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On the surface, building your own control panels inside your facility feels like a smart move. You get direct oversight, you keep schedules tight, and you reduce dependency on outside vendors. For some companies, that looks like savings. But when you dig into the details, the reality is more complex. Running an in-house panel shop carries a range of hidden costs that can quickly erase any advantage if they are not carefully managed.
Let’s break down where these costs come from and what they mean for your business.
Engineering and Design Time
One of the first costs that companies underestimate is engineering time. Each panel requires detailed schematics, layouts, bills of material, wire schedules, and compliance checks. If requirements shift during the build, you are dealing with engineering change orders that add more hours and more frustration.
Another issue is standardization. If every panel is treated like a unique design, engineers are repeating the same work again and again. Without a library of standard layouts and components, the workload grows quickly and efficiency disappears.
Compliance and Certification
Keeping up with regulations is no small task. UL 508A, NEC, CE, and other standards require specific components, certified wiring, and documented testing. An in-house shop must invest in calibrated testing tools, inspection equipment, and ongoing certification fees. On top of that, detailed documentation has to be maintained for traceability. That is time consuming and often overlooked when people assume in-house work is cheaper.
Material and Component Challenges
High quality panels need industrial grade parts. Enclosures must handle heat, dust, or moisture. PLCs, relays, breakers, and terminals are not inexpensive. And suppliers often have long lead times or minimum order requirements that tie up capital in inventory.
There is also the problem of waste and scrap. Miswired assemblies, poorly routed cables, or damaged components can lead to costly rework. The cost of poor quality includes not only materials but also downtime, service calls, and reputational risk.
Labor and Skills
Building panels is labor intensive and requires highly skilled technicians. Precision wiring, labeling, torqueing, and device integration all demand expertise. If you do not have enough qualified staff, you face overtime costs or expensive contractors. If you rush inexperienced employees into panel builds, you invite mistakes that show up later in the field.
Testing and debugging are another major cost. Panels need to be powered, cycled, and verified before shipment. That requires specialized equipment, bench space, and trained staff who can identify problems quickly.
Overhead Costs
The shop itself carries ongoing costs. Floor space, lighting, HVAC, compressed air, and tool maintenance all add up. Wire crimpers, label printers, and test gear need calibration and eventual replacement. These costs are rarely calculated up front, but they are real and constant.
Inventory is another overhead. Stocking a wide variety of connectors, relays, and enclosures ties up cash. Parts may become obsolete before they are used. Tracking and managing all of that inventory requires systems and staff time.
Long Term Maintenance
The cost of a panel doesn’t end when it leaves the shop. Over time, panels require upgrades, firmware updates, and replacement components. If the design left no room for future expansion, an upgrade may require tearing out and replacing entire sections. Without consistent standards, each panel becomes a one-off project with its own set of headaches.
Opportunity Costs
One of the least visible but most important costs is opportunity. Every hour your engineering team spends reworking schematics or testing enclosures is an hour they are not spending on higher value projects. Internal resources devoted to panel building cannot focus on process improvements, system integration, or customer solutions that grow the business.
Why Outsourcing Can Save Money
This is why many companies turn to specialized panel builders. Outsourcing provides access to economies of scale, established supplier relationships, and certified processes. These shops already have UL certifications, quality systems, and standardized designs that reduce cost and risk. Outsourcing also provides flexible capacity so you are not maintaining full time staff and equipment during slower periods.
Making In-House Work
To be fair, there are times when an in-house panel shop makes sense. If your volumes are high, your demand is predictable, and your designs are core to your intellectual property, internal control can be a strategic advantage. But even in those situations, success depends on strong standardization, investment in quality tools, and highly trained staff. Without those, hidden costs will continue to erode the benefits.
Final Thoughts
Running an in-house panel shop is not just about the price of parts and labor. It is about the full lifecycle of design, compliance, testing, documentation, inventory, and maintenance. When companies fail to account for those hidden costs, the in-house option often turns out to be more expensive than outsourcing.
The smart move is to evaluate the total cost of ownership before making a decision. If your business is considering the balance between in-house and outsourced panel building, weigh the unseen costs carefully. The lowest cost option is not always the one that looks cheapest on paper.
