 New Product Introduction (NPI), bringing a new idea to market, is often a much more complex process than expected. In previous blogs, I’ve talked about aspects of taking a product into production like writing a business plan, design for supply chain and design for assembly. The common thread is that this is a multi-disciplinary process. There are lots of stakeholders and to have a successful product, all of the stakeholders must be considered throughout.
The ultimate stakeholder of course, is the customer. This is something that many of us will forget, it’s natural that the engineers, designers, and craftsmen who developed an idea will take pride in their work. But, if customers aren’t willing to buy your product, you don’t have a product. Taking your product into production can often be the first point where the project becomes truly multi-disciplinary. And I don’t mean different types of engineering. NPI is the first time that all the groups in a company must be involved. It’s good practice to include all the stakeholders during ideation and design, that will allow a company to develop better products quicker. But when taking an idea into production, involving everyone in the company is critical. There are a lot of different stakeholders that have a wide array of skill sets (and opinions) and they all need to effectively contribute. finance, sales and marketing, purchasing, logistics, assembly, service, QA/QC all have input to a successful product and must be part of the development process. Managing all of the stakeholders means that the one key role in the NPI process will be the project manager. They may not have that title, but someone needs to consider the entire cross-functional scope of the project while balancing budget, timeline, as well as the needs and capabilities of all of the stakeholders. This is not a skill set that everyone has and randomly assigning the role to part of the team, or worse, dividing the project management responsibilities across the team, can severely jeopardize the project. Early stage companies may not have the multi-disciplinary staff or experience required for a NPI project. Engineers will rarely be good at sourcing, there may not be a purchasing department yet, or they may not have experience with negotiating longer term volume-based supply contracts. The list goes on. NPI is one point where a company should not try to learn by trying. NPI is time sensitive and expensive. It is also not a core function, most companies don’t continually develop products, NPI will be an occasional activity and not something that requires full time staff (and the associated long term cost). Finding external support for missing experience is not a failing, but often the best way to effectively get to the company’s real goal, to get that new product into production. An external firm may be the best option for project management where experienced NPI people can provide support just for the duration of the project. Providing guidance on requirements and timing they can also assist in building internal teams and processes to support production shortening the overall development time and helping to set the company up for success. NPI is all about getting your concept to market as quickly and effectively as possible. For most companies, NPI will be a periodic necessity, and not a core function. Therefore, it is important to consider the current team and establish if there is already a team member who can take on the critical role of project manager for this new product. If not, finding budget to bring on an external firm who can manage the NPI process and allow the team to focus on what they know best – the product and its potential customer – can save money, time, and get that product into production much more efficiently.  In part 3 of this series, I discussed the planning hierarchy and how it can be adapted and used to create both a model through which to structure a supply chain (from both a strategic and executional perspective) as well as how it can be used as a lens to prioritize supply chain activities. Its critically important to have a set of rules or standards around which to compare and contrast strategy and execution. It is the Bill of Materials (or BOM as it is commonly referred to) that sets these standards. Many early-stage companies believe that supply chain begins once the BOM has been established, but this is a critical error. This is because the BOM doesn’t exist on its own. While the BOM informs supply chain of required materials and specifications, it is the supply chain that informs the BOM itself about what it can viably include. Therefore the BOM serves as the bonding point between two iterative functions: supply chain and product design. However, it is important to remember that the BOM as a completed data set is merely the result, and a snapshot in the evolution of that data. It will continue to evolve with the product. The journey to get to a completed BOM is at least as important, if not more important, as the BOM itself. Avoiding unobtanium Throughout my career I have seen failed product launches due entirely to designs that have not been informed by critical factors such as: supply availability of specific parts, international trade considerations (logistics, regulations, customs, etc.), and even social/political/economic factors of either the regions of the materials supplied or the regions where the product is being shipped. That’s because a BOM can only represent what goes into something, it cannot represent why or how. It is in fact the journey of iterative exploration of different materials, parts, suppliers, manufacturing methods and supply regions that informs as to the viability of any design consideration, and invariably will influence design towards the lowest risk options while maintaining the overall functional requirements of the design. Sometimes functional requirements cannot be supported after supply chain research, and this is better to discover early on (as opposed to pre-production). Baking-in materials or processes into a design that are impossible to buy or support reliably (humorously referred to as “unobtanium”) is a recipe for failure. Often however, the design viability can be improved