15 Mar 2013

Introducing New Products: 5 key issues

Robert O’Rourke, Senior Vice President Sales and Marketing EMEA, Sanmina looks at the five keys to the successful introduction of new products

Today’s rocky economic climate has meant that OEMs must stay ahead of the competition - delivering innovations as fast as possible, and in a cost-effective manner.

What this means for the design engineer though is that they are increasingly left watching the clock, as they become locked into tight timeframes to bring new designs to market. Increasingly we are noticing that some engineers have perhaps moved things along too quickly and tipped the balance of the scales to successful delivery.

To successfully deliver a New Product Introduction, NPI, it needs to be thought out further than the achieving the quickest route to market. Instead, a multitude of considerations should be addressed and thorough planning mapped from the outset by design engineers responsible for the NPI. From experiencing unexpected high component costs, to regulatory barriers, a product road map can fall of course in an instant. More worryingly however is that OEMs are also at the mercy of their supply chain and one chink in the chain can cause the total collapse of a new product design.

Typical production facility

As such, OEMs must consider all elements of the design and to-market process, to avoid a delay in launching the product in the market place; or worse still, to avoid being the victim of an un-marketable product, and thus being burdened with irrecoverable debt.

These challenges have created an intense debate worldwide – should OEMs manufacture in-house or outsource? The latter option is on the rise, but usually the maturity of the manufacturing ecosystem for that particular industry or region is a key factor in the decision-making process. In the end, the decision comes down to knowing you have the best management team on board to guarantee success, be it if the team is in-house, outsourced, or a mix of both.

But even the best team needs to do its due diligence and to make sure it is first-past-the post for design innovation and to-market, there are five key points to consider:

1) Creating an Intellectual Property solution map to determine the appropriate source for every component and part

It is thought that there are typically five key components in any new product design project. What many don’t realise is that it is these very components that create 80% of hold-ups ahead of a launch – due to any or a combination of their expense, uniqueness, complexity, or lead time of the new product.

Using the latest technology as part of the design is important, but engineers must also balance the technology with the ability to deliver a viable product that meets the design specifications.

By creating an Intellectual Property (IP) map, design engineers can work with manufacturing and supply chain engineers to streamline how they source these multiple suppliers for all components. This helps to address any potential problems for the sourcing of appropriate, or alternative high quality materials and parts.

This collaboration at the early stages allows these experts to recommend alternative high quality parts that have shorter lead times, or can be shipped from closer to the manufacturing or assembly lines, at a lower overall cost.

Should there be just the one sole source - as is the case for some industries such as the energy sector - supply chain engineers can negotiate and work with that supplier to licence the IP so that it can be replicated at other supplier locations. This ensures that if the sole source isn’t able to meet an OEM deadline, it won’t hold back the design and introduction of a new product.

2) Reviewing suppliers and casting a wider net

Before the Material Requirements Plan (MRP) and Bill of Materials (BoM) are finalised, engineers should conduct a comprehensive review of the various suppliers for the components in the IP solution map.

The first port of call is clearly to examine the supplier’s ability to meet design specifications of that component. However it is critical that this review should also cross-check that they have the capacity to scaling up production to meet future and increasing OEM orders – whilst maintaining the quality expected. It should also look to whether the supplier can deliver to the manufacturing / assembly plants on time around the world (if needed) at the total lowest landed cost.

The analyses also take into account the supplier’s in-house engineering (manufacturing and design) expertise and hands-on experience with similar technologies, its equipment capability, the precision and completeness of its engineering documentation, its access to raw material availability, and its financial viability.

Doing this before the MRP and BoM are finalised gives the OEM an advantage in negotiating price points and lead times. On the other hand, if these specifications are locked before the analyses are complete, the OEM runs the risk of being at the mercy of the weakest link in its supply chain. And if that happens to be the supplier for one of the critical components, the OEM is now faced with potentially losing revenue and market share—not to mention incurring significant increases in costs.

3) Run ‘Design For X’ analyses to ensure reliability of the finished product

For an OEM to be successful a concept has to scale to volume, meet the schedules and costs required, and be of the quality its customers expect. The best way to ensure this outcome is to run ‘Design for X’ (DFX) analyses at both the prototype and production phases.

