Episode #15 - How to Evaluate Suppliers and Manufacturers with Mike Morena and Shawn Litingtun

Episode #15 – How to Evaluate Suppliers and Manufacturers with Mike Morena and Shawn Litingtun

In this episode of the Predictable Designs Podcast I speak with Mike Morena and Shawn Litingtun about how to evaluate suppliers and manufacturers.

Business people, two men at the table negotiating Flat style

Mike Morena started a successful medical device company called AdhereTech back in 2012 who’s core product is a smart bottle that helps to insure patients take their medicine on schedule. The product is now used by tens of thousands of patients.

Mike is also a mechanical engineer with massive experience working with manufacturers and suppliers.

Also on the call today is Shawn Litingtun. Shawn is an electrical engineer, who happens to be one of the best electronics designers I’ve ever worked with.

In the past, Shawn worked for both Compaq computer and Blackberry, and now he does full-time consulting. In addition to electronics design, Shawn also has a lot of experience evaluating suppliers.

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Mike Morena

Shawn Litingtun

Links mentioned in the show:
AdhereTech.com
Follow Mike on Linkedin
Follow Shawn on Linkedin
TheHardwareAcademy.com

Podcast Transcript:

John Teel: Welcome to the Predictable Designs podcast, where we discuss all things related to developing, manufacturing, marketing and selling successful new electronic hardware products. I am your host John Teel.

Today I’m speaking with Mike Morena and Shawn Litingtun.

Mike is also a mechanical engineer with massive experience working with manufacturers and suppliers.

Also on the call today is Shawn Litingtun. Shawn is an electrical engineer, who happens to be one of the best electronics designers I’ve ever worked with.

In the past, Shawn worked for both Compaq computer and Blackberry, and now he does full-time consulting. In addition to electronics design, Shawn also has a lot of experience evaluating suppliers.

In fact, evaluating manufacturers and suppliers is the topic for our call today.

Welcome to the show Mike and Shawn!

Mike Morena: Thanks for having me.

Shawn Litingtun: Yes, thanks.

John: It’s great to have both of you. Both of you are really active in the Hardware Academy Community and that’s what inspired this conversation. Is someone in their head asked about for suggestions on evaluating and assessing potential manufacturers and suppliers.

I had shared my suggestions, and then both of you had stepped up and really provided a ton of value. I didn’t realize that both of you have massive experience in evaluating and assessing suppliers.

Mike has a very detailed questionnaire with roughly 100 to 150 questions for suppliers that’s very detailed. Then Shawn also has put together a questionnaire with questions that he recommends for evaluating suppliers. I’m in the process of combining those two together to create a questionnaire that will be in the resources section of the Academy. So, I hope to have that here in the next week or so.

Thank you both so much for, first of all, chiming in on the- in the form and answering the question. I have a decent amount of experience in this area but not near the level that you guys- both of you do.

Since three of us were working together on a questionnaire for suppliers, I thought it would be good to jump on a call and run through– We can’t go through all the different questions, but just talk about some general advice and tips for selecting manufacturers and suppliers. I think this will be a really good call.

This will be the first podcast I’ve done interviewing two people, so hopefully, that goes well. We don’t talk too much over each other. I think it’d be okay. I’m going to go ahead and just quickly start with sharing just a few of my suggestions on assessing a manufacturer or supplier.

Then I’ll ask Shawn and Mike, both to share their thoughts on my suggestions, if they have any, and then also some of their top tips or top questions that they recommend for evaluating a supplier. I’ll just run through a couple of mine fairly quickly. I don’t want to get too detailed on mine. I’m interested in hearing what Mike and Shawn have to say, but I just wanted to touch on the suggestions that I had in the form.

My first suggestion was to always ask a manufacturer exactly how they plan to do something and not just if they can do it. From my experience, manufacturers will commonly say yes to just about anything. So, you have to be careful of that; them not necessarily lying but always been overly positive. It’s best to ask for details of how they plan to do something and not just whether they can do something.

Another tip when speaking with Chinese manufacturers, just make sure that you’re actually speaking with the manufacturer and not some middle person because that’s really common. People will present themselves as the manufacturer of the product, but they’re really just a distributor for that manufacturer. It’s always best to make sure that you’re actually dealing with the manufacturer directly.

My third tip is to always get samples of similar products that they’ve done. I think that’s always a key for any supplier or manufacturers. You want to request samples and see the products similar to what you’re doing or the components that they’re supplying. Then my fourth tip is to always get referrals when possible for manufacturers and suppliers. This is something we have in the Academy. There’s a couple of hundred manufacturers and suppliers that are listed in there that either I’ve personally used or members have used and recommended.

A lot of these, I will say, Mike Morena on the call, these were companies that he’s worked with and recommended. Thank you for that, Mike. That provides a lot of value. I don’t remember the number of manufacturers, but there were quite a few that you had listed and had worked with and recommended. That’s really helpful.

Then my other suggestion was to– I know Mike has also got a way of doing this. Is evaluating the interest level of the manufacturer and just how interested they are in your product and working with you.

