The most common mistake I see is when ODMs state they are OEMs, but the truth is that they do not have mechanical design development ability and rely on the real OEMs for that.

Hence, it is essential to know the differences between the two types of manufacturing to be able to make the most informed decision about future partnerships with potential contractors.

How to spot the differences

An ODM (stands for Original Design Manufacturing) designs and produces a product to sell to buyers, which may use their own brand to market it.

The buyer can make some customization requirements such as colors or software, but these capabilities are rather limited. On the other hand, this type of manufacturing saves a lot of costs to the buyers while enjoying the benefits of “owning” a product.

The ODM service is often categorized as a “private label” or “white label”. The white label means few buyers retail a similar or same product, while private labeling involves selling finished products that are produced and sold exclusively to a particular customer.

To sum up, the essential ODM basics are:

• An ODM is a company that designs and manufactures a product which is specified and eventually branded by another company for sale.
• An ODM is a business model that owns and/or designs in-house the products that are branded by the buying firm.
• This model is especially used in international trade, where a local ODM is used to produce goods for a foreign company that sees some advantage in the transaction, such as low labor inputs, transport links, or proximity to markets.

An OEM or “Original Equipment Manufacturing”is used to describe a manufacturer that creates an item, solely based on the buyer’s specifications. An OEM usually doesn’t design products for their own sales which makes it an important factor when a buyer decides to look for an OEM to save costs on labor and manufacturing facilities with flexibility in quantities. In a nutshell, an OEM company is defined as a company whose goods are used as components in the products of other companies, which on their side, sell the finished item to end consumers. 

To sum up, the crucial OEM points of understanding are:

• An OEM or “Original Equipment Manufacturing”is used to describe a manufacturer that creates an item, solely based on the buyer’s specifications. An OEM usually doesn’t design products for their own sales which makes it an important factor when a buyer decides to look for an OEM to save costs on labor and manufacturing facilities with flexibility in quantities. In a nutshell, an OEM company is defined as a company whose goods are used as components in the products of other companies, which on their side, sell the finished item to end consumers. 
• In the computer industry, OEM may refer to the company that buys products and then incorporates or rebrands them into a new product under its name.
• OEMs are mostly focused on business-to-business sales, while VARs are associated with public marketing and/or other end users.

Let’s look at the examples 

Although these two types of manufacturing are mostly common in the technology and electronics fields, they are not limited to these, but many of them operate in other industries – like automobile construction, health care, entertainment, etc. To understand the concepts thoroughly, I have provided some examples of OEM and ODM manufacturing that include top tier companies in their respective fields.

OEM examples:

• Microsoft – an example of an OEM with its Windows software. This software is provided to computer companies such as Lenovo, Asus, Dell, HP, and many others.
• Foxconn – an OEM for Apple. While Apple invests primarily in R&D and innovation, they provide all the necessary information to Foxconn to produce their products from scratch.

ODM examples:

• Walmart uses ODM services for brands like ‘ONN’ in electronics and ‘Great Value’ or ‘Sam’s Choice’ in the food sector.
• COMPAL – provide ODM services for laptops, desktop PCs, and other electronic products to famous brands.

Know your needs

Based on all these specifics, it is fair to say that each project needs to consider many different details and requires detailed evaluation. Here are some of the fundamental factors you should consider. Depending on your business, this list can be further expanded with more specific details.

• Unit price – depends primarily on complexity and volume.
• Injection and molding – when using OEM services, it is paid and owned by the buyer, whereas the ODM services are funded and owned by the supplier.
• Development time – OEM projects require much more development and will result in 4-6 months, while an ODM order can often be completed in 1-8 weeks. As you can see, speed plays a significant role here.
• Product specification – by OEM, it is provided by the supplier and can be modified by the buyer, whereas by the ODM, it is provided by the buyer.
• Intellectual property – In OEM, the buyer owns the IP, while in ODM, it is owned by the supplier.

To conclude, it is imperative to define your needs when evaluating the type of manufacturer you’ll require for your business or future product. This will help you determine the best option (or maybe several options) for either an ODM or an OEM to work with. You can make the most informed and optimal decision by understanding the details and in-depth structure of these two types of manufacturing.

So, now I believe that it will be easier for you to decide.

Are you looking for an OEM or an ODM?

The post Manufacturing 101 – are you an OEM or an ODM? appeared first on Crystel.

Research by AltFi Data reveals that in 2016 there have been only five successful crowdfunded ideas out of 955 campaigns across more than 751 companies. All this is in the United Kingdom alone – companies like Rebus, the luxury shoe company Upper Street, the food delivery start-up Pronto. Prominent examples of bankruptcy after a lot of money injected into the concepts they represent.

