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20150226 boston hw meetup

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20150226 boston hw meetup

  1. 1. HOW TO SELECT A FACTORY SCOTT N. MILLER CEO www.dragoninnovation.com @dragoninnovate 1Tuesday, April 7, 15
  2. 2. AGENDA http://en.wikipedia.org •Quick Survey and Context •Step 1: Decide Where to Build •Step 2: Run the RFQ Process 2Tuesday, April 7, 15
  3. 3. Quick Survey 3Tuesday, April 7, 15
  4. 4. Quick Survey 4Tuesday, April 7, 15
  5. 5. MIT RoboTuna 5Tuesday, April 7, 15
  6. 6. Agenda 6Tuesday, April 7, 15
  7. 7. Robotic Corvette Powered Dino 7Tuesday, April 7, 15
  8. 8. Agenda 8Tuesday, April 7, 15
  9. 9. Initial iRobot Expertise (Revenue) 9Tuesday, April 7, 15
  10. 10. Journey from $100,000 to $100 Price 10Tuesday, April 7, 15
  11. 11. My Real Baby ~ 100kVelociraptor ~100k + 11Tuesday, April 7, 15
  12. 12. Roomba and Scooba 12Tuesday, April 7, 15
  13. 13. 13Tuesday, April 7, 15
  14. 14. We are going to take something as insanely complex as manufacturing consumer electronics and make it feel easy. VISION 14Tuesday, April 7, 15
  15. 15. 15Tuesday, April 7, 15
  16. 16. 16Tuesday, April 7, 15
  17. 17. BOLT 17Tuesday, April 7, 15
  18. 18. BOLT 18Tuesday, April 7, 15
  19. 19. DRAGON INNOVATION HAS HELPED LAUNCH AND SCALE OVER 100 COMPANIES SINCE 2009 19Tuesday, April 7, 15
  20. 20. Why is Manufacturing Hard? 20Tuesday, April 7, 15
  21. 21. Hint 21Tuesday, April 7, 15
  22. 22. GOING FROM THE PROTOTYPE TO PRODUCTION IS A LONG JOURNEY WITH MANY “UNKNOWN UNKNOWNS” • COGS, tooling and manufacturing costs • Lead times • Permanence of Quality • Iteration cycles • DFMA • Factory Selection and Management • Team Scalability • Schedule & Project Management • Specialized skills (ME / EE / SW/ Q / SC / Logs) • Retail Channel 22Tuesday, April 7, 15
  23. 23. STEP 1: Decide Where to Manufacture 23Tuesday, April 7, 15
  24. 24. EXAMPLES TO TALK THROUGH 24Tuesday, April 7, 15
  25. 25. CHINA? 25Tuesday, April 7, 15
  26. 26. YES! MANUFACTURE IN CHINA IF YOUR PRODUCT... Requires significant manual labor to manufacture and assemble 26Tuesday, April 7, 15
  27. 27. YES! MANUFACTURE IN CHINA IF YOUR PRODUCT... Requires higher production volumes (>10k units) 27Tuesday, April 7, 15
  28. 28. YES! MANUFACTURE IN CHINA IF YOUR PRODUCT... Is COGS (Cost of Goods Sold) sensitive 28Tuesday, April 7, 15
  29. 29. YES! MANUFACTURE IN CHINA IF YOUR PRODUCT... Uses existing manufacturing technology (i.e. injection molding, etc) http://berkeleysg.com 29Tuesday, April 7, 15
  30. 30. YES! MANUFACTURE IN CHINA IF YOUR PRODUCT... Is tolerant of variations in supply chain and logistics http://berkeleysg.com http://kilterpulse.com 30Tuesday, April 7, 15
  31. 31. YES! MANUFACTURE IN CHINA IF YOUR PRODUCT... Can benefit from low cost Design for Manufacturing (DFM) Non-recurring Engineering (NRE) http://berkeleysg.com http://kilterpulse.com http://plasticstoday.com 31Tuesday, April 7, 15
  32. 32. YES! MANUFACTURE IN CHINA IF YOUR PRODUCT... Has “physically” protectable IP http://berkeleysg.com http://kilterpulse.com 32Tuesday, April 7, 15
  33. 33. USA (aka Domestic) ? 33Tuesday, April 7, 15
  34. 34. YES! MANUFACTURE IN THE US IF YOUR PRODUCT... Requires low volumes 34Tuesday, April 7, 15
  35. 35. YES! MANUFACTURE IN THE US IF YOUR PRODUCT... Can be manufactured and assembled through automation 35Tuesday, April 7, 15
  36. 36. YES! MANUFACTURE IN THE US IF YOUR PRODUCT... Is sensitive to shipping time and expense http://berkeleysg.com 36Tuesday, April 7, 15
  37. 37. YES! MANUFACTURE IN THE US IF YOUR PRODUCT... Has difficult-to-protect IP http://berkeleysg.com http://kilterpulse.com http://www.independent.co.uk 37Tuesday, April 7, 15
  38. 38. YES! MANUFACTURE IN THE US IF YOUR PRODUCT... Requires non-standard capital equipment 38Tuesday, April 7, 15
  39. 39. YES! MANUFACTURE IN THE US IF YOUR PRODUCT... Is part of a government contract 39Tuesday, April 7, 15
  40. 40. STEP 2: Select a Factory (RFQ) 40Tuesday, April 7, 15
  41. 41. OVERVIEW OF THE CM SELECTION PROCESS http://en.wikipedia.org 1. Talk with trusted network connections who have manufacturing experience. 2. Create a differentiated list of 5 - 10 CMs. 3. Down select to 3 - 5 factories based on your product category (why?) 4. Create a Request for Quote (RFQ) Package. 5. Visit! 6. Analyze Results. 7. Negotiate Big Items. 8. Talk with the CM’s customers. 9. Select the winner, and leave the others on good terms. 41Tuesday, April 7, 15
  42. 42. RFQ PACKAGE http://en.wikipedia.org • Company Overview - Team overview - Funding - Product - What’s done - What needs to be done - Factory Criteria • BOM - Canonical format (A2A) in Excel - Transparent and Formula Driven - Separate Std, Special and Consigned Margins/Markups - Include all costs to Ex-Factory - Fill in the blanks • Schedule - Gantt chart (Cloud) - Fill in the blanks 42Tuesday, April 7, 15
  43. 43. FACTORY VISIT CHECKLIST http://en.wikipedia.org Do you like the team? Are they experienced and friendly? Do they have the right manufacturing capabilities? Does your intended volume match their volume capabilities? Are they financially stable? Do they have enough working capital to get going? Do they have favorable payment terms? Are they transparent in their costing? Do they take IP seriously? Did they show you something they shouldn’t have? Are they ethical in their treatment of their workers and otherwise? Do you have access to upper management? Are they excited about working on your product? 43Tuesday, April 7, 15
  44. 44. CM COMPARISON (A2A DECISION MATRIX) • Total Material Costs • Labor • Margins/Markup (Std, Special, Consigned) • Pareto of Top 5 Most Expensive Components • Fixed Costs (tooling, fixtures, NRE) • Schedule • Fit Criteria 44Tuesday, April 7, 15
  45. 45. RECOMMENDED READING "Factory Girls", Leslie Chang:  W.S.J. Reporter Who Lived In China Interviewing Migrant Factory Workers In The Pearl River Delta.  Great Insight Into The Workforce. "Poorly Made In China", Paul Midler:  Light, Humorous, And Scary. "Mr. China", Tim Clissold:  Older Humorous Memoir Of One Of The First Westerners To Do Modern Work In China After Mao. 45Tuesday, April 7, 15

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