There are many factors that are key to the success of any product launch – understanding the target market, designing a product that fills a need, a great design, to name a few. However, securing a supply chain that can meet the technical, cost, and volume demands is at least as critical – without it, revenues just won’t happen.
In this context, we use the term “suppliers” to include any component, subassembly, software, consumables, and contract manufacturers needed to successfully produce a product. If you assume that every piece of a product is critical to its operation, then you need to have 100% of the parts in order to ship. Given that context, developing business/technical relationships (and eventually contracts) with your supply chain as early as possible is critical to successful production.
For the most critical components, it’s often important to establish a technical relationship with the supplier during the development phase. Product specification sheets don’t always tell the entire story or provide all the specifications you need, particularly if your application is using the component in uncommon or stressful ways. You may need to contact the company directly to obtain unpublished specification information, or written assurance that the component will meet your requirements, both from a performance as well as reliability perspective. You’ll also want to know if there is any special screening that needs to be done for your particular application, and if so, insure that your volume requirements can be met (and what, if any contracts/commitments are needed to secure the volumes you’re looking for).
For custom designed components, finding and securing a supplier early on that can provide the component to your specification reduces the risk of potential redesign later on down the road if a supplier cannot be found that meets your technical and business requirements. Indeed, it’s often good practice to have multiple suppliers lined up not only for price reasons, but to reduce the risk of potential availability disruptions. You also may want to schedule visits to these supplier production facilities to have the opportunity to see their capabilities, ask questions, look at their quality procedures, etc.. – particularly for smaller or lesser known suppliers. This will often give you a better sense of their capability to handle increased volume, as well as see their processes, equipment, meet their staff, etc.. We’ve all heard stories about how suppliers' claims for capabilities didn’t match the types of equipment or processes they actually have.
Your early work with suppliers should not only focus on function/performance and price, but also volume – can your suppliers provide components in the expected volumes you estimate you need, and what, if any, lead-time is associated with obtaining those volumes.
For products that have regulatory requirements (beyond things such as UL/CE), you may want to see their cleanrooms, inspection facilities, rework stations, inventory management, etc. (the latter is particularly important for CM’s you may be using).
If you’re product will be manufactured by a CM, working with them early in the development cycle can also reduce labor/assembly costs or issues – they can provide valuable input on the design that will make it easier to assemble (or disassemble if rework is needed).
Finally, it is possible that your product may require new technology, manufacturing processes, or both ranging from something simple to very complex (eg, the newer borderless screens on several newer smartphones). Development of these processes can take weeks, months, or longer – Apple is noted for working with suppliers for years on newer technologies prior to production.
Working with suppliers early and often as part of product development is a critical ingredient to successful product development – doing so can reduce risk, and improve your chances for production success.
Ken Haven has been CEO of Acorn Product Development since the company’s founding in 1993. Ken has more than 25 years of product development experience including technical leadership roles with NeXT Computer, Attain, Inc., and Hewlett-Packard. He holds MS and BS degrees in mechanical engineering from Cornell University.