1. business and industrial

THE OEM SERIES
Chris Hubert
A Guide to the
DIY VS. OUTSOURCE
DECISION
For Computer-Controlled Devices and
Embedded Computer Solutions
A PUBLICATION of CONTINENTAL RESOURCES
EXECUTIVE SUMMARY
1
Congratulations! You’re considering building
a computer-controlled device/appliance to
sell a turnkey solution for your software.
Welcome to the world of manufacturing. This
eBook outlines the elements involved in the
manufacture of computer-controlled solutions.
2
You’ll get a picture of all the departments
involved and the impact of the manufacturing
decision across and throughout your
organization. A quick review of the table in
Appendix A illustrates the complexity.
3
Any analysis wouldn’t be complete without a
discussion of alternatives.
Introduction
There’s Always
Something…
The possibilities and perils of the
Make vs. Buy decision
The phrase “There’s Always Something” is a
backdrop to make people think, laugh, cringe,
and better understand various aspects of “what
seem to be simple matters.” That same backdrop
provides a fitting storyline to explore the pains,
perils, and promises that people face when
their livelihood and day-to-day activities involve
embedded, purpose-built OEM computing
platforms.
Regardless of whether the custom-build initiative
causes pain or pleasure, it begins prior to the first
piece of code being written or first component
or subassembly researched… and continues
long after the unit is shipped, installed and
functioning.
Check out the table in Appendix A which
provides a fairly comprehensive list of the
various elements of a typical custom embedded
computing initiative, and the departments that
are either involved or affected in each step
throughout the process.
Find out how prepared you are to manufacture
your own systems – take the survey in Appendix
B. Send it to us for your ‘readiness’ score.
Read this eBook to understand and evaluate all
the components in the manufacturing scenario as
well as some of the alternatives.
Within this eBook, we reference a brief poem first
noted in the 14th century, a cautionary tale about
how overlooking the most inconsequential matter This eBook addresses six elements within the
could have broad and deep implications for a
process of designing, building, testing, and
successful legacy.
supporting an embedded computing solution.
Those six elements are the corresponding six
For want of a nail the shoe was lost.
chapters of this eBook.
For want of a shoe the horse was lost.
For want of a horse the rider was lost.
For want of a rider the message was lost.
For want of a message the battle was lost.
A LOOK AHEAD
For want of a battle the kingdom was lost.
And all for the want of a horseshoe nail.
CHAPTER 1: Systems Planning Services
FIGURE 1: How failure to anticipate or correct
some small issue leads, step-by-step, to a terrible
outcome.
CHAPTER 2: Vendor Selection and Management
CHAPTER 3: Systems Build, Integration and Testing
CHAPTER 4: Inventory Management
To begin, it’s essential to understand that the
Make vs. Buy decision affects more people and
departments than engineering. In fact, Make vs.
Buy is often more of a financial matter than an
engineering one.
CHAPTER 5: Logistics
CHAPTER 6: Post Sale Considerations
[III]
TABLE OF CONTENTS
page
i
Chapter Overviews
1
1
Systems Planning Services
4
2
Vendor Selection and Management
8
3
System Build, Integration and Testing
10
4
Inventory Management
14
5
Logistics Management
17
6
Post-Sale Considerations
19
A
Appendix A: Table showing how the various elements of the
22
B
Appendix B: Are you prepared to build your own solution?
24
C
Financial Considerations
27
Glossary
30
manufacture of custom systems impact
departments throughout your organization.
Take the survey.
[IV]
i
CHAPTER OVERVIEWS
Chapter 1: Systems Planning
Services
budgets needed to not only design the product
and prototypes but to build the product in the
anticipated quantities.
A penny for your thoughts?
Building a purpose-built solution with an
embedded processing engine has to start
somewhere… and so does this first chapter of this
eBook. Let’s start by assuming that you already
have the idea for the product/solution. Maybe
you want to build a turnkey solution for your
software – an appliance or computer-controlled
device to run your software.
Before jumping into the project’s design
stage, you’ll want to fully review the project
requirements. Does your organization have the
internal capabilities necessary? How difficult are
those capabilities to obtain? Do you possess the
correct:
• Engineering skills
• Processes
• Tools
• Financial wherewithal/systems
• Space
• Logistics
Engineering skills must be broad enough to cover
hardware identification/selection to the board
and sometimes the component level, software
(from bios and drivers, through connectivity, to
the application and its integration with other
systems and apps), as well as the design and
testing of prototypes.
The stage should be conducted with controlled,
documented processes addressing, in addition to
the code and device, mechanical and electrical
aspects. It’s during this stage (or even prior to it)
the group leader and team should determine the
Chapter 2: Vendor Selection and
Management
Vendor selection and management is one of
those ‘matters of degree’. You COULD start at
the ASIC (Application-Specific Integrated Circuit)
level, or for that matter, by designing your own
microprocessor. Or you could step up to the
next level of integration and build with ‘building
blocks’ of subassemblies and existing code from
libraries. Or, you could move closer to the top
of the pyramid and select a fully integrated
computing platform, add the needed options, and
then drop the code onto/into the platform.