drastically with early iterative interactions between design and supply chain. Part specifications Perhaps the most important part of the process is the creation of specifications for each and every item which will eventually be included in a BOM. This is as equally important to supply chains as they are to product design. In Design, all the components must act together as a system, ultimately focused on the form, fit, and functional requirements of the end product as dictated by the business case. For every item in the BOM, specific requirements must be spelled out including not just dimensions, and tolerances, but also (for commercially available components) approved brands, models, and manufacturer specifications. Even more important still, is the understanding of why all those specifications are required, relative to the greater system in which they are to become a part of. It goes farther to support strategic management of materials and supply strategies, also referred to as “Plan for Every Part”. These specifications are always arrived at through continual trial and error, testing and refinement. In supply chain, its impossible to source products, evaluate potential suppliers, or manage inventories or demands, without specifications. It is those specifications which will measure what will be acceptable, and what will not. For this reason, sourcing is often executed after much or all the BOM has been established. However, this is far too late and ensures delays, and risks failure in the development process. Instead, supply chain must work hand-in-hand with engineering through the design process, considering possible sources, and manufacturers in concert with the engineering effort. Supply chain also needs to engage possible suppliers for advice (particularly for any item made to specification – but not exclusively since “off the shelf” products must also be fully specified and understood) to understand manufacturing limitations and opportunities for efficiency. All of this must be gathered and relayed back to engineering as meaningful data, and engineering can then reciprocate with design iterations that are viable from a supply chain point of view. The importance of revision control Of course, as the design is evolving a tremendous amount of time and effort will be lost if there is no mechanism in place to track the evolution as well as documenting every change and the specific reasons for the change. For engineering, this is the process where all the learning and intelligence (IP) around the product is developed and retained. So it is also true with supply chain, as supplier and component strategies depend on understanding the intimate details (and challenges) of every specific part. Supply chain is sometimes affected by revisions, and other times is the cause of revisions (supply problems OR possibilities of better items/technologies become available) but a complete knowledge of the evolution is required to strategize and optimize the supply chain as well as manage day-to-day operations once in production. Shared ownership is no ownership While the BOM is the connective tissue between engineering and supply chain, responsibility for the BOM, its revisions and specifications lie squarely with engineering. Why? Because the BOM is the stated design intent of all components relative to the end product (or in other words, relative to the system they must work together in). Design intent cannot be shared jointly by supply chain and engineering, nor should it ever be. Likewise, responsibility for supplier relationships, strategies and sourcing methods lie squarely with supply chain and cannot be shared with engineering. These are, in effect the “design intent” elements of the supply chain system and production execution that must produce those specifications dictated by engineering. While both design intent and supply/execution strategy inform and influence each other, anything less than a clear delineation of ownership will make everything run amuck in short order. When creating a supply chain from scratch, the finished BOM is only a snapshot in time. The knowledge generation, supply strategies, and overall viability of the supply chain is made or broken by the journey to the BOM, not the BOM itself. Want to read more in the Creating a Supply Chain from Scratch Series? Click the links below:
Part 1 - Understanding What a Supply Chain is and When to Start Establishing Your Product's Supply Chain Part 2 - Understanding Chaos and How to Work With It Part 3 - The Planning Hierarchy: Unlocking the Path Forward Part 5 - Supplier Management  Challenge the expected, Dream the unexpected: A mantra Chrima Metal Fabrication has adopted to describe their approach to offering manufacturing as a service. Since 1960, Chrima has been providing custom steel components for various industrial applications in Southern, Ontario. In the early days, founder, Bill Christian, and his son, Dan Christian, brought craftmanship and high-quality components to manufacturers in the local area. Over the years, however, the business expanded rapidly by leveraging new technology throughout the business to offer better quality, faster turnaround, and exceptional customer service.  Today, Chrima utilizes a one-stop-shop approach to custom manufacturing and has found success in offering a large suite of capabilities to serve a diverse customer base. In their 65,000 square-foot facility, they offer sheet and tube processing, manual and robotic welding, precision machining, painting, and more. Their ability to serve many industries while still offering competitive lead times at competitive prices has been a critical element of their recipe for success. Chrima defines their business not as a component manufacturer, but rather a manufacturing service provider. Over the past year, they have found ways to further support their customers with robust quality documentation and engineering design and support. By seeking to improve their services they are constantly searching for ways to challenge what’s expected of a contract manufacturer and seek to deliver value in unexpected ways.   You’ve created a working design, the next step is to start production, right? The simple answer is unfortunately, no.
