In any industry, from automotive and defense to oil and gas, the term Commercial Off-the-Shelf (COTS) is widely used and it tends to be thrown around more in lower volume programs. The reason for this, is that COTS parts are used to save money, which is why lower volume programs favor COTS parts, along with their immediate availability. The idea is that, the lower the production volume, the lower the custom content. COTS parts can be a solution for this.
While off-the-shelf and COTS are commonly used terms, and would make sense to use in many instances, they’re both words that refer to a commonly misunderstood concept. No one wants to pay to customize or tool a new product, so they look for COTS solutions. While many programs start off with this approach and potentially design them into early iterations or prototypes, the majority move away from COTS solutions prior to production. This usually leads to greater than anticipated spending and, in some cases, may be more expensive than a custom design implemented from the outset.
Challenges
Miriam-Webster defines Off-the-Shelf as something that’s “available as a stock item: not specially designed or custom-made”; and COTS is defined as an “item that is commercially available, leased, licensed, or sold to the general public and which requires no special modification or maintenance over its life cycle.” There are many products out there that are commercially available, there’s no argument there, but what’s difficult in today’s business world is finding the right commercially available off-the-shelf part for a specific design.
Some companies make it a point to say they don’t offer COTS solutions because, while they manufacture parts that are commercially available, they know what goes into the full process. There are pitfalls to designing COTS parts into a platform without doing thorough research on the actual component/assembly. This is why procurement teams need to be involved in the design process, as they’ll be able to uncover every detail of a COTS part.
“What do I need to know about a COTS part? If it’s off the shelf and available, why do I need to research it any further?”, you ask. Here’s why: while a COTS part may be readily available when you design it in, it’ll more than likely go through some revision or change down the road. In many cases, this change may be OK for your design, however, there are many times when a slight design change will no longer work for your design. This will lead to engineering changes for not only this part, but potentially parts surrounding it. For example, an electronic switch that was revised may now require new mounting brackets, new pigtails and connectors, etc. There are also times where parts suddenly become obsolete, and depending on where you’re purchasing them from (distributor versus manufacturer), you may not find out until you put in the next order. By then it could be too late.
Below are three tips to better understand the concept of COTS parts, and why it’s crucial to determine whether or not a COTS part is the right solution for your program.
3 Tips to Better Understand COTS Parts
1. Customized to Design
This may seem like a no-brainer since customization pretty much derails the “off the shelf” mentality, but many supply chain professionals don’t understand this. At the beginning of a program, especially for low volume, it’s the goal to have as much COTS content as possible. As mentioned above, this saves total program cost and time, both of which are major elements low-volume programs struggle with.
What ends up happening though, is that a part will be located, whether at a commercial distributor or Tier I supplier, and approached for purchase by the organization’s procurement team. Unfortunately, the process is never as simple as you’d think; more often than not, once the parts are procured, they won’t work due to their design and by the time everything is situated, the part basically becomes a custom one. While this could be a solution and is a great starting point, never underestimate what goes into designing a COTS part into your component/assembly, and always have a contingency plan.
2. Modified to Design
As with the above, modified to design is another way the term COTS is misunderstood because what typically occurs is that every COTS part designed into a platform becomes either custom or modified by production. Again, the myth surrounding COTS parts is with their ease of purchase and ability to plug and play. However, in the majority of scenarios, an organization will require some type of technical support from the manufacturer, distributor, Tier I supplier, etc. This is when things become too complex and turn into a more difficult process than anticipated. Modifying the design of a COTS part is a significant task and isn’t as basic as just purchasing a part from said supplier and having it modified. This takes resources and adds costs on both ends.
3. Software Development & Integration
Software development and integration is likely necessary; technology’s everywhere and everything’s connected. It’s very rare that the same software can be used across multiple designs because there’s always some sort of adjustment somewhere, rendering the part no longer COTS. Sure, pieces of the puzzle can be COTS, which helps for total cost and time, but the overall component/assembly is no longer COTS and requires special support.
Conclusion
The COTS parts concept is very misunderstood. The three main reasons for this (which all stem from the design) include the need to customize the part to a specific system, the need to modify the part to a specific system, and software development and integration for a specific system. While COTS parts may offer a solution to many platforms, and are a great starting point for others, the requirements must be fully understood. In order to reduce risk as much as possible surrounding COTS parts, we recommend involving your procurement team early on in the design phase.
-Tony
