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Dragon pittsburgh 150122

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The journey from prototype to manufactured IOT product is complex and filled with many unknown unknowns. Every decision will impact your ability to deliver on time, at cost, and with quality. This presentation reviews the journey and offers advice and suggestions from a team that has navigated the hardware journey countless times.

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Dragon pittsburgh 150122

  1. 1. ! ! HOW  TO  DELIVER  ON  YOUR   IOT  PRODUCT  ! ! PITTSBURGH TECHNOLOGY COUNCIL JANUARY 22, 2015 ! ! ! ! ! ! ! SCOTT N. MILLER | CEO | @DRAGONINNOVATE | WWW.DRAGONINNOVATION.COM
  2. 2. 2 No Need to Take Notes http://bit.ly/Deliver-IOT-Pittsburgh
  3. 3. 3 Agenda http://en.wikipedia.org •Quick Survey •Our Hardware Journey •Why Delivering Hardware is Hard •How to Pick a Great Factory •Q & A
  4. 4. Quick Survey 4
  5. 5. Our Journey 5
  6. 6. RoboTuna 6
  7. 7. Agenda 7
  8. 8. Corvette Powered Robot Triceratops 8
  9. 9. Agenda 9
  10. 10. Initial iRobot Expertise 10
  11. 11. Journey from $100,000 -> $100 Retail 11
  12. 12. My Real Baby ~ 100k 12 Velociraptor ~100k +
  13. 13. 13 Roomba and Scooba
  14. 14. Agenda 14
  15. 15. We are going to take something as insanely complex as manufacturing consumer electronics and make it feel easy. OUR VISION
  16. 16. DRAGON INNOVATION HAS HELPED LAUNCH AND SCALE OVER 100 COMPANIES SINCE 2009
  17. 17. Bolt
  18. 18. Manufacturing is Complex
  19. 19. Getting from prototype to delivery 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)
  20. 20. HOW TO PICK A GREAT FACTORY ! STEP 1: DECIDE WHERE TO BUILD
  21. 21. Examples to Talk Through
  22. 22. China?
  23. 23. 25 Yes! Manufacture in China If Your Product... Is COGS (Cost of Goods Sold) sensitive
  24. 24. 26 Yes! Manufacture in China If Your Product... Requires higher production volumes (>10k units)
  25. 25. 27 Yes! Manufacture in China If Your Product... Requires significant manual labor to manufacture and assemble
  26. 26. 28 Yes! Manufacture in China If Your Product... Uses existing manufacturing technology (i.e. injection molding, etc) http://berkeleysg.com
  27. 27. 29 Yes! Manufacture in China If Your Product... Is tolerant of variations in supply chain and logistics http://berkeleysg.com http://kilterpulse.com
  28. 28. 30 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
  29. 29. 31 Yes! Manufacture in China If Your Product... Has “physically” protectable IP http://berkeleysg.com http://kilterpulse.com
  30. 30. China Drawbacks for Manufacturing
  31. 31. 33 China Drawback Significant Distance from USA http://supplychaindigital.com http://skeptically.orghttp://studentuniverse.com
  32. 32. 34 China Drawback Significant Language Barrier http://supplychaindigital.com http://skeptically.orghttp://studentuniverse.com http://asiasociety.org
  33. 33. 35 China Wages Rising Wages http://en.wikipedia.org
  34. 34. 36 China Concern Rising Exchange Rate http://en.wikipedia.org
  35. 35. USA?
  36. 36. 38 Yes! Manufacture in the US If Your Product... Requires low volumes http://berkeleysg.com http://kilterpulse.com http://www.theguardian.com
  37. 37. 39 Yes! Manufacture in the US If Your Product... Can be manufactured and assembled through automation http://berkeleysg.com http://kilterpulse.com
  38. 38. 40 Yes! Manufacture in the US If Your Product... Is sensitive to shipping time and expense http://berkeleysg.com http://kilterpulse.com
  39. 39. 41 Yes! Manufacture in the US If Your Product... Has difficult-to-protect IP http://berkeleysg.com http://kilterpulse.com http://www.independent.co.uk
  40. 40. 42 Yes! Manufacture in the US If Your Product... Requires non-standard capital equipment http://scientificmachining.com
  41. 41. 43 Yes! Manufacture in the US If Your Product... Is part of a government contract http://en.wikipedia.org
  42. 42. STEP 2: REQUEST FOR QUOTE / CM SELECTION* ! ! ! *THE MOST IMPORTANT MANUFACTURING DECISION YOU’LL MAKE
  43. 43. 45 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.
  44. 44. 46 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
  45. 45. 47 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?
  46. 46. 48 CM Comparison (A2A Decision Matrix) http://en.wikipedia.org •Total Material Costs •Labor •Margins/Markup (Std, Special, Consigned) •Pareto of Top 5 Most Expensive Components •Fixed Costs (tooling, fixtures, NRE) •Schedule •Fit Criteria
  47. 47. 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, "Mr. China", Tim Clissold:  Older Humorous Memoir Of One Of The First Westerners To
  48. 48. 50 Questions? http://en.wikipedia.org Feel free to reach out! www.dragoninnovation.com scott@dragoninnovation.com @dragoninnovate

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