Many problems can happen during the industrialization phase. Some of them are due to unforeseen, exogenous factors; others could have been avoided with better preparation, knowledge and advice.
To introduce this article, we’d like to share with you an edifying testimonial – rare, fortunately, but well worth reading – whose final advice might be as follows: make sure you keep maximum independence, or at least non-dependence on third parties, when industrializing your product.
Difficult collaboration
[This testimonial relates an incident that occurred between a new mobility startup and a manufacturer]
The start-up in question outsourced the development and manufacture of an electronic board to a manufacturer. This manufacturer subcontracted to another manufacturer, taking mark-ups on the startup’s production and using the advance payments made by the startup to replenish its cash flow.
The problem? When large orders were placed, the manufacturer was unable to ensure production, causing the startup to lose 40% of its sales. Upon investigation, the startup realized that orders for certain components with long lead times in volume had not been placed, due to a lack of sufficient cash flow to finance the volume inventories, even though the advance payments it had made should have more than covered the amounts involved.
The start-up did try to subcontract to another manufacturer, but soon realized that the manufacturer had developed the board [for which the start-up had the IP], but that they had installed a programming and test tool on the line, using proprietary libraries, even though the start-up had financed this, without specifying the nature of this dependency. These test benches were of course necessary for testing and programming the cards. In addition, a contract had been negotiated with the industrial subcontractor, authorizing the use of the test and programming benches by the latter, making the start-up a prisoner, without any prior information or agreements having been discussed and signed.
It was therefore impossible to re-industrialize with another partner. The quality risks involved in transferring without the test and programming benches were too great. What’s more, the new partner didn’t want to work in a different programming and testing environment. And when the start-up wanted to work directly with the subcontractor to manage the advance payments made for manufacturing, it realized that the test bench was not scalable, and that the cycle time did not allow for increased production rates.
These are serious consequences that can lead to bankruptcy.
In short, the majority of problems encountered are ultimately linked to the complexity of industrialization set-ups, and the cash flow and transparency required to manage them. So, how can we avoid this?
10 tips for better collaboration and successful industrialization projects.
Romain Queyrel, business developer at Kickmaker, with extensive experience of industrialization projects, gives us 10 tips for optimizing the industrialization of your product, and thus guaranteeing good relations between the various partners. These tips are based on Kickmaker’s working methodology.
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- Keep control of your industrialization (and design, of course) IP and all associated source files
- Have a complete overview of the design and industrialization choices made by Kickmaker, and the possibility of understanding/validating/challenging them
- Raise the skills of your teams in the industrialization phases (Kickmaker’s position as an extension of customer teams, sharing and explaining all stages).
- Industrialize a product in line with an ideal and enable a true DFx approach (design to cost, design to assembly, design to repairability, etc.) not influenced by production resources fixed in advance.
- Have a common industrialized product base, so that different ODM/EMS can be consulted to understand and challenge their costing.
- To build up a serious and complete industrial file, enabling us to convince the right industrial partners to position themselves on our customers’ innovative projects (as volumes are not always very high from the product launch stage, it is vital to carry out this preparatory work for industrial partners, enabling them to position themselves (or not) on the basis of their usual input data).
- Having an independent partner like Kickmaker capable of monitoring the series production carried out by the EMS and providing this visibility to the customer, for example by setting up production test benches controlled by the customer.
- Be able to work with several production partners, and even change partners if the need arises (in the context of production relocation, for example).
- Implement a global eco-design approach for the product, from the initial design phases through to series production and after-sales.
- To be able to study the feasibility and ROI of partial production automation (Indus 5.0), once again without being constrained by production resources fixed in advance, and to enable “Design to Automation”, which should ideally be anticipated in the product design phase.
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