We use Kanban cards at Montie Gear to manage our inventory. The purpose of the cards is to make sure we don’t run out of inventory so we have the products you want, when you want them. Kanban is a way to use a simple formula to determine how much product to keep on hand by using customer demand and the time it takes to produce the product. You can hear more about Kanban cards at:
If you are going lean, the boss has to set the example. One of the places where I spend a lot of time is at the shipping desk. So my 2 second lean project for the week is cleaning up the shipping desk. Here are the results.
Questions, comments, videos, suggestions are all welcome!
Managing Production and Inventory in Context of Lean
by Montie Roland
Audio File: 2016 Mar – Managing Production and Inventory in Context of Lean.mp3
Good morning. My name is Montie Roland with Montie Gear in Apex, North Carolina. And I’d like to spend a few minutes talking about managing your production and inventory in the context of Lean.
So with Lean, you have a thing called a Kanban, and the ideas that you have established a level of inventory that you need to maintain in order to meet your customer needs and your anticipated customer needs. So, when we think about it, we’ve got two types of parts and assemblies. One is parts and assemblies that we’re going to use to make finished goods, and the others, of course, finished goods that we’re making in anticipation of sales.
There’s a lot of different sizes of companies out there and a lot of different types of products. And some products are built to inventory and some products are built to order. And so if we just look at Montie Gear, in the past I’m realizing we had this kind of crazy system that didn’t really serve us well financially. And so in the past what we do is that we would build a batch of products and in this, the reason why we build a batch is mainly because of we’ve got several processes where we need to have a minimum order. And there’s just no getting around that without having ridiculous costs. So let’s say that with slingshots, the two places where we have to have minimum orders – one is to cut the slingshot and then where we do our secondary machining ops. You do the set up – that’s a lot of the work – and so you really want to have a minimum batch size through the secondary machining. And then the other one is paint or finishing if it’s to anodize (it’s called finishing). So, finishing also has a minimum order and can get very expensive if you don’t do a minimum number of parts. So in this case, we’re not going to have a single piece flow through these external processes. But we can have single piece flow through our assembly area (maybe). Alright, so in the past what we did, somebody (usually me) would sit down and say, okay, we need to build this, this and this. I guess we’re getting low on this. And I don’t know, we’ll sell these. Well, there was a huge lack of scientific method here. And what that tends to do is that tends to eat up capital because if you’re building parts that you’re not going to use for the next year, that’s money that’s tied up; it’s really not doing you any good. And it’s not doing your customers any good either because its money you can’t spend on products that they really want. So the next step for us, I believe, is to create a chart or a spreadsheet that shows each product; what we sold last year, what we sold this year, and the year before. And that way we’ve got three years’ worth of sales. And then we can say, okay, well based on this historical data, we expect we’ll sell this many of this product this year. Then what I need to do is to take and apply a time to manufacture that good through all the processes. And the external processes occupy ninety percent (or higher) of our manufacturing calendar days for Montie Gear. So, paint, water jetting, machining; what have you. And so if I apply a calendar date or calendar time to each one of these products . . . so, for example, with a slingshot. Maybe generally the queue at ADR for the water jet cutting is two weeks. And let’s say the queue for paint is generally two weeks, and the queue for machining is generally a week. So, I’ve got a five week delay from the time I order to the time I get parts that are ready for us to assemble. In this case, we’re cutting the frames, we’re painting the frames and the side plates, and then we’re machining the secondary operations in the frames. And so I’ve got a five week delay. So then if I know that I’m going to sell -amount of slingshots this year, then I can take and multiply that sales number by five-over-fifty-two. Now, I take the yearly sales, multiply by five weeks, divide by fifty-two weeks to prorate it for five out of fifty-two weeks. And that tells me how many slingshots I should sell during the period while I’m waiting on more slingshots. So, I establish a number that I know I expect to sell while I’m making more. And then also, I need to factor in any seasonal demands. So, you know, look at, for example, Christmas. So we sell more slingshots at Christmas than any other time just before. So I need to also factor in the seasonal affect. So, the yearly sales and then bump it up by the percentage that is increased for Christmas sales. Now, I know what I need to keep on hand. But I also need to apply safety stock, because there’s always going to be some variation. So, I don’t know, let’s say our safety stock – we’ve got to come up with a metric for that – but maybe the safety stock is one month’s sales. So now what I’ve got is I’ve got my yearly sales, prorated for the amount of time it takes to make those pieces, and then times the yearly sales. I’ve got how many I need during the period when I’m making parts; what my safety stock is; and then any adjustments for seasonal variation. And that gives me a much better idea of how many I need to keep on hand.
Now, I’ve also got to factor in the effect of minimum orders on this, because I want to keep my production economical by ordering above the minimum order. But that gives me an idea of how many of each product I should stock. And that way I don’t have inventory sitting on the shelves that I’m just not going to sell. Now, this can get a little . . . you know, this is not a perfect system but this is an excellent baseline. And it works well for products – or I think it will work well for products like the slingshot, where we have continuous sales of those. We have other products that the sales are not as continuous and they have larger variations and swings. Like, for example, our RFID products. Because they’re commercial orders we may get an order for two hundred or two hundred and fifty or twelve hundred. But with those, and those big orders, the lead time is figured in and anticipated by the customer. So, that’s a little different situation to calculate. Now, however, on those, I think it is important to note that the longer it takes to produce your product, the longer you have to wait for the effects of the profit from that sale because obviously, you know, percentage of the sales . . . for a domestic sale, where there’s terms, you don’t get paid until you ship; if an international sale, you may get paid a deposit upfront and then paid when you ship. But so, the longer you wait to ship, the longer you wait to get paid and the longer you wait for the benefits of the profit from that sale. So that’s definitely an important consideration but for the purposes of looking at it from Kanban, it’s a little different.
So back to our slingshots and other things where there’s consistent sales. So now what we’ve got is we’ve got product, and then what I’m planning on doing is to then do an inventory once a month. And then on that inventory we’ll post in the bin where we keep each product (we have a bin for each product in our inventory . . . or for each product SKU; so there’s a bin with slingshots, there’s a bin with glove shots, arrow rests. And so some of our bigger sellers like slingshots, there’s actually multiple bins depending on what color your slingshot actually is.) So then what I can do is to do an inventory once a month; compare that to our minimum stocking level that we created, which was, you know, our time to produce and you know, relating that to time to produce versus sales, so we know how many is in there; plus, our seasonal variation during the period where we’re going to be making new parts; plus, our safety stock. So we watch that and then flag it during our inventory and pull a card out that says we need to make more of these. So that way then we collect those cards and then those cards then become an indicator that it’s time to produce more. And that’s a nice, easy solution. And I think, too, that when we’ll have to post what that minimum stocking level is so that when someone is withdrawing products for shipment, then they can watch that as well. So, for especially where there’s, you know, low numbers, like, for someone where the bin’s starting to look empty, they can check. So maybe it’s between inventories; they check and go, Hey, Montie, here’s the card for this; we’re starting to get low.
So, I think that’s one of the concepts is that you’ve got this visual indicator where this product, this produce and this product are getting low and then we can leave those cards in the bins and walk by to see them, or we can collect those cards and know that we’ve got to produce some inventory – or at least check to see what the inventory is to decide when we’re going to. And the same thing for goods that we use on a regular basis to produce those products. Now, that depends, too, on how long it takes to get those. So, for example, for slingshots, the lead time on these services we purchased or the parts we purchase, it’s fairly long in some cases. For other pieces like screws, it’s fairly short. So it may be that we order screws, you know, about the same time we send out slingshots for paint, because we can get screws in just a few days easily without expediting anything.
So this is kind of the thought process I’m having to go through to decide, you know, how we’re going to make all this work. And also it’s good, though, because now, all of sudden, I’ve got a framework, so I can use that framework to make buying decisions, and keeping those simple. So, now we have a simple process for deciding, you know, how many of something we should keep. It’s no longer a “gut-feel” thing or something where we have to wing it. Instead, we’ve actually applied a metric to that. And I think that’s part of the value of Lean is that now, all of a sudden, we’re using a simple tool, getting organized and, in this case, making sure that we have the inventory so we can get it to the customer quickly. But, also, at the same time, conserving our resources so we’re not stocking too much inventory. And having a simple system means a couple of things. One thing is that it’s something that can be taught, not something that’s a gut-feel or something somebody high up has to make a decision. Instead, by using a simple process we can give someone the authority to make a purchasing decision without having to go through some sort of process or get as much approval. And I think that’s one of the values of Lean is now, all of a sudden, you can scale a lot easier; as the company grows, you have a simple process and your associates or employees, contributors, what have you – can learn that simple process. You can audit that process because it’s simple; it’s not a gut-feel thing or it’s not some guy in the corner that guesses what the seasonal demand will be. Instead you’re actually using simple math to solve what used to be a complex problem. And I think that’s great.
So this is kind of how I’m looking at developing our inventory control to function in more of a Lean way. It’s kind of cool. I’m excited because it’s a simple solution to something I thought would be a . . . before I thought, Hey, this is going to be a complex, computerized, we-need-to-have-some-sort-of-software-to-manage-this; but, no, I mean, we can do it with a card stuck in the back of a bin that gets collected when inventory reaches a certain level. And that’s kind of a wonderful thing to keep it simple.
Well, comments and suggestions and questions and thoughts are always welcome – Montie (M-O-N-T-I-E) at Montie (M-O-N-T-I-E) dot com. If you get a chance, visit our Montie Gear site. We make some kick-butt slingshots and some other cool products. And Montie Roland, signing off. Have a great day.
