For hardware entrepreneurs and start-ups, it’s important to become familiar with manufacturing terminology so you can talk to/with the manufacturer you’re selecting. Otherwise, you’re risking unpleasant surprises, ranging from added costs and time delays, to not getting what you thought you’d asked for.
In the first part of this series, we looked at some of the basic concepts of manufacturability and manufacturing; this week, we are going to discuss some common manufacturing terminology in order to avoid costly and time-consuming miscommunications.
Describing Your Product In Manufacturing Terms
Steve Chalgren, executive vice president, product management and chief strategy officer at Arena Solutions, which provides a cloud-based product lifecycle management (PLM) solution that increases speed of prototyping, reduces scrap, and streamlines supply chain management, offers these essential-to-know terms for describing your product to a manufacturer, and providing the essential information they’ll need to make it for you:
- Form, Fit, Function (a.k.a. “FFF”): Used in manufacturing to describe the identifying characteristics of a part. The most important question for a manufacturer is when an item is changed for any reason (Engineering Change Order or other), ‘Is the change an FFF change?’ If so, that will mean that the part must be inventoried in a different bin. This is a key area of conflict between engineering and manufacturing because if there is an FFF change, manufacturing prefers a new item number to be assigned because that is easier to track the old and new parts in inventory separately. Engineering may wish to only change the item revision – because changing the part number creates a lot of extra documentation work.
- Manufacturing Build Package: The manufacturing build package is everything – and, really, everything – that is needed to procure, create, build, test, and deliver an assembly. This is a key package used for outsourced manufacturing. For companies that have vertical manufacturing, a manufacturing build package may be only the key information needed above the existing organizational knowledge.
Naming the Different Manufacturing Relationships
Manufacturing terms that look or sound similar can have significant differences – and it’s essential that hardware creators be aware of this, stresses William Drislane, SVP, Engineering and Manufacturing at Dragon Innovation, Inc., which provides manufacturing expertise, connections, and a platform for hardware creators.
For example, says Drislane, the differences between OEM and ODM:
“OEM stands for Original Equipment Manufacturer,” says Drislane. “From our customers’ point of view, that means, ‘You bring a complete design to the manufacturer, and they build what you say, they don’t add anything.’ The negative of going to an OEM is that you have to do design work. The plus is that there is no debate who owns the IP (Intellectual Property), and that your design is ‘portable’ – you can go to another factory if need be.”
By contrast, says Drislane, “An ODM – Original Design Manufacturer – does the design (engineering) as well, even if it’s sold under your name. The plus: the customer doesn’t have to do the design work. The negative: determining who owns the IP can be complex, and there may be relatively little design portability, product may have to be redesigned – as in, go through a fresh engineering design cycle, if you want to go to another factory.”
An ODM is most often chosen, Drislane says, “instead of an OEM when the factory knows more about the product category than the customer does when, for example, the customer wants an industry- or use-specific tweak on a standard product, like a flatscreen display with a particular mount or frame, to accommodate a particular vertical market.”
In addition to OEM and ODM, there’s also JDM, Joint Development Manufacturer, notes Drislane. “JDM is a hybrid. For example, if you want to build a ‘smart’ toaster-oven nobody in the US knows how to design a toaster oven any more, in terms of safety and compliance, the right stainless steel, etc. So you would design the circuit board, camera, etc., and your manufacturing partner would do the toaster oven portion.”
Terms for Types of Changes by Manufacturers
Circumstances often force manufacturing to make changes to your original specs, like to dates and materials – and unsurprisingly, there are well-known terms for many of these events.
Here’s three, from Arena Solutions’ Steve Chalgren:
- ECO Effective Date: Engineering Change Order (ECO) processes often require a change effective date which is often equal to the ECO release date. In manufacturing, the ECO effective date is when that assembly is cut over in the manufacturing process -– this could be significantly after the change release date. The same term could be used in one organization where only the context of the conversation indicates which effective date is being used.
- Deviation: A deviation is a temporary authorization to do something different than what was documented in the process to manufacture/test/deliver a product. Deviations are commonly used to temporarily mitigate a component or material shortages. They can also be the bases of future ECOs to incorporate the deviation.
- Manufacturing on Redline Drawings: This is the process where through an authorization process such as ECO or signature, the manufacturing team will use a previous revision drawing that has been marked up with a pen (often red) for the manufacturing process. This occurs most often in an NPI – new product introduction process where there are many design changes that backlog the documentation department and the company wants to temporarily work around the backlog.
As you can see, there’s lots of manufacturing terms and concepts to learn.