CAN IT BE PRODUCED?
You May Have a Great Working Prototype, but if You Can't Manufacture the Product in Volume, You'll Never Make a Profit.
By James F. Riordan
Part One
Even if your Proof-of-Concept model works great, you must be able to produce your product in volume to make money. Producing a product requires several things:
* Proper Documentation
* Materials
* Labor
* Controlled Procedures
* Reliable Sub-Contractors and Suppliers
Lack of ONE of the above items can bring your product to a standstill. Winning products are those which can be easily and cheaply produced, anywhere, by unskilled workers, with several choices and sources of materials.
When I worked for a large defense contractor, we used to joke about "unobtainium" being the best material to use when building an armored vehicle. It was great stuff, lighter than air, stronger than steel, undetectable on radar, ferrous yet anti-magnetic, and self hardening. The only problem was you couldn't get any.
Make very sure there is no "unobtainium" in the product you're developing. Check with metal suppliers, plastic suppliers, and component suppliers. Be sure suppliers are available IN THE AREA WHERE YOU WILL BE MAKING THE PRODUCT. You can find manufacturers of almost everything in a set of books lovingly referred to as "The Tomcat" by buyers from coast to coast. I'm speaking of The Thomas Register, which you can find in your local library.
Before you make any final decisions about how, where, or with whom you will produce the product, even if you're planning on producing the product offshore, be sure to have a "vendor education program" with respect to manufacturing equipment and processes. When all is said and done, review a manufacturer's suggestions, use the best overall plan (or a combination of them), and give the business to the supplier who can deliver the best product and service at the best price.
You MUST take advantage of this opportunity. No matter how much you know about manufacturing methods and equipment, you'll never be able to keep up with all the new equipment and methods constantly being introduced, as well as the people who are in the business of selling the equipment. Even the sales professionals from "Company A" may not be thoroughly familiar with the product available from their competitors, "Company B" and "Company C." This is why you have to have all the different vendors come in and tell you how they would do it. Then you can make an educated decision on how YOU will do it.
To fail to take advantage of the vendor education program is to miss out on one of the least costly and most beneficial methods of determining the viable equipment and processes for producing your product.
If your product will be made offshore in a foreign country, you should always check with the U.S. Customs office at the "port-of-entry" closest to you or where the product will arrive, and find out the "customs classification" of the product. With some products, if they're brought into this country in a completely assembled or finished state, the import duties and fees can be so high that your cost-of-goods-sold will climb radically. Many companies then try to get the product reclassified into a classification that results in less import duty fees. If it's impossible to reclassify the product, the next step is to have the product partially assembled offshore, bring the product into the country as "unfinished goods" and do the final assembly and packaging in the U.S.
Be aware that offshore manufacturing can be a nightmare for the uninformed or naive, yet it can be very profitable for those who choose their suppliers carefully, and control the quality of the product before it leaves the country of origin. On a recent trip to Taiwan, there were 30,000 "trading companies" and only 6,000 actual manufacturers. You must be sure you're dealing directly with the factories who will produce the product or you'll be paying too much and you'll not have firm control over the quality and quantity of the product.
There are firms in Japan, Taiwan, Korea, Malaysia, Hong Kong, etc. that specialize in quality control of your product. These firms will go to the factories and be sure that the quantity and quality of your product is to your specifications before the product is packaged for shipment to the U.S. If you're manufacturing offshore for the first time and you don't have an established relationship with your prospective manufacturer, I highly recommend you use a quality assurance company for at least your first shipment.
Different countries have different customs which can "bite" you soundly if you're not aware of them. For instance, Taiwan and China all celebrate the Chinese New Year in February. The problem is they take their celebrating very seriously, and it practically wipes out production for the month of February, so don't count on getting anything done during that time period. Experienced importers plan their production schedules around the idiosyncrasies, rainy seasons, special events, and customs of the countries in which they plan to manufacture their products. Call the Department of Commerce and the country's embassy to find out about the country you plan to manufacture in.
NEXT ISSUE: More on Production
The above article was taken from James F. Riordan's classic book, HOW TO EVALUATE THE POTENTIAL FOR SUCCESS OF A NEW PRODUCT OR TECHNOLOGY. Riordan's highly-acclaimed, 36-point system is a valuable tool for inventors, product evaluators or anyone interested in the invention process. Each section is followed by a comprehensive questionnaire that can be used to evaluate your product.
The highly-recommended book can be ordered through the Dream Merchant, 2309 Torrance Blvd., Suite 104, Torrance, CA 90501. The phone number is (310) 328-1925.
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