Industrial Control Panel Building: In-House vs. Contract Design Factors

Which do you like more – control, or cost efficiency?

Building a successful industrial control panel is complex, from concept to post-installation. One of the most important decisions you'll make is taking on the tall task of designing and manufacturing in-house vs. outsourcing to a specialist.

We’re not here to judge your decision either way. (That’s coming in a future post.)  But we do have words of firsthand wisdom about the design and build implications of insourcing or outsourcing your control panel.

Control Panel Building & Design: 

Yes, price and oversight can be two massive factors in the success of building control panels in-house vs. contracting the work. Specific to the actual act of designing, there are deeper nuances certain stakeholders (say, the engineering manager) must consider:

1. The cost of business – today and years from now
2. Lead time
3. Quality
4. Customization
5. Building to strict standards
6. Value-added services
   
   

The Cost of Doing Business

Insourcing your industrial control panel manufacturing means you must invest in tools and people:

• Any machines & design software you don’t already own
• Skilled laborers
• Training
• Component sourcers
• Floor & storage space

As your design requirements become more demanding or customized, you’ll incur extra costs for:

• More skilled laborers
• Special testing equipment
• Sourcing & paying for unique components

If your in-house design heavily relies on a pricey or hard-to-find component, sourcing too much or little can be harmful to your bottom line.

What’s an engineer to do if an industrial control panel design looks cost-prohibitive? Either redesign the product so it’s easier to source and manufacture, or outsource the trouble. (Or do both.)

Any decent contract control panel supplier, of course, will already have sourcing and production processes in place. Where a specialist separates itself is how much more cost-efficiently it does nearly anything:

• Buys components at bulk discounts
• Can spot waste and optimize cost-quality balance
• Can build custom designs in minimal production time & without costly redos

A concept leveraging the right components and the right suppliers will require less field maintenance and fewer redesigns, further extending its value.

These are just starting points for deciding how to meet design requirements within budget. That’s because #s 2-6 on this list play into cost efficiency as well:

Lead Time

Say you’ve successfully installed your new equipment, trained talented employees, set up a supply system, and had a few successful production runs.

There’s a 90% chance your lead time will still be worse than if you’d outsourced the design.

Consider whether your concept is simple enough to efficiently insource with the talent and training capabilities you have today. If it’s a complex or high-risk build, you may be better off outsourcing design to a manufacturer with a dedicated panel team and production cells.

Consider the added time crunch you may put on your team when it must build with strict requirements or rare components:

• Skilled engineers & purchasers are hard to find and keep
• Shaky capacity to keep up with complex builds
• Redesign of products that fail regulatory testing
• Field support if your design launches and fails

Again, your needs and application may dictate you either lower your design standards or outsource to a specialist. And if you try to work directly with multiple outside companies to finish a complex job (instead of a single supplier/sourcer) you’ll further increase lead time:

• Part sourcing – dealing with numerous individual sellers 
• Manufacturing the enclosure – separate transport and paperwork
• High-grade surface finish – separate transport and paperwork
• Special testing – separate transport and paperwork

There may be an easier path if you’re simply replacing an existing electric panel at the end of its service life. See if your company still has the initial drawings or schematics, and whether you can replicate them. The same goes for your bill of materials – having it for reference will reduce research time for finding panel components.

If you have neither, you’ll get faster results letting a third-party expert piece together your next concept.

All these deadline risks aside, there’s a reason we said 90% chance, not 100%. There is inherent risk in putting all your eggs in one basket. If you pick a bad-apple panel supplier that can’t meet your custom or strict requirements as promised, those eggs will be on your face.

Quality

No matter what you think of Elon Musk personally, you probably don’t think you could’ve developed a better spacecraft than he did in 2012. 

Likewise, the higher your build quality must be, the more valuable an outside voice is. 

PLC control panels are tough jobs, and a dedicated specialist is far more likely to have purpose-built facilities, people, and equipment to make production easier. Control panel construction is a manual assembly line process – does your team have the manual and mental dexterity to design to strict quality requirements?

Consider your ability to handle all factors of a high-end control panel’s design:

• Material choices – Have you matched them to the assembly’s end use, and are they readily available?
• Layout & sizing – Will you account for heat generation, interference between components, and future-proofing?
• Wire & cable design – Is there proper clearance and routing for optimal safety and efficiency?
• Labeling – Do you follow panel labeling best practices for adhesion, readability, and compliance?
• Enclosure – Can it withstand explosions, corrosion, vibration, extreme temperatures, and/or dust as needed?