For my own case, I had found a manufacturer that really liked my product and they were able to– They liked it, so they were willing to end up offer me financing and really great payment terms. That was really huge. If they hadn’t liked the product, and seen that I had customers interested and I’d sales people and everything, then I don’t think they would have been willing to give me the type of terms that they did.

Those are the main ones that I’ve got. It’s just a few that are general and high level things to start your investigation or evaluation of the manufacturer. I think we’ll probably talk about these questionnaires. Like I said, Mike’s had over 100 questions.

It’s not the way you’re going to want to start your first communication with the supplier or manufacturer. You’re obviously going to need to have some warm dialogue and get them interested before you start telling them to spend hours completing out all your questions and documentation.

Let’s maybe go ahead and start with Mike. Well, first of all, do either of you have any feedback or comments on any of the tips that I just suggested, before I start seeing what individual questions or tips that you guys have?

Mike: I guess my one piece of feedback would be that for people that are going to be listening to this podcast, a lot of the things that we’re talking about are really framed from electromechanical products. That’s the frame of reference that I’m speaking from. When you’re thinking about evaluating the right partner to make that type of product, there’s a myriad of different types of suppliers that are involved. But typically, there’s usually one point of contact that you’re going to hire, which is like a contract manufacturer. They may have a different series of skills.

They may do some of the product. They may do all of the product. They’re going to have suppliers. And really what the point of the questionnaire and what I think the point of this discussion is, is how do you evaluate them after you’ve made your first pass at who you want to work with.

Maybe you’ve already found a contract manufacturer, but they don’t do electronics manufacturing. They just do assembly and they have a supplier. You need to figure out if that supplier meets your needs. Or maybe they have several.

That’s the frame of reference that I’m thinking about. Is there’s this journey that you take, you obviously have to reach out to people, get referrals, all the things you just spoke about.

Then when you have a working understanding of the level of interest, then you can use things like questionnaires and supplier assessments and visits to really identify their capability and their quality, and if they’re the right match for what you need. So, I just wanted to comment on the frame of reference in which I will be speaking.

John: That’s a great point. I think for everyone listening to this, in general we’re assuming that are like from mechanical. Both mechanical, which for most products is just the enclosure and then obviously the electronics. I know Mike had two questionnaires; one for electronics manufacturers and one for enclosure manufacturers. This can be varied.

As Mike hinted at, you may have a supplier that supplying your PCBs and then another supplier that’s supplying your enclosures, and then you have a third that’s your contract manufacturer who takes those pieces and put it together. But you may also eventually have one company that does all this. So, I think that’s a great point.

Was there any feedback on any of the points that I made, Shawn, that you have?

Shawn: Yes. My only thing is talk to your suppliers, whether it’s by voice or by email, and you can quickly judge their interest in you by how fast they respond to you or how thoroughly they respond to you.

If they are very interested in what you’re trying to do, they would respond very fast and they would respond very thoroughly. If not, then you’d find that they’re dragging their feet. That’s usually a sign that they’re lukewarm to your proposal. Also, get the WeChat because most of the Chinese companies, they have WeChat. They don’t use pretty much anything else other than maybe Skype, but mostly it’s WeChat.

John: Okay, got you. Communication is always an issue when dealing with China. Just the time difference and it almost always– In my experience always best to communicate in written form. The language barriers and just having a track record of everything that’s been said is always really helpful.

Okay, so we’ve reviewed my couple of questions or tips. I’ve got a couple more, but I feel like these are going to overlap somewhat with what you guys have to say. Like I said, I know there’s probably 150 questions between the two of you to ask suppliers, so I don’t want to go through all that.

I’ve just asked each of you to maybe highlight five or so; the questions or the types of questions, or even just general tips that you have. Let’s maybe go ahead and start with you, Mike. I don’t know if you want to start with the electronics or the enclosure? You can start whichever way you want.

Mike: I guess, we’ll start with electronics. One of the first things I always ask– I mean, I guess in general any supplier, I always ask generally; what the size of their business is. How many employees they have, how many market verticals they operate in. Are they a consumer electronics company?

Do they focus on medical, industrial? How many locations have they operated? That gives you just an idea of the relative size of the company because you’d be surprised at the varying depth of sizes of businesses that all do the same type of stuff.

Then specifically for electronics, the first thing I always asked is how many SMT lines they have. Typically, this gives you an indication of really their throughput. If it’s a company that has less than- it has less than three, they are a very small business. Most of their business is going to be what’s called a high mix. Their equipment is going to be designed for changing out for different customers. It’s going to be designed for small runs. Whereas a company that may have 10 SMT lines, they’re probably going to have eight of those to be dedicated to customers and two of those to be like high mix, so multiple customers on one line.

That quickly gives you a picture of what sort of businesses they’re looking to go after. If they have more than 10 SMT lines, they’re probably a very high-volume electronics manufacturer and they are really going to be difficult for you to get a working relationship with because they’re suited up to run continuously for a lot of customers. That’s definitely like the first question I always ask, “How many SMT lines do you have?”

