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The Hand-Off from Initial Product Concept to Design

February 21, 2017

Folks,

I was just talking with our good friend and frequent collaborator Jim Pelletier at Angle Development (www.angledevelopment.com). Jim runs a boutique product development firm based in Boston. Their foundation is deep knowledge of mechanical engineering with a strong dose of industrial design flair. They do beautiful work and their “turnover packages” make our job much easier.

What prompted our discussion was the challenge we face when deciding when it’s time to “jump in” to a new hardware project. While we know intuitively when it’s too early for EastBridge (“we have a pencil sketch and made a scale model out of cardboard”) I wanted o explore when the design team should launch.

Jim feels that in order to step off on the right foot, the following guidelines/checklist may prove useful to complete before you reach out to your development team.

You should come to the developer with a good idea of what their product “is” and “does”. This involves:

  • • An understanding of the market segment(s) their product belongs within (even if they’re pushing the boundaries of this market).
  • • A sense of who their customers are (demographics, abilities, intelligence, unmet needs/desires that the product will fulfill).
  • • A proven-feasible core technology for the product (*).
  • • An (at least rough) idea of what features and functions of the product will include.
  • • How their users might use/interact with the product.
  • • Consideration for the safety of the user, other stakeholders/bystanders, the environment.
  • • An understanding of all applicable regulations/testing/certifications required for the product (in all intended markets).
  • • A basic marketing/sales strategy (including a target cost-of-goods and project time line)

These would generally be communicated through a product requirements document (or PRD), a functional prototype or other embodiment of the core technology, and a project plan. None of these would need to be “set in stone”, as they will all invariably change as the project progresses. However, a good developer won’t be able to propose a decent product development process without these items.

(*) The assumption here is that the design team generally doesn’t engage in basic R&D or core technology development. However, depending on the type of product, a skilled design team may be able to make suggestions for resources that specialize in the earlier phase of the overarching process.

All logical and good stuff. Next month, we’ll highlight what your manufacturing resource needs for a smooth hand off from the design team.

Cheers,
Jack Daniels
+1.617.285.2486

From Giant Factories to Family Workshops: Suppliers of Every Size

December 14, 2016

workshops-factories

Folks,

When we’re setting off to make a new hardware device, one of the first steps involves assessing the key technical domains represented in the build. Printed circuit board assemblies (PCBAs), membrane switches, formed & machined metal parts, wire & cable and molded plastics, etc. can all be wrapped up in one device.

Our strategy in identifying a supplier that’s a good fit directs us to select a CM that has more than one manufacturing competence. A factory that’s as close to vertically integrated as possible.

An example is a box build factory that can stuff PCBs, build cable harnesses and stamp out sheet metal enclosures. This class of supplier will be better suited and lower cost than a “screwdriver factory” that purchases every component and sub assembly and simply screws the box together.

While total vertical integration is a terrific goal, it never happens for anything more sophisticated than gases… Never. Ever. Factories large and small have complex supply chains that they must rely on. As a result, you also must rely on their network of suppliers.

The complexity or number of degrees of separation contained in a typical supply chain is astonishing. If you consider something as “simple” as a deep drawn aluminum shell to be used in a consumer product, there are more than twelve suppliers that can be identified that directly effect the product quality: the metals distributor, the tool & die shop that fabricated the deep draw tooling; the centerless grinding subcontractor; the vendor that laser scribes the logo on the shell; the anodizing subcontractor; the pigment factory that supplies the anodizer; the packaging supplier; the laboratory that certifies that the finished shell doesn’t contain heavy metals… It goes on and on.

A multi-layered supply chain requires an enormous amount of planning and due diligence on our part. For high risk products, we need to go “upstream” to carry out due diligence on key components, materials, sub assemblies and processes. This can take us four or five levels and multiple branches up the chain. For lower risk components, we need to verify two to three levels and branches.

Regardless of the geography where we’re working, some upstream suppliers will be small (sometimes very small) and humble in appearance. This doesn’t mean that they’re not very good at what they do – they’re just not architectural showplaces and they may be a bit difficult to communicate or trade with.

So once the principal CM is identified, we dig in and confirm the capability of their vendors and sub vendors. We think that this is good business and worth the time and effort.

