Choosing Between CRAMS and In-House Manufacturing

When it comes to designing and manufacturing hardware/robots in the US, there isn’t just one path. The route you choose shapes your cost, speed, and level of control. Also, it is difficult to compete on pricing if you manufacture in the US compare to asian partner but it all comes at a cost too. You may also need to do frequent travel to manufacturer and deal with a lot of logistics. So there is an hidden cost there. Contract Manufacturer(CM) also like to manufacture in large quantities like 10k units at once which may not be compatible with startups that are iterating and wants to fix issues as they come. Here are the four main models I’ve seen teams use: 1. Designed in the US, Manufactured In-House You own design and production. Full control over IP, quality, and iteration speed. The flip side? Huge capital and operational costs. Works best when margins are high or you’re in sensitive industries. It looks like that is what Figure robotics is doing. 2. Designed in the US, Manufactured by a US Contract Manufacturer You keep design close, outsource production. Easier collaboration and fewer IP headaches. But unit costs are higher and scaling can be slower than overseas. e.g Paul Mikesell of Carbon Robotics in one of his interviews mention they manufacture in the US. 3. Designed in the US, Manufactured by a CM in Asia Lower unit cost and unmatched scale. This model built giants like Apple. But you face time zone, cultural, and IP challenges. DFM discipline is a must because mistakes are expensive to fix across the ocean. K-Scale Labs is using a chinese manufacturer in the US(Texas) 4. Designed and Manufactured by an Asian OEM Partner Fastest route to market. You ride on an OEM’s existing product, customize, and focus on brand. Many consumer electronics firms started this way. But you sacrifice differentiation and core engineering expertise. The reality is most robotics and hardware companies don’t stick to just one. They blend these options as they grow. Early-stage startups often lean on contract manufacturers. Later, some bring things in-house for control. Generally, medical devices products, military and defense products are produced in low volumes and for security purpose are manufactured in the US. The big question: which path balances cost, control, and speed for your product?

Better Make or Buy or Both: The ‘make or buy or both’ concept is particularly suitable for situations in which companies are faced with the decision of whether to manufacture certain components themselves or source them externally – for example, when establishing new production capacities, in the event of fluctuating demand, in development partnerships in the high-tech sector or when entering new markets. Services such as IT operations, logistics or technical services also often raise the question of whether an external solution is more efficient or whether in-house operations remain strategically more sensible. The figure below highlights this issue in a differentiated manner by comparing three options: in-house production (make), external procurement (buy or outsourcing) and a hybrid form (concurrent sourcing). Outsourcing describes the transfer of services or functions to external providers. This can involve individual tasks or entire processes and is often done to reduce costs, free up resources or focus more on the core business. Opportunities lie in financial flexibility, technology transfer and better planning. At the same time, risks arise from dependencies, loss of control, loss of know-how and increased coordination requirements. Particularly critical are losses of expertise and potential conflicts of interest with service providers. This contrasts with the strategy of simultaneous in-house and external procurement – also known as make-and-buy or concurrent sourcing. Here, services are provided internally and procured externally in parallel. This strategy allows companies to respond more flexibly to fluctuations in demand, develop expertise internally and set benchmarks at the same time. Companies also benefit from a better negotiating position, as they can evaluate both internal and external offers. Risks include higher coordination costs, potentially higher overall costs and limited prioritisation by suppliers. The decision between make, buy or a combination of both is rarely permanent and should be reviewed regularly. It is important to consider not only cost aspects, but also strategic goals, dependencies, quality, innovation capability and long-term effects on one's own value creation. The model shown provides a sound basis for structured decisions in complex procurement situations. Dr. Mario Büsch, PURCHNET.de

Outsourcing vs. In-House Manufacturing: What’s the Right Move? When it comes to building a product-based business, one of the biggest decisions you’ll make is whether to outsource your manufacturing or bring it in-house. I’ve done both—so here’s the real talk on the tradeoffs: Outsourcing Manufacturing You partner with a third-party facility—often overseas—to make your product. Pros: - Lower startup costs - Faster to launch - Scalable without massive infrastructure - Access to specialized equipment or processes Cons: - Less control over quality - Communication lags and time zone delays - Higher risk of supply chain disruptions - Margins often get squeezed over time In-House Manufacturing You own the equipment, facility, and the process from start to finish. Pros: - Total control over quality and timelines - Easier to innovate and pivot quickly - Builds long-term brand value and trust - Can improve margins once scale is achieved Cons: - High upfront costs (equipment, space, staffing) - Slower to scale early on - You carry all the risk—downtime, maintenance, hiring Why I Chose In-House: For me, owning the process has been a game changer. Yes, it’s harder. Yes, it costs more at the start. But long-term, it allows me to ensure the quality, consistency, and innovation needed to build world-class brands. And in a world where trust is currency, that control is priceless. If you’re building or have built a product-based brand, what’s your manufacturing strategy? And why?

Efficiency without control is exposure. For decades, Western industry optimized supply chains for cost and speed. Lowest bidder. Long global routes. Minimal buffer. It worked, until it didn’t. The last few years have made one thing clear: Supply chain is not a back-office function. It is a strategic weapon! If you cannot secure materials, control production, and scale output rapidly, you do not have a product, you have a dependency. True endurance requires two things working together: Resilient Supply Chains • Trusted raw material sources • Geographic diversification • Domestic or allied manufacturing alignment • Long-term supplier partnerships, not transactional purchasing • Visibility from magnet to motor to mission A spreadsheet cannot replace sovereignty. In-House Scale Manufacturing Outsourcing everything might look efficient on paper. But when demand surges from 1,000 units to 100,000, speed comes from control. In-house manufacturing means: • Direct quality control • Rapid design-to-production feedback loops • Real-time cost optimization • Protected (IP 49 patents) • The ability to ramp without waiting in someone else’s queue It is slower to build. Harder to fund. But strategically unstoppable once in place. At ePropelled, we’ve made a deliberate choice: Invest in factories. Build capability in the US, UK and India. Integrate propulsion, power electronics, and intelligent controls under one roof. Because scale under pressure does not come from a global sourcing strategy alone even though, you still need Supply Chain of raw materials. It absolutely comes from owning the capacity to produce, reliably, repeatedly, and at volume. Endurance is industrial. And industrial strength starts with manufacturing control and supply chain discipline. #IndustrialStrategy #DefenseManufacturing #SupplyChainResilience #SovereignProduction #UnmannedSystems #ePropelled