Then without going into too much detail, like some of the other additional electronics manufacturing processes, specifically like different types of soldering equipment. There’s typically surface mount technology then there’s through-hole technology, which everyone’s probably familiar with.

Obviously, those require two different sets of equipment. In the through-hole world, there’s usually either wave soldering or what’s called selective soldering or hand soldering, just by hand, or robotic soldering. Those give you the idea of their capability quickly. What sort of through-hole soldering technology do they have? They may not have any at all. Some companies are really coming over to only surface mount.

Then the last thing that I would say about electronics manufacturers, the last big question I asked is, “What sort of automated inspection equipment do they have?” I would never work with any electronics manufacturer that did not have an automated optical inspection.

It’s totally affordable equipment and it’s a game-changer for surface mount technology. You have to have that for me to select you. Then additional nice-to-haves are like automated solder paste and X-ray is really something that is valuable for parts that have really high pin counts or high-density pitch parts. Those are the main questions that I would go after electronics manufacturer.

I’m trying to think if there’s anything else. Also, asking a little bit about how they manage supply chain. A lot of what electronics manufacturers either do for you is not only maybe build your circuit boards, assemble your circuit boards, but also source all the components. If you have ever done this before, there’s always going to be changes to that and there’s always going to be stock that goes over, or there’ll be shortages and alternate parts. So understanding how they manage that is going to be something that you’re going to have to be involved in once you start working with them.

John: Okay, yes. Excellent. I have just a few follow-up questions based on some of the points that you just made. As far as evaluating the size by the number of SMT production lines that they have, do you do in general– You’d mentioned that if they have, say, 10 lines, then most likely they’re set up for high manufacturing with bigger customers.

So, they’re not going to give you any of the attention that you deserve or want to be willing to work with you. In a case like that, do you generally think it’s better to try to still find companies like that so you have a company that you can grow into? Or is it better to start with a company with fewer lines, do some low volume production with them, get that smoothened out and then eventually transition to a larger manufacturer?

Mike: I suppose it depends on what your ultimate goal is. If you’re going to be a company that’s building equipment or machines, where you’re going to build 1,000 circuit boards a year and that’s doing well- if that’s the definition of doing well- then you’re not going to want to go to a company that is going to be tooled up for volume production, in my opinion.

Again, this is mostly my opinion. But if the definition of success is a high-volume product that you’re going to make, you’re going to want to try and target a company that has that capability and try and shoot a little bit over what you need so that you can grow into it.

In the past, I’ve worked with manufacturers. I had a mix of mostly high volume lines and then a few, what I call high mix lines. To this day, we’re still on the high mix lines but that’s because their equipment is so fast at changing over and that technology has come a long way.

But not every manufacturer has that and some of these lines are a little bit harder to change over to different customers’ products. So, I definitely recommend picking a manufacturer that you can grow into, but I wouldn’t discount anyone based on their size. It’s just to give you a good sense of how big they are.

I’m sure Shawn can attest to it. Some Chinese manufacturers will have 40 SMT lines and your business then might be really small starting off. But if eventually you could be a company that would occupy one that would be something they would be interested in.

John: Got you.

John: With your own product, because you were in the first podcast episode, I recall that you ended up landing a pretty large manufacturer either like a tier-one or tier-two manufacturer that has a really- like is world-class reputation. Is that is that correct?

Mike: Yes, that’s correct.

John: Okay. I mean, it’s obviously ideal if you can get the attention of a larger company, one that you can grow into. That’s the strategy I went with my own company. My own manufacturer, they weren’t really set up for small volume production. They were set up to make hundreds of thousands or millions of units.

My other question was kind of random. You’d mentioned inspection equipment and they definitely need to have optical inspection equipment. Have you seen electronics manufacturers that don’t even have optical inspection equipment?

Mike: I’ve seen ones where they do not have automated optical inspection equipment. I don’t know, Shawn, if you’ve ever seen any without at all.

Shawn: Most of the SMT lines these days have automated optical inspection. I’ve seen one as well. They had a camera and then they had people look over that. If that person is feeling sleepy on that day or something, then they might miss a few things. But most SMT lines already have automated optical inspection built-in. It should be there should be.

Mike: Right, exactly. It should be there. That’s what I was meaning to say.

John: Okay, just to confirm. That’s what I thought and had always assumed. My last question is; you had mentioned the supply chain and whether there’s two options– Well, yes. I guess the two options are they do all the supply chain management, so they source all the components, or possibly you can do it. Maybe that’s not practical in a lot of cases. For my product, I chose early on to do all the sourcing all the components myself because I just wanted to have maximum control over all the components that were being made. Then my plan was eventually, once I had relationships with all these suppliers and got all the little kinks worked out of everything, then I was going to transition over to having the manufacturer handle all the supply chain.

Do either of you have any thoughts on that?

Mike: Yes. Definitely, when it comes to getting launched, you need to be involved a lot. Especially for components that are, what I would call unique or harder to get. A lot of times we’re developing a new product, it’s centered around something new that isn’t necessarily readily available.

