The True Cost of Interconnect Solutions
Cost, Cost, Cost. What does it cost?!?
Everyone, no matter the industry, deals with this reality buzzkill. And the world of interconnects is no different. As a device engineer, sourcing personnel consistently knead the thought of cost into your head to ensure cost is always being considered during the development phase of a device.
Unfortunately, in the world of custom connectors, knowing the cost of the interconnect is not as simple as presenting a pricing chart.
So, what does a Connector cost? Let’s dive into it.
Let’s hypothetically start with the development of a connector needed to produce the best results and functionality for the device.
For this device, we have to consider the requirements of the FDA’s 21 CFR, part 820. [We won’t bore you in this post to exhaustively correlate the requirements established by the FDA and the standard requirements for a medical device connector as this is a hypothetical situation] As you read and continue to develop your reasoning to go one direction or another, remembering the need to uphold FDA 21 standards, consider the value-add of working with a company who keeps it top-of-mind throughout design, development and production.
Figuring out the cost to develop a device connector—whether for medical, consumer or industrial use—are as follows:
Before we get too far along in this process, start by asking, “what are the quality department requirements for the Design Input Summary (including the human factors, risk and hazard assessment and applicable standards or requirements), the Design Validation Protocol, and the Design Validation Report?” Then ask, “are these tasks we are going to do in-house, or are we going to ask our design partner to complete these tasks?” The answer to these initial questions is the first line in the quoted price. Depending on the requirements for the design verification and validation and establishing who completes said requirements, the design phase could range in cost from $25k – $50k.
It’s this stage of the game is where the system will determine if what you have designed is going to be able to survive the tests it will be put through. Here are a few items to consider that commonly occur in this phase:
- Validation Master Plan
- Process Risk Assessment
- Environmental Health and Safety Assessment
- Installation Qualification (IQ)
- Operational Qualification (OQ) (and all the requirements that are included in this step)
- Performance Qualification (PQ) (and all the requirements that are included in this step)
Each company, each device category and even down to the specific device could have its own unique requirements for the IQ, OQ and PQ phases. The costs associated and required will dictate the price of the development phase.
During the development phase, identifying and establishing the regulatory strategy is a must. After deciding on the level of tooling utilized in the phase, it is then necessary to decide how many parts are needed to produce and complete the phase.
Taking the fluid nature of the components mentioned above into consideration, it’s easy to see the complexity of quoting a price for the development phase at the onset of a project. But, since we’re talking about cost, let’s not dance around it. The cost of the development phase is the largest expense as it can grow in scope as the project grows and changes—requiring an investment of $50k – $200k, depending on who does what and how much is required.
Let’s not forget the expense of manufacturing. Manufacturing is, for all intents and purposes, the cherry on top of the development phase. A big decision to be made for each product is whether to produce domestically or globally. Where manufacturing is done, plus the number of units being produced and materials being used, the build price can vary drastically.
And now for the payoff. This is where all the efforts from the last 3 to 18 months, or—heaven forbid—longer, come together. Your design has been beaten up, refined and optimized, you’ve moved from concept to completion and are ready to unleash your wonderful creation on the world—making the medical community a better place to operate, to make consumers lives so much easier they won’t even realize it and kickstart a whole new industrial revolution.
During the launch phase, departments outside of engineering become much more involved providing the voice of the customer and discussing anything from color schemes, aesthetics, customer price point, etc. These same groups are going to tell us how many products we are going to build for a Pilot run, how many parts they want in stock prior to the official launch and how many parts they want in the first quarter, the first six months, etc.
Also during the launch phase, the NRE diminishes and the price per part expense begins. There are a couple of remaining items to think about enlisting NRE for:
- Ongoing measurement and testing during the initial product runs and across a certain number of lots
- Documentation – a company’s documentation requirements may be different than the company engaged to design, develop and produce the device. There may be additional documentation required during the Launch Phase. This is not documentation tied to regulatory though, as all regulatory documentation must be completed prior to launch.
- It might also be beneficial to engage engineers during this phase to capture initial findings to—when it’s time to begin looking for opportunities to generate cost down—judge the initial line functionality against production efficiency later.
There could be other areas to engage engineers and pay an NRE. Generally, the NRE at launch decreases and accounts for the smallest portion of the NRE expense. In this phase, the cost could also be between $10k – $25k.
The costs associated with taking a concept converting it into a design, transitioning it into a manufacturable device and then launching the device requires everything we have discussed above and much, much more depending on the device. We did not discuss any of the other ancillary aspects of bringing a device to the market, items such as the Business Review, Sterilization Validation, Packaging Requirements, submission for a Premarket Notification (510K / CE Mark) or Premarket Approval (PMA), nor did we discuss Post Launch Review.
In the end, you can start to see the complexity of building what the lay-person sees as “just a cord” and attaching a cost to said “cord.” Let ATL work with you and your team to build your cable, to the exact specifications you need, and help you find the best price point possible—without compromising industry-leading technology and quality.
How can ATL Technology help with your next connector or interconnect project?
ATL Technology is a leader in interconnect solutions. Specializing in design, development and production of connector-based devices, ATL’s success is built through its dedication to building strong, successful partnerships—facilitating their engineering team working side-by-side with its partners’ engineering teams, their project managers working alongside their partners’ and so on. Utilizing their experience and expertise to benefit their partners, ATL creates success by commercializing innovative connector based devices with cutting-edge technology.