Here are some unique ideas that never actually saw the light of ultimate success, and I tell you – there are some really great ones out there:

• The Induratus – Stephen Lauzon’s technologically advanced underground shelter system designed to mitigate CBRN, EMP, seismic & security threats. The starting goal was 4.958 million, raised – 1 (one) dollar.
• Crystal Wash 2.0 – a “Bio Ceramics”-based laundry system that uses antibacterial and anti-oxidant properties that don’t require detergents, chemicals, or perfume, along with a mobile app to boot. This one actually met its funding goal, but it turned out the whole thing didn’t work “any better than hot water.”
• Tiko – a miniature 3D printer. Raised more than 2 million dollars, but the company hit a rather common problem – the immense difficulty of going from prototype to mass production. They didn’t get passed the prototype phase, so in November 2017, the company closed without delivering the otherwise fantastic idea.
• Zano – another gadget company, Zano, was a hand-held drone photography device that even debuted at CES in January 2015. This one also hit the 2 million mark, but again – shipping just several such gizmos to backers isn’t what we call a success. After a message about excess spending, the company shut down.
• Ouya – a “new kind of video game console” – a tiny, Android-based console with an open development platform that was retailed for only $99. Raising over 8 million this little console actually delivered, but big players on the market like PlayStation 3 and Xbox 360 made it obsolete on its very public arrival. The company has been bought by Razor, and we are yet to see the triumphant return of Ouya.

All this being said, let’s explore the different stages and reasons behind the many various failures of ideas, start-ups, and crowdfunded projects.

Maintaining the right perspective 

Maintaining a wrong perspective is a prerequisite for failure. Your own point of view might be very different from that of your target audience, customers, and end-users. Get in the habit of making market research, coupled with top-notch surveys about your product. Asking the right people the right questions is crucial. Account for as many aspects of your product as you can, and set your strategies right!

Missing the target

Failing in making the right impression can cause losing the opportunity. Know if you are the one to present the idea or get professional advise in doing it for you. Your customers need to get the message of your product easy and straightforward. It must be clear, simple to understand, and provide high value. Make your customers want what you deliver, or even better – make them understand why they want a piece of your idea.

Controlling expectations 

You may have the best idea for the most excellent product, but failing to deliver expectations is failing overall. Do not promise more features in a product than you can actually deliver – better to offer less and surprise with more when the product itself is ready. Furthermore, notify in advance if you must cut on some of the initial features.

A clear message

Your customers need to get the message of your product easy and straightforward. It must be easy to use, simple to understand, and provide high value – educational value, quality of life changes, meeting the day-to-day needs. Control expectations to avoid failure, make your customers want what you deliver, or even better – make them understand why they want a piece of your idea.

Skipping steps 

Every new idea needs a proper process and pipeline to achieve its full potential and lead it to a fully realized product. Development and production, resource management, timelines, risk assessment – compromising or skipping any of these aspects will cost you much in the later stages, and it can easily lead to flat out failure. Do not skip your well-established routines; take the time needed to make the best version of your idea. Handle these steps one at a time and trust the process.

Choosing the right partners 

The next critical junction on the road to failure or success is selecting the right partners. As you most definitely cannot do all the needed things by yourself, you will need partners, or you will have to outsource. Getting the right advice is of great importance, so choose your partners wisely, get different offers, allow yourself time to research options.

“The most successful supplier is not necessarily the most suitable for you.”

Make the hard calculations 

Handling all those significant numbers is an entirely independent process of its own. Fail to calculate the selling price or the costs, make the “number mistakes,” and you are bound to fail. Often creative people – inventors, engineers, artists and even professional accountants and sales managers miscalculate or skip this critical step entirely. Then they fail, blinded by the assurance of success. If you want to do business out of your idea, your passions, then you got to work the numbers or find the right professionals to do this for you. Take into account your market research, the industry you’re in, the benchmarks and specialists, perform the calculations, and thus – make failure impossible.

Getting the timing right 

Maybe the most sophisticated action of all, timing is essential. It combines planning when to release, when to announce, the media schedules, the launch, and the selling start. You must plan your product for the right time, and this is your best assurance against failure.

Create your schedules accordingly and by the book – make them work for you, not against you. It is always important to allow yourself a suitable buffer and do not get overenthusiastic. Avoid creating high expectations regarding speed that can frustrate your targeted customers.

Despite all the precautions, the idea failed. Now what?

Take your failure with the good, as well as the bad. Failing can lead to success – build a better understanding of your idea, become more realistic about the day-to-day challenges that led you to your failure. Then, analyze them, overcome them, and succeed with your product. It might sound like a cliché, but there is always the luck factor involved in every endeavor. Sometimes, failing first is a good thing, as this will make you grow and pay attention to the details needed to achieve the best idea realization.

Remember – be aware of your failures, pay attention to the statistics when necessary, take the right steps to countermeasure. You fail only if you don’t learn from your mistakes!

The product development industry can be a harsh place, but keeping yourself optimistic, following good practices, and adapting is the best way to achieve success.

The post Most great ideas will fail in becoming a product. Will mine fail as well? appeared first on Crystel.

It all begins with an idea

Once the idea of an invention comes to mind, I recommend starting to put it on paper. Notes, sketches, anything that you can think of on the spot.

First off, making a prototype gives you the opportunity to “touch reality” with your vision. If you have the time, make a low-fidelity prototype, it will probably help you make a better high-fidelity prototype.