Let’s say, Texas Instruments comes out with a new sensor that’s never existed before and is just going into production in the next quarter. Obviously, you can’t really ask a manufacturer to go get that because it’s probably not available.

Maybe you’ve been working with Texas Instruments for the last few months and really have been digging into their datasheets and getting information from their sales teams or what have you, and you’ve identified that you need 100 pieces to do a pilot build.

You’re going to have to go get those parts and provide them to whoever is going to do the electronics assembly. But eventually, you don’t want to be doing that. You want to get away from that.

Honestly, these companies that are going to do this; they have more buying power than you’ll ever have.

John: Absolutely.

Mike: I’ve worked with contract manufacturers that automatically get a 10% discount through Digi-Key. They’re just paying 10% less than you would, even for the same low quantity, because they do so much business with them every year. They do millions of dollars in business. So right there, you’re getting cost savings just by having someone else buy the same quantity of parts that you would do.

That’s the way I approach it. It’s like, “What are those critical parts?” You need to manage those really early on, and then make sure that your bond is clean and organized and then let them go manage purchasing. Because really what you want to do is you want to get to a place where you just place an order for your skew and they go and build it. Then they manage, making sure that the material comes in on time and they have enough parts of everything. They’ll have, likely, software tool that help them manage this.

John: Got you. I guess in my case, if it’s a standardized component that has a defined part number and is just widely available, then I really don’t see any reason why you would want source that on your own. For my product, it was mainly some customized pieces.

There was a couple custom springs and a custom sheet metal piece that were custom. So, I felt like there was some advantage to me managing that initial relationship and getting the supply- getting that flowing and then transition over to the manufacturer.

Mike: Definitely. For anything custom, you need to figure that out, in my opinion. Now, it’s always easier to have an existing relationship. If you’re lucky, you work with a sizable contract manufacturer, they’re going to have what’s called a verified supplier list or whatever- approved supplier list.

You can go ask them like, “Hey, I need to have a custom spring made. I don’t need you to work with the supplier. I just need you to recommend to me anyone that you trust and already doing business with. Do you know anyone that makes custom springs?”

Then you go work with that company to develop your custom part. They’re already a validated supplier for your contract manufacturer. When the day comes to synching those two people together to order your custom parts as needed, it’s so much easier.

John: Got you. Okay. Shawn, do you have any thoughts on this? I’ll try to get you in the conversation. Obviously, you’ll have your turn to share some of your tips, but I wanted to see if you have any thoughts on– I don’t want to leave you sitting there without having a chance to say anything.

Shawn: From my point of view, again, it depends.

John: I’m sorry. Shawn, can you maybe get- try closer to the microphone again.

Shawn: From my point of view- and again, it depends on what kind of a supplier you’re looking at. If it’s a small to medium one, it might be a good idea to ask them about their revenue and how long they’ve been in business. That would give you an idea of how stable they are, or they just started and then they won’t be here tomorrow to support you.

One of the things that you will want to see is how stable- or you want to try at least to get an idea of how stable they are and how long they might stay in business, or whether they’re stable or reputable or not. That’s one thing you want to get, just by asking them.

The second thing that you want to ask them, and most large or medium-sized suppliers have a process map or some people call it a control chart. That means that they have thought about their own process and they have formalized it into a document.

If the supplier does not have that, it just says that they haven’t really gone over their entire process completely and mapped out even their own steps, or they may know how to do it but it’s in the collective- all the people know but without any kind of formalization. If they have a control chart or a process map, that means that they have put it on paper.

Generally, what it has is it’s a whole bunch of steps; from incoming inspection, all the way to inventory control, all the way to outgoing inspection, and maybe ongoing reliability tests and all that- and sampling and all that kind of stuff. Each of these steps will be detailed in that process chart. Then they would say, “Okay, well, this is what it’s done. If it doesn’t pass, this is how it goes. If a process step fails, this is how we handle that.”

So it’s always good to have that. It says that the supply is very focused on getting the process and doing it consistently, time over time.

Mike: In that same vein, John, I think a good thing to check for- it’s in my list of questions- is they should have some sort of ISO certificate, which is an international standards quality system, and they should be certified by a qualified body. They should be able to provide that.

That should be something that they absolutely have. ISO 9001 is a pretty common one. There’s also ones for automotive and medical. These are less common but it depends on their customers and their requirements. I think a good way to verify what Shawn’s talking about is also asking for a certificate of quality system.

John: Yes, that’s a great point. I’ve been through a company that was going through ISO certification. I know if they have that then that means they have all their processes really documented well. So that’s a great point. I think that having documented processes or standard operating procedures is really critical for any business that’s going to be really efficient at it.

Even for my own business, I’m constantly working on creating standard operating procedures from everything to publishing a blog, to publishing a podcast. That’s always going to make any business more efficient if they have that down in a procedure that everyone can follow. It not only makes it more efficient and quicker, but less likely for any type of errors to happen if they have a process. Including a process of making sure that there are no errors that get through.