Designing and making products is something we really enjoy at Montie Gear. We serve you (our customers and our vendors) by pursuing manufacturing and operations excellence. What does “manufacturing and operations excellence” mean? Operations excellence means that you receive exactly the product you want quickly. It also means that our vendors get paid on time. When this happens it is a win-win-win for you, Montie Gear contributors, and our vendors. Lean is all about continuously working to eliminate the 7 wastes
Non-hunters reading this blog may not realize that preparation for deer hunting season is almost a year round endeavor. These pictures were taken in March when we were planting a deer food plot. The plot includes
sunflowers with high protein content seeds
Imperial Whitetail Clover™ from Whitetail Research Institute
Patch #1 (roughly rectangular) – consisting of soybeans and Imperial Whitetail Clover – The soybeans grew faster and taller than the clover, helping to discourage the deer from eating the clover until the clover could get established.
Patch #2 (thin strips around the campsite and up the hill) – consists of sunflowers, sugar beets, white / red clover, and soybeans
Patch #3 (small patch across the road from the main plot) – deer vetch and white / red clover – Vetch can be invasive in some locations, so this was a test area that where we can apply Roundup™ as needed.
Look to future blog posts showing off the results.
Can you get so Lean (Lean Manufacturing) that you get lost in the process? You bet you can.
Lets talk about the Kano model. The Kano model helps you to organize your product development and management efforts between basic expectations, performance enhancements and delightful additions to your product. Understanding the difference and applying this model to your product management and design management ultimately serves as a reminder to not forget the joy of creating delightful products that please your customers is great ways. Don’t end up getting lost in the process and forget to delight your customers.
Forget about designing from a clean sheet of paper. It can’t happen. The designer himself prevents brings a tapestry of experience, skills and preconceptions with him. Embrace that diversity and create better designs, even when you are starting from scratch. Once you understand you, then you can think on a broader scale and truly innovate on your next project!
This is a podcast I originally created in 2012.
Audio File Transcript: Who Are You and What Does that Mean
Hello. My name is Montie Roland. And I’m with Montie Design in Morrisville, North Carolina. I wanted to spend a few minutes with you this morning talking about who are you and how does your skillset, your drive, your . . . how you go about creating new product concepts or new product ideas; how does that fit into everything.
We all have our own desires, drives and I want to kind of go through it and talk about it. And maybe learn a little bit about each other as we go through it.
I’m the president of Montie Design and also the president Montie Gear in Morrisville, North Carolina. Montie Design is a product development firm. And we develop products for you. And we fill in gaps. Sometimes it’s a small project; sometimes it’s a large one. And what we do is fill in those gaps in your engineering or your industrial design or your prototyping department; fill in those gaps to help get your product to market.
Montie Gear is a company that provides outdoor shooting equipment, and slingshots and fun stuff. Montie Gear was founded about four years ago as one of those things we decided as an institutional learning tool. And we decided that we wanted to design some of our own products, not just everybody else’s. So we did a couple and then said, well, what would it be like to sell them? How do we sell products without spending a lot of money on advertising? So, we put them on our website, Montie Design website, and then we also came up with the idea – thanks to Carl – of doing a lot of test and evaluation units. And over the years that test and evaluation unit approach has even rolled into a service we now call Social Reviews. And so, I don’t want to spend all day talking about that. Something we’re proud of. Montie Gear line has grown from zero to over a hundred thousand dollars in sales in about four years with very little advertising. So we’re very proud of that and we’re proud of the products we sell.
So it gives us a little different perspective on the product development process. So, not only do we develop products, we also are responsible for some of those products for selling, and manufacturing them. And that’s also kind of spilled over in that we’re now doing that for two clients where we’re providing the backend services – they sell them, and we ship them. We make sure they’re manufactured, that they’re packaged, they’re QC’d and then the customer’s happy.
And so, first question, our first thought is I want to throw out the thought of, you know, who is Montie? Who am I? If I’m going to tell you how other people are, I’m thinking maybe I should go ahead and kind of do a little analysis on myself. Now, Montie Design designs products for a wide variety of situations – manufacturing approaches. We have products that we design – they’re going to go straight overseas. We have products that we design and we get to a certain point and we turn them loose to an ODM somewhere the other end of the Internet and they take it from there; and we read about it in a magazine. We other products we’re more intimately involved with throughout the whole lifecycle. But, you know, it comes down to the “Who’s Montie” and how I think. I think the best example is to maybe watch what I do and not what I say in this case and look at Montie Gear.
With Montie Gear we’ve come at it from the standpoint of we want to have a high quality product that’s what we call heirloom quality-Toublesome Gap tough. Which means a very robust product that’s going to perform well in the field and it’s going to be the kind of product that you want to give to your grandkids because it’s that lasting and hopefully timeless.
So, right there, you kind of have to ask, well, how many of those products are high-volume. And the answer is very few. So we have mainly products that are low-volume, low-capital requirements – and by low-capital requirements, we haven’t built a lot of tooling; we haven’t spent a lot of money to get the products to market. Now the trade-off with that, of course, is the products cost more to manufacture, so you have a higher quality product, higher cost of goods sold, but at the same time that fits in with the Montie Gear approach where what we want to have is this heirloom quality, made local, products.
So, when I go to create a product for Montie Gear, or work with someone on our team that does, or work with an intern or what have you, we’re definitely in the mode of Let’s-get-something-out-there-fairly-fast, without spending a lot of capital investment; without a lot of investment. So, we want to design it, have it work well, but not rely on the fact that we’re going to injection mold it to get the price down or what have you; die cast it, and have to sell gazillions instead. We’re going to plan to sell handfuls at a time. So, in this case, my natural instinct is to rely on local manufacturers for Montie Gear, and to work with those local manufacturers closely to have a higher quality product sold at lower volumes – higher cost, but at the same time the higher quality and also that emotional appeal of having a product that the down the street made (which I think is having more and more value in our society). At the same time, if we’re going to have a higher-end product, we need to provide a higher level of customer service as well. So what we want to do there is to treat that customer well and make sure that we meet their needs on a timely basis.
So if we take that a little farther and look at it in a broad perspective, there’s several different kinds of companies. One company is a company that’s service excellence. They may not be terribly innovative, but you get the same service every time. A great example of this is McDonald’s. You know what you’re going to get no matter where in the United States you go; and to a certain extent, you’ve got a good idea of what you’ll get no matter where in the world you go. So, their goal is to bring you a reliable product at a reliable price, and get it to you quickly and have no surprises. So, it’s a safe bet. You stop and eat at McDonald’s, you know exactly what you’re going to get. That’s not a terribly innovative company at this point. It may have been innovative early on by driving the concept of fast food and so forth. But at this point, it’s a mature company and they don’t do a lot of innovations. They do little tweaks here and there. And they definitely don’t create a lot of new intellectual property; at least, that goes into their products. Most of the intellectual property goes into logistics, service.
So let’s look at other companies that have to innovate. So, kind of break it down into two different types. One is a product excellence company. So a product excellence company is a company where you know that you’re going to get the finest product you can get. You’re going to get a high quality product; you’re going to get service to go with it. So, the whole experience is excellent. They may or may not be innovative, but at the same time, you’re going to get this high quality, high satisfaction product. A good example is that you may go buy a ring for your wife (or your husband); and that ring hasn’t really changed a whole lot. You got a little filigree here and its silver instead of gold, but for the most part, your expectations is very high level of quality. Not a lot of innovation in that industry, I would argue, for the most part. There’s some artistic work but not a lot of what I describe as true innovation. And then another example is a company that’s very innovative, or it could also be very inventive, where they create new intellectual property. And so, in either situation that organization is relying on either innovating or inventing to drive their products ahead of their competitors. And that’s a very important part of the whole ecosystem as well. And that’s the ones a lot of times we tend to really want to get behind. And everybody just wants to always tell the example of Apple, but they’ve come up with some really great products by often by innovating and inventing. And so they’re an example of a company where they try to stay ahead of the curve. And a good example of that is if they don’t, they’re products don’t always compete as well because of cost. So, they want to have this innovative customer experience, these innovative products; but as those products age, there are a lot of times that “me, too” products are a lot more attractive. A good example of that is the iPhone is now starting to be displaced by other smartphones, where at first they were “me, too” – for example, Samsung, HTC – but now they’re starting to actually have some innovation and some invention in what they do. And so they’re competing very well. And if you look at the iPhone 5 versus the latest HTC or the latest Samsung, there’s starting to be a technology gap, which in this case isn’t in Apple’s favor because they really relied on having this amazing edge in the marketplace. Now, they also have a lot of other things going for them, but in the realm of phones, that edge is absolutely critical to maintain their market share.
This also applies to smaller organizations. I like going to the Apex farmers’ market. And there are several folks there that cook different types of items. So, one example is there’s a lady there that makes pies and she makes muffins and so all the recipes she’s using are pretty old school. There’s not a lot of innovation. So, what she’s bringing to her product is quality; its handmade from scratch; these very desirable elements, but there’s not a lot invention or innovation that goes into that. So, if you look at this in the context of the three categories I described earlier, she’s in the service excellence category, or product excellence. So, she’s using her time buying some materials and turning that into a product. Now, in no way am I denigrating that as a model for business. There are a lot of very successful businesses that do that. Think about how many large cookie companies there are. And so, it’s a very valid way of doing business. I think the important thing is that if you’re in that type of business, it’s often handy to understand what your model is to help you make future decisions and current decisions.
