Advice for Product Startups when Manufacturing
In recent years, SinoScan has been approached by an increasing number of product startups looking for help to make the transition from prototype to manufactured product.
We have written this article to offer a few points of advice that we believe can be helpful for a startup when approaching suppliers and manufacturers.
How we can help
Each topic will include a section explaining where and how we can help, and where we cannot.
DESIGN FOR CUSTOMER
Knowing your Product
As you approach the manufacturing stage you will be faced with a large number of options that all need to be turned into decisions: Various standard component types, bespoke component manufacturing processes and end-product assembly and manufacturing setups all come with different price tags, advantages and disadvantages that in turn affects the properties, logistics and price of your future product.
The more you know your product and your market, the easier it will be for you to make good decisions during the production engineering stage saving both time, money and frustration.
Design and Engineering
When it comes to consumer- or market-driven innovation and design consulting we do not have much to offer. But if you have reached the stage where you believe you have a product design that could be succesful in the market, our engineers will be able to help you through the process of preparing, optimizing and bringing it all the way to manufacturing.
Of course, it will still be fairly crucial that you have a solid understanding of your end-goal, but you can count on us to provide the design-for-manufacturing and production engineering capabilities and perseverance needed to make your product a reality.
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Where to make it
For many hardware startups the question concerning their manufacturing setup boils down to this: Should you engage directly with factories in China or Mexico or some other low-cost production country, go there through a 3rd party engineering and manufacturing company like SinoScan or get your product manufactured at home.
Going directly to off-shore low-cost manufacturers or component suppliers will help you cut down on unit production cost, but might end up costing you more in time, money and focus spent on micro-managing them and occasionally running into instances of things gone horribly wrong.
Conversely, depending on the volume of the business you bring with you, the cut of your margin paid to a third party company or a manufacturer at home might at some point represent a figure large enough to make it unjustifiable.
Some startups or companies launching new products might choose to work through a third party company short to medium-term and gradually built resources internally as their sales volume grows.
The fundamental value proposition of SinoScan is that we bring the best of two worlds: 50+ staff and 25+ in-house engineers in our Chinese subsidiary accessing a vast supplier network in China under the technical supervision and management of our 15+ Western in-house engineers in our sales engineering offices in North-America and Europe. Additionally, our purchasing volume enables us to negotiate prices and drive progress at suppliers and manufacturers in ways that is hard to do for smaller companies.
The answer to whether we are the right choice for you will vary from company to company, but if you have drawings, a forecast and 2-3 weeks to spare, drop us a line or fill out our Request a Quote form. We will give you a quotation free of charge, complete with unit and tooling prices, sample and production delivery lead times and part specifications spelling out all aspects of the components or products delivered.
PARTS IN ASSORTMENT
TOTAL QUALITY COMPLIANCE
Bill of Materials (BOM)
If you are dealing directly with component suppliers and manufacturers in a low-cost production country, make sure you have a thorough understanding of your bill of materials and that it is communicated clearly.
Differences in national and regional industry standards and certification requirements along with language and culture barriers can lead to a – sometimes willfully – imperfect understanding of what it is you are trying to accomplish.
However, many suppliers can still be great partners – even during development – if they are willing and able to share their expertise with you.
Our engineering teams in Europe, China and North-america have the resources and experience to engage in technically robust dialogue with manufacturers and suppliers on behalf of you and your product.
The same in-house Western SinoScan engineer will be working with you from the early stages and throughout the entire life cycle of your product.
This means that you can focus your product in cooperation with an engineer that speaks your language and knows your culture, knowing that he has the skillset, organizational resources and supplier base to bring your vision all the way to the production floor and back in one piece.
Forecasts, Trust and Liquidity
The level of support and service you receive from a supplier or manufacturer now and in the future can be heavily influenced by the volume of business you bring with you - make sure you know what you can expect with regard to technical support, quality control and handling of non-compliance issues.
Many suppliers and manufacturers in low-cost production countries will require you to pay upfront. Thus, in most cases, you will have a to commit a significant part of your cost of sales from the second you submit a product order. Apart from the trust in the supplier that this requires, this can also challenge the liquidity of a young startup company.
Doing Business with SinoScan
Apart from the margin added to the upfront 50% tooling cost we charge at commencement of sample production, our only source of revenue is in most cases a markup on actual approved deliveries (payment terms are usually 8 days after customer receives delivery).
In other words, although we are capable of provding design-for-manufacturing and engineering services, we are not a consulting company and we do not really start making money before things are working the way they should.
This means two things. One: We have a strong preference for working with customers, whose long-term success we believe in. Two: If we work together, you know that you have a supplier who is committed to the long-term success of your product.