As far as Shawn’s comment on the size of the company, that’s a really good point. Mike was saying it from a standpoint of how many lines you have. Shawn was maybe more revenue or how long they’ve been in business. I know that it’s common to group them into tiers.

Where, I think, tier-one is kind of loosely maybe above five billion a year in revenue. Then you’ve got tier-two, which is maybe 500 million to five billion. Tier-three is 100 million to 500 million. Then tier-four is less than 100 million. I know in the referral section of the Academy where we have contract manufacturers, with Mike’s help, we’ve got those classified into these different tiers. That gives you at least some upfront estimation on the size of the company.

Okay. A question I have for both of you is- and Shawn, you can start first- is; how critical do you feel is it to audit the factory? Either the founders do it, someone from the company or potentially hiring a third-party service to audit the factory?

Shawn: Yes. You can hire a third-party and there are some of those in China that would give you a complete report. At the very least, I think someone from your site should at least pay a visit. Maybe a full audit will be good, but at least pay a visit to the place when you’re getting serious and getting ready to start.

The reason why I’m saying that is that it’s fairly easy to have a website- to make a website and make it look really good. You can even borrow pictures from other places and like stitch it in your website and make it look good. But unless you’re on site and you see the attitude of the people, doing the things that are going to manufacture your product, you won’t get a good idea of whether they are really, really serious. Even large companies, they have A Team and B teams and C teams, and all that stuff. You don’t know exactly who you’re getting assigned to. Whether you getting assigned to the A team or the B or C team, and then there will be a difference in the kind of support and in the kind of seriousness they give or they put onto doing your things.

For example, you can go there and find out that the EST process is really just a name only.

Shawn: They can take pictures of equipment and all that. It doesn’t mean they actually follow what they’re preaching. The only way to actually really, really find this out is to actually be there in person and look around and ask questions and talk to the people really involved.

Mike: Yes, totally agree.

John: I think that’s the best case scenario but like you mentioned, there are companies that you can hire to do this. Especially to a lot of people listening to this, going to China and evaluating a factory or auditing of factory, is something that they may not feel comfortable doing.

Obviously, you can still go there and get a feel for it and see that it’s a real factory and that you can meet the people. You can get an idea; is it a nice clean facility They seem to be following procedures or is it just someone in their garage manufacturing your parts? You can get that feel without any experience.

But if you want to really have a more in-depth feel, you can either audit, pay someone to audit them or obviously the questionnaire that we’re talking about here is going to go a long way in answering some of those questions for you.

Mike: I think that you should definitely visit. It’s my opinion that really hiring a supplier or a contracting manufacturer is like- it’s a little bit like hiring an employee without ever meeting them.

You probably would never hire someone to work for you without ever speaking with them or meeting with them first, and that’s really the equivalent of visiting a factory.

One; it just goes a long way in developing relationships from a business professionalism. Also, I’ve actually gotten feedback from Aspire, they didn’t actually end up working with, but it was for more of a fun project than it was a professional project. I basically said like, “Well, I can’t really afford to visit you because I don’t plan on doing that much business this first year.” Now, if I’m only going to do $20,000 orders with this person, spending $3,500 to go to China for a week is not well-balanced use of funds.

Immediately that sends a negative signal to them. It’s like, “Well, if you can’t afford to fly for a few thousand dollars to come visit our factory, can you afford to pay for the order that you just placed?” Because it’s like these are not substantially different quantities of money.

I’ve had suppliers, evaluate my businesses from a financial stability perspective. It’s like if cost is so tight that you can’t visit a factory, then you’re probably not entering the right business, in my opinion.

John: I think that’s a valid point [crosstalk] they don’t want to mess with someone that can’t pay for orders or won’t ever actually get an order.

Mike: The way I think about it is like; think about a scenario where you did place an order for a substantial amount of money and there’s a huge major problem. In that scenario, you’re most likely going to get on a plane and go figure it out. It’s in your best interest to do that before you do that.

John: Yes, absolutely. With my own product, I was fortunate because they actually came to meet with me the first time. But that was partially because I lived in Alaska and the general manager of the factory I think was wanting a vacation in Alaska, so they worked it out.

He visited me and probably did the tax write off. But nonetheless, it was nice to be able to have them come to me and get that initial meeting. That’s probably not something that happens very often, unless you happen to live someplace that someone at the factory wants to take a vacation.

Okay, so the general answer is yes to the audit. Yes, to visiting the factory at the very least, whether or not it’s a full audit, at least visit the factory. Did you have any other points or questions that you wanted to highlight, Mike? I was going to switch over and let Shawn do some of the ones he’s– Obviously he’s already mentioned a few of them, I think, in this conversation.

Mike: I didn’t touch on the plastics manufacturing, but I don’t know if you want discuss that.

John: Oh, yes. Let’s do that one.

Mike: Okay, cool. One of the points about plastic is also applies to electronics as well, but I’ll get to that. When you’re evaluating manufacturing company to make an enclosure or some part for you that is either manufacturing plastic or metal, you most likely are going to work with an injection molding company.

