Cost Reduction in Electronics & Control Panels: 7 Design Strategies


In today's landscape, cost is a competitive challenge – both internally and outside the building.

For original equipment manufacturers (OEMs) and others figuring out an industrial electronic solution, there's pressure to offer customer value. There's also pressure to perfect internal processes and make production as efficient as possible. 

This is especially true in any design that includes an electronic control panel, which serves as the nerve center for many industrial projects. Not only do they represent a significant investment; they’re also tricky and highly manual builds that go into sensitive applications 

Making smart decisions about parts and partners can translate into substantial cost reductions in electronic systems and devices.

Let's explore seven methods proven to streamline control panels and other electronic designs, whether in your facility or in the field.

7-Step Process to Electronic Cost Reduction

Unless you're already working with a high-end control panel team, chances are there are ways your design can be leaner and meaner. That can be literal or figurative:

  1. Be flexible with components
  2. Space efficiently – and futureproof!
  3. Simplify
  4. Don't be cheap for the sake of it
  5. Design & test properly the first time
  6. Outsource the tough stuff
  7. Bundle turnkey services

1. Be Flexible With Components 

Materials make up 60% of an electronic product’s cost on average. Even the tiniest component can drive that price up significantly.

Many engineers lock themselves into using specific parts early in the design process, leaving little room for cost optimization later on. To avoid this pitfall, embrace flexibility with your component choices.

Don't rule out alternative components just because they weren't your first pick! If you’re outsourcing, team with a supply chain-savvy panel manufacturer to substitute in alternative, lower-cost components that still meet requirements in:

  • Function
  • Performance
  • Durability

The right manufacturer will have knowledge of past project successes and strong supplier relationships. These qualities can help you score more affordable:

  • Connectors
  • Controller ICs
  • Semiconductors
  • Passives
  • Other pars

No matter who’s in charge of sourcing parts, keep these best practices in place:

  • Stick with off-the-shelf components wherever possible. Design your product with components that are known to be trustable and are already manufactured.
  • Don’t use different components to perform the same or almost-same task. Use uniform component sizes and tolerances.
  • Consider the financial impact of availability. Would an alternative part get your operation up and running sooner?

Cost-reduction-electronics_Small-computer-component2. Space Efficiently – & Futureproof!

Sometimes it’s hard to see the digital forest (your assembly) for the trees (single components. Don’t overlook the value of optimizing the use of physical space inside your panel enclosure or cabinet.

Sticking to modular design principles allows you to efficiently arrange components and allocate space only where they need it. 

Then, think about the size of the components themselves. Select compact components like surface mount devices and high-density interconnects where possible. Then work closely with your builder to optimize the panel’s layout for minimal waste.

Space efficiency for today might not be enough – could there be a change in needs a few years from now? If there’s even a remote chance, consider futureproofing the design. 

Allocate extra room – the rule of thumb is 20% – for potential expansions such as:

  • Inputs/outputs
  • Communications
  • Safety features

A little extra space can prevent the need for a full panel replacement later to accommodate updates. The up-front cost is trivial compared to rebuilding from scratch.

Hand-in-hand with physical space is the need for functional headroom with the core components you select. Choose data devices and power supplies with enough juice to handle any features or software updates someone might squeeze in later. possible future feature additions or software updates.

3. Simplify

“Simplify, simplify, simplify!”
– Henry David Thoreau

While the writer/philosopher died in 1862 and thus probably wasn’t talking about electronics in his famous quote, the idea still applies.

Unnecessary complexity is one of the biggest culprits behind cost inflation in electronic designs. Consider this your “Is my project getting fat?” checklist:

  • High # of parts
  • Rare, hard-to-find parts
  • Intricate layout
  • Custom modifications
  • Not DFM-friendly

Start solving this by giving some side-eye to your component count, types, and complexity

  • Can you reduce the total number of semiconductors, connectors, & cables? 
  • Can you consolidate and standardize part mix to reduce labor in ordering, stocking, assembly, & documentation?
  • Can you simplify the layout or remove a non-critical feature to make the design less intensive to manufacture?
  • Could alternative component materials or sizes reduce weight or volume and save you shipping & warehousing costs?

Examine design aspects like wiring layouts, shielding, indicators, and other areas that add complexity. Are all those bells and whistles truly necessary? Removing low-impact frills keeps costs down – as long as you leave in the core tenets of compliance, safety, and functionality.

A control panel manufacturing partner can be an invaluable resource for pinpointing opportunities for a simpler build.

4. Don't Be Cheap for the Sake of It

We asked you to be open-minded about alternatives for your go-to components. At the same time, total cost of ownership (TCO) is a real thing.

Be wary of slashing and switching left and right if the changes might compromise critical areas like:

  • Power efficiency
  • Thermal performance
  • Long-term reliability

The key is striking the right balance between cost and technical specifications – kinda obvious, but easier said than done.

As you look to reduce costs on your control panel design, resist the temptation to automatically go with the cheapest components and manufacturing.

The True Cost of Cheap Components

Low quality

Questionable sourcing/screening

Lack of testing




Premature failure

Compliance issues

Unreliable performance




Early replacement



Faulty or counterfeit parts that cause downtime, repairs, and early replacement quickly erase any initial savings. On the manufacturing side, low-rate fabrication and assembly vendors may sacrifice …

  • Material quality
  • Process quality
  • Testing

… to undercut others’ pricing. Sloppy builds open the door to defects that don't rear their head until later. At that point, you're facing expensive rework – or scrap.

