In this talk, we discuss the process to get from hacking and making to mass production. We use a real life example to talk about how to think about sourcing and building and managing the supply chain for a consumer electronics business.

1. MIT Entrepreneurship and
Maker Skills Integrator
Product Development and Manufacturing 101
AKA How to get stuff made / mass produced
June 6, 2017
Elaine Chen

2. What we are going to cover today
2
1. To ”Making” and beyond
2. Processes and sourcing / supply chain 101
3. What we are going to see in China

3. FROM MAKING TO PRODUCT
DEVELOPMENT
3

4. What many first time founders believe
4
Making |
Hacking
$$$!

5. What it really looks like
5
Business
concept
Making
(aka Duct
tape
prototype)
Saleable (but
non-scalable)
MVP
Scalable
Product
Platform &
Release
processes
?

6. Hardware
6
http://hardwareproduct.info

7. Software
7

8. Hardware != software
Hardware
• Need $$ to buy materials, parts
• Much slower design iterations
• You can preorder from Day 1 – but you
cannot sell most products without
safety marks / regulatory compliance
Software
• Cheap
• Fast
• You can charge from Day 1
8
=> While highly suboptimal, you
*might* be able to get away with a
pure MVP led approach
=> It pays to invest up front in PMR
and planning before spending big
$$s on making the prototypes

9. FROM PRODUCT DEVELOPMENT
TO MASS PRODUCTION
9

10. A Story from the field: The Zeemote
($6.50 FOB HK)

13. Magic
Tons and tons of
detailed work

14. What we will be doing: Making prototypes
14
• Mechanical
– SLA/SLS (5-10)
– 3d Printing (various processes) (5-10)
– Urethane casting (for 50+ parts)
• Electrical
– Perf boards for prototyping
– Prototype 2 layer custom form boards
(PCBA)
– Hand soldered cables / hand crimped
connectors

15. What we will see in China: Mass production of
finished goods
15
COTs
parts
Custom
parts
Critical
Commodity
Electrical /
Electronic
Mechanical
Final
Assembly
3rd party
logistics
(3PL)

16. Zeemote supply chain
16
COTs
parts
Custom
parts
Critical
Commodity
Electrical /
Electronic
Mechanical

17. Zeemote supply chain
17
COTs
parts
Custom
parts
Critical
Commodity
Electrical /
Electronic
Mechanical

18. What we will see in China: Mass production of
finished goods
18
COTs
parts
Custom
parts
Critical
Commodity
Electrical /
Electronic
Mechanical
Final
Assembly
3rd party
logistics
(3PL)

19. Supply chain >> 1 factory
19

20. Eye candy
20

21. Apply common sense
<0.25lb
$6.50 FOB HK
Zeemote

22. HOW TO HIRE A CM
22

23. 23
Calculating COGS (Cost Of Goods
Sold)
BOM Cost
Labor
Standard
Test
Standard
Cost of all
components for
a given lot size
$ / hour
X
# hours
$$ / hour
X
# hours
+ + X Profit = COGS

24. 24
Calculating COGS (Cost Of Goods
Sold)
BOM Cost
Labor
Standard
Test
Standard
Cost of all
components for
a given lot size
$ / hour
X
# hours
$$ / hour
X
# hours
+ + X Profit = COGS
Beware “MOQ” (Minimum Order Quantity”)

25. 25
Selecting a contract manufacturer
This story is about setting up
mass production in China

26. 26
Selecting a contract manufacturer
Step 1: Partner with a
sourcing specialist who
has great relationships
with CMs in China

27. 27
Selecting a contract manufacturer
Step 2: Fly to Asia
(This picture is at a
night market in Taiwan)

28. 28
Selecting a contract manufacturer
Step 3: Go on a road
show to visit CM’s

29. 29
Selecting a contract manufacturer
Step 4: Administer a
competitive RFP / RFQ
process where you ask
multiple CMs to propose how
they might work with you

30. 30
Selecting a contract manufacturer
Step 5. Analyze
responses, follow up calls

31. 31
Selecting a contract manufacturer
Step 6: Pick the best
partner

32. 32
Kickoff
Selecting a contract manufacturer
Step 7: Kickoff (what is
wrong with this picture?)

33. 33
Kickoff
Letter of
intent
Selecting a contract manufacturer
Step 8: Schedule
pressure sometimes
makes you do things
out of order…

34. 34
Kickoff
Letter of
intent
CM contract
Selecting a contract manufacturer
Step 9: Nail
down terms, IP,
exclusivity etc
ASAP

35. SNEAK PREVIEW:
CHINA TOUR
35

36. Our China Tour
36
Ash Cloud

37. Questions?
37