It’s the highest likelihood that you’d use that technology. Those companies primarily do two operations; they make plastic parts and they also make tooling that makes the plastic parts.

Typically, quick off the top of my head things that I asked are- the first question is, “Do you make tooling in-house?” A lot of molding companies- for example, domestically in the United States- a lot of them don’t make tooling in-house because it’s very cost-intensive and there’s not a lot of money to be made on tooling. They’d rather make money on running parts.

That being said, having commissioned like 20-something-plus injection molds, I find it incredibly valuable to work with companies that do tooling in-house. Mostly because it’s faster and they charge usually less for it. Again, because they’re not really trying to make money on the tooling.

Also, any design changes are much faster and simpler when they can take the tool off of the mold base and just bring it right over to their tooling shop and make a change. It take days to make a change as opposed to weeks to boxing it up and trucking it over to their tooling vendor. That’s the first question I always ask is like, “Where do you do tooling in-house or not?”

The second question I usually ask is, “How many presses do you have and of what sizes?” Because this will also– And/or you can ask like, “What’s the smallest part you can make? What’s the largest part you can make?” Because a lot of companies won’t have certain presses over a certain size.

A press is the machine that actually opens and closes the mold and ejects plastic into it. Based on tonnage, is typically the clamping pressure so that usually means like the larger the part, the more pressure you have to push plastic into it so the larger the machine. That tells you how big of a part you can make.

You can imagine the base of a laptop would be like a medium-sized part, a TV would be a large-sized part. The bumper for a car would be a very large-sized part. These companies typically split themselves up into large-part makers and usually small-part makers. That’s been my experience.

So asking them how many presses they have and of what sizes that they have tells you what parts they typically make. If you have really specific requirements, for example, making an optical part, that would be a question I’d also ask right away. Is, “Do you make optical parts like a lens or a light guide, or something that requires really high precision molding that you can’t have any defects in?”

Then the last thing I usually ask injection molders is; what sort of secondary operations they’re capable of doing. Because you’ll often find when you design molded parts, there’s something you have to do it after you mold it. Whether it’s a printing a logo on it- that’s called pad printing or screen printing- or maybe you need to have brass inserts heat-staked into the plastic part, or maybe you just need to combine two plastic parts together.

For example, a cut that has an inner part and an outer part and you want them to snap them together. Those type of secondary operations; to see if they can do those things for you because there’s always a lot of value-added services they can provide typically when they mold the parts. They can do small or sub-assemblies, if you will.

An example of a part that I once designed had an antenna inside of it. They would actually buy the antennas from a supplier that I picked and then it was actually ultrasonically welded between two pieces of plastic, so it was inseparable.

They molded the two pieces of plastic, they bought the antenna, they installed the antenna in one piece, put the other piece on and they welded it together. That was all done in the same factory that made the tooling, that made the plastic parts; so secondary operations.

Then the last and probably the most important thing that I always ask is, “Do you offer DFM reviews before you place purchase orders?” One of the things that you will quickly become aware of when you’re designing plastic parts is that injection molders have typically a ton of feedback on your design and things that they like or don’t like. Thin walls, thick walls, transitions, radiuses, draft; all these things. There’s a lot of work that goes into making those design changes. If you can do that without having to put out any money, that’s a huge advantage.

I’d always ask, “Hey, can you guys do a DFM review of my parts before I place an order for tooling?” Because it just shows a level of interest in your product. That’s immensely helpful because typically, a lot of companies won’t help you out until they know that they’ve won your business.

I usually ask that and sometimes you get a yes, sometimes you get a no. They should be able to do that no matter what. Even if you have provided the purchase order for the tooling, you really want them to provide you a full DFM feedback.

Where they look at the draft, they give you the parting lines, they tell you where they’re going to put gates on the part. They tell you where they’re going to put ejector pins on the part. They give you feedback if there’s going to be any work or sink marks or any cosmetic issues. They should do all of that before cutting tooling. That’s definitely something that I always ask about when it comes to selecting the plastics part.

John: Those are great. I liked the suggestion to have the tooling in-house. Because like you said, most products are going to require some tweaks be done to the mold at some point.

So having the ability to do that in-house is going to just speed everything up because you find these weeks start to add up after a while. With everything taking longer than you think and just communication delays, so anything you can do to minimize that I think is really beneficial. So that’s [crosstalk]–

Mike: Yes, and that DFM feedback applies to electronics as well. If you go to an electronics company manufacturer, he’s going to look at your designs and say, “This is going to cause soldering issues,” or, “Increase this pad side,” or, “Give me a little bit of more room here or there.” That’s something that they should do before you build anything.

John: Absolutely, and for both the mold and the electronics, I’ve found– Manufacturers will typically have some engineering department. I found that’s one of– The easier things to get a manufacturer to commit to as far as “investing” in your product, is to get them to offer some engineering services like this DFM review. Which is what my manufacturer had done, even though it was pretty close to being already injection molding, it was obviously designed for injection molding, there were lots of changes that they wanted that required it to be done to increase the mold flow and make the wall uniform- wall thickness more uniform in search for a more even flow.

