Cheaper labor overseas isn’t your biggest threat—it’s the excuse some businesses use to avoid doing the hard, smart work. The manufacturers who are winning today are building products customers need tomorrow. That requires a team that can move fast, think creatively, and build with purpose.
If you’re tired of hearing that you “can’t compete” with offshore manufacturers, here’s the truth: You absolutely can—but not by playing their game. Lower-cost labor might win on price, but you can win on value.
The manufacturers pulling ahead today are doing it by building smart, focused product and engineering groups that are obsessed with solving real customer problems. These teams aren’t just building what the market wants—they’re creating what the market didn’t know it needed. And they’re doing it faster and better than their cheaper overseas counterparts. Let’s talk about how to build a team like that—step by step.
Step 1: Stop Treating Engineering as a Cost Center
This one’s tough because it requires changing how you’ve probably viewed engineering for years. In many businesses, engineering is seen as a reactive department—someone brings a problem or spec, and they execute. That approach might keep the lights on, but it won’t drive growth. To stay competitive, especially against offshore firms, you need to reframe your engineering group as a revenue driver—not just a technical resource.
Think of your engineers as builders of your future product line. Their ideas, innovations, and process improvements are where the next margin boost or customer win is going to come from. But they won’t deliver that value if they’re buried in maintenance requests or chasing tasks that don’t move the needle. That shift only happens when leadership treats engineering as a strategic asset.
Let’s say you run a small industrial pump manufacturing business. For years, your engineering team has mostly just refined existing models or responded to defects. But what if, instead, you challenged them to design a pump that could be installed in half the time by a single technician? That kind of challenge—if tied to a real business opportunity—could unlock a differentiator that no offshore manufacturer can match.
A hypothetical example: A 50-person plastics company in the Midwest used to rely heavily on customer specs to guide production. Nothing wrong with that—but it meant they were always reacting. They changed the game by forming a small innovation team within engineering. Their mandate was simple: work with sales to identify the most common customer complaints and then build solutions proactively. One of the ideas they launched was a modular component design that shaved two days off install time for OEM customers. That feature alone gave them leverage to increase pricing and win several new accounts.
The insight here is powerful: engineering can be a source of profit, not just cost. But it won’t happen by accident. You need to give the team room to think, clear goals tied to business outcomes, and the expectation that they’re not just executors—they’re creators. When you do that, you’re not just responding to offshore pressure. You’re making it irrelevant.
Step 2: Hire Builders, Not Just Problem Solvers
You don’t just want people who can fix what’s broken—you want people who get excited about building what’s next. There’s a big difference. A lot of manufacturers hire engineers who are great at responding to technical issues or refining existing products. That’s useful, but not enough. You want engineers who lean forward, not back—people who tinker, question assumptions, and think like product owners, not just task handlers.
When interviewing or evaluating talent, look for curiosity. Ask, “What’s a product you’ve helped improve, and how did you come up with the idea?” You’re not hiring someone to follow a spec sheet—you’re hiring someone to improve it. And if you’re working with a limited budget, don’t underestimate the value of hungry, mid-level engineers who are eager to prove themselves with the right direction and support.
Let’s say you’re making parts for HVAC systems. A typical engineer might optimize a bracket to reduce vibration by 5%. But a builder might step back and ask, “What if we eliminated the need for that bracket altogether?” That kind of thinking comes from people who are empowered—and expected—to challenge the status quo.
Step 3: Pair Engineering with Customers—Not Just Sales
One of the best ways to spark product innovation is simple: get your engineers talking directly with your customers. Not through a product manager. Not filtered through sales. Directly.
Why? Because engineers are problem solvers by nature. But if they don’t hear the problems firsthand, they’re stuck working in a vacuum. When your engineering team hears a customer say, “It takes us 90 minutes to install this sensor, and half the time we get the wiring wrong,” that pain becomes personal. And that’s when great solutions get built.
One Midwest tooling company started inviting two engineers to sit in on customer onboarding calls once a month. No pressure, no expectations—just listen. Six months later, those same engineers redesigned a connector system that reduced customer setup time by 40%. It wasn’t some moonshot idea. It was just a smart solution to a real problem they wouldn’t have heard about otherwise.
Want innovation? Put your builders closer to the friction.
Step 4: Build a Rhythm Around Launching, Not Just Designing
Some companies design endlessly. They build prototypes, run tests, and tweak designs over and over—chasing perfection. Others launch early, gather real-world feedback, and iterate fast. The second group usually wins.
