Fictiv’s 2019 State of Hardware Report finds tariffs add cost, complexity

San Francisco-based Fictiv has released its fourth annual State of Hardware Report, exposing the effect of tariffs on an industry already struggling to bring products to market quickly and affordably.

This year’s survey of 711 developers and manufacturers spanning 53 industries found that companies across the U.S., from large enterprises to small startups, have encountered exaggerated supply chain and resource constraints when trying to get to market as a result of tension between the U.S. and its trade partners. To compensate, product development teams said they are leveraging multiple tariff engineering tactics to circumvent manufacturing obstacles and sculpt more agile supply chains.

Sixty-two percent said tariffs have resulted in an increased cost of materials and components, with 30 percent of projects over budget and 38 percent behind schedule. Forty-three percent of respondents do not have adequate resources to manage their manufacturing operations. As a result, 61 percent of employees are working outside of their designated job responsibilities.

The report details how trade tensions have inflamed some of the industry’s core long-term challenges and made it even more difficult for respondents now bringing products to market.

The process from prototype to production continues to strain product teams; one in five respondents were “dissatisfied” or “very dissatisfied” with their manufacturer’s ability to ramp production volumes up or down. Product developers rely on manufacturers to manage quality, but only 26 percent of respondents were “very satisfied” with their supplier’s level of quality management, while 71 percent of survey respondents were “somewhat satisfied” or “dissatisfied.”

To counter these trends and ensure supply chains remain agile in uncertain times, 51 percent of respondents use local manufacturers, and 47 percent use manufacturing platforms for prototyping. Once in production, 65 percent have started to assemble products locally.

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