So that’s definitely something that’s helpful if you can get a manufacturer to offer to do that for you. I know it can be expensive. One member of the Academy, he- I think it was a manufacturer that he’s working with and they wanted to charge him $9,000 to do a DFM analysis on it.

Which I encouraged him to not do at this point because he’s still early stage. And $9,000, that’s pretty steep for that. I think you can get that done a lot cheaper. I recommended that he try to maybe find a different manufacturer. That doesn’t really sound like a manufacturer. They just look like they’re trying to make some money off the DFM analysis maybe.

Mike: Yes, I call that the no-bid quote. It’s like they don’t want to do the work, they don’t work with you but if you pay them, they’ll do it. So it’s not really a good business partnership.

John: Yes, “If you give us enough money then we’ll do it, but really we’re not that interested.” Those are really good. We’ve touched on some of your tips for electronics and some on the enclosure.

Obviously, Shawn, you’re an electrical engineer, so you may or may not have much input on the molding process. [crosstalk] But obviously, you’ve done a lot of supplier assessment, so I suspect you have experience in all those areas. I’ll let you go now. Thanks for being patient. If you could share any other tips that you have that you’ve not mentioned yet, that would be [crosstalk]–

Shawn: One other thing that I’d like– You can get into details in the questionnaire, but initially, you should really ask about operator trading. It’s not uncommon for a Chinese manufacturer to have someone apply in the morning and by lunchtime that operator is working on your product.

Your product quality depends on that operator who that same morning didn’t know anything about your product, and didn’t know about how it works and how to test it and all of that. And now your entire product quality is just dependant on that one person who didn’t know anything about it this morning- that same morning.

It’s always good to ask about their training and how they retrain their operators, and whether they have a formal way of training it.

As opposed to someone applying in the morning and they just take her on the manufacturer floor and say, “Here, you just do this and do that, and then off you go now,” kind of thing. It’s always good to have something in writing at least that says, “Yes, we have a formal training method and we have a formal retraining method for all of our operators. Green operators are always paired with someone who can teach them before they actually, on their own, doing your product.”

Also, it’s always a good idea to ask about the incoming inspection and outgoing inspection at the very least. Whether they have a formal way of doing that or it’s just like, “Okay, well, the product comes in. I just log it in.

Then it just goes up to the manufacturing line.” A lot of companies will have an incoming inspection area where the product pre-inspection will be one area and then you’ll go through inspection. Then post-inspection; the product moves to another area that will physically separate it so that you know at least they have been inspected.

Also, for things that they cannot inspect in-house, they usually have- and you can ask for traceability like that- certificates of compliance or certificates of acceptance.

The products or components or assemblies that they could not test at incoming inspection, so they have to depend on their suppliers to have done that. Their suppliers, therefore, should have a certificate of compliance that is shipped to their customer that says, “Yes, we have done that.”

Same with outgoing inspection. You want to know about the sampling and how the sample– Usually, it’s a AQL level. That means that depending on the lot size, they take the number of sign posts- a number of random sign posts and they check.

Then if it doesn’t pass, if it has more failures than is required for the AQL level, then they will fail the entire lot. That’s another thing. Again, for outgoing inspection; the same thing.

The other thing- two things, especially for electronics manufacturing that you really want to have them talked about or at least show you that they have a process is solder paste. One thing with solder paste; solder pastes have to be kept at cold temperatures until used. A lot of people, they just have that in writing but they don’t really follow that.

Usually, it comes in a dry ice package and then they put it in a refrigerator, and then they take it out in the morning, they activate it. Once activated, you have 24 hours. If you don’t use that solder paste within 24 hours- the activated solder paste within 24 hours, you have to discard that.

Some will kind of, “Okay, well, it’s been 30 or 40 hours. That should still be good,” kind of thing. You won’t find anything wrong in the product you get but reliability will suffer in the long run if you don’t have the right soldering done for the product. That’s one thing.

The other thing is treatment of your PCB. PCB materials will absorb moisture. First of all, they have to be stored in a humidity-controlled environment. Second; they will oxidize regardless of surface treatment and all that. So usually, you don’t order PCBs a year in advance and store it before you use it. You have to make sure that the PCBs are maybe bought a month in advance and then you use it and not have it stored for a long time.

Also, because even with humidity control and all that, they can absorb moisture, so what you want them to do is to bake your PCB. Especially if you’re using large parts like BGAs and LGAs and all that.

What will happen otherwise is when it goes to the reflow oven, the PCB will warm and will actually crack the solid joints because of the escaping steam or escaping humidity kind of thing. So, you want- the PCB first, you want them to have a process for doing that. To bake your PCB first to drive out the moisture before it goes through the wave soldering. That’s another thing.

Of course, EST is important. You just want them to at the very least say that they have a regular EST testing and regular operator training, which is just as important as the testing. T

he operator has to be trained properly to treat EST as being a very serious matter and not something that after the training, you’re all done. Of course, you want them to have work instructions posted so that the operator can refer to them or standard operating procedures posted so the operator can– That’s all signs. These are all signs of a good manufacturer.

