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A Tip To Navigate Around Minimum Order Quantity

February 26 2013  |   Cliff  |  All Posts, Manufacturing, Manufacturing Tips  |  1 Comment

The Leardon Solutions Logo Represents Innovation And Quality From Medical Devices To Consumer Goods

Minimum Order Quantity

One aspect of product development that often catches people new to product development by surprise is the practice of minimum order quantity.

Minimum order quantity is the minimum order a vendor will take before beginning work on your product. When it comes time to manufacture your product, minimum order quantity or the “M.O.Q.” as it is known will be a large part of every manufacturing decision that you’ll have to make.

So how do you navigate around an M.O.Q. as a startup or small business that doesn’t need 60,000 of the widgets that you will be producing? Maybe you only need a 1000 or 100 just to test the market before committing to larger quantities. The low number M.O.Q. can be a significant hurdle to overcome.

One very effective way to reduce the M.O.Q requirements is to have a great relationship with your manufacturer of choice, this will carry a lot of weight when it come to negotiating an order quantity that is affordable for you and fair for the manufacturer – this is especially true overseas where business and personal relationships often overlap.

If you know that you want to have small trial run of your product before committing to a larger order then it would be wise to partner with a team of folks that have relationships with manufacturers in your industry. By doing so, you are also adding some level of quality control to the manufacturing process. This can be especially important if the factory is far away and you can’t afford to have people there to audit the end product before it is packaged and shipped.

Have questions about your MOQ? Contact Us for assistance.

 

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Tips To Reduce Your Product Development Minimum Order Quantity

February 19 2013  |   Cliff  |  All Posts, Manufacturing, Manufacturing Tips  |  Comment

The Leardon Solutions Logo Represents Innovation And Quality From Medical Devices To Consumer GoodsMinimum Order Quantity

or “MOQ” as it is known in the manufacturing industry simply defines the number of units that a manufacturer requires before accepting an order.

Manufacturers make their profit margins and keep costs down by producing products in large quantities. This cost savings practice directly impacts the manufactured product.

M.O.Q.s affects every type of manufacturing from screws to complicated medical devices and consumer products. Understanding how an M.O.Q. works is vital to the success of a product.

If you are an entrepreneur, startup or small businesses and negotiating minimum order quantities is not your specialty, The Leardon Solutions team recommends that you find someone to work with that can help use an M.O.Q. to your advantage.

There are several factors that affect the M.O.Q. – Here are a few.

1) First off, not all manufacturers have the same M.O.Q. for a product. Shop your prototype around and get quotes to compare. What you are likely to discover is that there will be large discrepancy between some quotes and others. This could be for a number of reasons – all of which should be explored before signing on the dotted line.

2) Core Competencies -

The core competency of a manufacturer can impact the M.O.Q. of a product. A manufacturer may or may not have experience building a product like yours. If they do and they can re-purpose a strategy or equipment already set up the M.O.Q. may be reduced.

3) Manufacturer Relationships

Like many other industries, great relationships go a long way with manufacturing. Working with a team or individual that has built a relationship with manufacturers will give an entrepreneur, startup team or small business a BIG competitive advantage. An example of this would be working with a top tier manufacturer while producing a relatively low number of products on the first round. The benefits of a large manufacturer are quality control, stronger core competencies and sometimes more efficient workflows that help reduce costs.

Have questions about minimum order quantities, please contact us Here.

 

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Product Development Is NOT Product Manufacturing

January 24 2013  |   Cliff  |  All Posts, Manufacturing, Manufacturing Tips, Product Development  |  Comment

Joe Donoghue, San Diego Prototyping, Patents & Prototypes, Live Web Show, Product Development, Engineering Services, Manufacturing, Entrepreneurial Product DevelopmentIf you are looking to develop a product, it’s important to know the key differences between product development and product manufacturing. The two terms are often confused and the expectations of each are vastly different.

What Is Product Development?

Product development requires that a creative team of engineers, industrial designers and program managers work in sync to solve unique problems related to functionality, design, standards and the costs of a product idea.