Combining design for manufacturability (DFM) and design for assembly (DFA), DFX analyses helps to ensure the reliability of the finished product when it comes off the line and for years to come; because the last thing an OEM wants is a product that fails. The earlier any problems are surfaced, the sooner they can be solved, resulting in significant savings.

Typical production facility

Both DFM and DFA analyses surface potential problems well in advance of finalizing the BoM and building tooling for material manufacturing and tooling for the assembly line. The earlier these problems are surfaced, the sooner they can be solved, resulting in significant savings. A £1 design error found during the concept stage could multiply to hundreds of thousands once it’s running in volume.

These analyses often highlight ways to simplify the design and provide other options for materials, manufacturing and assembly processes. This smoothes manufacturing and assembly, helping the solar OEM’s product get to market faster, at lower costs. And given the competitive nature and speed of the solar industry, being able to fill an order on time is the difference between getting or losing the business. This is especially true due to the time-limited nature of many local, regional and national government incentives, tax breaks, and rebates.

4) Really understand potential market constraints and complex regulations

If an OEM is expanding their market presence into different countries, being aware of the different local government constraints is crucial, as this can affect a product’s deliverability and total cost.

For instance, knowing that a product manufactured in one country can be imported into another without violating any trade agreements or import / export regulations is vital. Sometimes there are also financial advantages: a country could require a higher import duty if a percentage of the Bill of Materials (BoM) was assembled externally. Conversely, if a percentage of the Bill of Materials (BoM) BoM was made in its country (or a trade partner’s) a significantly lower export duty might be the result.

Essentially, the bottom line here is that the most successful OEMs factor these constraints and advantages into the overall product’s manufacturing strategy.

5) Nurturing long-term relationships with supply chain partners

Take advantage of your supply chain partners’ expertise. Successful engineers develop long-term, trusted relationships with manufacturers to gain access to new technologies and processes that can be licensed, and /or transferred from other industries. These relationships foster opportunities for co-development and licensing arrangements that can help them leapfrog their respective competitors.

The DFX analyses, supplier reviews and IP solutions maps as mentioned in steps one – four can bring to light many opportunities for collaboration and partnerships for OEMs. Each situation, whether using existing technologies or developing new technologies, leads to a case-by-case agreement regarding the intellectual property’s development and its ownership.

Overview

There is no single answer to product development; however, employing these five steps will bring to light any issues, but most importantly many opportunities for collaboration and partnerships for OEMs. What seems like an admin-heavy duty at the outset could ultimately be the difference between product success, and stumbling at the starting block. Particularly as this information is more often than not easily extractable from within, this investment time really is the critical factor. The savvy design engineer should be aware of these five key steps, but if not there is certainly some food for thought for the future of designing products, so that the OEM doesn’t get left behind the competition in a rapidly evolving climate.

Essentially with any new product introduction, OEMS will have many factors to weigh up. Decisions may result in a balancing act between speed, cost, quality, and expertise. However as long as all five steps have been reviewed and challenged, the design engineer can sleep easy that there will be no tremors further down the line to disrupt production and ultimately success.

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About the author

Robert O’Rourke is senior vice president of business development for Europe at Sanmina. He joined the company in 2008, where he has also served as vice president of operations and general manager of the Fermoy, Ireland design and manufacturing facility and vice president of worldwide business development for Sanmina’s medical division. Prior to his current position at Sanmina, Robert O’Rourke worked at Tyco Fire & Security and Exel. During that time, he held management positions including director of global operations and director of logistics, planning and customer service EMEA. Robert received his BBS in Business, Finance and Management from University College Cork.

Sanmina is a leading integrated manufacturing solutions provider serving the fastest-growing segments of the global Electronics Manufacturing Services (EMS) market. Recognised as a technology leader, Sanmina provides end-to-end manufacturing solutions, delivering superior quality and support to Original Equipment Manufacturers (OEMs) primarily in the communications networks, defence and aerospace, industrial and semiconductor systems, medical, multimedia, computing and storage, automotive and clean technology sectors. Sanmina has facilities strategically located in key regions throughout the world.

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