Fictiv’s 2019 State of Hardware Report Shows Tariffs Add Complexity for Product Teams Trying to Get to Market

Fictiv released its fourth annual State of Hardware Report, highlighting the added burden of tariffs on an industry working to quickly and affordably bring products to market, according to Fictiv. The data-driven insights from this year’s survey found that companies across America, from large enterprises to small startups, have faced heavier supply chain and resource constraints when trying to get to market as a result of tension between the U.S. and its trade partners, Fictiv reports. To compensate, product development teams said they are leveraging multiple tariff engineering tactics to bypass manufacturing obstacles and create more agile supply chains.

Findings from the 2019 report include: 

• 62% said tariffs have resulted in increased cost of materials and components; 

• 30% of projects are over budget, and 38% behind schedule; 

• 43% of respondents do not have adequate resources to manage their manufacturing operations; and

• as a result, 61% of employees are working outside of their designated job responsibilities. 

“It’s clear from this year’s survey that recent changes in trade policy have complicated and exacerbated inherent inefficiencies in manufacturing and the global supply chain,” says Dave Evans, co-founder and CEO of Fictiv. “But it’s reassuring to see the continued resourcefulness and ingenuity of product teams as they counter these enhanced challenges by embracing new manufacturing platforms and technologies, ramping up near-shoring, and assembling final products locally.”  

The report shows how trade tensions have impacted some of the industry’s core long-term challenges, and made it more challenging for respondents now bringing products to market:  

• Agility to Scale: The process from prototype to production continues to affect product teams with many saying that they have difficulty finding partners that can adjust production volumes. One in five (20%) respondents were “dissatisfied” or “very dissatisfied” with their manufacturer’s ability to ramp production volumes up or down.
• Teams: A total of 43% of respondents are reporting they are understaffed and/or don’t have adequate resources to handle new supply chain management issues and 61% of employees taking on work outside of their normal responsibilities to make up for the resource gap. 
• Quality: Product developers rely on manufacturers to manage quality, but only 26% of respondents were “very satisfied” with their supplier’s level of quality management.  
• Time: Twenty-four percent (24%) of respondents listed the pressures of rapid product development as a critical risk for development teams, including the tradeoffs between speed and quality and costs. 

According to respondents, 51% use local manufacturers and 47% use manufacturing platforms for prototyping. Once in production, 65% have started to assemble products locally.  

“As Industry 4.0 unfolds and the digitization of manufacturing matures, we believe product teams will be better equipped to combat the onslaught of geopolitical forces that impact their ability to get to market,” adds Evans. 

Despite the demands of managing the manufacturing process and supply chains in the face of changing trade policies, teams still reported a sense of satisfaction when jobs are completed successfully. The report also found that smaller companies seem to have higher job satisfaction. A total of 70% of people who reported high happiness levels are employed by companies with 100 people or less. 

Webinar 

On May 21, 2019, Fictiv will host a webinar on the State of Hardware 2019 report. Fictiv will welcome Adam Benzion, co-founder of hackster.io, to discuss how product developers are adjusting their development and manufacturing processes to meet the challenges of bringing products to marketing in 2019.  

2019 State of Hardware Report Demographics & Methodology

This year’s survey polled 711 developers and manufacturers spanning 53 industries. Most participants were highly experienced with 32% reporting having more than 10 years professional experience in their respective fields. Thirty-four percent work at companies with over 100 employees and 18% at companies with 500+ employees.

To view the entire Fictiv’s 2019 State of Hardware Report and learn more about Fictiv, click here. 

Sources: Press materials received from the company and additional information gleaned from the company’s website.

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