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In this SlideShare, Dragon Innovation will provide an overview on how to select a factory. This presentation was given at Hardware Workshop NYC in October 2014. Topic include: - Dragon Innovation Background - Where to Build - Contract Manufacturer Selection Process (RFQ) Share the presentation here: http://bit.ly/HK-Hardware-Workshop-Dragon-Innovation About Dragon Innovation Dragon Innovation works with entrepreneurs to launch hardware products and scale companies. Founded by a team of hardware experts, Dragon provides a clear path from prototype through production with unmatched manufacturing expertise and trusted connections. Dragon's client roster includes Coin, MakerBot, LIFX, Scout, Romotive, Sifteo, Orbotix, FormLabs and over 100 more companies paving the road for how new technology gets made. Connect with Dragon Innovation Website: http://www.dragoninnovation.com Blog: http://blog.dragoninnovation.com Twitter: http://twitter.com/dragoninnovate Slideshare: http://www.slideshare.net/dragoninnovation
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DRAGON INNOVATION, INC.
HARDWARE WORKSHOP -‐ NYC
HOW TO SELECT A FACTORY
NOVEMBER 11, 2014
WILLIAM DRISLANE | VP ENGINEERING AND MANUFACTURING | @DRAGONINNOVATE | WWW.DRAGONINNOVATION.COM
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Presentation Download
http://bit.ly/HK-Hardware-Workshop-Dragon-Innovation
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Agenda
http://en.wikipedia.org
•Quick Survey
•Dragon Background
•How to Select a Factory (aka “The RFQ”)
•Q & A
Quick Survey
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Dragon Innovation Background
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MIT RoboTuna
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Disney Dino
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My Real Baby
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Agenda
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DRAGON INNOVATION HAS HELPED LAUNCH AND SCALE OVER 100 COMPANIES SINCE 2009
Step 1: Decide Whereto Manufacture
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Examples to Talk Through
China?
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Yes! Manufacture in China If Your Product...Is COGS (Cost of Goods Sold) sensitive
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Yes! Manufacture in China If Your Product...Requires higher production volumes (>10k units)
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Yes! Manufacture in China If Your Product...Requires significant manual labor to manufacture and assemble
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Yes! Manufacture in China If Your Product...Uses existing manufacturing technology (i.e. injection molding, etc)
http://berkeleysg.com
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Yes! Manufacture in China If Your Product...Is tolerant of variations in supply chain and logistics
http://berkeleysg.comhttp://kilterpulse.com
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Yes! Manufacture in China If Your Product...Can benefit from low cost Design for Manufacturing (DFM) Non-recurring Engineering (NRE)
http://berkeleysg.comhttp://kilterpulse.com
http://plasticstoday.com
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Yes! Manufacture in China If Your Product...Has “physically” protectable IP
http://berkeleysg.comhttp://kilterpulse.com
China Drawbacksfor Manufacturing
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China DrawbackSignificant Distance from USA
http://supplychaindigital.com
http://skeptically.orghttp://studentuniverse.com
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China DrawbackSignificant Language Barrier
http://supplychaindigital.com
http://skeptically.orghttp://studentuniverse.com
http://asiasociety.org
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China ConcernRising Exchange Rate
http://en.wikipedia.org
USA?
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Yes! Manufacture in the US If Your Product...Requires low volumes
http://berkeleysg.comhttp://kilterpulse.com
http://www.theguardian.com
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Yes! Manufacture in the US If Your Product...Can be manufactured and assembled through automation
http://berkeleysg.comhttp://kilterpulse.com
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Yes! Manufacture in the US If Your Product...Is sensitive to shipping time and expense
http://berkeleysg.comhttp://kilterpulse.com
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Yes! Manufacture in the US If Your Product...Has difficult-to-protect IP
http://berkeleysg.comhttp://kilterpulse.com
http://www.independent.co.uk
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Yes! Manufacture in the US If Your Product...Requires non-standard capital equipment
http://scientificmachining.com
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Yes! Manufacture in the US If Your Product...Is part of a government contract
http://en.wikipedia.org
Step 2: Select a Factory (RFQ)
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Overview of the CM Selection Process
http://en.wikipedia.org
1. Talk with trusted network connections who have manufacturing experience.
2. Create a differentiated list of 5 - 10 CMs.
3. Down select to 3 - 5 factories based on your product category (why?)
4. Create a Request for Quote (RFQ) Package.
5. Visit!
6. Analyze Results.
7. Negotiate Big Items.
8. Talk with the CM’s customers.
9. Select the winner, and leave the others on good terms.
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RFQ Package
http://en.wikipedia.org
•Company Overview-Team overview-Funding-Product-What’s done-What needs to be done-Factory Criteria
•BOM-Canonical format (A2A) in Excel-Transparent and Formula Driven-Separate Std, Special and Consigned Margins/Markups-Include all costs to Ex-Factory-Fill in the blanks
•Schedule-Gantt chart (Cloud)-Fill in the blanks
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Factory Visit Checklist
http://en.wikipedia.org
Do you like the team? Are they experienced and friendly?
Do they have the right manufacturing capabilities?
Does your intended volume match their volume capabilities?
Are they financially stable?
Do they have enough working capital to get going?
Do they have favorable payment terms?
Are they transparent in their costing?
Do they take IP seriously? Did they show you something they shouldn’t have?
Are they ethical in their treatment of their workers and otherwise?
Do you have access to upper management?
Are they excited about working on your product?
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CM Comparison (A2A Decision Matrix)
http://en.wikipedia.org
•Total Material Costs
•Labor
•Margins/Markup (Std, Special, Consigned)
•Pareto of Top 5 Most Expensive Components
•Fixed Costs (tooling, fixtures, NRE)
•Schedule
•Fit Criteria
Questions?
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