So a lot of the folks that we buy stuff from that make pies and pastries at the farmers’ market, there’s just not a lot of innovation there. So, they want to provide a high quality product; they want to provide a friendly face; and it tastes good. You like the fact that the person you’re talking to made it yesterday or this morning, put their time and love into it. And so that’s a good way to look at that. The other categories you find in different places. So, for example, if you’re an inventor, then generally when someone considers themselves to be an inventor, or we consider them to be an inventor as an organization, they have an interest in creating intellectual property, and then selling the concept. So, they’re truly inventing. So, in this case, they’re viability as a service provider (or as a vendor) to someone is their ability to innovate. So, they fall in that last category because if they come up with a concept that’s already out there and it’s a “me, too”, as an inventory they really haven’t invented anything. When you look at entrepreneurs, the entrepreneur – and I want to define the inventor as someone who invents for the sake of invention-to-license later – an entrepreneur is someone who builds a company and an infrastructure that is designed around selling a product; manufacturing and selling it. It’s an important distinction.
So when the entrepreneur does this, the entrepreneur may be making pies to sell at the flea market; may be making cupcakes; and in the last few years there’s been this huge amount of cupcake industry forming. It’s really amazing how many cupcake companies there are. These companies that make cupcakes make some amazing cupcakes sometimes. So you can go and get a cupcake at the grocery for $2.50; or you can go to a specialty store – you might get a $20.00 cupcake. Yes, a $20.00 cupcake. So, could a cupcake company kind of fall into these categories? Well, yes. A cupcake company could be a matter of picking twelve existing cupcake designs, styles, and then making those. And in that case, their appeal is service. They’re providing a product that’s based upon their labor. So it’s not a real inventive product in that case. But there are also cupcake manufacturers and cupcake stylists that provide cupcakes that are very different. And they’ll actually do research into different ways that they can do this. Or maybe come up with their own. So, there may be a new style of icing or a new style of . . . packaging. You know, what can they do different that sets them apart? Now, the question to ask is – Are you selling cupcakes because you have something that’s truly original? It’s a, I don’t know, vacuum-puffed cupcake that no one else can do. And you’ve got this trade secret on how to make vacuum-puffed cupcakes. Or, are you selling products that are just based on your hard work and love? And usually there’s a mixture of the two. But, so, it’s important to understand how your business thrives based on where you are in these models. Because then, all of a sudden, you can make better decisions about how much time and resources and money you should put into these different activities. So if having inventive cupcakes doesn’t drive sales, then maybe you’re putting too much effort into inventing those crazy, new technology cupcakes. If the fact that you sell these crazy vacuum-puffed cupcakes is what is driving your new sales (or your existing sales) in a big way, if that’s what’s driving your growth, then maybe you need to put more effort into the crazy ones.
And so it goes a little beyond just the matter of the accounting; saying this cupcake sold this many, this cupcake sold this many. I think it also goes into the strategic planning. So I think it’s important to plan your strategy around what type of company you are. And so understanding these distinctions and where you fall, and how where you fall helps your business grow, is very, very important. This type of strategic planning and understanding is important at the Fortune 500 level; its important at the small business level. Because it important for anyone in a small business to make sure that you’re always, always – always – making good use of your resources. And understanding, you know, your place in the process of developing new products; or not developing new products helps you make the best decision to maximize your return on investment. Which is critical because it’s a small business; it’s tough enough to survive even if you’re making good decisions. So, making better decisions may be a different between subsistence and true growth and just kick-butt kind of company. And I think how you go about product development, or don’t, is an important part of that and can help you dramatically.
I hope this podcast is helpful. This is a tough subject to sometimes kind of articulate through and work through and walk through with you. So I hope it was helpful. Understanding your spot in your strategic model and what the strategic value of your . . . or what the value proposition of your company is, is something that can really help.
Let me know if you have any questions. Montie Roland, Montie Design. (M-O-N-T-I-E)@montie(M-O-N-T-I-E) .com. Visit us on the website – (M-O-N-T-I-E)@montie(M-O-N-T-I-E) .com. There’s a handy little chat tool and you can click on it and get immediate help. Either way, it’d be great to hear from you. And have a great day. Montie Roland, out.
Join me and talk about the first steps in considering how Montie Gear could go Lean.
Normally, when you think about Lean Manufacturing it is in the context of a large manufacturer. Can a micro manufacturer go Lean? Six Sigma? Lets talk about it.
Comments welcome at firstname.lastname@example.org
Here is the transcription from the podcast……………………………………………..
Audio file: 2015 May 17 – Lean Thoughts 2 – Lean at Montie Gear – Can it be done.mp3
Time transcribed: 17:58 minutes
Hi. My name is Montie Roland. I’m with Montie Gear in Apex, North Carolina.
I want to spend a few minutes having a chat and a little bit of dialogue, and talk about the first steps towards implementing lean at Montie Gear.
So, I’ve been on this journey of learning lean. And, what does it mean? You know, what does it really mean? Not just, you know, overarching concept, but how do you make it work? You know, and how does combine work? How does, you know, work site visits work? How do MDI boards work? So, there’s all these things, these tools that lean uses to monitor your process and communicate to everyone.
So, now the trick is how to implement that in a very, very, small, micro-manufacturing environment. I’m going to make the argument that a lot of the tools in lean are going to apply even to a micro-manufacturer. And, at first, you sit there and say, “Well, yeah, if I want to tell John something, I’m going to lean across the table and tell him. I mean, there’s only three of us” – blah-blah-blah. Okay, so, I still think that there’s a place for lean within the organization because it helps you monitor your process. And in a small company, monitoring the process often doesn’t happen, because you assume it’s not worth it; you don’t have the manpower; you’re too busy putting out today’s fire; or just barely getting stuff out the door; keeping things resourced efficient. But, I think there’s more to it than that. So, one of the things that we want to do with lean is we want to optimize for flow first, and optimize for resource efficiency second. So, optimizing for flow means we want to get stuff out the door; optimizing as quickly as possible to the customer. So we want to add that value as quickly as possible. Whereas optimizing for resources means we want to do it as cost-effectively as possible. Well, the problem with putting too much of an emphasis on optimizing for resources is that it’s easy to create silos where people are thinking, Wow, I’m doing a great job. I’m cost efficient. But, then, what they’re doing isn’t necessarily getting the product out the door to the customer as quickly as possible, which interferes with cash flow. Because the quicker it gets to the customer, the quicker the cash flow happens, and the happier the customer, or more satisfied.
So, one of the things that we were already doing (and I didn’t realize how it already really fit into lean until after we started learning all this) is that . . . two things. One is that we were already doing single piece flow. So, in lean, lean’s going to most likely push you to single piece flow. So, single piece flow means that you build your products in a continuous manner down the line. So, in the past, you might have had facilities where someone with, let’s say, building a rifle – they’d make two-hundred-and-fifty barrels. And then everybody would go and they’d make two-hundred-and-fifty triggers. Then they’d go and make two-hundred-and-fifty stocks. So, what happens is that you’re putting all this in inventory while you’re finishing. This is kind of an extreme example. But with single piece flow, once we start the process of making a product, then it goes all the way through the process as quickly as possible. So, instead of having ten people making one part, we’re going to have ten people doing ten steps to make that part. So, now the advantage is that we have less inventory, and once we start making a product it goes through the line fairly quickly. So, if we were making all the pieces in a batch mode, then it takes a while when there’s a customer order for you to fill that order. Now, so, really quickly, there’s two ways that pull works. One is that you build to a certain level of inventory based upon your expected sales over a given period, and you maintain that inventory. So when that inventory is depleted, then there is a call to make more inventory, there’s an authorization to make more inventory, and that authorization results in the manufacturing floor making those parts to bring that level back up to that inventory level. The other way to do that would be you made-to-order, so you got an order for fifty, so now you make fifty. So, what we want to do is get that order through and out the door as quick as we can.
So, when we think about a slingshot and put it in that prism, a slingshot is a combination of batch and single piece flow manufacturing. For example, we’re not at a quantity level, where we make enough parts so that we paint every day. So as a result, we will make, for example, a bunch of slingshot frames, and then those will get cut at a vendor’s location. And they want to cut a minimum. You know, there’s work in setting it up, running it. And so they want to sell us a minimum of slingshots in a batch, otherwise it’s not cost effective to make them. So, there’s a batch of slingshots that’s cut on the waterjet, and then they go to paint as a batch. Now, and currently, we have two different processes that now I need to start rethinking now that I’m learning more about lean. One is that we’ll get the slingshots back; they go to the machine shop. Now, one of the things we haven’t invested in is specialized equipment to just drill the slingshot holes. So, they go to the machine shop in a batch and the holes get drilled in the slingshot frame. They come back to us and then we put the heli-coils in, and then they go out to be wrapped. So, so far, we’re not doing single piece flow; we’re doing small batches. But that’s driven by the fact we have to do it out-of-house, and it’s just not economical to do that as single piece flow – yet (the painting and the cutting). So, then what we do is those slingshots go to two places. Part of them go to the mountains, because we have capabilities there, and we anticipate inventory, we build to inventory, so probably two-thirds of them go to the mountains, get wrapped there. A third of them stay here. And the reason why we keep those here is to accommodate for anywhere that someone has a custom paracord color we want (because we wrap the handles with paracord), and it’s easy to do a color change. Or, we missed on our projections. So now this is a little bit of a challenge because now I end up, when they come back from the mountains after they get wrapped, so maybe two-thirds of my slingshots have already been wrapped in specific. And so those colors, it may be a third woodland camo, a third desert camo, a third black. So, now what I’ve got is I have frames that have paracord on them with heli-coils in them, and they’re ready for final assembly. So, generally, what we do is at this point we switch over and go to single piece flow. So, what I want to do is kind of put a bookmark here in our conversation, so we’re going to come back to this point.