When you get to the actual development process, or a new product is planned to be added to the line-up, the need for making a prototype is an essential step in the process for production.

Define your expectations strictly 

A prime example of defining expectations is this – ask yourself, what is the purpose of your prototype – to showcase its design, outlook, and dimensions, or to demonstrate its functionality?

Define your expectations for your final version of the prototype. You can make a list of “mandatory”and “not critical” expectations.The challenge of achieving all the desired things can be time-consuming and may get you into a psychological loop of not being satisfied with the outcome, whilst forgetting the true purpose and objectives.

Another good idea is to meet your mandatory list and then turn to the customer for more feedback. Supply your customer/evaluators a sample that they can observe and test. Collect all the feedbacks and improvements and decide based on your time constraints and budget if you need another version of your prototype or if you are ready to move on to the product development stage.

Be prepared to achieve expertise regarding your prototype 

Sometimes you get a great, unique idea which can achieve good market value. But between the idea and the prototype, you’ll face many problems, because maybe you are a professional in one area, but you can’t reach every aspect of a given matter, considering your prototype. Here are some basic steps and important details to follow through:

• Learn your field! Get comfortable with your idea – a prototype can be a software, hardware of plastic, metal, electronic part, or fabric. Each field holds its own challenges, so use the opportunity to learn new things. Study those challenges well while planning your prototype.
• Be professional! Although it’s just an idea, once you decide to make a product out of it, you must take it seriously. No cutting corners whatsoever. Cutting corners means missing details, and missing details puts you on a slippery path to failure. Learn all the steps that need to be taken and follow them throughout.

But consider this – being professional does not mean spending a lot of money!

• Spend wisely! Make these two principals your main guidelines:

1) Know the scale of your project and turn to service suppliers aligned to your needs.

2) Always have a few price offers for reference.

You will be surprised to find out how much you can learn from checking prices. Be careful as to not fall into the “too many offers” routine. This may confuse you. Do not “burn” yourself with the service suppliers, be honest and ask directly what you need.

Key considerations in the prototype production process

It is perfectly natural to stumble upon many difficulties, as well as general problems which need to be overcome. That is why it is important to have key notes and considerations regarding your prototype and the production process after it is done. Here are several examples that may come close to your own future examples and experiences. Learn them by heart or pay them no special attention, but bear in mind that the chance of getting these points is considerable:

• Good idea and a good plan are not enough for your prototype. Good prototype does not mean a good product.
• Every product has its own distinctive life cycle. You’ll need to take advantage of the time to launch your idea/ prototype/ products. Take a good buffer in assessing this time, as obstacles are inevitable.
• The budgeting cost of product development also should be taken well into consideration. Many good ideas/prototypes/products die on the stage of development costs.

So, to sum it up, you’d need particular help for: 

(1) Development

a: Optimized service and best user experience to end users.

b: Localization from the user’s perspective. Where is your product being marketed – include the right design, language input and detail realization accordingly. The end users need to handle your product easy and intuitively.

(2) Cost

• Start planning your supply chain, it is an important part of learning that your product is doable. Don’t wait for the prototype to be presented before you know the feasibility, the costs and the lead time for parts that build your mass market product.
• If you consider the following questions comprehensively, you will get A successful prototype.

Between turning an idea into a prototype, you need to do a Feasibility analysis report. It is more than a market survey. A feasibility study is an analysis that takes all of a project’s relevant factors into account. This includes the economic, technical, legal, and scheduling considerations, thus ascertaining the likelihood of completing the project successfully. Feasibility studies are used to discern the pros and cons of undertaking a project before investing a lot of time and money into it.

Also, feasibility studies often provide a company’s management with crucial information that could prevent the company from entering blindly into risky businesses.

After the feasibility analysis, you’ll know how exactly to do the prototype. Furthermore – in order to ensure the prototype is good, you’ll need to do a reliability test.

What comes at the end?

Okay, so you have your great idea, you have defined your expectations, prepared the needed expertise, and lined out your important considerations regarding the process. Now comes the endgame.

• Part 1 – Marketing analysis: This includes a comparison of similar to your products if any (let’s say function and/or pricing), different consumer groups, their involvement in the product, market prospect, and annual usage forecasts. All this can be done in one go, or in different steps, depending on your personal strategy and preferences.
• Part 2 – Product development: Starting with the cost of development, technical difficulties solutions, development cycle estimation, resource allocations, supplier and cost management, quality control, sourcing.
• Part 3 – Last, but not least – when you get a great prototype, don’t forget to apply for a patent to protect your product. Study your options and opportunities to register the patent for your design and/or technology.

To conclude the whole great journey of creating your prototype, we can come to the core of a concept. And that concept would be simple – protect and grow your idea with the help of a mindful, fully proven plan. Be prepared with adequate expertise, have a map of the most important key considerations, know when and how to get help for particular difficulties. Good preparation, combined with a great aid makes for the most complete prototyping, and this is the start of the future of your product.

The post The journey of creating great prototypes. How to make it work? appeared first on Crystel.