Building more than one of anything effectively and efficiently is completely different than building just one. That’s a sweeping statement, but there’s a lot to consider in planning your production. By assuming that you can simply duplicate your initial builds can lead to costly delays, significantly higher manufacturing costs, more frequent redesign, and often considerable post sale costs due to warranty and service issues. Building one or two units of a new product to prove out a concept is a necessary step in new product development. These first builds, or proof of concepts, help to prove that the idea is viable, can theoretically meet the business goals , and should be developed further. They allow for testing the concepts before spending any significant time and resources on engineering and manufacturing. However, those first units are typically hand crafted, often by the engineers/designers themselves, using whatever parts can be found quickly. Taking great care to make and fit parts, they test out functionality and tweak the design to work and hence, these first builds require a great deal of time and skilled labour to build and commission. Once the first builds are complete, there is a lot more work to do before the product is ready to be built in any volume. There are a host of considerations that go into a production ready design based around being able to provide a consistent, high-quality product at volume. The business plan will help identify the quantity of units that need to be produced and when. It should also outline the expected cost (profit) goals that will help determine what can and cannot be considered in production. Custom and Fabricated Parts Most products are going to be a mix of custom fabricated and purchased parts. If you don’t consider how the custom parts are made, you can design parts that are difficult, expensive, or even impossible to make. You need to select your fabricators and work with them to ensure the designs work for their equipment, tooling, and processes. You can craft a lot of things by hand that can not be made cost effectively in production. Ramping up production over time may also require a series of different designs to suit different manufacturing methods. Machining vs. injection moulding a plastic part is a prime example, you have to consider when does the extra capital cost for moulds make budgetary sense for your unique product. Additive manufacturing allows designers to get hands-on examples quickly and can be a great development tool. However, 3D printing is currently not a cost-effective process for volume parts and often produces a part that is significantly weaker with poorer surface finishes than other lower cost production options. 3D printing also allows you to create features that aren’t practical, or impossible, to make with other fabrication techniques which will lead to part redesign. Building Supply Chain Simultaneously with Product Design Supply chain frequently gets overlooked in the early development. However, sourcing the correct parts from reliable vendors that can be supplied at a reasonable price and in the quantities required throughout the lifetime of a product is critical. Not being able to secure a single chip for example, can mean a PCB can’t be assembled which can delay the entire build and a purchased part that gets discontinued can mean a lot of part redesign to accommodate an alternative. Logistics and regional requirements can greatly affect your design. If your product contains batteries for instance, there will be special considerations on how you package and ship your product. There are some jurisdictions that will require information on where all of the parts were made and assembled, and that can affect shipping and sales. It’s crucial that you develop your supply chain as part of the design process (not as a separate activity). Developing your supply chain in collaboration with your product design rather than one after the other not only improves your product design and delivery, but speeds up your time to market. This is a huge topic and we will dive into it further in a future post. Assembly Probably the highest cost of most products will be the assembly. It can also be where the most variability is added to the final product. At the end of the day, every finished product should be as close to identical to the rest as possible, consistency is paramount. Assembly must be as simple and as quick as possible to insure the lowest cost with the fewest quality issues. The first builds take a great deal of time, skilled labour can do anything with enough time and money, but that’s not the goal behind production. Production has to be the repeated building at the lowest cost to meet the sales requirements (business case). To optimize assembly, you have to look at each assembly step and ensure that it can be done as simply, safely and as quickly as possible. Parts need to align well without extra effort, tooling should be easy to use and fastening should be common throughout whenever possible. The entire process must be well documented allowing consistent training and the development of quality control standards. DFx When you have a product idea that can go to production you need to go through the entire DFx process - design for manufacturing, design for assembly, design for test, design for supply chain, design for service before it is truly ready to be made in any volume. Moving from a prototype into production is not a simple journey to navigate and it takes skill sets that are specific to new production introduction. Most companies will need some external support to do it well and efficiently and it’s well worth seeking input early in the process.  There’s nothing more exciting than that aha moment – when the light bulb goes off for a great new product. It’s very tempting to dive in right away and start building. But it’s all too easy to get carried away creating, and forget to consider what a new product must do to be successful.
