Standard Operating Procedure for Contract Manufacturing

Are you looking for skills and support in Contract Manufacturing? Here we cover a sound, basic approach in 6 easy to digest steps.

Startups and growing companies are constantly faced with the range of challenges in NPI (New Product Introduction) – sometimes lacking team experience in manufacturing to draw on. This often leads to false starts, based on waterfall process thinking and backfilling missed steps after-the-fact.

This leaves Contract Manufacturers having to steer and guide their new customers, to try to make everyone’s life easier – guiding the learning of 5 fundamentals:

1 – the Contract Manufacturers don’t understand your product or your market – and do not need to

2 – they are NOT ready to accommodate your pivots and backtracks

3 – it’s hard for the Contract Manufacturers to accommodate your inexperience in DFM

4 – you probably don’t have a comprehensive test, but it’s a MUST HAVE

6 – you don’t really know your supply chain yet, so you’re not as ready as you think

The success of your business will be greatly influenced by the transfer to manufacture – all the steps that are required to develop, optimise and deliver your product to the market.

Every business is unique, but one aspect that is common to new product introduction programs that deliver is a collaborative approach. Responsibility for bringing a product to market cannot rest on one individual or department. Everyone must be singing one song and working towards a commonly held goal.

Above all, remember that new product introduction is never a linear path. Many processes must be concurrent and adaptive management is a must, for anything like an optimal process – so communication and team integration are key.

Finding the right partner is a process we will discuss in detail – but here’s the main steps in making the choice;

You know someone who knows about this – work your connections;

Build an initial target list of up to 10 Contract Manufacturers as potential partners, and work this list down to 3 as soon as you can;

Present your design package to all three and VISIT them – nothing works better than face to face – and Zoom is a poor second option;

Analyze the responses to the package (and your impressions from your visit/interactions;

Take up customer references – they’ll only show you happy customers, but read between the lines;

Demystifying the process

The type of Contract Manufacturer you use, the services you access and the division of responsibilities will show you where you are on the contract manufacturing continuum. There are other classifications, but this is enough for now;

– Basic Contract Manufacturer

A basic contract manufacturer offers little input into the development process, focusing solely on manufacturing. The factory follows the instructions you provide. So those instructions better be good!

A Senior contract manufacturer

An senior contract manufacturing supplier can support in designing your products. This more comprehensive service is powerful, allowing you to out-source many intricate aspects and filling in the gaps in your experience – at a price.

Engineering the product

The first step in the process is to embody your idea into a manufacturable thing, with a working prototype and initial production documentation that can quickly be understood by your suppliers. This step is the biggest difference between OEM and ODM Contract Manufacturers – a true OEM will not do ANY of this for you – and will not be happy when they need to direct you back to the drawing board too many times.

Entailing responsibility for engineering the product – development of the technology, refinement of the design to be ready for manufacture (DFM) and building-in quality – this is often seen as the key skill in the company.

Too often, products arrive at Contract Manufacturers having poorly qualified in these steps – lightly documented, neither DFM or quality optimised and hard to interpret. The customer often feels heavily invested in what they’re presenting and doesn’t react well to the shortcomings – but this is where the metal meets the meat and your manufacturing partnership with your Contract Manufacture can be forged.

This is the stage at which most companies are most confident and secure in keeping these steps in-house – but it can be the stage where overconfidence and inexperience cause the greatest shocks, downstream. Non mouldable plastics, obscure or archaic PCB manufacture/assembly details, obsolete and end of life components, obscure quality details and incipient HALT failings can ALL be expunged, if the team gels and accepts the need to bridge the gaps from concept to prototype to production.

To minimise the need for fundamental support in the late stage development process, your design package must encompass (but is certainly not limited to);

~A design FREEZE;

~Detailed drawings (2D, PCB schematics) with component specs/materials/ tolerances/critical dimensions;

~CAD files (3D, GERBERS) where appropriate;

~CAD animations where useful;

~Production process descriptions/notes and draft assembly instructions;

~Failure mode analysis, MTBF studies and HALT testing plans;

~A QA plan, from goods inwards to shipping; and a plan for inventory control.

Pre-production preparation

The second fundamental step sits squarely in the contract manufacturing service scope – as long as the preparation has been done to a standard that can be applied rather than recreated.

~Do you have an Indented Bill of Materials, components sources validated and contacts listed?

~Is your tooling ready and trialed? Can the parts be made, are the materials available, is the supplier ready to schedule?

~Do you have build instructions/SOPs ready to go – subject to live changes to suit the factory?

~Do you have an initial quality/inspection plan, so that production can proceed with confidence about each stage, rather than building on re-work?

~Do you have an initial test solution that can traffic light the product? This may not be complete or refined yet – but the Contract Manufacture will want to be able to measure success or failure!

~Do you have a packaging solution that suits the Contract Manufacturers preferred approach?

These are not small tasks – and the more you need the Contract Manufacturer to provide from this list, the more towards the ODM end of the spectrum you sit. That’s not a BAD thing – but you need to be aware that none of this can be expected to be free – or for that matter cheap!

However, when these aspects are all ready (or at least ready enough), you can proceed with a Pre-Production Build. Nothing builds confidence like seeing real product, from real production, get into your end customers hands, to validate your assumptions, research, hunches and hopes.

Mass production services

Once you’ve reached the sunlit uplands of a completed pre-production or pilot build, you can relax – not.

The transfer from pilot/pre-production to initial mass production will need every member of the team on deck, it will pose a range of intricate and unexpected challenges and it will be hard work – but the rewards are there to be had – your work executed, your product built and ready to sell and stability of revenues within your grasp.

Of course, that assumes market aspects are all smoothed out and ready – which is a discussion for another day!

Mass production will shake down your processes and find EVERY hole in your armour – at least you can hope so. When your processor goes end of life at your first production order; when the mass production fasteners are oiled (to prevent rust) and this destroys your plastics; when your serial numbering system doesn’t work; and your ‘trial’ software has an obscure bug that puts curse words on the display; you just have to work through every roadblock.

Happily, you will not see ANY of these problems – but there will be issues in your sourcing, your assembly process and your SOPs that will have to be worked through.

Quality control

Stable mass production is going to require inspection and compliance testing at every stage.

You’ll need rigorous and thorough;

IQC – Incoming materials Quality Control. Knowing parts comply makes production possible – and knowing when they DON’T saves a lot of heartache.

PQC – Process Quality Control. Knowing that each critical step is done right, before you try to add value by building onto rework, will make the production flow smoothly

FQC – Finished goods Quality Control. Knowing that the product is right, meets the specification and will meet the expectation of the end user is a big deal. You do NOT want to see this product again, and FQC is a great tool in ensuring that you don’t!

All of these stages need Standard Inspection Procedures that are usable, clear and comprehensive – you need to be sure that the faults you already know about – and the ones you haven’t yet seen – will get caught early and reliably.

Production management

Now you’ve navigated all the minefields and crossfire that could so easily have destroyed your work, things do actually get easier!

When production is stable, your product supply becomes a management task rather than a series of fire-fights. There will be fires, but momentum and team experience will carry you over these, generally without serious disruption.

Make sure you have great control and transparency in scheduling, make sure supply chain issues are flagged early, and make sure that your team responsibilities – from scheduling, through sourcing, supplier payment, QC, manufacture, test, packing and shipping – are all working on ONE program and understand their roles.

Supply chain management

With all of this sorted out, well oiled and slick, you’re in the luxurious position of being able to focus on the long term improvement of your production process, to optimise margins and build in anti-fragility. And as disruptions diminish – and are caught well before they follow through to market irritations – you can move your attention to the next product, the next generation and the market.