John: Definitely, those are good. A couple questions or clarifications is on the inspection. Just for anyone listening; incoming inspection, you’re talking about just inspecting the components that will be used in the final product.

I’m curious, what would be– Let’s just say it’s not a custom component, but let’s just say it’s a microcontroller- an STM32 microcontroller chip. What type of inspection would they do for something like that?

Shawn: First of all, they would inspect a lot to make sure that they have no issues with misplaced components. Usually, it would come in reel and all that, they’d make sure that all the property– Second; all of these have storage requirements, moisture and humidity requirements because those chips can also be– In that case, because they cannot really test anything, they would rely on the certificate of compliance from their suppliers that says, “This product has been tested and these are my incoming limits.”

This lot specifically now would be logged and say, “We have received this lot and now this quality in this lot.” So that in the end, when your product is done, if ever you have an issue they can trace it back to, “Yes, that issue was with this lot of STM32 microcontrollers.”

Your exposure to the issue now is now limited to this window, like two days or whatever that we use this, and you have actually X number of boards that were made using components on this lot. That’s the maximum extent of your exposure.

Heaven forbid, if you have something that’s quite wrong with the board and you do failure analysis and you found out that because for some reason the process of– You want them to be able to trace back to, “Yes, this incoming inspection lot, we received something like 4,000 or whatever on that day, and it was inspected and this was the manufacturing lot, and it went into production on that date and it was used up on that day.”

Now, you know the extent of your exposure. Then you can decide from a business point of view whether you want to recall the product or just let people make claims, but you need to have the data to allow you to make that decision.

Mike: Traceability is incredibly valuable. You won’t find it at every manufacturer. One manufacturer I’ve worked with, they would serialize every single PCB and they would have a barcode on it. It was actually really cool. Their SMT lines, actually they’d barcode up the raw panels.

They didn’t ever make a mistake loading the wrong SMT program because the barcode on the raw panel would tell the SMT machine to load up the right assembly program. All they had to do was just feed it boards and it would pull up the right program, put the parts on it. They would put all the parameters into the oven, all that stuff. It was incredibly valuable.

Then any time an operator was out the SMT machine, they had to scan their badge. If anyone ever made a mistake, like if there was bad parts, I could say, “Hey, I have circuit board number 347,” and they would go, “Okay, let me look that up. John’s on the SMT machine that day. We built 800 units.

The five reels of capacitors that we used on that run were these.” They would go tell me what are the other boards that might have those bad capacitors and then we would go and quarantine those parts- those finish-built boards and then maybe do some more testing and inspection on them. Or we would know what units those went into out in the field and we’d get them back.

So traceability can be enormously valuable because you’re always going to have some issues, and minimizing the issue- the impact to other parts that may have similar problems is really valuable.

John: Obviously, it’s always best if you can catch an issue earlier on in the process. It’s much better to catch an issue with the component when through the incoming inspection than it is for that to make it on your board and make it to the final assembled part, and then testing there.

If the part ends up failing and now you’ve used a bad part and actually manufactured the product with a bad part, so it’s much better if you just catch that issue with the part early on before it goes through all that process, and you just end up wasting or scrapping the entire board or the product or having to go back and rework it.

Okay, great. Mike, do you have any other comments or anything on anything that Shawn- any of the things that he had listed? You touched on a couple.

Mike: No, I think that’s pretty good.

Shawn: I’m good too for now, yes.

John: Well, great. I think this has been really good. I can’t thank you both enough for coming on and sharing this. It’s a really important topic for everyone listening to this at some point.

Hopefully, if you get to that point that you’re going to have to evaluate suppliers and manufacturers. This is going to be really good. The questionnaire, obviously, I’ll be putting that together in the next week or so, so that will be available for members as well.

Before we end the call, Shawn, do you want to maybe tell people how they can find you or learn more about you? I assume maybe LinkedIn is the best way?

Shawn: Yes, LinkedIn is fine or just send me a private message on the Academy and I’ll provide you with links and all that, and we can talk.

John: Great. I’ll be sure to include your LinkedIn profile link in the show notes for this. He’s always in the forum answering questions, so always feel free to reach out to Shawn there or Mike as well. Mike, how can people contact you? [crosstalk]–

Mike: Yes, same. LinkedIn or you can hit me up on the Academy with a direct message or just tag me in a post, I’m happy to help.

John: Got you. I’ll also include a link to your startup, which I know you’re still on the board but you’re not actively- you’re not in that startup anymore [crosstalk] at AdhereTech, but I’ll definitely throw a link on there so people can learn more about the company that you co-founded.

Well, thank you both so much for doing this. You both have such a wealth of knowledge in this area. Thanks again for coming on, I appreciate it.

John: Okay, that’s it for today. Be sure to tune in next week for another episode of the Predictable Designs podcast.

Episode #15 – How to Evaluate Suppliers and Manufacturers with Mike Morena and Shawn Litingtun

Episode #15 – How to Evaluate Suppliers and Manufacturers with Mike Morena and Shawn Litingtun

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