At the end of the day, a product is going to have to be sellable, someone is going to have to want to buy it. It will also have to make the company a profit and it cannot expose the company to any undue risks. That sounds simple enough, but there’s a lot there to consider and it can drastically affect how a product is designed and built. That first inspiration needs to be weighed against a few very important business decisions to understand if the product is viable, and if so, what are the conditions it will have to meet to be successful. Initially, those decisions will likely be based around market size, time to market and a predicted sales price (potential profit). Those 3 basic criteria are already more than enough to shape the conceptual design. Building a business case to define the expectations for a new product helps to direct the development and avoid costly unusable labour and purchases. It also lets everyone in the company understand what the goals are for the new concept. A new product that doesn’t meet the business goals is not going to be successful. The new product idea may come from anyone in the company. It may be from sales filling a customer need, engineering implementing some new tech, or really anyone in the company. A good idea can come from anywhere, but it’s very likely that no one person will fully understand everything that goes into making a successful product. The more input you get from throughout your company will allow you to build a more comprehensive business case. Typically, when you start to look at the new concept with respect to selling, the idea will change. External input may prove some ideas incorrect or point out missing features. Looking at the end sales volumes and pricing may dictate the eventual manufacturing methods and change the materials, interface, feature set etc. That doesn’t mean the idea wasn’t a good one to start with, it’s just going to help that idea be successful. As the product ideas are developed, the business case will be refined as well. Like every other design document, it will be a living document. There will be more detail around use cases, regional differences, shipping, manufacturing, industrial design, etc. that affect the company goals for the product. Take the time to build a business case for every new product idea. They don’t need to be complicated, start with the basics. With a business case in hand, you can begin to develop the new idea in a direction that has much a higher chance of success.  Iron Embers is a manufacturer of premium outdoor fire pits and accessories for a variety of outdoor spaces ranging from domestic residences to commercial settings. Constructed with high end materials including the signature use of ¼ inch carbon steel, Iron Embers is highly capable of creating long lasting outdoor products that will outlive the competition.  Originally a summer project for the Tamminga brothers, Iron Embers has since developed into a competitive manufacturing company with ambitious growth plans. Since 2019, the company has been continually scaling to meet the increased demands of the at-home leisure market and providing a unique fireside experience to thousands of families across North America each year. Our growing leadership team is committed to building a community centric company culture where individuals aspire to raise each other up in a communal effort to achieve continuous improvement.  2G Robotics has made a significant impact across the ocean sector over the last 10+ years by commercializing the first subsea laser scanner and deploying products across the globe on a wide range of subsea projects. We have laser scanned and imaged well over 10,000kms of seabed and modelled countless subsea assets and shipwrecks. We are extremely proud of what we have accomplished so far, but there is so much more we want to do. As we embark on the next phase of our journey, we feel that our identity isn’t truly capturing who we are and what we do in this innovative industry. Our team has been planning a rebrand for some time now as we look to redefine ourselves with a brand that better represents our mission, values, and passion. The last year has been filled with significant change, including our joining Sonardyne Group, and this time has provided us the perfect opportunity to showcase who we really are.  We made sure to involve our team of passionate problem solvers in the process and we certainly received some interesting feedback! We realized that a simple update to our existing branding wasn’t enough. We needed a new name and a fresh new look to bring us together while also setting us apart in a stronger way.  Our team is incredibly excited to reintroduce ourselves to you as Voyis. Our new name was inspired by the essence of what we do in this industry. Voyis stems from the word voyage and embodies exploration and discovery. After all, the ocean is truly the world’s last frontier and we work on incredible projects that help our customers explore further than before. We are now more focused than ever on our mission: to push the limits of what’s possible subsea, and Illuminate the Unknown. The rebrand has also brought new names to core product lines that better align with our vision of enabling every subsea vehicle to see the depths like we see the surface. Our well-known ULS line of underwater laser scanners are now named the Insight Laser Scanners, and a new line of Perception ROV skids was introduced. Voyis continues to proudly operate in Waterloo, Ontario.  Creating a Supply Chain from Scratch: Part 3 – The Planning Hierarchy: unlocking the path forward7/27/2021