By in large, a process is followed and often referred to as the product development lifecycle. This lifecycle includes gates and checkpoints that help the product development team reduce failure rates, avoid common pitfalls and design the product for manufacturability.

Generally, the product development lifecycle can take far longer than the actual manufacturing of a product. When performed correctly, product development will reduce manufacturing time and costs by achieving the aforementioned goals.

Product Manufacturing

After the product development has been completed and production prototypes have been fully qualified, manufacturing is ready to begin. A well designed product can be replicated thousands of times with consistent performance results directly off the production line.

Comparatively, manufacturing a product is easier since most variables and unique problems to that particular product have been solved and worked into the production prototype which was designed with manufacturability in mind.

Common pitfalls to watch for during product manufacturing include quality control, materials sourcing issues, labor problems and missed delivery dates.

If you have questions about product development or manufacturing, please contact us here for more information.

 

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Secrets Of Crowdfunding Success

December 11 2012  |   Cliff  |  All Posts, Crowdfunding, Manufacturing, Manufacturing Tips, Prototyping, Supplier Management  |  Comment

Joe Donoghue, San Diego Prototyping, Patents & Prototypes, Live Web Show, Product Development, Engineering Services, Manufacturing, Entrepreneurial Product DevelopmentSecrets of Crowdfunding Success

Crowdfunding hasn’t been around long, but it changed the face of product development by allowing people to vote with their money and that is a powerful thing when it comes to preparing product for market. At Leardon we have had the privilege to work with crowdfunded entrepreneurs. In doing so, we’ve compiled some advice based on our experiences. 

A quick list of our recommendations for crowdfunding success:

1) For better or worse, Your product is in the public eye.

    Our advice: Attempt to lock in quotes and estimates prior to raising any funding. Once your campaign is successful, vendors and service providers will not have to look too hard to find out how deep your pockets are. Be strategic to avoid being taken advantage of. 

2) The 80 / 20 Rule

     Our advice: A fancy prototype can get you pretty far, but successfully crowdfunded entrepreneurs have told us how surprised they were to have to do an extreme amount of marketing. If your campaign is successful, it may be because you spent 80% of your time marketing it and 20% doing everything else. Don’t hesitate to reach out to every single person you know to ask them to spread the word. Make it easy for them to share the information and remember to include a call to action in everything. Social media, local TV, blogs and experts will work to your advantage, make relationships prior to the campaign launch. 

3) Design for manufacturability

     Finding out your prototype isn’t manufacturable sucks, but it really really sucks after you’ve taken 50k in orders.
    Our advice: Prototype as far you can until you absolutely need funding. Regardless if your idea is software or hardware, always consider designing for scalability. If you are unfamiliar with this process, reach out to product development teams that specialize in end-to-end product development and that can design for manufacturability.

4) Walk the Walk – Talk the Talk :

Let’s face it, until manufacturing comes back the US, chances are that you will be building your products overseas to compete with global competition. You may find yourself in a sticky situation if you do not know much about your partners overseas.
    Our advice : Consider finding service providers that have reps, project managers, engineers, ect..  in the areas where you will be manufacturing. Their ability to perform a factory audit, speak with factory managers and correct issues before you start shipping product to customers will save face and your business. 

5) Watch every cent, do what you know how to do well and get help when you are far out of your comfort zone. 

For questions related to product development, please reach feel free to contact us.

 

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Why Choose A World Class Manufacturing Partner Early

November 26 2012  |   Cliff  |  All Posts, Business Tips, Insider's Perspective TIps, Inventing Profit  |  Comment

Leardon Solutions Product Development, Joe Donoghue, San Diego, prototyping, manufacturing

Reasons to choose a world class manufacturing partner early.

You’re the design engineer / inventor/ team and you have this great innovative product, you’ve cogged together 10 units, spent a ton of hours and money on getting them built and running and and countless more hours keeping them running. The good news, you’ve got your funding and the OK to move forward, the challenge, taking this design from the “fragile-works-mostly-with-a lot-of support” to producing 10’s of thousands of units with inexpensive parts, simple/fool proof/low cost assembly, with 100% part, assembly and top level yields. A world class manufacturing (WCM)  partner can get you a long ways to this end game with your product. 

