The document provides an overview of the processes involved in taking a product from the initial prototype stage through mass production. It discusses that while making initial prototypes can be relatively cheap and quick for hardware, significant investment is needed for product development and manufacturing before large-scale production. The document then outlines the specific stages the company Zeemote went through to mass produce their remote in China, including sourcing custom and generic parts, electrical/electronic and mechanical assembly, and working with a contract manufacturer for final assembly and distribution. It concludes by offering tips for how to effectively hire and work with a contract manufacturer, such as partnering with a sourcing specialist, visiting potential manufacturers, and properly structuring agreements.

1. MIT Entrepreneurship and
Maker Skills Integrator
Product Development and Manufacturing 101
AKA How to get stuff made / mass produced
January 2018
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