The notion of involving purchasing in design is not a new concept. Some OEMs have involved purchasers in design to varying degrees for years.

However, in recent years OEM powerhouses such as IBM, Motorola and Lucent have included purchasing in new product development in a big way. They have hundreds of people who report to purchasing involved in design.

As the cover story in this issue points out, the idea of involving purchasing in design is to make sure standard parts are used in new designs whenever possible and that parts are reused, i.e. components used in other OEM products are designed into new products. Purchasers involved in design also try to steer designers to previously qualified suppliers who are on the OEM's preferred supplier list.

Purchasers can make sure design teams don't build in parts that will soon be obsolete or might end up in short supply because of unprecedented demand.

While these seem like simple ideas, they result in big savings for OEMs. Costly unneeded custom parts or components that might be subject to shortages never get designed in. OEMs use suppliers with proven track records rather than untested suppliers who might have some manufacturing or quality issues.

Some OEMs report striking results. Lucent began a major effort to involve purchasers in design about a year ago. The company, while still struggling, reports its profit margins have improved from single-digit percentages to 20%. Lucent expects margins to reach 30% for new products by next year. It has also reduced inventory levels and moved products to market quicker through its new supply strategy, which involves procurement in new product development.

The trend of involving purchasing in design will continue and won't be limited to the IBMs and Lucents of the world. Medium and smaller sized OEMs will also benefit from having someone concerned about the supply chain involved in new product introduction.

Outsourcing will also affect the trend. As electronics manufacturing services providers handle more manufacturing for OEMs, they are also handling more of the day-to-day purchasing of parts. Purchasers at OEMs can focus on more strategic purchasing issues, and involving purchasing in design is as strategic as purchasing gets.