So this is happening; our website, you know, our main customer contact point. And so folks are visiting the website and placing orders. So if you visit the Montie Gear website and you place an order, that order gets recorded on our website. And then, usually three times a week – Monday evening, Wednesday evening and Saturday, I’ll go and I’ll download new orders. So, when I download the orders, so I download it into a piece of middle-ware called T-HUB. T-HUB brings up a visual dashboard that shows me what has been paid for, what hasn’t been paid for, what has been shipped, what hasn’t been shipped, and what has been transferred to QuickBooks. And so I take this and I use T-HUB to print out a sales receipt. So I take those sales receipts and then we have a table. And so each sales receipt sits on that table and becomes the routing sheet for the order. What I didn’t realize in doing all this was I was already taking somewhat of a step towards a combine by how we set this up. So those sheets sit on the table. When Lars comes in, he instantly has a visual indicator of what needs to be built. Now, he can also go back to T-HUB and look it up. A lot of times, though, he doesn’t need to because I have already printed them out so he can take a look at it, and instantly know what he needs to build. So, this is a great way we’re communicating; so everybody knows how many orders we have that are unfulfilled. Now, kind of a next step on that would be to track days until shipment. So this is kind of one of the things that we need to do, is to track how long it’s been since the shipment.
Now another thing we need to do is automate the receipt of orders coming from Amazon. Right now, we don’t (and from eBay); right now we process those manually; so that’s a step. Once we get all that going through T-HUB, then we’ll have that computer visualization of, you know, what’s shipped and what hasn’t and what’s been paid for. And then we’ll also the table with a slip and a space for every order. So, as the order gets fulfilled, it gets passed to the next step. So Lars does single piece flow on the assembly – for example, the slingshot. Some products we build to inventory. Does single piece flow on the slingshot, puts it in a box, sets it for on the next table, where, when I come in then I take that box and ship it. Now, the beauty of it here is that we’re using this dashboard and we’re using the presence of this sheet of paper to show us, you know, so in an instant I know how packages I generally have to ship, because its sitting right there. So it’s very quick. Now, then what happens, I take that . . . after its shipped, I take that sales receipt and it goes into the “shipped sales receipt” or “done” pile. And then that gets filed away. And then, of course, the process of shipping it also means that T-HUB records it as being shipped. So, in this way, that’s a nice streamlined way of doing that. What we need to do to be more lean is to track, for example, number of days until shipment; you know, what was the reason why we didn’t ship on a day. So if Lars comes in, I need to track failures; you know, what we were missing, and then track how long it took to rectify that, who’s responsible. So maybe we don’t have a part or are missing some screws. So if we track that and find out that, Wow, we had seventy-seven times we were out of screws, and that held us up from shipping, then we need to keep more screws on hand; or we need to have a better way of monitoring that. So, at some point, what we need to do is actually to track our inventory so that there’s a card, so we can visualize, you know, what’s our safety inventory, what’s our normal consumption, so that when someone goes into the supermarket – which is where we store our parts that are ready to either for final assembly or to ship – when they go in that supermarket, then there’s an easy way to see what we’re low on. So that’s another aspect of lean that’s very common, is that you monitor that visually.
So, at this point, one of the things I’m starting to go after is to say, Okay, how do we monitor our process in a way that I can maintain (or everybody can help maintain), that’s not painfully expensive to monitor, but also lets everybody know where we are, how we’re doing, and gives us information for continuous improvement. So, that’s kind of the next step is to think that through; you know, is it a board? How do we track these things? And so, I’m open to suggestions. Anybody that wants to come by, make some suggestions on how to track this. You know, between X-Cart and T-HUB and QuickBooks, you know, what can we use to have a continuous monitoring of our process so that we can improve that; use our resources more wisely; and, you know, maximize our through-put flow-wise.
So, I hope this gives you a little insight into where we are now and kind of thinking and the process. It’s definitely a big challenge. A lot of these things, you’ve got to change at a very root level of how you do business and how you spend your day. It’s not just a matter of adding on a piece of software. A lot of times it’s a matter of just physically changing how you conduct your business. And that’s one of the tough things about lean, is that it’s a culture change. It’s not just something you throw over the top that adds a burden. If you do that, if all you do is just bolt it onto the top, you never really get a lot of benefit. You’ll never follow it. With lean, you’ve got to dig in and make a real in-depth change.
So, I hope this was a good talk for everybody. I appreciate you listening. Please don’t hesitate to send me an email. Come by the shop and you can see where we are in our lean transformation. And have a great day. Bye-bye.
10 years ago, the push was to go paperless. Is paperless too much of a good thing?
Data in your computer is passive. Yes you can manipulate it, share, mine it but you have to go ask for it. Why not make data active?
Lean Manufacturing techniques include tools to make your data active but getting it out in from of your employees and managers on daily basis. Put that data in front of your team an understandable and actionable format where it does the most good, i.e. right in front of them.
Lets explore the various facets of active vs. passive data. Comments and suggestions are welcome here or at email@example.com
Here is the transcription from the podcast………………………………………………..
Audio file: 2015 May 17 – Lean Thoughts 1 – Active vs. Passive Data.mp3
Time transcribed: 12:29 minutes
Hi. My name is Montie Roland. I’m with Montie Gear in Apex, North Carolina.
What I wanted to do is to share some thoughts with you today and have at least a one-way dialogue – it could become two, if you email me – about the difference between passive and active information. So I’d like to spend a few minutes talking about that. And maybe define it and have some examples.
One of the things that’s happened over the past twenty years is that we’ve had this head-long rush to get everything on the computer. So, we assumed that getting it on the computer is more efficient; is more cost-effective; is safer because you can back it up. And so we’ve created database after database after database. And one of the joys and the beauties of – and potentially harm – of doing this is that everybody can have access to information, without having to go down the hallway and grab something from a file cabinet. Now, of course, the horror is that can be hacked. Someone can get into that from across the world. Whereas, a file cabinet, you’ve got to physically be there to get into it. Now, a file cabinet can be broken into as well, but someone on the other side of the globe isn’t going to be able to do that without visiting here. So, we’ve created this electronic database that contains what we do. And the beauty of it is that everyone in your company can sit down, and if they have the right software and they have the access, they can read that data. The problem is that they have to go read it; they have to go look for it. So I’m going to call that passive data. Now, active data is data that’s right up in your face. And for those of y’all that are family with lean, you’re going to start going “Oh-ho, this is exactly where he is headed” because with lean the goal is to use vertical surfaces as . . . well, I shouldn’t say the goal. Lean is going use boards, charts and effectively, use your vertical surfaces as a way that in an instant you can look at a chart, and have an idea of that particular part of your business and what’s happening in there. And so in lean, there’s a lot of different charts and you chart different areas. And so the idea being that in seconds you can know what’s going on. So, let’s throw out an example. So, one example would be if I have a database of a soccer game. And what I’ve done is, through the magic of the computer and a vision system, I’ve tracked where the ball is, where the people are, what their speeds are, how fast they’re moving, how fast the ball is moving, how . . . blah-blah-blah. So, I have this giant database of excruciating detail regarding the performance of every player on the field. And somewhere in there I have the fact there was a goal scored at this point – point-oh-oh . . . twenty-seven minutes, three seconds and two milliseconds, the ball entered the net. So, if I want to know what’s happening in the soccer game, now I’ve got to have a way to visualize all that data. So, I’ve got to go to the computer; I’ve got to use my visualization tool; I’ve got do all this stuff. But the beauty of it is if I want to know what that player’s performance is, or that team’s performance is, I can do that ad infinitum. Now, let’s make a contrasting example. So, I’ve got the computer database with all this wonderful information. And then the contrasting example is I go to the game. So at the game, there’s several key elements involved – there are players on the field; there’s a ball; from where I’m sitting, I can see the ball. There’s two goals, there’s two goalies (or a football, for our European listeners). And so, I’m in the stadium. I can see the scoreboard. The scoreboard gives me a few pieces of information – what’s the score, what’s the time remaining in the half, what’s the, you know, which half are we in. And so, those pieces of information are there. I can see the ball moving. I can see the ball going in the net. Well, maybe I’m not sure. Did it miss the net? Or did it go in the net? Oh, I look at the scoreboard – boom! So, by going to a soccer game, I can instantly know what’s going on from anywhere in the stadium. So the beauty of it is that I don’t have to have a visualization tool; I don’t have to bring out my computer – it’s all right there, between the scoreboard with an absolute minimum of information (but the right information) – and – watching it unfold on the field, I always know what’s going on just by a glance. Whereas if I monitor this on the computer with this huge amount of data, I have to go to the computer; I’d have to figure out to get what I want and so forth. Now, I think it is important to, you know, throw out there, that you can have a visual board on the computer. I’m going to make the argument that the difference between something you printed this morning and what’s on the computer, effectively if the data is current, it doesn’t matter. And the beauty of printing it on the wall is that someone can walk by and in an instant and see it. And you’ve got a lot more wall space than you have monitor space.
So, yes, there are lean set-ups where people put their display, their information, on monitors. Now, that means you’ve got to bring that information into that display. Maybe it’s automatically from other systems. But the idea is that active information is something that you can glance at and get an answer. You may be glancing at a giant monitor; you may be glancing at a color print-out or a black-and-white print-out that’s hanging on the wall when you walk in the building. But one of the things you see with lean – and lean being, you know, the popular name for the Toyota manufacturing system, is you see active information that’s organized and updated, and that active information lets you know what’s going on. And is a way of communicating what’s going on in an instant because you look at a chart, you know what to look for, you see the colors, you see the ways that everything’s laid out. So now, in an instant, you’ve been updated. Which is a great way to communicate.
So, the opposite of that is passive information, where you’ve got to go to the computer, sit down, look it up on a spreadsheet or look it up here, or do what have you. And so, I’m going to make the argument that where you can use active information, you’re in a much better position because someone doesn’t have to spend the time to go look it up; and also, someone can walk in, know what they have to do, have a constant reminder of where they are and what they’ve got to do; how things are going – because it’s right there and that information’s available. That helps everyone in your organization make better decisions because they’ve got the information they need, and it’s timely and they can make decisions that are timely. And every day every employee makes thousands of decisions. So if you leave them in the dark, they’re guessing at what’s best for the company. If you inform them, give them a structure, educate them, and, you know, lay this all out, now, all of a sudden, those thousands of decisions can be decisions that are the best, the ideal ones, that help get the product out the door quicker with high quality and conserving resources.
