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How to Select a Factory - Hong Kong Hardware Workshop - November 11, 2014

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In this SlideShare, Dragon Innovation will provide an overview on how to select a factory. This presentation was given at Hardware Workshop NYC in October 2014. Topic include:

- Dragon Innovation Background
- Where to Build
- Contract Manufacturer Selection Process (RFQ)

Share the presentation here: http://bit.ly/HK-Hardware-Workshop-Dragon-Innovation

About Dragon Innovation

Dragon Innovation works with entrepreneurs to launch hardware products and scale companies. Founded by a team of hardware experts, Dragon provides a clear path from prototype through production with unmatched manufacturing expertise and trusted connections. Dragon's client roster includes Coin, MakerBot, LIFX, Scout, Romotive, Sifteo, Orbotix, FormLabs and over 100 more companies paving the road for how new technology gets made.

Connect with Dragon Innovation

Website: http://www.dragoninnovation.com
Blog: http://blog.dragoninnovation.com
Twitter: http://twitter.com/dragoninnovate
Slideshare: http://www.slideshare.net/dragoninnovation

Published in: Technology
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How to Select a Factory - Hong Kong Hardware Workshop - November 11, 2014

  1. 1. DRAGON INNOVATION, INC. HARDWARE WORKSHOP -­‐ NYC HOW TO SELECT A FACTORY NOVEMBER 11, 2014 WILLIAM DRISLANE | VP ENGINEERING AND MANUFACTURING | @DRAGONINNOVATE | WWW.DRAGONINNOVATION.COM
  2. 2. Presentation Download http://bit.ly/HK-Hardware-Workshop-Dragon-Innovation 2
  3. 3. 3 Agenda •Quick Survey •Dragon Background •How to Select a Factory (aka “The RFQ”) •Q & A http://en.wikipedia.org
  4. 4. Quick Survey 4
  5. 5. Dragon Innovation Background 5
  6. 6. MIT RoboTuna 6
  7. 7. Disney Dino 7
  8. 8. My Real Baby 8
  9. 9. 9
  10. 10. Agenda 10
  11. 11. DRAGON INNOVATION HAS HELPED LAUNCH AND SCALE OVER 100 COMPANIES SINCE 2009
  12. 12. Step 1: Decide Where to Manufacture 12
  13. 13. Examples to Talk Through
  14. 14. China?
  15. 15. 15 Yes! Manufacture in China If Your Product... Is COGS (Cost of Goods Sold) sensitive
  16. 16. 16 Yes! Manufacture in China If Your Product... Requires higher production volumes (>10k units)
  17. 17. 17 Yes! Manufacture in China If Your Product... Requires significant manual labor to manufacture and assemble
  18. 18. 18 Yes! Manufacture in China If Your Product... Uses existing manufacturing technology (i.e. injection molding, etc) http://berkeleysg.com
  19. 19. 19 Yes! Manufacture in China If Your Product... Is tolerant of variations in supply chain and logistics http://kilterpulse.com http://berkeleysg.com
  20. 20. 20 Yes! Manufacture in China If Your Product... Can benefit from low cost Design for Manufacturing (DFM) Non-recurring Engineering (NRE) http://kilterpulse.com http://plasticstoday.com http://berkeleysg.com
  21. 21. 21 Yes! Manufacture in China If Your Product... Has “physically” protectable IP http://kilterpulse.com http://berkeleysg.com
  22. 22. China Drawbacks for Manufacturing
  23. 23. 23 China Drawback Significant Distance from USA http://supplychaindigital.com http://hsttutpd:e//nstkuenpitviecarslley..ocorgm
  24. 24. 24 China Drawback Significant Language Barrier http://supplychaindigital.com http://hsttutpd:e//nstkuenpitviecarslley..ocorgm http://asiasociety.org
  25. 25. 25 China Wages Rising Wages http://en.wikipedia.org
  26. 26. 26 China Concern Rising Exchange Rate http://en.wikipedia.org
  27. 27. USA?
  28. 28. 28 Yes! Manufacture in the US If Your Product... Requires low volumes http://www.theguardian.com http://kilterpulse.com http://berkeleysg.com
  29. 29. 29 Yes! Manufacture in the US If Your Product... Can be manufactured and assembled through automation http://kilterpulse.com http://berkeleysg.com
  30. 30. 30 Yes! Manufacture in the US If Your Product... Is sensitive to shipping time and expense http://kilterpulse.com http://berkeleysg.com
  31. 31. 31 Yes! Manufacture in the US If Your Product... Has difficult-to-protect IP http://www.independent.co.uk http://kilterpulse.com http://berkeleysg.com
  32. 32. 32 Yes! Manufacture in the US If Your Product... Requires non-standard capital equipment http://scientificmachining.com
  33. 33. 33 Yes! Manufacture in the US If Your Product... Is part of a government contract http://en.wikipedia.org
  34. 34. Step 2: Select a Factory (RFQ) 34
  35. 35. 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. 35 Overview of the CM Selection Process http://en.wikipedia.org
  36. 36. 36 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
  37. 37. 37 Factory Visit Checklist 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? http://en.wikipedia.org
  38. 38. 38 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
  39. 39. Questions?

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