Cheers,

Jack Daniels

+1.617.285.2486

Six Key Points To Remember When Buying Tooling

November 13, 2016

large_mold

 

Folks,

When you’re developing a new hardware product, once you get past the prototype and proof of concept stage, chances are you’ll need to buy some form of tooling. Be it injection molded plastics, die cast metal, metal injection molded (MIM) or blanked & stamped parts, at some point, you’ll need to commit to custom tooling.

While there are several baby steps that you can take before ordering production tooling (“soft” tools such as cast silicone or urethane and slush molding, aluminum & mild steel single cavity molds, 3D printing, etc.) once you’ve pinned down the design, it’s time to order real tools.

When we order and buy tools, we follow a checklist that was developed after many years and a few misadventures. It’s summarized below:

1. Project Scope

Consider the production requirements of your project: number of units to be ordered in Year 1, 2 and 3; appropriate number of tools and cavities; press capacity/capability of the molder (can they scale to a larger multi-cavity mold as your volume grows or add additional tools on smaller presses to keep up with the demand?); as your design evolves and product extensions are introduced, are options such as inserts, over molding and in-mold decoration, assembly available?

You should partner with a molder that’s flexible and can grow with you. If you can avoid moving the tools, you should.

2. Triple Quote the Tools

While this seems obvious and a basic tactic of procurement, it’s surprising how many companies reflexively single quote their “go-to” molding vendor.

Don’t do it! While it’s important to have multiple quotes for any project, it’s more critical when your parts require a specialized mold. There’s a lot of variation in tooling production techniques which impacts pricing. This is magnified when the molder uses a third party tooling vendor to make the molds (more on this below).

3. Mold Flow Analysis

We perform design reviews on all of our clients’ new designs and then carry out mold flow analysis. This allows us to predict the appearance and quality of the finished parts before pulling the trigger and ordering this molds. It also helps us to maintain their design integrity. Further, it gives us the opportunity to recommend small changes (“Can we change this radius a couple of degrees? It will reduce the cost of the tool by $7800.00…”) that save time and money.

4. Mold Specifications

Consider the grade of steel and finishing operations (hardness and surface finish) called out on the tooling quote. Those variables help to define the and number of shots (yield of molded parts before the tool needs to be retired) and the quality of the finished parts.

Related to this, what’s called out for mold & part validation? Can you send your representative to the factory to conduct mold trials? How many “Tool Grooms” (T-0, T-1, T-2, etc) are included without triggering an additional charge? And what is the number of complimentary samples included in the trial?

5. Allow Sufficient Time

Everyone is rushed. There’s never enough time – we know this. Complex tools take a minimum of four weeks and often six weeks to turn. If a vendor quotes two weeks, find a new one.

6. Commercial Language in the Contract

Reasonable tooling vendors will request a down payment of 50% with the balance being paid upon your approval of the tool and parts. Unreasonable vendors want a much larger down payment or total payment up front.

Other elements of the tooling contract focus on the life of the tool (number of shots) and often replacing the tool gratis once you’ve achieved some “parts purchased” threshold. Other language defines who actually owns the molds. It should be you – it generally doesn’t work in your favor to amortize the cost of the tools in the finished part price. You should be guaranteed the right to “pull” or transfer the molds to a different vendor, with some reasonable notice. And if the molder is outsourcing the tooling generation to a third party, this should be clearly defined.

We’ve crafted a tooling agreement (it’s bilingual Chinese-English, especially helpful in Asia) that clearly lays out the conditions that we’ve learned is advantageous for our clients. You can find it by following this link:

http://www.eb-intl.com/china-tooling-agreement/

[Please don’t construe this as legal advice… You’re free to use it and you’re also free not to use it.]

Purchasing tooling shouldn’t be a trial (though it should include a mold trial). Follow our checklist for a more predictable and profitable experience.

Cheers,

Jack Daniels

+1.617.285.2486

 

Product Inspection Checklist: Eight Steps to Success

July 21, 2016

Folks,

We routinely carry out WIP (Work in Process) and final inspection of complex products for our customers. For the WIP, working with our suppliers, customers and our team of Supplier Quality Engineers, we determine the optimal time(s) to inspect the products during production. It’s usually much easier to measure performance of key subsystems and components before the unit is fully assembled and “in the can.”

Inspections at this stage allow us to have confidence that the quality is “baked in” to the product during assembly.

Final inspections usually take place before “pick, pack and ship” and provide the opportunity to monitor product performance, cosmetic standards, fit and finish and compliance with all specifications. This inspection stage often involves taking the product through the paces of performance – running through all of the steps in the user’s manual, examining the packaging, doing a tear down on a small number of units and assuring that the user experience will be what the design team intended.