Shortly after I started my R&D career at Hewlett Packard two key changes were made in how we organizationally approached product development. First, everyone went to the 3 day workshop on “Market Driven Product Development” and got the religion. No more cool product ideas by the R&D geeks to be developed THEN marketed.  The second big change was the move to cross-functional integrated product development teams (Marketing, Finance, Quality, Manufacturing/Production, and R&D), staffed from the start. The effect of the integrated team was to eliminate the functional silos that existed along with all of the associated problems and inefficiencies associated with the inevitable “us vs. them” thinking. These changes were key enablers to HP becoming a printer powerhouse.  In today’s world of outsourcing and/or off-shoring of manufacturing the silos are back and more problematic. My single most significant piece of advice is eliminate the silos with your outsourced partners and work very hard to be that “well-oiled” integrated development team. Select them early and get them involved early.  

As I mentioned above, by engaging a World Class Manufacturing partner early in the design cycle you can improve product cost, quality, production agility, and time to market in some of the following ways:

  • Taking advantage of economies of scale in the existing supply base. For components and fabricated parts.

  • Fabricated parts designed with high yields ( work every time, fabrication process can easily produce parts to specifications, failure rates are reduced) – See an example of weak yields here ( Apple scrambles to fix it )

  • Avoiding part designs that can be assembled incorrectly.  Parts whose orientation during assemble does not matter or parts that only fit will improve product yields and quality.

  • Avoiding special tools, fixturing, and/or tests on the production line.

These are just a few of the obvious benefits that should flow from a world class manufacturing partner. If not, consider engaging a manufacturing engineering consultant to work with your manufacturer to achieve the benefits of Design for manufacturability.

Have questions about manufacturing? Contact Us Here.

This post is written by Mike Hoggatt – Leardon’s Director of Product Development

 

 

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Best Tips To Design For Manufacturing or DFM

October 9 2012  |   Cliff  |  All Posts, Business Tips, Manufacturing, Manufacturing Tips  |  Comment

Joe Donoghue, San Diego Prototyping, Patents & Prototypes, Live Web Show, Product Development, Engineering Services, Manufacturing, Entrepreneurial Product Development

A list of tips to consider when you begin to design for manufacturing ( DFM )

 

 

Designing for Production

The maker movement is on. Mass production is no longer a game only to be played by corporate giants. The internet has given individual inventors, entrepreneurs, startups and  small to medium sized businesses the tools and communities to market, fundraise, and distribute their products. Anyone with an idea can bring that idea to consumers as a product with speed and cost efficiency never available before.

However, a good idea will only get you so far. As an electrical engineer working with inventors on a daily basis, I see people falling into the same pitfalls over and over again. Their ideas are good and they are always well motivated but they typically are not production minded. A working prototype is a great way to show investors and customers what a product does but if that prototype cannot be reproduced in a reliable and inexpensive manner, you’ll have to invest time and money getting your design ready for production. Keep in mind that the term production doesn’t have to refer to a massive factory; production can be done in your living room. Regardless, the same principles still apply: the less time you spend putting something together, the more time you’ll have to do other things that drive your business. You should be thinking about production as early as the prototyping phase. Why do something twice when you can do it right the first time?

With that primer, here are some quick tips on production for electronic designers / entrepreneurs / inventors to be thinking about when it is time to design for manufacturing.

 

Design for Manufacturing

You know those little things that annoyed you while you were building your prototype? Like how hard it was to plug in the connectors because too many tall components were nearby? Or how you had to repair a PCB because a trace was routed to close to the board edge and was sheared off? Well, imagine how annoyed you’ll be dealing with those issues over and over again in production. And if someone else is manufacturing the product for you, it’ll annoy them too and they’ll make sure you pay for that annoyance in dollars. Trust me, contract manufactures know what they’re doing. They’ll spot manufacturing issues from a mile away and include that cost in your quote. Take advantage of that knowledge: show your design to a contract manufacturer. They’ll let you know the issues and how to resolve them.