The boss will never let you totally ignore up-front cost, but they’ll (hopefully) appreciate you making decisions with TCO in mind.

The wise approach is investing in quality, reliable components and sound manufacturing practices up-front. While this raises initial design and production costs somewhat, it can also prevent catastrophe during field use.

5. Design & Test Properly the First Time

The life cycle of a control panel shouldn’t go in circles. You’ve got problems if you’re frequently running into the back-and-forth of:

  • UL test failures
  • Rework
  • Recalls
  • Field failures

To sum it up: Find problems while they’re vastly cheaper and easier to fix.

Being thorough in the production phase keeps you from tripping just before or after the finish line. There are several checks and balances you can use:

  • UL-friendly design – If you require UL approval, why wait for the auditor to pan your product before you build to their demands? Even if a UL 508A panel isn’t mandatory in your situation, it never hurts to follow those standards. UL requires all materials and components inside an assembly to be proven safe and reliable.

  • Prototyping – Use advanced simulation and modeling tools to their fullest. Modern software allows you to validate designs, uncover issues, and optimize performance – all before laying a finger on any physical parts or materials.

  • Testing – Work closely with your control panel builder to develop procedures that mirror real-world conditions and uncover any defects or inaccurate specs. From virtual to validation testing, verifying that production and launch will go smoothly is both satisfying and cost-savvy.

Yes, testing and low-volume prototyping create some overhead cost. But think of the costs of a failed product launch:

  • Picking new components
  • Respinning boards
  • Recut tooling 
  • Scrap existing inventory

That list doesn’t even include liability issues if your product hurts people or causes major equipment damage. The old adage "measure twice, cut once" perfectly applies to control panel development – even when you’re on a tight turnaround. The people who ship your panels from the production line should never see them again.

6. Outsource the Tough Stuff

You may have amazing design and engineering teams, but trying to handle every aspect of panel production in-house is still inefficient for a non-specialist. Outsourcing certain processes to a panel manufacturing shop can lead to a little more money in your company’s pocket (and a little more sanity).

Take an objective look at your squad’s resources, capabilities, and bandwidth for:

  • Design
  • Fabrication
  • Assembly
  • Testing & prototyping

In many cases, leveraging an outside team’s experts, facility, and supply chain connections is more economical than trying to do it all yourself.

Control panel manufacturers invest millions in:

  • Special equipment
  • Highly trained technicians
  • State-of-the-art facilities
  • Quality systems

By outsourcing labor-intensive steps like assembly, wiring, or testing, you can avoid the burden of developing and maintaining those skills internally.

When it comes to outsourced manufacturing, the savings go beyond just labor expenses. Partnering gives you access to perks you probably can’t get going solo:

  • Specific volumes
  • Tooling
  • Supplier programs

Be strategic in your “make vs. buy” analysis, but don't be afraid to lean on a manufacturing partner's expertise instead of unnecessarily shouldering high-overhead productions yourself.

Mechanic with wrenches in pocket at the repair garage

7. Bundle Turnkey Services

Many of the more legitimate panel contractors (read: not mom-and-pop shops) offer a suite of value-added services. This convenience allows you to focus on your primary work rather than wasting time and overhead piecing services together separately. 

When you bid out an electronics project as an all-inclusive package, you gain the manufacturer’s punching power and economy of scale. Examples of valuable services include:

  • Component sourcing
  • Inventory management & warehousing
  • Wiring harnesses
  • Rack integration
  • Cable assembly
  • Specialty labeling
  • Programming & integration

The benefits of turnkey manufacturing apply to custom panel modifications, too. For example, if you’re looking to reduce costs for an existing panel enclosure design, a manufacturer offering automated CNC machining in-house could:

  • Remove the extra cost of manual measuring & fabricating
  • Eliminate the overhead of sending the panels to a second vendor
  • Help you move on to the next lucrative project sooner

In the end, a streamlined, vertically integrated approach is simply … simpler. It makes the supply easier to manage and gives you a single point of accountability. Or, to borrow another famous quote:

“Keep it simple, stupid – KISS.”
An actual engineer this time

Cost: 1 Part of the Control Panel Equation 

By using these seven cost-saving strategies, OEMs and industrial users can optimize their control panel design process, reduce expenses, and increase profitability. 

To boil them down in a way Thoreau and the KISS guy would be proud of:

  1. Loosen up – avoid unnecessary rigidity in picking components.
  2. Optimize the layout and part size to minimize wasted space – for today & 5 years from now.
  3. Minimize the component mix and total number, and avoid elements that make sourcing or manufacturing harder.
  4. Prioritize TCO by choosing parts and processes that minimize downtime, repairs, & replacements.
  5. Leverage prototyping & simulation tools to assess risk before physical production.
  6. Evaluate your in-house capabilities and whether outsourcing to a dedicated panel shop would save money.
  7. Bundle value-added services to eliminate overhead. 

Cost, quality, and timeliness are each an important section of the product life cycle, from sourcing to production to field use. Cost reduction should never compromise quality, safety, or compliance. Balance is what’ll win you this race while others trip near the finish line.

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