Occasionally, our customers require EastBridge to step up and (usually quickly) inspect products at a factory that’s new to us. In order to do a useful job, we need the following:

  • Name and address of the factory plus the name, email address and mobile number of your contact person there
  • General description of the product
  • Specifications, inspection standards, drawings, etc. for the product, accessories and packaging
  • A list of critical, major and minor dimensions or appearance criteria
  • The AQL
  • A “golden sample” or reference standard
  • The size of the lot to be inspected.
  • Any special requirements

If you can share this information, plus at least a few hours of notice, we can be efficient, helpful and you can confident in the quality of the goods that you’ve purchased.

Cheers,

Jack Daniels
+1.617.285.2486

Source Development – The EastBridge Process

June 16, 2016

Folks,

Not to stretch the creation metaphor too far, when a new or redesigned product is conceived, is in gestation and and is about to spring forth, it pays to have and experienced midwife in the mix. We frequently hear that EastBridge is just that – the midwife who guides the birth of new products.

When you get down to it, we’re in the business of landing (birthing) fairly priced and top quality custom products on the docks of our customers. There are many steps (and countless phone calls, meetings, design reviews, BOM development, mold-flow analyses, material testing and email notes) before we arrive at that point and a lot to juggle.

In order for the “baby” arrive healthy and on time, we follow a process that’s tried and true. The checklist that guides each of our projects is summarized below:

STAGE I

Phase I:

General Specification Review

Pre qualification of approximately three (3) contract manufacturers (CMs) and a corps of supporting subcontractors

Execute customer/vendor mutual non disclosure agreement (NDA)

On-site factory audit of the candidate vendors

Confirmation of the specification & generation of budgetary quotations, FOB term

Estimated Duration: Four Weeks

Phase II:

Specification refinement and confirmation

Sample generation/trial run (tooling build, FAI, etc.)

Secondary pricing & commercial terms negotiation

Finalize vendor(s)

Design for manufacturing & assembly (DFMA) and process optimization

Estimated Duration: Twenty Weeks

STAGE II

Place initial order on behalf of the customer by transmitting customer’s PO to the vendor(s),

Expedite the order and advise the customer of the delivery schedule

Perform work in process inspection (WIP)

Perform inspection of the finished goods

Supervision of all shipments

Shipment coordination, administration & translation.

Estimated Duration: Ten Weeks

Now while the timing shown for each phase differs from project to project, the overall process and trajectory for complex products is defined by this checklist. With or without us, it’s a lot to keep track of… We think that the EastBridge process is helpful and hope that you will as well.

Cheers,

Jack Daniels
+1.617.285.2486

When You Reupholster a Sofa, Start With the Couch…

March 21, 2016

Folks,

We’re in discussions with an early stage consumer products company. They want to “re-skin” an existing small electric appliance. Re-skinning involves creating a new “skin” or plastic enclosure or shell for an off-the-shelf device.

We’ve done this many times and it represents a product development model at the intersection of the ODM/OEM universe. The buyer isn’t simply re-branding (by changing the imprinted logo or packaging) a current product made for the mass market, but rather they’re leveraging the “bones” (sometimes referred to the “chassis” or “guts”) of a product that’s in production.

This is a useful strategy to introduce a somewhat new product with a customized appearance, without going through a complete ground-up redesign.

All good: the process starts with searching for products that have the required attributes or properties. Physical dimensions, power level, feature location and usability, etc. Once we’ve purchased samples, performed the tear down, recorded the chassis dimensions and variables, the next step is for the industrial designers and mechanical engineering team to create a new skin to cover the bones.

Not all good: start with creating renderings and sketches of the desired skin, throwing them over the wall to us and asking that we find a device that “fits”.

Sorry, but this is bassackwards… We can’t shoehorn an existing chassis into a new shell with any expectation that it will fit or work. And we really can’t gauge how much it will cost. With zero confidence in the process, we can’t even SWAG a cost for the tooling.

This is not a good approach. When trying to explain why, we came upon the upholstery example. We can talk endlessly about fabric, stitches per inch, ruffles, wooden feet, etc. We certainly can’t even guess at how much fabric to buy, how we’ll attach it to the frame, how long it will take and if it will meet flammability standards.

So – if you’re planning on re-skinning a small electric device, please start with the device.