If you’re looking for something highly reliable with a 10-year life span, in-housing to an underprepared team isn’t going to end well – for the panel or your reputation.

That’s not to say every outside manufacturer is capable of building high-end electrical panels for demanding applications like datacom, medical, and automation. Do homework on who you’re working with; otherwise the design outcome will look similar to if you’d gone solo.

It sounds cliché, but part of successful production is communication, especially when a contract panel designer enters the mix. When quality is king, lean on a third party – it can provide invaluable review of your design and improve both its functionality and cost efficiency.

A Highly Custom Customer?

If the product doesn’t need an overly complex build, it might be cheaper to insource rather than enlist an industrial control panel shop. 

The more your design pushes the boundaries past “commodity,” the more you’ll be sticking your neck out by trying to DIY it.

Here’s a mini-checklist of sorts for sourcing custom industrial control panels:

• If it requires (or you think it requires) unusual components or materials, order early and often from a trusted supplier – or find a competent replacement.
• If the user might adapt the application post-launch, leave room to expand the panel’s contents – otherwise quality and maintenance issues will happen during later customization.
• Your design’s potential ends where your team’s ability ends – are you missing out on a creative solution?

Contracting out a design can come at a cost. Outsourcing something unique, creative, or proprietary does risk loosening your control over design intellectual property. That’s where hopefully the “trusted” in “trusted supplier” comes in.

Overall, if you can tell your model will be a pain to make, it probably will be for a contractor too. But at least it’ll have the expertise to work around it (and perhaps improve your design in the process).

Building to Strict Control Panel Standards

Control panel standards are in place to ensure the user and general public that your product is safe and reliable. Do you plan to build to UL508A certification standards?

If your company builds alone, it must earn official certification or hire a third-party tester to verify the product meets UL508A-equivalent baselines. Initial certification to become a UL 508A panel shop can cost a company tens of thousands of dollars, plus annual fees. 

Control panel certification ties into a design in a few ways:

• Is anyone in-house familiar with building to UL508A regulations?
• How much testing will your design direction require?
• Can you afford – money-wise and time-wise – a redesign if the build fails testing?

Even if UL508A standards aren’t of concern to you, it’s essential your design is safe and reliable. And it’s essential that you, in turn, outsource to a reliable partner when your application has stringent quality standards. 

One perk of turnkey panel manufacturing is that it can recommend design improvements specific to testing criteria for UL 508A industrial control panels. The panel builder can evaluate spec requirements and design to standards based on the end user’s market and geographic location.

Value-Added Services – Is This a Bigger Problem Than You?

A clever control panel design is a great step toward improved operational efficiency. But some variables of success are out of the designer’s hands.

That is, unless the designer is also the purchaser, engineer, assembler, and warehouse.

Some control panel manufacturers offer flexible outsourcing, meaning you can either supply a design to build or outsource the entire project. 

All stages of a project’s life cycle impact the design. A full-service control panel solutions provider can support the design at each phase:

• Engineering resources – Improve the design or come up with a new one. Make your idea more manufacturable for higher quality, lower cost, and easier field servicing.
  
  
• Component sourcing – Consistent access to key components of your industrial panels thanks to a network of potentially 100s of industry-leading niche and general suppliers. Quick thinking to source a viable replacement for missing parts or tweak the design so a problem part isn’t necessary.
  
  
• Warehousing – An off-site facility that safely stores your stock in just-enough amounts so you don’t pay for wasted space.
  
  
• Supply chain support – Forecasting for shortages and last-time buys. A supply ready when you need it, so you’re not stuck laying off a crew you don’t currently need, or overwhelmed when demand surges.
  
  

In-House Manufacturing vs. Outsourcing: Pros & Cons

So … control, or cost-quality balance?

Staying in-house for panel manufacturing gives you more control over each step of production.  This results in greater flexibility and quicker turnaround times on projects that are:

• Low-complexity
• Low-risk
• Low-volume

Simple projects may not be financially worth the involvement of a partner.

However, there are many cases where an innovative and collaborative 3P engineering team can offer and deliver on clear-cut expectations for pricing, timing, and quality. This keeps you in control and in line to succeed when your project needs custom, highly engineered solutions:

• Environmental, heat, and other variables unique to control panels 
• Access to high-performing and hard-to-find components
• A facility, setup, and team capable of executing your dream scenario for quality & accuracy 

Each “insource vs. outsource” decision has pros and cons, but be sure that all project stakeholders understand how all stages come back to design – and cost efficiency.