Outsourcing Essentials 4 - Specifications

Once you have evaluated and selected a preferred supplier for your manufacturing requirements and agreed upon contract terms, you should then be in a position to start transferring your IP for current products to the manufacturer. The information you have provided the supplier at quotation stage can be imperfect without affecting the final pricing, however once you are proceeding to manufacturing stages with this supplier you then need to go through your documentation and specifications on a microscopic level to ensure any requirements you have for your product is adequately captured.

The majority of issues at early stages of a manufacturing contract with a LCC supplier can usually be pin-pointed to issues with the documentation provided rather than an incapability on the behalf of the supplier. In essence any requirements that have not been explicitly documented will likely not be met by the LCC supplier, even if those requirements would seem to be a commonsense requirement from  the perspective of the OEM designer. This article details common areas where documentation may be insufficient, misleading or targeted for a entirely inappropriate audience.

Packaging

Packaging is an often overlooked detail that is not communicated to the LCC supplier. This does not only mean the retail packaging that your company provides to the end user but also any protective material used to isolated your product from environmental influences, dehumidifying inclusions (e.g. silica gel if required) and bulk shipping cartons used to encapsulate the retail product for shipment to a warehouse or distribution centre. It is best to adopt the theory that for any packaging requirements, unless your company has explicitly specified a particular type of packaging, material and grade and configuration for bulk cartons, your product will not be provided with these options. This does not suggest that the supplier will ship your product with shipping labels attached directly to the exterior but it is best to adopt this way of thinking so you then specify exactly what you require for packaging of each item and you then don't risk the ruin of an entire shipment because your supplier thought it would be acceptable to use a particular type of packaging material since it was not specified otherwise in your documentation. It is also advisable to consider that unless your orders are shipped by container load, the transportation or your product from the supplier to your warehouse or DC is not likely to be conducted with the utmost of care and you should plan bulk shipping carton material and design to withstand extensive mistreatment by freight forwarders and to ensure your products are sufficiently protected within this carton.

Assembly & Testing Procedures

If you are engaging your LCC supplier to conduct product assembly, final or interim functional testing on your products prior to dispatch it is important to ensure that your assembly and testing documentation is both current according to current work practices and written for the correct target audience. A product that has been in domestic production for a considerable period of time may no longer be tested in exact accordance with the original testing documentation. This is especially true if testing has been conducted by a single operator over this period of time. Often the operator becomes sufficiently familiar with the testing requirements of the product that continual reference to the test documentation is not required and is often considered to be a delaying factor in the productivity of the tester. The problem that arises is this tester may, in the course of testing your product over a significant period of time without constant reference to the original test document, introduce variations to the original procedure that are not captured in the documentation. These variations usually will be to the benefit of the yield of your product or the efficiency of the test procedure (variations that cause the yield or efficiency to decrease will incur further investigation and reference back to the original document to confirm where testing has "gone wrong"). In this situation, the move to a LCC supplier results in an immediate reduction in yield and efficiency as the testing practices revert to the original documentation.

Another consideration with testing documentation is target audience. If your testing documentation has been written with the intention of being conducted by a qualified and experienced engineer instead of assembly personnel, the procedures may in turn omit vital information that the engineer may consider to be "common knowledge" or "standard practice". The testing by your LCC supplier is not likely to be conducted by an engineer and often will not be conducted by an English speaking operator. Instructions need to be SIMPLE, COMPLETE, DETAILED and wherever possible accentuated by illustrations and photographs to clarify the text description.

Technical Specifications

As with packaging it is important to ensure all specifications for your products are detailed within the technical documentation provided and where more than one document references a single process or product that these are in complete agreement. In many cases a designer may have an engineering design file as well as a text document referring to a single product. The design file will invariably take precedence over any accompanying documentation, therefore it is vital to ensure that any product changes are reflected first in design files prior to being transferred to a text document. Design files and documentation need to have revision version iteration for any change regardless of how minor and the preceding files need to be reverted to historical data. These changes need to be communicated immediately to the LCC supplier to prevent continued manufacture of obsolete product revisions.

Material selection also needs to be reviewed with the LCC supplier, especially where the move to a LCC supplier involves a change in process to reduce manufacture pricing (e.g. CNC products onshore may be converted to Die-Cast offshore to significantly impact the unit pricing. The grade and type of material used in a CNC process is not the same as that used for die-casting so the material used needs to be reviewed to ensure the die-cast product is comparable in material quality to the original CNC item or at least does not have a detrimental impact on the final product). When looking to reduce material and component costs it is also important to review whether any items are over engineered or over specified for the purpose they will fulfill in the final product.

Design tolerances need to be thoroughly reviewed in a similar fashion (e.g. products selected for initial CNC processing typically will have a much lower tolerance specification than products that are to be submitted to die-casting regardless of whether these specifications are actual design requirements or drafting artifacts).


Brian Le Mon

Principal Consultant at GBOS

Offshore manufacturing has become the only option for many Australian industries competing in the global economy – but thorough preparation is essential. Inconsistent quality and unreliable delivery are just two of the potential hazards awaiting companies that go into this major exercise inadequately prepared. If you’re considering offshore manufacturing, or you’re not satisfied with an existing offshore manufacturing partner, then GBOS can guide you through the minefield.

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