Cheers,

Jack Daniels
+1.617.285.2486

Why Your Annual Order Rate Means Nothing

February 21, 2016

Folks,

When our customers send us a RFQ, we’ve always asked that they share their technical requirements including the BOM, 2D drawings, and 3D flies, inspection standards, Product Requirements Document (PRD), required international certifications and their specification.

We also request the product or program commercial information. How many units will you order over the course of the year, size and frequency of the shipments, the Incoterm (ex works, FOB, CIF, DDP, etc.) and your target price.

This has all been quite typical and an accepted path in the product sourcing & supply chain management business. We may know and have done business with the world’s best linear motion control device manufacturer, but if our customer’s commercial and technical requirements don’t mirror those of the factory, it’s not a good fit for either party.

All logical, with the exception of one very important factor. Many suppliers no longer place any value in the EAU (Estimated Annual Usage) or customer forecast. Instead, the key variable is now your MOU (Minimum Order Quantity).

While forecasts and purchase orders had long been considered the end-all in guiding the negotiation process, many factories, especially those in Asia discount the value, if not totally disregard customer forecasts. They focus solely on the immediate and that takes the form of your PO.

Why is this? Well, it goes without saying that economic times remain uncertain. While forecasts used to assist with the level loading of factories and planning for capacity utilization, nowadays forecasts rarely predict the actual consumption rate. Factories know this and place their trust, and calculate their price on the PO and only the PO.

This trend is magnified by the factories desire to hold “zero inventory”. When I tour suppliers in Asia and elsewhere, I rarely see any appreciable number of components, consumables or raw materials in stock. When we request price breaks based upon an annual forecast, say 10K, 20K and 35K units and releases against those numbers, we get a quotation that shows price breaks based on 1K, 2K and 3K POs and the related MOQs.

What this means is everyone that makes up the supply chain quotes on spot purchase quantities and then get slammed with rush orders. A tough way to do business, but it’s the new reality.

The 2016 version of the old axiom “Money Talks and B.S. Walks”.

Cheers,

Jack Daniels
+1.617.285.2486

Negotiating Manufacturing Agreements: What Would Ovid Do?

January 31, 2016

Folks,

Regardless of whether it’s in a LCC (Low Cost Country) or right at home, negotiating a manufacturing or supply agreement with a new vendor is always challenging and often painful.

When we’re sitting across from the table from a supplier, I often flash back to high school Latin class. The lengthy process required to get to the goal line reminds me of this quote from Ovid, “Perfer et obdura, dolor hic tibi proderit olim” or “Be patient and tough; someday this pain will be useful to you”.

Well, the pain of hundreds of negotiations (and a high school Classics education) have been useful to us. During a career spent crafting countless supply agreements, I’ve come up with a checklist that keeps us on track and helps to minimize the pain. It’s summarized below:

  1. In advance of meeting with the supplier (always in person) submit an agenda setting the goals for the discussion.
  2. Also in advance, provide rock solid drawings, CAD files, prototypes, specifications, etc. By the time you’re ready to negotiate the details of a supply agreement, the technical variables should be well defined.
  3. During the meeting, pause often to summarize key points. Use that pause to restate important elements using slightly different language. This reinforces the importance of the topic and helps to prevent doubt or misunderstanding.
  4. Embrace a “win-win” mindset. You don’t want to do business with a supplier that can’t make money or feels that they’ve been backed into a corner.
  5. Per Ovid, be firm, but also be respectful. No one likes to do business with someone who swaggers like a pimp. If you get to loggerheads, ask for a break or politely disengage. Stalking out of the building doesn’t accomplish anything.
  6. Include arbitration language in the written agreement. You don’t want to “go legal” if there’s anyway to avoid it. We recommend CIETAC arbitration be utilized in China.
  7. At the conclusion of the negotiation, write the key points of the agreement on the whiteboard. Work for verbal confirmation as well as head nods and other physical checks to confirm that you are in alignment. Then publish a written summary promptly.

This is a lengthy and granular process, but it’s worth it. Marching slowly and deliberately forward, taking regular breaks to summarize your mutual goals (especially offshore) and publishing meeting notes pays dividends. And your high school Classics teacher will be proud of you!

