How to Manage a Supplier - MakerCon 2014 - May 13, 2014
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Transcript of How to Manage a Supplier - MakerCon 2014 - May 13, 2014
DRAGON INNOVATION, INC.
How to Manage a Supplier
MAY 13, 2014MAKERCON 2014 | ???
ADAM CRAFT | VP MANUFACTURING | @DRAGONINNOVATE | www.dragoninnovation.com
No Need t o Take Not es:ht t p: //www. sl i deshare. net /dragoni nnovat i on
/how- t o- manage- a- suppl i er
Adam’s Background Contract / Manufacturing Services Agreement Schedule Testing / Quality Overall Supplier Metrics Other Thoughts
OVERVIEW
The Contract
Protecting yourself
The contract, sometimes known as the Manufacturing Services Agreement (MSA), is a legal document spelling out the details of the arrangement with your supplier.
Manufacturing Services Agreement
Quiz What do you think is important to have in this document?
MSA Sect i ons / Topi cs
Manuf act uri ng Servi ces: Defines who is doing what Materials: Vendors, procurement, consigned materials Subcontractor agreement
Forecast s and Purchase Orders: Forecast planning PO procedures, lead times, cancellation
Fees and Payment : Pricing (what’s included / not – VAT, taxes, fees, etc.) Margins / Markup (standard vs. consigned vs. “special”)
Shi pment s, Sampl es, Qual i t y Test i ng: Shipping requirements, schedule Samples: quantity, timing, who pays Quality Testing: Who does it, who pays for it, how it is done Epidemic failures Audit: Record keeping Final Inspection
Product Accept ance & Warrant y: You can return product that doesn’t meet the specified warranties Warranties: Professionally made, original work, tested as specified,
manufactured as specified You’re allowed to visit and audit at any time
MSA Sect i ons / Topi cs
Represent at i ons & Covenant s: This is a legal document, no conflicts of interest Manufacturing in a safe environment, no child labor, ethical, etc.
Int el l ect ual Propert y Ownershi p: Definitions Who owns what
Conf i dent i al i t y: Mutual Non-Disclosure Agreement
Term & Termi nat i on: Defines the term of the agreement How you terminate the agreement
MSA Sect i ons / Topi cs
Indemni f i cat i on & Li abi l i t y Li mi t at i on: General protection for everyone involved & related procedures
Mi scel l aneous: Terms of agreement, use of name Successors / assignment – new agreement Controlling law, jurisdiction, venue
MSA Sect i ons / Topi cs
Schedule
How long does it really take?
You have a working prototype and you’ve chosen a factory. Now you “just” have to start making thousands of identical and robust production versions of your prototype. What could possibly go wrong?
Production Schedule
QuizHow long should you budget from supplier selection until you
ship your first production units?
Schedul i ng Ti ps
When creat i ng a product i on schedul e, consi der t he f ol l owi ng:
Many consumer schedules are driven by Christmas, which doesn’t move. However, you need to be realistic.
Plan contingency in your schedule. Things never go according to plan.
Allow several prototype cycles and allow enough time between prototype cycles so you can fix issues that are found during testing.
Your manufacturing partner is unlikely to be as optimistic or aggressive as you (and this is good).
Schedul i ng Ti ps
Schedul i ng consi derat i ons ( cont i nued) :
Have an onsite presence in the factory.
Track schedule closely and take corrective actions early. Don’t expect to make up the time in the end.
In almost all cases, shipping known bad product is worse than shipping late product. Large numbers of returns can kill your business and reputation.
Avoid: “There’s never enough time to do it right the first time, but always enough time to do it again.”
8 wks 8 wks 8 wks 2 wks 2 mths 1.5 mths
DFM / Mold Drawing
6 -10wks
1st OBS
1 wks 2 wks 2-5 wks*
2-5 wks*
* Depends on Complexity
2-5wks* 2-5 wks*
1 year
CriticalComponents
Selectione.g.
MotorsMagnetic Encoder Wheel
Life testing…
Oct2004
Prototype1st Round
Nov2005
Jan2006
2nd Round
Apr2006
3rd Round
Jun2006
Finished Prototype
VQP Project Hand Over
Quotation Finished Factory Selected
Aug2006
First Shot
Dec2006
Tool Start
Oct2006
MEP
Jan2007
EP1
Feb2007
EP2 A-B
Mar/Apr2007
FEP
Apr2007
PP
May2007
PS
Jun2007
2-5wks*
* Product Complexity Lead Time Between Each Milestone
New Accessory 2 weeks
New Version with some minor changes 3 weeks
New Generation or Simpler New Product 4 weeks
New Product Line – Complicated 4-5 weeks
New Product Line – Very Complicated 5 weeks
The Road t o Product i on
Reference example: Roomba 3
Testing / Quality
How do know what you’re shipping is good?
Manufacturing quality can only live up to design quality, but not beyond. What you design is as good as the product will ever be.