Design for Reliability

Nothing does more damage to your bottom line and brand than a product failure in the field. The way to reduce failures is to design with margin and test, test, test. Test the margins in your system while you are prototyping. What if you increase your clock speed? Can your design handle it? Operating on the edge of the capabilities of the board design is a recipe for disaster because the stars will align eventually and you’ll experience failures. Be sure to test the life of your product too. What’s your product meant to do? Whatever it is, find a way to repeatedly test that functionality over and over again day and night. Your goal is to test years of normal use in a period of days or weeks. Any issues you find and resolve during life testing is one less defect users will experience.  This means happier customers and less time and money spent on resolving failures in the field.

For more information, please feel free to contact us.

This article is written by Ryan Wilshusen, The director of engineering at Leardon Solutions

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I have found a manufacturer for my product idea. Now what? Part 3 of 3

July 3 2012  |   leardonsolutions  |  All Posts, Manufacturing, Manufacturing Tips  |  Comment

Leardon Solutions Product DevelopmentHow to Manage Production Quality From Your Manufacturer

This is the last of three posts covering the steps that should be taken once a start-up company, entrepreneur, or inventor finds a  manufacturer for their product. 

• First, the company should put all manufacturers through a supplier selection process to identify the one supplier to move forward with into manufacturing.

• Next, the company should qualify the product manufactured by the manufacturer prior to moving onto the next step of starting volume production and managing the production quality.

Once production begins, there are many checks and balances throughout the manufacturing and production system that are implemented to ensure that the resulting product functions as expected and all parts meet their documented specifications. These checks and balances make up the product quality plan which must be put into place and properly executed when the product is in production. The field of quality management has been around for over a hundred years and managing production quality is a skill that requires years of experience and training. Experts in this field not only understand the function of the product but also have a background in statistics, probability, and the theory behind product sampling plans. It is recommended that those not trained in the field ask the manufacturer for their product quality plan and take it to a professional who can provide advise on the validity and effectiveness of the plan.

The quality plan consists of those checks and balances that occur at different frequencies throughout the part fabrication and product assembly processes. Some common aspects of a quality plan are described below.

  • Incoming Quality Control The incoming quality control (IQC) occurs on parts and components that are used in the assembly process. Typically, this is done on an audit basis (inspect a sample of parts rather than 100% of the parts) and the complete lot is either accepted or rejected based on the results of the test.
  • In-Process Quality Control After the parts are accepted in IQC, they are sent to the assembly process. During the assembly process, there are many checks and balances carried out by automation or by humans. These checks ensure that the product is being assembled properly. Also throughout the product assembly line, there are functional tests that are performed on the complete assembly or subassembly to ensure it functions as expected. These checks occur on 100% of the products.
  • Outgoing Quality Control Prior to shipment of the final assembled product, a sample of the finished goods inventory (FGI) is passed through tests and checks to be sure that they meet the expected quality levels. If the sampled products pass all the required tests and quality checks, the complete lot of FGI is released for shipment. If a higher than allowed number of products from the sample do not pass the quality checks, the FGI lot is rejected with 100% inspection and rework/repair necessary.
  • Process Audits During production, a set sample of products are typically taken from the production line and checked to be sure the assembly and test processes are being performed properly. This audit ensures that the processes are not drifting from the expected values.
  • Functionality and Performance Audit Another audit that is done on the finished goods inventory (FGI) is a functional, life, and performance test of the product. These tests are done to be sure that the product is meeting its functional specifications throughout the operational life of the product.
  • Regulatory and Safety Audit Since every product must meet country-specific regulatory and safety requirements, audits are performed on a periodic basis to be sure that the product still meets the regulations.

When a manufacturer has a well defined product quality plan and executes it diligently, the product quality will be maintained at the highest levels and product returns from customers will be minimized. Work with the manufacturing supplier and a quality engineer to implement the quality plan and avoid unnecessary headaches.

