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December, 2014 Production
What Contract Manufacturers Should Know About Product Development
By Steve Owens, owner of Finish Line Product Development Services
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unlike products businesses, the customer is a key part of the product realiza- tion processes. His research leads him to the conclusion that truly great serv- ice companies recognize this difference and create strategies that focus on “managing the customer”. Great service companies know they need to be very much involved in helping their customers be successful; they cannot become successful by simply offering “great service” alone.
I
Managing the Customer Strategy This “managing the customer” strategy is particularly true in the EMS
business. Customers provide the key input into the manufacturing process — the design. The old adage “garbage in, garbage out” is a reality for CMs. How do you “manage the customer?” For larger CMs, the trend has been
to take over the design process entirely (or nearly so). This strategy can be ef- fective because the customers (usually large companies themselves) have the means to fund these efforts and there is enough scale within the CM to justi- fy a large development team. For smaller CMs, adding even a small team of engineers to the fixed cost is not viable and getting customers to fund such ef- forts is often tenuous at best.
The Four Things Every Service Business Must Get Right: l
l The employee management system. l The offering. l The funding mechanism. The customer management system.
For smaller and mid-size CMs, managing the customer necessarily evolves into helping them to manage their own processes. The following list of tips is a good place to start: l
only are they a good source of leads, they are great assets in helping the cus- tomer to produce better designs. Small and mid-size companies tend to bene- fit the most by adding “brains” to the team. l
Form relationships with outsource product development companies. Not
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about manufacturing until after the design is complete. l
easiest way to kill a good product is to build it before it is ready. l
variances are all signs that there is a design problem. Don’t let your customer ignore these problems. Get them fixed before increasing build quantities. l
Get involved as early as possible. Smaller companies often do not think Start small. Encourage your customers to slowly build up quantities. The Follow up on red flags. Poor yields, lots of returns and large manufacturing
“possibilities”. In order for you to be successful, your customer’s product has to be successful. If a design change can cut the product cost in half, it does not matter how good your quote is, your customer’s competitor is going to get the majority of the market share. l
Go beyond a quote and make sure your customers understand the cost
UL, CE, FCC, etc. when it is required can be an expensive lesson. l
n the landmark HBR article, “The Four Things a Service Business Must Get Right,” by Frances X. Frei, the author differentiates a product busi- ness from a service business. The author states that in a service business,
mous for the “excel spreadsheet and Gerbers” documentation. This leaves a lot to the imagination — the so-called “tribal knowledge”. Contractually, you are only responsible for what is in the drawing package, but practically, any significant rework cost is going to be a problem that no one can afford. Help your customer understand what good documentation looks like and the value it brings. l
can either find them, make them, or some combination of both. Whatever path you take, it is important that your company culture is one of under- standing what good input looks like, and is ready to tell the customer what they need to hear, even if it is not what they want to hear.
The key to being a great service company is having great customers. You
The Finish Line PDS Process Product development, like any other complex group endeavor, can be con-
ducted in many different ways. And, like other complex endeavors, product de- velopment benefits greatly from adherence to a proven process. While the nature and technology of products may differ greatly, the steps leading to their success- ful development do not. An effective product development process starts with ideas or visions and ends with the documentation required to manufacture prod- ucts that fulfill the visions and make money for their companies. At Finish Line Product Development Services, we have always found success in the classic ISO model for product development that includes the following phases: l
Requirements document. l l Design verification testing. l
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Conceptual design. l Pilot Production.
Detailed design. Finish Line PDS also offers a comprehensive and complete contract man-
ufacturing facility, since the best idea, even the best single prototype, may not succeed as you had hoped if the execution is flawed. It is important for the
drafting and documentation to be equal in quality to the concept and design. Contact: Finish Line PDS, 94 River Rd., Suite 101, Hudson, NH 03051
% 603-880-8484 fax: 603-880-8480 E-mail:
info@finishlinepds.com Website:
www.finishlinepds.com r
Make sure your customer understands compliance engineering. Not having Do not let customers skimp on documentation. Small companies are fa-
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