It’s “easy” to make one widget. Making 100K widgets that perform similarly is another story….
Quality / Testing in Production
QuizWhat sorts of tests do you think you should run during
production?
Product i on Test i ng
Pri nt ed Ci rcui t Board Assembl y Test s : In-circuit tests (ICT) – bed of nails Automatic Optical Inspection - AOI Functional / Built-in tests
Overal l / Mechani cal Assembl y: Subassembly functional testing Overall functional / Built-in tests
Ongoi ng: Torque / Tension / Drop HALT / HASS – accelerated life / environmental Life test
Product i on Test i ng / Fi nal Inspect i on
The desi gn has been veri f i ed, and t he purpose now i s t o ensure t hat i t i s bui l t correct l y.
The object is that as much testing as possible is performed on 100% of the product. Normal function testing can usually be tested 100% Abnormal function testing sometimes can and sometimes cannot. Abuse testing cannot.
When testing damages the product so it cannot be shipped, then it must be tested on a sample basis.
Resources: MIL-STD-105E – Officially canceled, but still widely in use in industry. Officially replaced by MIL-STD-1916 for military use and ANSI/ASQ Z1.4
for civilian use. Still used throughout industry, especially in China.
Key paramet ers: Acceptable Quality Level (AQL)
Largest allowable defect rate in inspected product Lot Size
Typically not a matter of choice – determined by other factors. A shipment of goods to one customer may be a lot, as could production from one shift or day, or a batch of parts delivered from a vendor.
Sampl i ng Pl ans
Quality Test Plan
QuizWhere are all of these tests and criteria defined?
Qual i t y Test Pl an
Import ant Sect i ons: Mold qualification process / criteria Pre-Control of Production Process (SPC)
Variable sample inspection: Molded parts, Incoming parts, Critical parts Attribute inspection (interim production)
Static Discharge Test Aging Test Humidity Exposure Test Environmental Test Life Test Regulatory and Safety Requirements
Qual i t y Test Pl an
Import ant Sect i ons ( cont i nued) : Final Inspection
Sampling plan Defect Definition (Critical , Major, Minor) Date Code Transportation Test Aesthetic Inspection Functional Test Disassembly Check Critical Measurements Drop Test Torque / Tension Test Compression Test Paint Abrasion Test
Document at i on Cont rol
THIS IS VERY IMPORTANT! ! !
How: Use ECN’s for every change Tie to date code / production revision
Why: You need to know what you’re building Sometimes required by regulatory agencies (FDA) Helps tie production and/or field failures with potential causes
Overall Supplier Metrics
How do know your supplier is doing a good job?
There are many t hi ngs you coul d t rack, but some key met ri cs t o wat ch over t i me coul d be:
Key subassembly test yield(s) Final functional test yield Final inspection data / trends Ongoing life test results On-time shipment record
Wat ch f or t rends, but al so wat ch f or st epwi se changes.
What should I track?
Other things to watch:Customer returns
Defective vs. non-defective Specific failure analysis – design issue or production issue?
PO lead time
Long lead parts – shortening lead times can help with inventory management / production forecast shifts
Keep an eye out for component substitutions, vendor changes, and worker changes. All could be approved, but may have unexpected results.
What should I track?
Other Thoughts
Bug Tracki ng
In the course of development of any complex project, the number of bugs that will be found will be a large number.
The iRobot Scooba had to eliminate > 1,100 bugs in the last six weeks before production start.
If you miss even one significant bug, then you can fail to meet your quality requirements, and could cause a significant safety problem
Key Poi nt s : Test thoroughly
Emphasize functionality and robustness
Track *all* bugsYou can’t afford to even let one slip through
Fix everythingIn the vast majority of cases, any test you can afford to do (as constrained by cost and time), will generate a short enough list of bugs that you have to fix all of them in order to meet your targets.
Bug Tracki ng
No product is perfect, and you will have failures before and after the product is in the field.
Allocate allowed failure rates to different components and systems, within economic and safety constraints.Allow for unanticipated failures.
Tangent: Failure Budgeting
QuizWhat is a realistic expected failure rate for a product headed for
retail?
Exampl e: Typi cal consumer product ( vacuum cl eaner)
The allowed rate of retail returns is 4% - how is this broken down? Non-defective returns are estimated to be 2.4% (60%) Defective returns are estimated to be 1.6% (40%)
0.55% is budgeted for unanticipated problems 0.65% is budgeted for factory quality, per AQL levels
0.40% is left over for actual defects that occur during the warranty
Fai l ure Budget i ng
Fai l ure Budget i ng
Component Budgeted Warranty Failure Rate
Suction Motor 0.05%Brush Motor 0.10%Belt 0.05%AC Cord 0.10%Switch 0.05%Hose 0.05%Total 0.40%
Questions?
Fi nd us at DragonInnovat i on. com
dragon@dragoni nnovat i on. com
@dragoni nnovat e /dragoni nnovat i on