Need more information on new product development or or how to select a manufacturer? Please contact us with any questions or contact me directly at joseph.donoghue ( at ) leardon.com

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I have found a manufacturer for my product idea. Now what? Part 2 of 3

June 19 2012  |   leardonsolutions  |  All Posts, Manufacturing, Manufacturing Tips  |  2 Comments

Leardon Solutions Product DevelopmentHow to Qualify the Product

This is the second of three posts covering the steps that should be taken once a start-up company, entrepreneur, or inventor finds a supplier who can manufacture their product. The first step of selecting the supplier, described in the post How to Select a Manufacturer, should be done prior to moving onto the next step of qualifying the product manufactured by the supplier.

It typically isn’t possible to immediately start up production and manufacturing once a supplier is selected. Even a product that seem simple must be qualified with a number of tests and quality checks to be sure it is being made to the engineer’s specification and will function as planned across all the operating environments. For example, a simple product label that must be removed by the customer should be qualified in high temperature storage to be sure it can be removed once the customer receives the product and doesn’t leave residue.

Below is a summary of the steps to properly qualify a product with a manufacturer. Even though it might be tempting to take a slight risk and skip some of the qualification steps to save money, it is not recommended. A product can go through a diverse range of operating conditions (temperature, humidity, sunlight, altitude, etc.) and therefore the quick operational check done in the factory will not ensure that the product has been qualified for use by all customers.

  • Map out the qualification tests for the completed product. It is recommended that a start-up company, entrepreneur, or inventor work with an quality professional who understands the tests required for the product. This will depend on the expected operating conditions, countries of sale, method of shipment, customer use model, and government regulations. Once complete, review the test plan and determine how many products are required to fulfill all the tests. It is possible to reuse products for multiple tests. Typically, the test plan will require between 20 and 40 test prototypes.
  • Make the required number of prototypes using final production processes. The manufacturer should now produce the number of test units using the same processes that they will use in final production. Do not produce a large quantity of products at this stage as chances are high that these will need to be remade as issues and defects are found in the product and the manufacturing process.
  • Perform all qualification testing of your product. Execute the qualification test plan on the products that were produced by the manufacturer and document all the defects, failures, and issues that arise. These tests are done on calibrated test equipment where it is possible to measure the important variables such as temperature and force. Don’t attempt to run a high temperature storage test in a kitchen oven!
  • Determine required design changes. Review the defects, failures, and issues found in the last step with the engineering team to decide which require engineering design changes.
  • Review changes with supplier and implement changes into design. Revise documentation. The engineering team should meet with the manufacturer to review the changes that will be made to the engineering design and understand where it impacts the manufacturing process. Make changes to the manufacturing process where necessary and update all product and manufacturing documentation.
  • Evaluate any new pricing due to changes. Review any pricing changes with the manufacturer based on the changes that will be made to the product and manufacturing processes.
  • Remake the prototypes with the changes. Make the products again using the revised final production processes.
  • Perform final qualification testing to ensure the product functions as specified. Execute the product qualification plan on the new products to be sure that they meets all the required test specifications. Once all the specifications are met, the qualification phase is complete.

Product qualification and testing is a critical step in the product development life cycle. Be sure that the product passes the qualification tests prior to starting the final manufacturing and production. While this phase of product qualification might seem excessive and expensive, remember that one customer with a bad review of the qualify of the product could destroy a company.

Need more information on new product development or the manufacturing process? Please contact us with any questions or contact me directly at joseph.donoghue ( at ) leardon.com

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Tips to Cut Product Development Costs – Part 2

March 13 2012  |   leardonsolutions  |  All Posts, Business Tips, Manufacturing Tips, Product Development, Prototyping  |  Comment

Leardon Product Development Tips, Manufacturing ServicesIn Part 1 of Tips to Cut Product Development Costs, three ways that innovators, entrepreneurs, start-up companies, and small/medium enterprises can be smart and spend the least amount of money throughout the product development life cycle were discussed. Here are the next three ways that entrepreneurs, innovators, or small companies can save money without cutting corners or skipping product development phases.