Cheers,

Jack Daniels
+1.617.285.2486

Taking Cost Out Of Your Supply Chain

January 21, 2016

Folks,

Based upon the strong response we received to last month’s blog regarding how to negotiate advantageous and fair manufacturing agreements, this month we’d like to share our thoughts on how best to reliably take cost out of your supply chain. The five recommendations listed below are tried and true tactics that we find yield strong results and enhance your purchasing power and improve your company’s EBITDA.

Buy Direct and Bypass Distribution

We’re always surprised when we encounter situations where our customers are           purchasing reasonable quantities of hardware through distribution because “it’s easy” or “that’s the way we’ve always done it”. Unless you’re buying only a handful of units or your distributor is providing kitting, stocking, etc., there’s no reason not to trade directly with the manufacturer.

Piggyback on the Vendor’s International Certifications

Many products require some form of international certification such as CE, Energy Star, FDA, or UL. While it’s often feasible to apply for your own dedicated registration, this is expensive and time consuming. Many product segments will allow you to piggyback on your vendor’s existing registrations. Explore adding your product listing to their registration and save time and cost..

Pay the Freight Yourself

This is a no brainer, especially if you have a relationship with a good freight forwarder. No manufacturer will coordinate your shipment door-to-door and pay the freight bill without adding in some commission or mark-up.

80/20 Split Your Orders

Or 70/30 . . . The level of granularity on the split isn’t so critical. What is important is to have a strong relationship with your majority supplier plus a hungry minority supplier waiting in the wings. This provides you with supply redundancy, a more secure supply chain and two suppliers that are fighting to make you happy.

Leverage Economically Useful Lot Sizes

We constantly see RFQs listing oddball quantity breaks: 1 – 219; 220 – 1773; and 1774 – 11,250. While an order from your customer may specify these quantities, chances are that candidate vendors’ factories are structured around very different lot or run sizes. Requests for weird quantity breaks usually yield weird pricing. Ask suppliers for quotes based upon their (not your) economically feasible or desired lot size. With some products that require significant set-up time, the aggregated cost of a larger lot may cost dramatically less than a smaller lot.

These tactics help us and our clients to be smart, get it right, get it on time and make some money for our companies!

Cheers,

Jack Daniels
+1.617.285.2486

It Can’t Possibly Take That Long…

November 18, 2015

Folks,

When we’re launching into a new manufacturing launch project, our customers will very reasonably ask “How long will it take to get products that we can ship”?  We review the 2D and 3D drawings, their BOM, specifications, Product Requirements Document ,etc., and based upon our experience offer a good faith time line.

If we use the example of a mid level technology product, say an automotive aftermarket electronic module that installs in the diagnostic port under the dashboard, the short answer is “Five months. . . If everything goes perfectly”.

Our time estimate is often met with head shaking, looks of disbelief, and utterances of “That’s crazy! It can’t possibly take that long.” Well, guess what? It can and does. We’re not hacking prototypes, we’re building retail ready products and that takes time.

The beginning of the process looks something like this:

  1. Review the product documentation: one week
  2. Ask questions/resolve BOM and design issues/recommend DFM tweaks: one week
  3. Identify suitable manufacturers and send out RFQs: one week
  4. Respond to the candidate manufacturers’ questions, requests for design relief, component or material substitutions, etc.: one week
  5. Share the above requests with our customer and negotiate buy-offs: one week
  6. Update the manufacturers and receive their quotations: one week

That’s six weeks to get to the point where we have a budgetary quotation. If we’re doing our job (and not forcing a guesstimate rather than an estimate through the pipeline) it can take longer. And the delays are unavoidable. If the CM has suggested an alternate component because the one you designed around has an eleven week lead time, it’s necessary to review the data sheet, order a few samples and test them in your prototype.

More significant design changes or finding alternate sub systems, electronic modules and active components takes longer still. And that’s all before we can order and build the tooling for the enclosure (four to six weeks), shoot the first articles (one week), tweak the molds through T1, T2 and maybe T3 changes (a couple more weeks) and spin out bare PCBs (one week minimum). And if we need to apply for FCC, UL or other international certifications, work around various holiday shutdowns, more time still.

If the product development gods are with us, we’ll hit the five month estimate. They rarely are.

We know that you did all of the heavy lifting through the brainstorming, design and prototyping phase and your product looks “finished”. It’s not. The messy and somewhat unpredictable transition into mass production is part of the process. Please budget time in your launch plan and treat your manufacturer gently while this is all happening.

Cheers,

Jack Daniels
+1.617.285.2486

 

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