So, that’s why I think understanding the difference between active and passive information’s important. And then, also, putting that understanding to use in terms of getting that information to everyone. Now from a Montie Gear perspective. So one of the things that I’ve been thinking about as I’ve been taking my journey into lean is how to implement that in a small company. So, maybe that’s a discussion for another time. But I hope that this has been a good bit of information for you. Give you a little better understanding of that difference between active and passive information, and why it can be so valuable to give your employees the information they need to make those good decisions all day long, every day. Because they’ve got the information they need and then they can act on it.
Join me as I chronicle my journey into lean manufacturing! This is part 1 of the series. Comments and suggestions are always welcome at firstname.lastname@example.org.
Here is the transcript from the podcast……………………………………
Audio file: 2015 May 17 – Lean Thoughts 0.mp3
Time transcribed: 15:50 minutes
Hello. My name is Montie Roland. And I’m with Montie Gear in Apex, North Carolina. Today, I’d like to spend a few minutes and talk about my journey into Lean, and what I’ve learned in the past few months.
So, let’s back up and let’s talk about, you know, what is lean? Lean is a popular name for the Toyota manufacturing system. Toyota has spent a lot of effort and time and intellectual capital in developing a state-of-the-art way to make cars. The Toyota manufacturing system is the model for the rest of the world. When you hear someone in business talk about that their company is lean, or they’re going lean or what have you, it’s about putting into practice that basically leaner, a version of the Toyota manufacturing system.
Toyota has a really, really, really well-thought-out way of making cars. And this applies to other segments of their business as well, not just manufacturing. It applies to their . . . to their dealerships; it applies to other areas that are ancillary to their manufacturing of their cars. They’ve got to sell them; they’ve got to service them. And so, as I understand it, the principals of lean and the application of lean has been put in place by Toyota throughout their entire system (as far as I know). I know that dealerships put it in place. They definitely put it in place on the manufacturing. And so, it’s important to have an understanding of what “lean” is.
So one of the guidelines behind lean is that you want to optimize your process. Now, a lot of times when you’re talking to someone about lean, first thing they say is, “Well, lean is about reducing waste.” And so, when someone says that and looks at you, you should say, “No! It’s not. It’s a by-product of lean, is reducing waste.” And you get a . . . sometime they’ll maybe tilt their head, look at you, and go, “Well, no. This is . . . in lean, we reduce waste.” So, I want to make the argument that in lean you’ve got two directions that you can do optimization; two main directions – you can always optimize, you know, a lot of different ways. But, there are two main directions that you can optimize for. One is that you can optimize for resources. So that means that you can try to keep everybody busy; you can try to make the best use of space; make the best use of materials; make the best use of personnel; keep your per-unit cost low. And that’s a good thing. However, the challenge with that is that you end up inevitably, by optimizing for resources, you end up developing silos. And by a silo, what I’m talking about is that if you’re, let’s say, the person that assemblies widgets; then, your pay and your bonuses may be directly driven by how many widgets you build. Well, and that’s fine until the point where the person who takes your widgets and ships them can’t keep up. At that point, you may be making widgets, but they don’t have the capacity to ship; or maybe the capacity to sell. So at this point, you’ve got an incentive to continue making widgets because if you’re not making widgets, well, you’re efficiency goes down. And when that efficiency goes down, your incentive goes down. So, now we have a problem because you can imagine that even if it’s not this severe of an example, every group is going to be evaluated based on that group’s performance. Well, when you do that, that’s great; what you’ve got to watch out for, though, is does that group’s performance help the company as a whole. And so they may be amazingly efficient – but – something they’re doing is the part of being so efficient may make someone else inefficient. At that point – mmm, maybe you’re not doing the right thing.
So, this is a natural outcome of building silos and optimizing for resources. So in lean you’ve got to do more than just optimize for resources. What you’ve got to do is you’ve got to optimize for flow. So when you optimize for flow, you have to establish communication between groups. Now, you may have a corporate culture that is absolutely wonderful, where people, you know, talk; they communicate. And everything is wonderful. But a lot of times you have a lot of communication within your group (whatever that group is – manufacturing, shipping) but a lot of times you don’t have communications, let’s say, with accounting. So, if want to optimize for flow, you’ve got to communicate. And that’s the first challenge. And that’s one of the things that lean really tries to address is that communication.
So, let’s talk about optimizing for flow. And what does that mean? Well, when I optimize for flow, I want to optimize for the speed at which I’m adding customer value. What that means is that when I get an order, I want to get that order in this customer’s hands as quickly as possible. Because when I get it in their hands as quickly as possible, then the customer is happier; more delighted or more satisfied. And also, I get paid quicker. So, I don’t have money sitting around in inventory or work-in-progress or what have you. So, lean is all about a customer pull. So, you know, the customer’s making an order – or – we’re filling to maintain an inventory – either one – but we’re going to refill that inventory after its depleted, so you want to refill it as quickly as possible. Or we want to ship as quickly as possible, depending on how the expectations of your customer are and how your industry works.
So what we want to do is we want to get that product made as quick as we can, get it out the door, get it to a customer, and, of course, that being a high-quality product that we made in somewhat an efficient way. So, now you can see what’s at odds is that the most efficient way when it comes to resources may not be the quickest. Now, I want to point out an example. Let’s say that we have four people making slingshots. And let’s say each slingshot takes a month to make (for one person). But let’s say that four people can make a slingshot in five-point-two days. So in this case, if I have four people working on a slingshot at once, there’s some inefficiency because four people have to work together, shared resources, what have you. But, I’ve got the capability to make one slingshot at a time, instead of four at once. And so, the trade-off is that if I look at the folks that make those slingshots and I say “You get paid by how many slingshots you make a month”, then they’re going to say “Well, I’ll make slightly more if we work on them separately”. But then, the trade-off is that it takes a month for one person to make a slingshot. Now, let’s say that I have four people making slingshots and it takes one-point . . . one week and an extra four days, or one month and four extra days to make four slingshots, but I do them sequentially. So, now I’m kicking out a slingshot at just over a week; so a little bit over every week I’m getting a slingshot out the door. Little less efficient – but – now all of a sudden I’m getting it to my customer quicker; I’m getting paid faster. So when you think about, you know, work-in-progress and inventory, that works out well. But it’s not quite as efficient. So if I organize for efficiency, then everybody’s going to want to make one slingshot per person. Or, excuse me, for resource efficiency, everybody’s going to want to make one slingshot per person. If I say I want to get these out as quick as I can, then I’m going to have all four people working on that slingshot, kick that slingshot out; now, I’m shipping a slingshot in a little over a week. So every week, almost, I’m kicking a slingshot out the door. And so this is one of the conflicts that built into lean. So, we want to be efficient and lean has a lot of tools to do that, but lean recognizes right off the bat that you can never be one hundred percent efficient because you also want to optimize for flow. If we’re a hundred percent efficient then the delivery time goes up because of multitasking, because waiting . . . it gets, you know, your deliver time goes up exponentially, not linearly, as you work on multiple things at once. A good example with our slingshots, is that let’s say that it takes a week to ship four slingshots. So now I’ve had four people working on slingshots for a month, and I’ve had . . . or I’ve had one person . . . or excuse, four people working on one slingshot at a time – well, now all of a sudden, if I had limited shipping capacity, then it’s important to not overburden that shipping capacity by forcing them to ship all four slingshots at once. Whereas, if I could spread that out, it may be that I have to have a fourth less people in shipping to ship slingshots, because I’m shipping one at a time, not four at a time.
This is definitely a very arbitrary example, but you kind of get the idea of this . . . dichotomy between optimizing for resources and optimizing for flow. And I think it’s a really important because if you consider lean just purely making your company more efficient then you really aren’t doing lean. You’re not. Lean is about monitoring your process. So, when we go to the next step here is that how do we optimize these things. Well, lean is not as much about the outcome as it is monitoring the process, and improving the process by everybody constantly improving. And so, when you think continuous improvement, you know, well, okay, that means people learn how to make widgets faster. No. Because at some point, a person’s going to sand a corner down only so fast; there’s no . . . that is going to peak, in a way. So instead what we want to do is monitor those processes so we know what’s happening. And so lean is all about monitoring the process, and by monitoring the process and educating the workforce and getting the workforce involved in monitoring, then all of a sudden, as a by-product, everybody’s making better decisions that improve productivity. So, I think that’s a really, really important part of that.
Well let me leave you with this for now. And I know I’ve kind of talked a little bit about lean, but it’s kind of a really neat way to run your business. It’s not a simple thing; it’s an all-encompassing thing. It’s not a couple of charts on the wall. It really is a way to run your business from stem to stern. Lean is not a partial change. It’s a culture change. Without the culture change, then the effectiveness of the lean efforts are dramatically reduced.
Well, Montie Roland, signing out. Have a great day. Bye-bye.
Audio File: 2014 Feb 12 – Cooling Electronic Enclosures.mp3
Audio Length: 14:12 minutes
Hello. My name is Montie Roland. I’m with Montie Design in Morrisville, North Carolina.
And today, I’d like to spend a few minutes talking about how to develop a strategy for cooling your electronics enclosure.
One of the products that we do a lot of design for is the electronics industry, but in a bunch of different facets. Because when you say electronic enclosure, that could be anything from a computer or related; it could personal electronics; it could be lab equipment; it could even be machinery or process. So, there’s electronic enclosures that go in a variety of locations, from factories to vehicles to aircraft to your pocket. And so it’s important to consider how you’re going to keep that device cool.