Avoid Multiple Hand-Offs During the Product Development Life Cycle
Most entrepreneurial, start-up, or small/medium companies do not have large internal staffs to handle all stages of the product development life cycle. These companies typically nearsource or outsource much of the work in an attempt to minimize product development costs and maximize development speed. While nearsourcing and outsourcing can improve your costs and speed, it unfortunately can create a costly and slow system if not managed properly.

Many service providers and suppliers do not provide an end-to-end product development solution from product idea to manufacturing, forcing companies to hire multiple service providers throughout the product development life cycle. When entrepreneurs piece together a product development team by hiring these outside firms, an inefficient team that doesn’t have visibility to the tradeoffs between cost, schedule, and scope is sometimes created. To create an efficient system, the innovator or entrepreneur should try to minimize the number of hand-offs throughout the cycle by hiring an end-to-end engineering, prototype, and manufacturing firm that internally handles all the hands-offs without dropping or losing any of the knowledge gained in the last phase.

Here are some tips for an efficient product development team:

  • Have one experienced internal program manager for the complete project that is responsible for product/project cost, schedule, and scope.
  • Minimize the number of hand-offs by hiring one company that can take the project from design concept to manufacturing.
  • Eliminate any supplier agents, go-betweens, or representatives that don’t allow you to work directly with the suppliers doing the work.

Don’t Buy Production Tooling Until Final Production Qualification.
When a product enters mass production phase, fabrication methods different from those used to produce prototypes are required to meet the quantity, cost, and schedule goals of mass production. Some examples of these production tooling methods include injection molding for plastic parts, progressive stamping for metal parts, production lines for efficient assembly, and wave soldering for printed circuit board assembly. Prior to starting mass production qualification, there is no need to purchase these production tools early in the product development life cycle. Delay the cost of these production tools by using early proof-of-concept and design prototypes for as much testing as possible.

There is usually no need to spend money on any production tooling in the proof-of-concept or design prototyping phases. Even if a production-like method must be used to produce a part in a prototype, the cost can be minimized by fabricating only what is absolutely necessary to make the parts. For example, if you are producing a rubber seal in a prototype, a prototype tool can be fabricated inexpensively to yield the high quality part required. Do plenty of research if a prototype company says that they need to produce a high-volume production tool for a part being used in your prototype because more than likely this is not required.

Minimize the Amount of Product Inventory Purchased.
Once you enter into the production qualification phase, try not to lock up cash in expensive inventory by purchasing large quantities of your product. Work with a supplier who is happy to provide you with a smaller volume, say 1000 production products, that will allow you to test out the market prior to ordering more. This will also prevent expensive inventory reworks.

A misconception in the world of entrepreneurial product development is that all suppliers require entrepreneurs to buy tens of thousands or even hundreds of thousands of products on their first order. For a custom product, it is recommended that the entrepreneur only buy as many products as necessary to fulfill the immediate customer demand of the product. There is a high chance that changes will be required as sales begin so keeping inventory low will minimize the financial pain of any design changes, reworks or repairs.

There are many entrepreneurs who are “up-sold” to higher quantity orders for a lower product price. There are other entrepreneurs who are shocked to learn that a supplier is unwilling to take a low quantity order and will not to work with the customer unless a large order is placed. It is important to know the prices at all order quantities early in the relationship with the supplier. If the supplier is unwilling to fulfill low quantities in the range of 1,000 products, it might be best to switch to another supplier. Chances are high that there are hundreds of other suppliers that are capable of supplying the product and willing to work with entrepreneurs.

Need more information? Please contact us with any questions or contact me directly at joseph.donoghue ( at ) leardon.com

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Pitfalls of Manufacturing : Entrepreneur Beware!

