive industry the same engine platform is used for entry level, mid-size and luxury segments, likewise in an industrial HMI application the same SOM can be used to provide user interface for a 5”, 7”, 10” and bigger displays.

In a nutshell, the advantages of buying off the shelf Module outweigh the approach of designing in-house. While at low volumes the pragmatic approach is “buying”, at larger volumes “buying” results in quicker time to market, scalability, reduced support cost.

For further information or enquiries please write to mktg@iwavesystems.com or contact our Regional Partners

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