Over the past twenty years, we’ve grown to expect more and more from our boxes filled with electronics. And part of that’s because of our capacity to do more with those boxes has gone up dramatically. A good example would be, you know, in the nineties, phones were just that. Cell phones were phones. Before that, they were car phones, because they were physically mounted in your car. If you were born after 1980, you’ve probably never seen a car phone. Back then, car phones were expensive; they were expensive per minute; and they were boxes mounted in your car. Think it more as a radio with an operator. And then what happened was is we got bag phones. And bag phones were . . . well, they were about the size of a laptop, but about double the thickness or triple the thickness. So, you opened the bag, you pull the handset out, you dial. Those were big; they were clunky; all analog. And pretty soon we had handsets that didn’t need a bag. And then pretty soon we had smartphones. My wife will be the first one to tell you that I probably pay way too much attention to my smartphone and keep way on track of things. And the guys who’ve gone camping with me; I had a threat that my nice, new iPhone might meet a horrible death on Troublesome Gap if I didn’t put it in the truck and lock the truck.
So, having said that, we rely on these boxes to do a lot of stuff for us. But, as we rely on them to do more and more, we’re packaging more and more electronics in there and we’re getting them hotter and hotter. So, one of the things that’s a common application for Montie Design, as we design products for clients, is to come up with a strategy for cooling that box. Now, we see a variety of cooling needs. There are some enclosures that we just need to do some very basic things and manage the thermal load in a simple way. You know, we tie PCBs to the outer enclosure; use thermal materials. Then we have other enclosures where we have to vent those somehow. And then we have other ones where either it takes a lot of airflow to cool; or, it takes a lot of analysis to make sure that we can cool the box within whatever limitations we have. Maybe it’s a handheld device but there’s a lot of power coming out of it. So we’ve got to get that power out to the atmosphere, or that thermal energy out; keep the box cool but we also don’t want to burn somebody’s hand, or make it uncomfortable to use.
So, we’ve had a lot of cases like that, so we’ve had a good bit of experience in how to meet these thermal requirements and how to keep the electronics cool so they function efficiently – and function. And there’s a couple ways to go after that. One thing you can do is once we have a computer model, we can do what’s called CFD analysis – Computational Fluid Dynamics. And with that, we actually model the heat transfer in conduction; so, from one part to another, or through a part, that, across a joint – either, maybe its bolted; maybe there’s a thermal material like a gap pad or a cell pad; or, from the part to the air via convection; or forced convection where there’s a fan or some other driver that’s causing airflow across that face. So, CFD is great because we can actually tell you down to the chip level how hot or what the temperature is of every component in there. Now, we can also look at what are the effects of airflow; run analysis to figure out how much airflow we need; you know, model the effect of the fan; model the other effects; and give you really, really great results. The downside of CFD is that where . . . of course, we have to have a computer model to start with, but they’re fairly simple for CFD. So you can do that very early on in the design process. The downside is it’s an expensive process to set up. Now, if you’re designing a product that going to be mass-produced or a very high value product, or just a high value product, the cost of the CFD may be very palatable. If you’re designing a product that is lower volume or has extremely tight financial constraints, then that may or may not fit in there. It just depends. We can take a look at that and give you an estimate. And there’s some things that are easier to predict than others. Like, for example, we use CFD very effectively to model LED lights. In that case, you’ve got a small amount of elements; often, you’ve got a heat sink; not a lot of modeling we have to do between the chip and heat sink; usually it’s a short path. Not a lot of components and that helps. And so then we’ve managed to very cost effectively do it for that type of application. So it really depends on your application if it’s cost effective.
Now, the other option is to build your product, and then after you’ve built it, instrument it and see what the results are. For some projects, that’s a good idea. If you have a product where there’s not a lot of thermal energy – you’re not trying to dump a lot of heat into the environment – then, maybe it’s okay just to go ahead and build it. Especially if you have historical data and you’re not making a huge change from the previous product. So, in that case, it may be good to build it and then make some tweaks afterwards to the design to solve the problem. There are cases where you’re not sure. You think you may be okay, but you’re not sure. In that case we can run a CFD, or we can build a mock-up. And there’s cases where you know you have thermal problems. So, in that case, a lot of times we’ll end up doing a CFD and a mock-up. When you think about a mock-up, first thing to remember is that when it comes to thermal management, there are a lot of things that aren’t as critical for the thermal performance as they are for functional or esthetic reasons. And this applies to building a CAD model to do a CFD analysis on or a thermal analysis on, or it applies to your mock-up. So, there’s an appropriate level of detail in your mock-up so that you’re keeping the mock-up simple but you’re getting relevant data on what you’re thermal performance is. You know, how hot everything is getting. And so, generally, the rule of thumb is that you want to have much less detail in your mock-up than you have in your final product. And this is good because if you’re building a mock-up just for thermal testing, you want to keep the cost low, and a lot of times the best way to keep the cost low is to pull out features that you don’t need. So, you’ve dumbed down your prototype. Now, obviously, if you have production parts already then you should go ahead and use those. But if you don’t, a lot of times we’ll build a box, maybe out of Lexan™ or wood (and I’ll get back to the Lexan™ for a second when it’s important). And then you got this clear box. And now we can put fans or we can put chips; we can put heat sources in there, and then turn around and start measuring the performance of this, both from a thermal standpoint and from an airflow standpoint. For a lot of products nowadays, the airflow has become very important because you can’t cool it from natural convection alone. And this is one of the reasons that a lot of these enclosures end up being Lexan™ or some other Plexiglas or some other clear plastic. Because then we can introduce smoke and visually see what the airflow patterns are. This is especially helpful if you’ve done a CFD analysis, and you can compare the predicted airflow from the CFD analysis on the computer to what you’re actually seeing with your eyes based on the mock-up. Then you can correlate that to the computer analysis. And the beauty there is that now if we make a change to our computer model, we can rerun the analysis and see what the impact is without having to build another prototype; especially where you’re making an incremental change. And after we’ve taken and confirmed that our model’s correct, then you’ve got a lot of confidence that your CFD model matches the reality. Then it’s very . . . well, I won’t say very quick, but it’s very possible to start making changes in the computer model, rerun the analysis, and see what the result is.
I know I’m kind of hitting a lot at once here. But these two different tools – one is your physical mock-up; and the other is your computer model using CFD tools – are a great way to determine how your product’s going to perform. The challenge is to right-size your effort based on the need. And sometimes there’s an experience factor. Sometimes there’s a historical data factor that can be brought into effect. There again, if you’ve built similar products, you know what the thermal performance is, hopefully. We can use that data to determine how exhaustive an analysis we need to do. Sometimes we need to do a very exhaustive analysis; and other times, let’s put a fan and a heater in a box and see how warm it gets. And that’s a matter of just right-sizing. That’s something we can definitely help you with or happy to help you with. We offer that as part of our project services to do that analysis.
I hope this has been helpful today, talking about the different ways you can plan for your thermal analysis as part of your design project. If you have any questions, please don’t hesitate to give me a call – Montie Roland. 1-919-481-1845, or 1-800-722-7987. 800-722-7987. Email me – Montie (M-O-N-T-I-E ) @ Montie(M-O-N-T-I-E ) dot com. Or, visit the website – www.montie.com. Your comments, suggestions or questions or project opportunities for us are always welcome. We’d love to help you out with your next project. Or, maybe it’s just a lunchtime discussion on one of these topics. Have a great day. Montie Roland, president of Montie Designs, signing off.
Audio File: 2014 Feb 24 – Organic Growth vs Marketing.mp3
Audio Length: 15:19 minutes
Hello, my name is Montie Roland. I’m with Montie Design in Morrisville, North Carolina.
I wanted to see if we could spend a few minutes chatting about the role of organic growth in the growth-year product versus the role of marketing.
At Montie Design, we develop products for a variety of clients from electronics packaging of electronics and applications like high reliability rack mount applications, such as a data center, all the way down to wearable electronics. So we get to see a lot of different products go through.
We also have a mix of products in our portfolio which some are B-to-B (or business to business) products and the others are B-to-C (or business to consumer) products. The B-to-C portion of our portfolio has grown. And so that’s a something that originally didn’t push for. That’s kind of just the way that portfolio has changed over time as the opportunity mix changed. But, so, we also have a lot of products that we design and manufacture ourselves. And they’re called Montie Gear. So, the Montie Gear products are consumer products that we sell directly to outdoorsmen. And they may relate to slingshots; they may relate to camping equipment; shooting; or archery.
We have an approach to our marketing in Montie Gear that has changed over time. For the first four years, we relied almost exclusively on organic growth, and fueled that growth by using a test-and-evaluation program where we identified writers and bloggers and folks and we got products in their hands so they could write about it; make videos about it on YouTube, what have you.
So now what we’ve tried to do is to supplement that program with marketing and advertising. So, it’s very, very important to remember that, as far as it goes, bang for the buck, sending out a press release with some images and getting a magazine to write about that – there is no better bang for the buck, period. It’s just . . . it just works. Advertising is a long term commitment. You’ve got to stick with it. And you’ve got to tweak it. So not only are you paying for those ads, you’re also trying to develop some sort of metrics to gauge the response so that you can actually have those ads pay for themselves and give you a return on investment.
And by selecting good venues that apply to your product, you can definitely find that return on investment. But it takes a good bit of work.