You don’t need to be sloppy. But you do need to be scrappy. Set a 90-day clock for every new idea your team works on. The goal: can we get something into a customer’s hands—whether it’s a beta part, a pilot run, or a demo—within three months?
Speed doesn’t mean cutting corners. It means cutting through indecision. That’s how you beat overseas competitors who might be cheaper, but slower to respond. A regional sensor manufacturer put this into practice by launching “micro versions” of new products to 2 or 3 pilot customers. It let them learn fast, fix what needed fixing, and create stronger products faster than their offshore rivals.
Progress beats polish. Every time.
Step 5: Give Engineering a Clear Business Scorecard
If your engineering team’s only metric is “complete projects on time,” you’re missing the point. Great teams don’t just ship—they ship things that make a difference. So give them a scorecard that reflects the business impact of their work.
That could mean tracking how many ideas came from customer conversations. Or how much time their improvements saved on the factory floor. Or how many product iterations they tested in the last quarter. Whatever you choose, make sure it connects to value—cost savings, customer satisfaction, time to market.
One packaging manufacturer began scoring their engineering team on three things: percentage of revenue from new products, number of customer pain points addressed, and average prototype-to-launch time. It gave the team real clarity—and pride—about what mattered.
If engineers know what the business really values, they’ll build accordingly. That alignment is how small teams punch way above their weight.
Step 6: Make Engineering a Magnet for Smart Ideas
Finally, your engineering team can’t innovate in isolation. Make them a magnet for ideas from the shop floor, the sales team, the field techs. Create a simple system—maybe a shared form or monthly meeting—where anyone can submit an idea, pain point, or workaround they’ve seen.
Some ideas will be rough. Some will be brilliant. That’s not the point. The point is creating a culture where engineers aren’t the only innovators. They’re the force multipliers.
Picture a CNC machining business that set up a simple whiteboard by the break room where employees could post process or product improvement ideas. Every month, the engineering team reviewed and selected one to explore. Not only did it yield real innovations—it showed the whole company that building better wasn’t just “engineering’s job.”
When people see their ideas taken seriously, they start bringing more of them. That’s how you create a company that doesn’t just respond to competition—but redefines what customers expect.
Key Takeaways
- Treat engineering like a growth engine—not a cost center. Give them business problems to solve, not just tasks to complete.
- Build for speed and relevance. Launch fast, learn faster, and focus on solving real customer pain—not perfecting designs in isolation.
- Make innovation everyone’s business. Encourage ideas from across your team, and empower engineers to lead the charge on building what’s next.
With the right product and engineering team in place, you don’t need to worry about offshore pricing pressure. You’ll be too busy building the next thing your customers can’t live without.
Top 5 FAQs Business Owners Ask About Building a Strong Product & Engineering Team
1. What if I can’t afford to hire a full product and engineering team right now?
You don’t need a huge team to get started—you need the right people with the right mindset. Start small. Hire one builder-type engineer who’s hands-on and curious. Pair them with a team member from operations or sales who knows the customer well. Keep it lean and focused, and scale as you see results. A few smart people can make a big impact if they’re focused on high-value work.
2. How do I get my engineers to think more about customers and less about specs?
Expose them to real customer feedback. Let them sit in on customer service calls, join sales reps on visits, or walk through installations. The more direct their exposure to real-world usage and pain points, the more naturally they’ll start thinking like problem-solvers instead of code-writers or CAD jockeys.
3. What if my team is stuck in a perfection mindset and slow to launch?
Change the metric. Reward learning speed, not just final product quality. Set 90-day launch windows. Encourage “version 1” thinking—get it into someone’s hands, get feedback, and iterate. Make it clear that progress is the goal, not polish. Customers usually prefer timely help over perfect answers.
4. How can I encourage more innovation from the shop floor?
Create low-barrier ways for people to share ideas. That could be a suggestion box, a shared form, or a recurring meeting. But the key is follow-through—acknowledge submissions, try out ideas, and celebrate wins. When people see action, they keep the ideas coming.
5. What does a great engineering hire look like in a smaller manufacturing business?
Look for curiosity, not just credentials. The best hires ask “why” a lot, show interest in the whole product (not just their piece of it), and have a history of side projects or improvements they took initiative on. You want someone who thinks like a builder and a businessperson, not just a technician.