There is no elevator to success, you have to take the stairs – Zig Ziglar.
It is often believed that turning an IoT prototype into a scalable production is as easy as pushing a button to change floors on an elevator. With less urgent timelines, smaller quantities, and lab driven development, the prototype environment can make the transition to production appear like a walk in the park. But ramping-up to commercialization is a rigorous ascent that can be exhausting if not approached properly.
Let’s talk about three common challenges IoT innovation teams must avoid to elevate their IoT project to the top floor successfully.
1. Not Getting Stuck Between Floors
There are countless design, material, and production variables that can change dramatically between producing a handful of devices in a lab, to thousands on a production line. For example, it’s often believed that cost per unit reduces with higher volume. This is generally true regarding certain fixed cost elements such as essential tooling/dies or product certification. But there are many potentially troublesome variable cost elements to factor including raw material purchases, shipping, duties, taxes, labor, parts, and packaging. These variable costs can be unpredictable and highly susceptible to economic market swings. This can make the financial viability of the production version of an IoT product look quite different than the prototype as previous cost assumptions are no longer relevant.
Price changes aren’t the only variable costs factor that can get IoT project teams “stuck”
Cost of Assembly – Human costs and engineering one-time parts like assembly jigs
Cost of Materials – Plastic, metal tools, and dies
Cost of Design for Manufacturing
Back-up vendors, dual sourced, failed parts / poor yields
Cost of Certifications – Could be $50K+
Shipping – Air vs. boat makes a big difference in cost and turnaround time
Duties and Customs – Between 3-10%. Taxes
If the product was not originally prototyped with eventual scale-up in-mind, then there could be extensive re-work or redesign efforts to obtain a scalable model. Given the continued challenges in our supply chain, some re-design may be unavoidable as part availability is a dynamic situation. This requires project teams to anticipate and budget for price and time increases.
To control the controllable factors, it’s critical to thoroughly investigate the implications involved with ramping-up production before embarking on the journey as many well-documented failures have occurred. It’s easy to “get stuck between floors” when these unanticipated costs and challenges surface during the ramp-up process.
2. Selecting The Right Manufacturing Partner
While Hallsten Innovations is a full-service design house, we also use partner contract manufacturers (CM) to build products in higher quantities. This visibility into both the prototype and production environments enables us to help our clients move from product design to manufacturability, to production successfully.
Based on our experience, here are some key factors to consider when selecting the right contract manufacturer for your project:
- TRUST: Trust in both service and quality is critical
- THIRD-PARTY EVALUATION: Run your estimates by third parties for a reasonable examination.
- PLANNING AND COST: Add significant padding factors in both time and cost.
- IN-PERSON VISITS: Visit a CM in person both in the USA and/or overseas. Conducting an in-person audit is a MUST before selection.
- SCORECARD EVALUATION: Evaluate potential CMs in a consistent and uniform manner. One of the best tools for evaluation is a Scorecard. See below for a template Hallsten Innovations uses for our clients.
CONTRACT MANUFACTURER SCORECARD TEMPLATE – This is a scorecard we’ve created internally to help identify quality CMs that meet the needs of our clients. This scorecard is a simple web form available through the button below that asks 70+ questions about your potential contract manufacturer. Once you finish the survey you will receive your personal results in PDF format to compare.
3. Not Getting Caught Off Guard by Third-Party Requirements
Third parties are often brought in to handle specific tasks and have specific technicians/engineers assigned. Difficulties can arise in partnering with these service providers that can delay product launches. Oftentimes, project teams get caught off guard by either learning their project requires third-party involvement too late. Other times, they simply underestimate the time and scope working with these third parties requires.
To help avoid some of these challenges, take a look at some common examples below:
This may include certificate provisioning, credentialing, and cloud-related access. Even with longstanding business relationships, these firms can be difficult to navigate. Identify the need and engage them early and often.
Changes in the carrier’s network occur often. For example, a large carrier recently disrupted the IoT industry by pulling out of Mobile Virtual Network Operator (MVNO) plans/partnerships. Multi-carrier cell network access is ideal.
Additionally, certification of IoT devices on singular networks can be extremely challenging. This can be from both a technical perspective and simply connecting with the right person that can help within the carrier. Hallsten Innovations has the right connections to assist in this effort.
Certifications (FCC, CE, medical-related, quality, safety, and more) typically requires working with trusted labs/partners. This is another area Hallsten Innovations has the experience and established relationships to help our clients navigate.
Take the Stairs
It may not seem so, early on, but taking the stairs can sometimes get your IoT solution from prototype to production faster than the elevator. Perhaps more important, many lessons and other benefits may be gained through the healthy climb.
It’s no mystery that when IoT projects are scaled successfully, they create direction, insights and visibility into your organization that can be invaluable at growing and improving business operations. However, it’s an endeavor that requires the right partner to help hone in the right solution that will hit the target. Our team demystifies technology and brings years of wisdom from lessons learned to help you position your business for success.
Bring Us Your Napkins! ™
Is your team thinking about solving a business challenge with an IoT solution but you’re not sure where to start?
A great place to start is with what we call a Napkin. This is a rough sketch of your idea, concept, or vision. Hallsten Innovations would be happy to review your napkin idea and provide feedback.
Please send them our way or reach out for an introductory call by emailing email@example.com.