 In part 2 of this series, I talked about the chaos of the very early stages of any company, or product and how to approach that chaos as both infinite complexity but also infinite opportunity. Since its neither practical nor productive to try to create a product or supply chain system that is all things, to all customers, all at once, we’ve got to apply some boundaries to the complexity and opportunity. We need to focus – on the data, activities and risk/reward opportunities that will best bring us toward our goals. Preferably with the least amount of time, effort, and cost wasted as possible. The planning hierarchy is the structure and the lens through which to achieve this. And, as a structure it allows you to apply a System Thinking approach to planning your product and your supply chain. The structure is applicable to any company that produces a physical product, regardless of if they are a start-up, or a well established multi-national giant. The key however, is in how to apply it. To understand that you have to have a relentless focus on your customer, and your business case to provide value to that customer as well as to the business (if the business cannot generate value, it won’t be a business for very long!) The hierarchy is the roadmap, how you decide to get there will determine your operations strategy and the overall success, profitability, and sustainability of your company. The further we go down the planning hierarchy, the more detailed and short term our decisions (and repercussions) become. But each level needs to be aligned to supporting the business case above all else. A typical planning hierarchy (applicable to any manufacturing company) appears as follows:  Applying this framework to a start-up In a start-up (as with any company) things need to be considered from two views simultaneously from day one: how will decisions impact the project/company today, and how decisions impact the project/company tomorrow and beyond. Building a brand-new supply chain from scratch is no different, since project or business decisions made today can have implications and costs that the company will have to bear for weeks, months or possibly for the entire product life-cycle including cost, risk, effort to produce, and agility to react quickly to changing market conditions. For start-ups it can be difficult, if not impossible, to know all that you need to know for success. This is the complexity or chaos I’ve mentioned previously. In order to overcome this, most start-ups will forgo any consideration of supply chain and focus on marketing and product engineering while leaving supply chain to a later date when there aren’t so many variables. In most cases, these firms will invest time and money into developing a product, only to have to do much or all of it a second time to produce a product that can actually be viable for manufacturing and supply chain, that will actually generate a profit, and will deliver measurable value to the customer. This time lag can be deadly to early-stage companies, who will either run out of funding or simply be beaten to market by a better organized competitor. Instead, I argue that the planning hierarchy can be adopted to meet and overcome these complexities during development, not after. And the process will result in a purpose-designed supply chain that develops concurrently with the product. Let’s walk though some ways to apply this.  Business Level Considerations (Annual Outlook/Consideration) At the top of the planning hierarchy, your supply chain must consider the business case. The business case is the anchor. If this isn’t solid, anything tied to it will be no better. At the top of the planning hierarchy are the long-term and broad concerns to be responded to. Long term considerations:
While nobody can expect to understand these elements fully (especially sales forecasts) for a new product or for an early-stage firm, it’s worth mentioning that they need to be understood as well as they can be and be constantly challenged when new information is available. The business case grows and matures in this way, and the complexity of the supporting planning hierarchy will grow and mature accordingly to support it. In the planning hierarchy, these are usually annual considerations since to change direction in any of these elements requires a major reworking of all supporting systems. It is also important to note that this is why supporting systems should be no more complex then necessary, for maximum agility in times of crisis.  Operations Considerations (Shorter term, typically monthly) Once the business case is identified, vetted and validated, product development can begin in earnest. There may already be some napkin sketches or even conceptual models, but now all that must be tempered with the requirements of the business case. The development will look up to the business case and also any available feedback from potential customers or markets as a guide. Operational considerations:
Inputs and outputs here can, and will, change more frequently than the business case, especially in product development because new information is learned as the development cycle progresses. In a production environment, this is a monthly exercise. But in a start-up, it should be considered at any decision affecting the product development and design. A criticism I have often heard is “why spend that time for things that are only conceptual, isn’t that waste?” The answer is a firm no. All of this work, if documented, becomes your supply chain knowledge base specific to your product and it will inform both your design and your supply chain strategies as you go. It will orient your products and your operations towards viability at first, and competitive advantage over the long haul by steering you clear of pitfalls and avoidable challenges.  Detailed Production Considerations (Weekly) In production, this level of detail is a weekly review cycle, but in a start-up, it becomes something completely different. Start-ups that are just developing their products aren’t engaged in capacity planning or master scheduling of production. Instead, consideration needs to be given to how, at a detailed level, your product will be produced based on the development done to date. Detailed production considerations:
Figuring these out post-development is far too late, and will force a re-do of much (or all) of the development cycle to re-align with the realities of supply and resources, before any real production can happen. The opportunity here for a start-up, is to really research what resources are available and weigh cost against value. This is where you can build your database of who is out there, and what they can offer and share that with the development team. Its also a good opportunity to build relationships and vet ideas with potential manufacturing or supply partners who are subject matter experts. This is where the heart of your new supply chain – data guided by knowledge, will start to grow.  Daily Execution Considerations At the bottom of the hierarchy is all the detailed day-to-day considerations of producing your product. In production, this would include daily activities around the shop floor – scheduling machines and people, daily material consumption and replenishment, as well as shipping and receiving (both your finished goods to customers, but also incoming supply of materials) to name just a few things. Ultimately, the details at this level will determine your profit margin, your quality, and your ability to satisfy the customer. In many ways the work done at higher levels will frame how effective work at this level can be. For a start-up, this can be applied as additional detail to the elements already described when considering specific aspects of the design and how it will be produced in scale. Considerations for daily operations:
Bringing it All Together This is just the beginning. There is more that can be done to apply this hierarchy to a start-up, in order to streamline development and build a viable supply chain concurrently. Much more in fact than I can touch on in a short blog. But hopefully this illustrates how this framework can serve to cut through complexity and unlimited variability inherent in start-ups with a repeatable, scalable supply chain structure that can grow with the firm and guide the product development towards successful execution, by designing and developing with the end in mind the whole time. The effectiveness of the end result be governed by your supply chain, for better or worse. They key to remember is that it is never too early to start this process. Want to read more in the Creating a Supply Chain from Scratch Series? Click the links below:
Part 1 - Understanding What a Supply Chain is and When to Start Establishing Your Product's Supply Chain Part 2 - Understanding Chaos and How to Work With It Part 3 - The Planning Hierarchy: Unlocking the Path Forward Part 4 - The Bill of Materials - The Journey is At Least As Important as the Destination Part 5 - Supplier Management  On June 29th, BKW's, Peter Heuss and Matt Weller were joined by Microart's Mark Wood and Charles Tonna to discuss taking a product idea through to production. They also talked about how partnering BKW's services with Microart's manufacturing facilities creates a unique full-service team that makes it easier for companies to take their product concepts through production and into the hands of their customers. Moderated by Phillip Stoten, this webinar provides practical advice to help innovators navigate the design process and get ready for manufacturing and scale. Watch the webinar replay below. |
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