There’s a failure on the part of a lot of organizations, especially small, to rely too heavily on the concept of “I’ve the greatest products in the world and people will beat down my door to it”. Even if you have the greatest product in the world, and people are beating on the door, you’re probably going to still have to put a lot into commercializing that product – getting it out in the market; getting it in a format the market will accept. If you have the greatest product in the world, you may have this very broad patent, but now in order to get someone to write you a check, you still need to have that product in a format or commercialized so that the customer will say I want X-number of units. And that takes a lot of work. There’s a common misconception in smaller companies that once we get it to a point, someone will just buy us and go on. And that does happen. It happens a good bit. You get your product to a point and at some point a company buys you and maybe you can go retire.
Now, the value of your concept and later product and later manufacturing goes up almost exponentially as you get farther along in the process. So the value of a concept is pretty close to zero. The value of a concept with a prototype and a patent goes up dramatically. And then the value of a concept plus a patent, plus manufacturing, plus sales – and brisk sales, growing sales – then all of a sudden, that takes another leap in value. So, what you want to do is figure out where you want to be on that curve. And it may be that you want to be in it for the long term and you want to manufacture and you want to go work and have trucks show up at the shipping dock and ship product; and that may be very gratifying; have some number of employees and even with the headaches – if you have good employees you have less headaches, by the way – you end up with, you know, something you can do for the rest of your life. On the large company side of it all, large companies traditionally have really not pushed organic growth; they’ve pushed marketing-based growth, because they need results quickly. So if you’re Chevrolet, and you have a new car, they’re going to do a mixture. They’re going to provide press releases and pictures and press days. And then they’re going to advertise the daylights out of it. So for a small organization, you spend, maybe, seventy percent towards organic growth, and thirty percent towards traditional marketing and sales (and I’m kind of pulling these numbers out of thin air); and then your counterpart, who’s a larger company, may spend five percent on organic growth and ninety-five percent on marketing.
The problem with organic growth is that you can’t control it. You can push it a little bit by getting product out there for people to write about. You can have events and other things. But it’s still . . . you got to have the right products at the right time in front of the right people, as far as to write about it, to talk about it, to grow. Whereas with marketing, if you do a good job with sales and marketing, then you can drive that growth in way that you couldn’t with just organic. So that is an important distinction because it relates back to what your goals are. If you need to be selling two million cars a year, and you need to be up at that rate in three months, then you need to do everything you can to get the word out about that car. You need to have an organic component. You need to have press days. You need to have a valuation unit out for press and editors and drivers and everybody to test. And you need to be spending a whole lot of money on advertising. If you got time to let it grow more organically and wait on these things, then maybe you spend less on advertising. And maybe you’re happy with a much lower growth and a lower return on your investment.
And this is especially true if you’re a small shop; you have a lower capital investment. And your cash requirements are, you know, small, then maybe that’s perfectly the way to go. And there’s probably something in-between for everybody’s company. You know, where do you fall? We’re not, obviously . . . very few companies the size of General Motors. So, you know, they’ve got a mixture that works for selling cars. But a smaller company’s going to have a slightly different mixture. But I think it’s important to understand that you’ve got to push out in multiple directions.
Now, when you think about marketing, there’s large scale marketing and then there’s guerilla marketing. Guerilla marketing is something that has been pushed by a guy by the name of Jay Levinson. So, there’s a book called Guerilla Marketing. And one of his concepts is that one out of three times an ad passes your face, you actually see it, at some level. And then it takes seven times of that ad passing your face before you make a buying decision. So, what that means is that you’ve got to see that ad twenty-one times, or have it pass your face, before you’re to the point that the average person is ready to make that buying decision. So, depending on the venue of the ad, then that may mean months, or even years. Now, if you’re buying commercials on Hulu or NBC and they are flashing past your face the same commercial ten times during a program – okay; then you watch it for two-and-a-half weeks and if you’re going to buy, you’re going to buy. But, for the most part, most advertising is much slower paced than that. So, you know, magazine ads come out; other things. So, even your organic growth push, just because someone sees something once in a magazine that’s got a glowing review, it still may take twenty-one times before someone sees a review about your product before they actually go buy. So, I think there’s a similar approach. I think now I do think that it’s slightly less if it’s a trusted source. So, if an author they trust greatly says you should have one of these, then maybe that number’s significantly less than twenty-one. And of course it’s graded on a curse, so . . . you know, there’s some number of people that are going to go, “Yeah, oh, I like what this guy’s saying about this; love the product. Let me call and order it first time.” But I think the bulk of your sales still is going to come from that similar curve where someone sees it twenty-one times before they buy.
And at that point, it’s twenty-one times before they start researching to buy, maybe. Because one of the trends that has happened over the past few years is there’s much, much more of an emphasis placed by consumers on checking reviews before buying.
So I hope this has kind of explained some of these differences between an organic model and an advertising-based model, you know, where you’re looking at marketing as something you spend money to do, or directly spend money. Because if you give out samples of product you’re still spending money because you’re losing the ability to sell that and you’re giving away that product – the cost to manufacture it, the cost to ship it, the cost . . . figure out who to place it with; the cost of developing that relationship with that writer or editor. So, either way you’re spending money. The question is it’s just the magnitude and how you go about it. And I think it takes a good mix. I think smaller organizations tend to push way too hard on the organic portion and then larger organizations look a lot harder to find the mix between sales (which is actually someone going out and selling that product), marketing (which is exposing that product to the world), and then organic marketing (which is relying on others to expose it for you). So, it’s definitely a mix. You want to consider that mix. If you totally abandon part of that mix, then you may be not getting the best bang for your buck. And that’s the same thing, too. If you have an idea that you’re turning into a prototype and a patent; and then you want to get that idea to where you can sell it, a lot of time you need a reference design. And a reference design is where you’ve got a product that’s buildable, that you can give someone as a template for them building their own product based on your technology. And so at that point what you’re doing is you’re marketing your technology, and even if you’re going to license it, having that reference design is a big help. Because you’re giving the person’s licensing the ability to go out quicker, or more quickly, and promote that product, because they’re got something that they’re going to . . . it’s more of a product and less of just some piece of intellectual property. So the farther you can get along that curve of concept, prototype, patent, manufacturing, sales – then, the easier it is to license or sell that concept or that product, or that patent.
So, I hope this has been beneficial. Hope y’all have a great day. Montie Roland, signing off.
Audio File: 2014 Feb 12 – Giving The Go Ahead To A New Product.mp3
Audio Length: 10:10 minutes
Hello, my name is Montie Roland with Montie Design in Morrisville, North Carolina. We’re a product development firm with core competencies in mechanical engineering and industrial design.
One of the interesting things that happens working with clients from bigger companies or medium-sized companies – or even smaller ones that are, you know, are growing – is that we’ll design a . . . whatever. And so we’ve designed this project, we’ve gotten to know our contact at that client, and one day after a design review that client looks across the table and says, “You know . . . I’ve got some stuff I’ve been working on in my basement”. It’s interesting that it’s very likely for a client that’s in charge of – or enabling; in charge of, also – product development for his company often will have something that they do on the side. And it’s interesting; so they may enjoy their job and they work very hard at it; at the same time, when they talk about the thing they’re making in their garage, there’s usually this big smile. And so, then what happens is they look at us and say, “That’s why I respect what you did so much with Montie Gear; because I know how tough it is”. And Montie Gear’s our product line that we created four years ago of our own products. We manufacture them; we sell them; we distribute them; we maintain the website . . . well, Daniel helps us. But, so it’s our own products, though. And it’s become kind of this company fascination. But, we’ll have clients that have this emotional connection to our Montie Gear products. Maybe it has nothing to do with the products; it’s just the fact that they really like coming up with new stuff. And so they see us doing it and having a good time and it’s a common situation that we’re both having a good time doing new products.
And so, there’s a couple of thoughts I want to throw at you. And we’ll talk about it from the perspective of an entrepreneur, but this also can apply from the perspective of a big company. Because, if you look at a big company as an organism, some of the same thought processes, many of the same thought processes, apply. They’re modified in some ways but, at the basic level they’re pretty similar.
So, one of the first thought processes is to go after the whole enchilada. It’s go big or go home. Well, the good side about that is that if you go big and you win big, then you profit big. And so, that’s a good thing. So if you go for a product where you’ve stretched what you can do or what your company can do, and it’s a product that can change the market or can take over a market or can grab market share, then Woo Hoo! That can be a big winner because the upside to that is that you can have some big profits. The downside is that you’ve invested a lot in it and you’ve also not invested in other products. Now, form an entrepreneur standpoint, we’ve had one single owner, single employee companies where the owner of the company said, “I’m going to do this. I’m going to go big. I’m going to injection mold this. I’m going to sell these all over the country” and, you know, “Either help me or get out of my way”. And so, the one I’m thinking about at this moment had the funds to back it up. He had the money in the bank to do what he needed to do, and so, he wrote checks. We helped him out. He did other stuff and now he’s got a product that’s starting to take off like crazy. So the upside is going to be huge for him, I think. Good product. Great salesman. Good attitude. Thinking about the business. And thinking about, you know, how he’s going to make all this happen on a big scale and, hey, let’s . . . we helped him push.
And so, we have other clients – and like I said, this can apply to an entrepreneur or to a company – where they’re not in a position yet, for whatever reason, to go for the big score. And so for them the medium-sized score or the smaller score is a much better option. Maybe because of cash flow; maybe because of other resources. Maybe because of time resources. Maybe they’re very business doing something else. So if they go after this major product, then it may take years to get there because they got so much on their plate. Well, the other possibility is to go after a bunch of smaller products, or smaller, I should say, lower effort products. And, then that gets them into that new market. That gets them experience in that market. And one nice thing about that is if you’re tightly resource-constrained, then that experience can help you make wise use of that money by having a less feature-rich product; a simpler product. Maybe instead of having this medium-scope project, you say, “I’m going to do something that we can do in the next eight weeks.” Get that out there; start selling it; see what happens; get some experience. And that’s a call you’ve got to make. You know, we have clients that are going to go for the big score; and that’s what they need to be doing. They’ve got their resources; they’ve got the people; they’ve got the time; they’ve got the talent; and they’ve got the motivation. And we just help them do that. And we have other clients that are much, much better off coming at it from much more of a cottage industry approach. And so, in this case, they’re going to put less capital out and they’re going to sell less. And you know the upside – and maybe two orders of magnitude smaller – but at the same time, they’re not risking other things to do it.
