So you want to take your prototype into production. Now what? We’ll walk you through three steps to take before you start manufacturing.
Step 1. Plan for Production
Before you even start looking for a manufacturer, you need plan for production.
Reevaluate Prototype Design for Manufacturing
The first thing you want to do is drive value through design for manufacturing. Often times when you design for a prototype, you do just that: you’re trying to illustrate the prototype. But when you design for manufacturing, you have an opportunity to look at how the design is constructed and potentially draw value by minimizing parts. You also want to look at how the product can be manufactured on the line.
Factor in COGS – Cost of Goods Sold
The second you want to do is create a budget, and you want to factor in the cost of goods sold – the COGS, and that is the cost to deliver product into your hands. And it’s not just the manufacturing cost; you also want to consider tooling costs, shipping costs, and even financing costs.
The third thing you want to do is lay out specifications and requirements; specifications meaning your drawings or CAD drawings, and also what materials you want your product to be. Requirements would include your functional requirements, your safety requirements, and when and where you want your product delivered.
Step 2. Source for Success
Once you have a plan in place, you’re ready to start sourcing for success. One thing you want to do is develop a sourcing plan: you want to find out what services are most important for your business. Once you’ve established that, then you go out and you can see a supplier that is going to be a best fit for you. Evaluating them for those requirements such as: quality assurance, pricing, location. And it’s not just the cheapest price; it’s the best cost.
Cheap Price Doesn’t Mean Best Cost
Here’s what I mean: you may find a supplier who is 5% cheaper price than any others, but their quality is no good you have to return your product, and it’ll end up costing your business more money. Or, for example, if they require more man-hours to manage, it will end up costing your business more money. So look for the best cost – not the cheapest price. When doing this, seek out partnership. A partnership approach is your best approach for long-term success.
Step 3. Finalize Pre-production
Now that you’ve sourced a suitable supplier, you’re ready to finalize your preproduction. By now, you probably got in a few quotes from your supplier. What you want to do now is, you want to start to review and approve pre-production samples to make sure that what you get off the production line is exactly what your requirements are.
At this time also make sure that you’re finalizing your budget. In the beginning, when you first created a budget you may have made some assumptions. Well, now’s the time to get final pricing in from all of your different partners: distribution, shipping, duty rates if you’re importing in. You want to finalize your budget.
And finally, during preproduction you want to make sure you negotiated a strong contract that will not only include your cost structure, but also your payment terms, when and where product will be delivered, and other areas such as customer service and post-termination
Start Manufacturing Your Product
Now you’re ready to start manufacturing! You’ve planned for production, sourced for success, and you’ve finalized your preproduction. You’re well on your way to produce quality products on time, on budget, and without worry.
About Frank Kautzman
Frank Kautzman is an operations consultant at Made Concepts, a company he founded to help entrepreneurs turn concept into product and accelerate business performance. With more than 20 years experience working in the consumer products industry, Frank has held leadership roles in product development, engineering, sourcing, manufacturing, cost management and operations. Frank studied mechanical engineering at the University of California, Irvine and continued his education at HKUST Business School.
Frank has commercialized 3000+ product concepts and guided the development and production of more than $1.4 billion in goods, from furniture and apparel to toys and electronics. While living and working in China, Frank directed the manufacture and supply of Burger King toys delivered around the world. With hands on experience in more than 100 factories, Frank has worked on some of the most recognized brands and licenses including Kellogg’s, Kraft, Sony, Hasbro, NFL, Warner Bros., DreamWorks and many more.