December 20 2011  |   leardonsolutions  |  All Posts, Manufacturing, Manufacturing Tips, Product Development  |  1 Comment

When working with outside suppliers and vendors to take your idea into manufacturing, there are many pitfalls that can hurt your chances as an Entrepreneur for a successful product introduction. Manufacturing a product is a process that must be followed with rigor. There are five common pitfalls that entrepreneurs encounter when taking their product into production. Review the advice below and improve your chances of a successful manufacturing introduction.

Take Ownership of the Design and Manufacturing Tooling

When working with outside suppliers to design and manufacturing a product, it is important that you maintain ownership of the product design as well as any manufacturing tooling. For example, the supplier might be hired to design and prototype the product per your specifications. If you are paying this supplier, it is important that you make it clear that you own the product design, intellectual property, and the entire computer aided design (CAD) files generated. Be wary when a supplier performs all the design work for free but will not allow you access to any of the original design files.

It is usually necessary to purchase production tooling in order to fabricate your product. This could include plastic injection molding tools or metal stamping tools. If this is the case for your product, be sure that any money you pay gives you full ownership of the tools and allows you to move them to another supplier if necessary. Supplier-owned tooling puts you at a severe disadvantage when negotiating the price of your product.

Sign off on all Manufacturing and Design Changes

One of the scariest situations in manufacturing is when changes are being made to the product without the client’s knowledge. Changes should only be made to resolve an issue or defect and change require a large suite of qualification prior to implementation. Therefore, it is necessary that all changes are approved by the client. Without knowledge of these changes, the client will most likely be surprised when new production units arrive.

Many times throughout prototyping and manufacturing, the supplier might say “We’ll solve that issue in the next batch of products” when discussing a current issue or defect. This isn’t an acceptable solution since there is no proof that the solution will resolve the issue. Be sure to make new prototypes with each change prior to kicking off a new order of production units.

Know the Price at all Order Quantities

Early in the relationship with a supplier, it is important that the client knows the product purchase price at all manufacturing quantities. Many times, a supplier will provide an enticing price quote for an extremely high quantity of products that is usually higher than the needs of the client. Chances are low that an entrepreneur’s first order will be a high quantity and therefore it is important to know the cost structure and supply chain costs at all order quantities. It is recommended that you get cost estimates at 1,000, 10,000, and 100,000 order quantities so you can get a good idea of the costs across all volumes. This will also give you an indication of the supplier’s ability and desire to supply low and high quantities. This will ensure that there are no surprises when you make your first orders.

Buy Only what is Necessary for Immediate Sales

Only buy as many products as you need to fulfill the immediate demand of your product. There is a high chance that changes will be required as you begin to sell you product so minimizing the number ordered will eliminate the expensive reworks or repairs required.

There are many entrepreneurs who are “up-sold” to higher quantity orders in order to get a lower price. There are some other entrepreneurs who are shocked to learn that a supplier is unwilling to take a low quantity order and will not work with the customer unless they order a higher quantity. It is important that you know the prices at all order quantities early in the relationship with the supplier. If the supplier is unwilling to fulfill low quantities in the range of 1,000 products, you probably should move to another supplier.

Don’t Pay until Quality is Confirmed

Finally, many suppliers will ask for 100% of the payment up front in order to start the product production. If you pay all the money up front, then you run the risk of having no recourse if the product does not meet your specifications upon receipt. It is more standard to pay 50% up front with the final 50% due upon receipt of your products.

You should also verify that the product meets all your specifications and quality levels upon receipt prior to paying the final 50% of the payment. Verify that the product meets all the specifications including product dimensions and materials as called out on the 2-dimensional prints and operational specifications as called out on the product specification document. With respect to verifying the materials, be sure to ask for Certification of Conformance on all the materials used in the product as it is important that no changes have been made since the prototypes were supplied.

When entering into manufacturing, be sure to own the design and tools, monitor all changes, know the pricing structure, buy only as many products as you need, and pay when quality is confirmed. This will ensure that you don’t fall into any of the pitfalls of manufacturing and successfully get your product into the hands of customers.

Need more information? Please contact us with any questions or contact me directly at joseph.donoghue ( at ) leardon.com

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