VOICES: Philip Carpenito, Strategic Advisor at CADDi - Design World

By Sana Kazilbash | August 5, 2026

Sponsored by CADDi. In this Voices article, Design World spoke with Philip Carpenito, Strategic Advisor at CADDi and the former Chief Procurement Officer at L3Harris Commercial Aviation, where he shares a procurement leader’s perspective on reducing costs and establishing effective cross-functional collaboration between engineering, procurement and manufacturing.

Design World: Why is it increasingly important for procurement and engineering teams to work together earlier in the product development process?

Philip Carpenito: This discussion is near and dear to my heart because I’ve lived with it my entire career in every company and industry that I have worked in. Collaboration has always been essential, especially in the design stage. What’s changed over the last several years is that this collaboration has become imperative.

Before, procurement and engineering would perform their specific functions in silos. Today, companies need a more holistic approach. All functions including procurement, engineering, manufacturing, quality and supply chain need to work collaboratively in order to achieve success. Today’s companies face volatile markets due to geopolitical risk, long lead times, tariffs and increasing product complexity. This all has a significant impact on costs, manufacturability, delivery and customer satisfaction. Most product costs are determined right at the design stage of their lifecycle, which means that’s the best time to go after cost reduction. Design for manufacturability means that products can be built effectively, efficiently and at the right cost.

When teams work together, institutional knowledge is preserved. Both engineers and procurement know what they’ve done in the past, and can work together to make the best decisions.

Then there’s the newest change, AI technology to help with designing products. AI tools work best when they operate collaboratively with procurement, engineering and manufacturing to break down silos and bring a better product to market.

All together, this demonstrates how procurement has evolved from buying what engineering tells them to buy, into a strategic contributor to product development. Organizations understand the immense value that procurement brings to the table, especially around lower total product costs, reduced supply chain risk and faster product launches.

In the old days, people would come up with ideas, engineers would design a product, procurement would source materials and manufacturing would produce it. These are no longer sequential functions in my eyes. Instead, they form a chain all the way through, ensuring you get the best design, the best components that can be sourced, the best manufacturability — and at the end of the day, the best product that will drive revenue and margin growth within the business.

What should manufacturers consider when deciding whether to make a part internally or source it externally, including the cost impact of that decision early in development?

In my experience, make-buy decisions centered around direct product cost. A product is going to cost this amount internally manufactured, or that amount if externally manufactured.

This decision has become much more significant, and much more strategic today. Companies are dealing with rising labor costs, supply chain disruptions, tariffs and capacity constraints. Today companies need to understand this decision from a holistic view and determine how this is going to affect the entire business.

Factors that play into today’s make-buy decision include total cost of ownership, not just the product cost itself. Companies are evaluating:

• What is the total cost of this product?
• Is this a core competency for us?
• Is this something that you want to make core in your business?
• Does it give us a competitive advantage over our competitors?

A lot of companies miss that it’s not just the product cost. Now they understand it’s the cost of the equipment, manufacturing space, technology changes, supply chain labor and inventory requirements. When you decide to make a component or product, you need to be all-in on more than just the price of that one product. You have to take into account capacity utilization, supply chain expertise, equipment needs and capabilities, and skilled labor requirements to produce this product. There is also the supply chain risk to consider. Making a product internally means taking on the burden of finding and sourcing all materials, and performing manufacturing to produce the product. If you look at outsourcing, each stage of design, procurement and production, it frees up your internal resources to work on more strategic initiatives.

At the end of the day, it’s a strategic decision that balances cost, capacity, risk, quality, IP and long-term competencies.

When does it make sense to choose a custom part over a standard one, and what trade-offs should teams weigh in terms of performance, cost, availability and product lifecycle considerations?

Choosing between a custom and commercial part is beyond important, because this affects everything in the lifecycle of the product. Custom parts can certainly deliver superior performance but can also result in greater cost, supply chain complexity and lifecycle risk.

The decision is a strategic business decision, not just, “What about this one part?” Considerations for making a standard part include lower engineering effort, lower tooling investment, an established supply base and greater understanding of quality and reliability of a component. With a custom part, you’re starting from ground zero.

Standard components are available immediately, so you don’t have to wait around or try to find a supplier. With a commodity or standard part, you don’t have to worry about inventory complexity, such as carrying inventory or having safety stock. Standard parts have a much longer product lifecycle versus a new custom part. Maintenance and replacement are also easier.

There are advantages to using a custom part. Custom parts can drive IP in your product, making it harder for people to replicate. The performance should be better than a standard part. It differentiates your product from competitors. The downside is that lead times are usually longer with a limited supply base for that specific custom part.

Bottomline for custom parts is, will customers pay for the additional performance? Procurement can weigh in, and help manufacturing engineers validate product development decisions:

• Is it going to differentiate my product significantly from the competition?
• Are long-term economics feasible?
• What are the financial, supply continuity and product differentiation benefits that justify a custom part?