And so that’s kind of where you have to decide is that, you know, what are you going to do? You just got to man up and go. And, I think the trick there is there’s some things to consider. And this is kind of the podcast from a little while back. Where, you know, do you have the funds to do it? Do you have the time? Do you have the energy? Do you have the motivation? Do you have the people? And do you have the people that are in the right spot? And so, there again, this is why all products live or die by the management team. Because that’s where you can make good decisions or bad decisions that, you know . . . if you’re not careful, you’ll make a decision that means you have a product that requires so much effort, it takes you so long to get there, that then there’s a risk you’ll never get there. I would say that with product development, generally, the longer it spreads out, the less likely it is you’ll ever get there. Now, there are exceptions to that, but for the most part that’s true.
So, I hope that you can take something away from this. And, look at it from the standpoint of right-sizing that product for your capabilities, your resources. And there’s nothing to say that if you do a simple product, you can’t come back with a complex product. So, just kind of decide. Think it through.
We’re happy to help you all the way through. Big. Small. Little. Massive. Disruptive. Incremental. We’re the engine that helps you push. And we get in, we help you push and we help you take it from that concept to the shipping dock. And we fill in the holes that you need along the way to get you there. Sometimes they’re small gaps; sometimes they’re big gaps. But, our job is to get in there and push.
I hope this helps out. If you have any questions, please don’t hesitate to give me a call, shoot me an email, visit our website. It’s 1-800-722-7987 – or – 919-481-1845. montie (M-O-N-T-I-E)@montie(M-O-N-T-I-E) .com is my email. Or just visit our website – www. montie.com. Thanks. Hope you have a great day. Bye-bye.
Audio File: 2014 Feb 25 – Design Process Steps Funnel.mp3
Audio Length: 12:01 minutes
Good Morning. My name is Montie Roland with Montie Design in Morrisville, North Carolina. I’m also with Montie Gear in Morrisville, North Carolina, as well.
Montie Design is a full-service product development firm. We provide everything from taking your concept all the way to a fully designed, fully engineered, ready-to-manufacture product, and helping you get that on the shipping dock. We can provide a value from the engineering side, from the industrial design side, to the project management aspect, and also from product validation, all the way to introducing you to contract manufacturers, and as-needed service liaison between your organization and the contract manufacture to make sure that it’s a win-win for everybody.
The design process has several steps. Those steps are intended to create a funnel. That funnel helps you to minimize the cost of the design process by starting out with a lot of ideas and a lot of concepts and boiling them down to the concept that is going to be the winner in the marketplace.
So, the next question becomes, well, how do you do that? So, if you use the funnel metaphor, with the funnel you’ve got a wide top. Let’s say you’re putting oil in your car. So you’ve got oil coming out of a jug, which is similar to the thought of ideas coming out of your staff, your constituents, your customers, and your stakeholders. And so, you pour that oil into that funnel, and the idea behind the funnel is you’ve got a big target. So all the oil you pour in starts running down the funnel. Well, the same thing; what we want to do is capture those great ideas, capture those concepts – written, verbal, unstated – capture those rules, because you know the design of your product has a lot of rules. And that’s because you’re in a market space where you have experience. So, as you put that experience to use, those rules have value because you don’t want to repeat any missteps in the past and you want to build on successes in the past.
So, what we do is the first step is to do research. There again, the research is akin to putting a second jug of oil in there. So we want to do research, understand what the market’s about. And then also make sure that we’re completely oriented to your market, and hopefully do a lot of the nuances of your market – some of that we have to rely on you; others, we can look at trends and research. So, that design research is the first step. And then the second step is to start pulling out concepts, thoughts, what we call “space shuttle ideas”, and do some ideation. And the initial ideation gets kind of everybody thinking, but I don’t want to pin any super solid concepts down yet; just get everybody thinking. And then what we want to do is do some brainstorming. So, now we’ve done some research, made a few sketches, enough to throw some stuff up on the wall and chew on it. And then we use brainstorming. And brainstorming is where there’s no such thing as a bad idea. Most people use a brainstorming session as a planning session; and it’s not. It’s a good way to ruin your brainstorming. Because some of the crazy ideas don’t work exactly as stated, but may lead to some really solid innovations. So, we brainstorm. Take that brainstorming results and then start doing ideation. Now, one of the steps that I just blew right by here as I was talking is we also want to create a style board. And we do want to do that in the beginning. That’s so that we can understand what you’re thinking. And a style board is to get your thoughts. With a style board, you bring us images, pictures, magazine clippings, polaroids; what have you. And show us things that you like. And, also, concepts that may be difficult for everybody to convey that doesn’t do this for a living, or just may be difficult to convey or it’s just a lot quicker with a photograph. For example, you may see a device on a piece of machinery. Take a picture, bring it to us, and say, I like how this device works; this could work great in our application. Or, I like the color; I like the shape; it could be the rear end of the Audi TT. Wow, these proportions are nice. So, we take that style board and we use that in our ideation. And we’ll also probably create one of our own. So, the brainstorming and the style board are very valuable tools.
Now, for some products, we need to do a personalities and personas session, where, kind of like a style board, we want to dig out a vision. So, with personalities and personas, we’ll design a product for an individual customer, and then we’ll go on to do this for a suite of customers that are very different – demographically, what they’re looking for, what they earn, who they are. You know, in some cases with some products we’ll throw in race and religion because there may be a cultural influence that we want to capture in our product development. And, yes, it’s important that you don’t design products for vanilla people, because vanilla people just don’t exist. So, what we have to do is look at the culture where our product’s going to be sold. If it’s a worldwide product, then we have to look at multiple cultures. What we don’t want to do is to create a product that won’t sell well in a given country because we’ve violated some cultural norm, and that’s really important.
So, then, we’re making sketches. We take those sketches and we review them. And it’s important to spend a lot of time looking and thinking about those initial sketches, because this is the inexpensive part of the project, relatively. Sketches are quick. So then we take those; we narrow a whole wall full of sketches down to a few concepts; work on those concepts. And the whole time we’ve been creating this design buffet. So what we want to do is create all of these concepts and all of these pieces, and then we can pick and choose from those pieces and some of those may integrate well together in the final product. So, there again, we’re starting out with a lot of ideas and then we’re narrowing it down as we go. So now we’ve got sketches of a bunch of ideas; we’ve narrowed that down to, say, one, two or three; and then we take those and refine those. And then we do a review again. Then narrow that down. So, the whole time, everybody’s getting a chance to provide input. If possible, we want to create a massing model. A massing model is a simple prototype that just reflects size and shape – simple, inexpensive, quick, you know, blue foam type prototype. Not something you show to the CEO unless he’s really hands-on. But something you can pass around between the product manager and the engineers and just in a, kind of, a closed circle of review.
And then we take that and narrow it down to one concept. Take that one concept and refine that concept. Get it signed-off. So, everybody needs to sign off, all the stakeholders, that this is the concept we want to move forward with. We take that concept and we go to the engineering stage. In the engineering stage we work out the nuts, the bolts, where everything goes. It’s important during the engineering stage to maintain the vision so that the engineers don’t lose track of what’s the aesthetic vision, what are the values, the, you know, it’s not just a collection of specs and bolts and nuts; it’s a product for a living, breathing people.
Somewhere in that stage we want to build a prototype. We want to build prototypes as soon as possible and as often as possible. So, once we have an industrial design concept and we’re starting to commit this to a solid model, a lot of times its good to build a cruder prototype, but one that’s actual size that may have some of the functionality as we’re going through the engineering process. At the end of the engineering process we want to build a functional prototype; maybe even an alpha unit. We’ve made drawings; we’ve gone out for quotes, created a bill of materials. As early in the process we want to start our bill of materials so that we’re starting to get an idea of what this is going to cost in production. From there, we transition to manufacturing. Make those introductions – Who’s going to make your product? Are you going to assemble it yourself? Is it going to come in a box, ready to go, from a contract manufacturer? We got to think about packaging. We may need to design you some packaging. Got to think about – Is it shipped over the Internet? Or is this a point-of-sale type product, where we need to have point-of-sale packaging?
And so we work through these issues and these challenges and opportunities, and create for you this product. And those are, in a nutshell, the basic steps. If you’re a Fortune 100 company, or an entrepreneur that’s selling your second product, you’re going to follow the same steps – maybe not as formally, but in general – you’re going to follow those same steps. As you can imagine, a change on a sketch early on is inexpensive; a change after you’ve fully engineered the product gets more expensive; and a change after you’ve started producing it is painful. So, what we want to do is pull out that vision; we want to get the stakeholders to weigh in, make sure that important parts of the product and those aspects are fully realized; and we don’t trip over something. Like, for example, an unknown requirement. So, by going through these steps, we minimize the risk of that unknown requirement popping up. And that’s one of the reasons you want to prototype early because usually when you lay something on the table, some of those unstated, understated or just not known products requirements start coming out.
So I hope this has been helpful. If you have any questions, don’t hesitate to give me a call – 1-800-722-7987. It’s Montie Roland. Or, montie (M-O-N-T-I-E)@montie(M-O-N-T-I-E).com. Or www.montie (M-O-N-T-I-E) .com is our website.
I hope you have a great day. I hope this is beneficial. Montie Roland, signing off.