What lessons have manufacturers learned about maintaining supply continuity over the past few years?

This has really changed. Prior to 2020, most organizations, and most procurement organizations, were all centered around cost and efficiency. Companies relied on just-in-time inventory, global sourcing, and drove initiatives to save time and money on inventory. But when COVID hit, all those processes exposed us to vulnerabilities when faced with global disruption.

In today’s world, we have faced COVID, environmental disruptions and geopolitical issues. Companies now understand that risk and resiliency need to be balanced. Successful companies try not to have single-source suppliers, because that creates a larger amount of risk.

Another difference over the last five years is visibility. Visibility was communicating with your suppliers and having them provide the updates on the market. Today, it’s very different. Not only do good companies have visibility into the company producing their product, but they also go down a layer to the tier two and tier three suppliers. They understand what those suppliers are doing to get the product to the tier one supplier to meet your needs.

Raw material availability is another issue today. Companies need to monitor such items as oil, plastics and precious metals to ensure availability.

Transportation is also vital. Before, companies could put products on a boat, or fly it over. Now that transportation network is very different and has greater pain points than in the past.

Another consideration is strategic inventory. For example, memory chips and other chips used for data centers are becoming extremely critical. Companies have to be more aware of what your strategic inventory needs are.

Supplier relationships matter more than the transaction. When you’re working within all these constraints, there’s nothing better than picking up the phone and talking to someone you trust, who you know will tell you the good, the bad and the indifferent. Creating trusted partnerships with your critical supply base is imperative.

Business continuity and cross-functional planning all play a role. Companies that have spent money implementing software around supply diversification, digital visibility, strategic inventory and relationships are all in a much stronger place.

How can better visibility into past designs, supplier history and part performance help manufacturers make stronger procurement decisions?

This is the reason the CADDi AI data platform exists. Better visibility into historical engineering, procurement and operational data enables faster, lower-risk, more cost-effective sourcing decisions. Rather than treating each product as a new effort, CADDi software can help companies leverage institutional knowledge, avoid repeating mistakes and capitalize on proven solutions. It also improves the collaboration across functions, especially engineering, procurement, quality and manufacturing, because they all use the same data.

The benefits include greater standardization across product lines. This helps avoid creating unnecessary new custom parts, reduces engineering effort, and it enables companies to leverage volume across different products. In most cases, there are lower qualification costs and testing costs because companies know what the product is, and how it performs. From a new product standpoint, this means shorter development cycles.

CADDi software lets companies use their approved suppliers and components. This allows companies to increase their leverage and spend with their approved suppliers. From a procurement standpoint, this enables companies to understand delivery performance of particular materials:

• What are the quality results?
• What’s the capacity and scalability of that part or one product?

Warranty and field performance allows both the sourcing team and the engineering team to understand failure rates, warranty claims, failure modes and environmental performance. Supply chain risk — sole-source dependencies, suppliers with recurring delivery issues, geopolitical or geographical concentration risks — all can be better understood by having this information.

I always return to AI because it’s the biggest initiative today. Modern analytics platforms become significantly more valuable when they can access integrated historical data. With CADDi, teams have every piece of information on every drawing, all the way down to the piece parts. They have CAD information, spec information, purchasing history, supplier report card information, quality, service, and pricing. Companies can find alternate suppliers, more standardized components and potential risks. All that can be done because you have a tool with all that information.

To effectively capture and connect engineering, procurement, quality and other functions, data is a significant competitive advantage. Better visibility transforms engineering procurement from a reactive function to a data-driven function. Before, we used to ask a lot of different questions: who can supply this part, what’s the price. Now, we are moving to more valuable questions:

• What are the costs associated with the component?
• What is the lifecycle?
• Have we designed something similar?
• How has this part performed not only today but in the future?
• What risks have we encountered previously?

By using historical knowledge and data to inform current decisions, we reduce cost, improve quality, shorten development time, strengthen supply continuity and build a more resilient and efficient product lifecycle. It’s the old adage: good data in, good data out. If you don’t have good data in, then you’re going to make the wrong decisions, and some of them are going to be very financially costly.

CADDi turns decades of drawings, costs and quality records into a searchable intelligence system engineers use for that critical step: finding proven parts early and acting on them before release. Read the whitepaper Value Analysis & Value Engineering for Manufacturing: The Challenges and Solutions of Implementation. Yushiro Kato, co-founder and CEO at CADDi offers a related perspective in a recent Design World interview.

CADDi is an international technology company that develops AI-powered data intelligence platforms for manufacturing, engineering and design. Headquartered in Tokyo and Chicago, the company was founded in 2017 by industry veterans Yushiro Kato and Aki Kobashi, formerly of McKinsey and Apple. CADDi brings AI technology expertise to help manufacturers preserve decades of engineering and design knowledge. Recognized globally for innovation, CADDi was listed in Fast Company’s Most Innovative Companies and received the SaaS Award for Best Business Intelligence and Engineering Management Software. To learn more, visit us.caddi.com/company.