Using the lowest level of integration enhances
your control but exponentially increases your
vendor selection choices and management
conundrums. Not only must some component be
designed at the chip level, but each component
must work – it must work in-and-of-itself, work
with the other components selected and continue
to work for the anticipated product lifetime.
“Do you feel lucky? Well...
do ya?” (with deference to
Dirty Harry)
The lower the level of integration, the more
people and companies you’ll need to rely on.
Each contact at each vendor-partner must be
available, responsive, and knowledgeable. And
you have to be a big enough fish for each and
every vendor in order to get the level of support
for the most important development project
going on ANYWHERE IN THE WORLD – the one
you’re working on.
[01]
i
CHAPTER OVERVIEWS
“It’s only money.” Each and every matter in this
Each element of this stage has engineering
stage has two interrelated elements: engineering matters at the heart and financial matters on the
and finance. Making the assumption that the
wings.
design is flawless, there are soft opportunity costs
and hard financial costs associated with vendor
Chapter 4: Inventory
and product selection.
Management
Chapter 3: System Build,
Integration, and Testing
“Don’t get caught holding the bag” is something
your accountants will think about. There
are proper and improper methods to report
inventory. And the first step is to know and record
what type of inventory it is. Raw materials (so to
speak), Work-In-Process, and/or finished goods
are reported in different ways on the financial
statement. Be aware of it and plan for it so it does
not become a toxic asset.
Integration. Imagine if it was simply building
a super-complex electronic solution and foolproofing it from the well-intentioned (and
the not-so-well-intentioned). In the build of a
custom, embedded computer-based system,
the complexity is a factor of the number of
components (or building blocks), the number
of models, combined with personnel, space,
engineering, testing and logistics. Building it is
just one part of the equation.
Look beyond your workstation and outside the
lab to see your colleagues. Are they, will they, can
they be fully engaged? Will they be all-in?
• Who will be responsible to
account for manufacturing,
imaging, testing, revision control,
branding, packaging, logistics,
installation, warranty service and
post-warranty support?
• Who will be responsible to ensure
that your processes are proven
and documented, in one or
perhaps more languages and with
respect to many environmental
and even cultural matters?
• Who will be responsible for
certifications, new accounting
principles, logistics?
Once your prototype is built and tested, will
your business begin to enjoy the full measure
of the potential revenue stream? To ensure
that the revenue stream is sufficient (if not
maximized/optimized), you need to have the
right quantity of finished goods on hand, the right
quantity of work-in-process in production, the
correct amount and mix of the various options
understood, planned, and flowing (but not
flowing too quickly or too slowly), and be totally
aware of any components/subassemblies of your
solution that are nearing end-of-life, rev changes,
and/or last time buys.
The stakes have increased. Hitting these goals
on the nose will maximize ROI – but fumbling
any aspect could lead to negative financials
associated with obsolete inventory and/or sales
opportunities lost due to mismanaged inventory.
And, don’t forget the obvious. Someone, using
suitable systems, still must manage the inventory
- all of it, from each ‘piece-part’ to the fully
functioning and tested systems.
[02]
i
CHAPTER OVERVIEWS
Chapter 5: Logistics
Management
Chapter 6: Post-Sale
Considerations
Logistics is defined as the detailed coordination
of a complex operation involving many people,
facilities, and/or supplies. Another way to
think about it is “getting your exact solution, to
exactly the right people, looking exactly like it is
supposed to, exactly when and where they need
it.” And this matter even involves inspectors that
will want to know exactly what is in the box,
without opening the box.
Wouldn’t it be wonderful if you could clear your
mind after your solution was built, shipped,
delivered, and successfully installed! Don’t exhale
yet. There’s still a lot of work to be done. Whose
responsibility will it be to:
Which of your colleagues can you count on
to create the custom packaging that may
be needed? Are you going to be personally
responsible to make sure a drop-ship gets to your
client’s designated target destination (and not
to their warehouse or buyer’s desk)? Will the
recipient know exactly what to do if they receive
a package or the unit within the package, and if it
was damaged in shipment? Will you be shipping
FOB Factory or FOB Destination or via some other
manner? Will you be shipping overseas? Are you
prepared for foreign business registrations and
taxes?
• Provide technical support via web,
phone, or on-site
• Coordinate hot swaps and spares
• Administer on-site repairs
• Address AND RESOLVE the
unexpected?
Somebody has to do it, and somebody has to pay
for it.
Given that we live in an electronic/informational
era, people need and expect everything ‘right
now’. And the expectations of immediacy are
becoming more severe when companies like
Amazon talk about “delivering by drone; same
day.”
ICON KEY
Customer Considerations
Certification Considerations
Department Considerations
Factory Considerations
Logistics Considerations
If shipping is your business’s primary business,
you understand and deal with the financial
impact of missing any one step. If shipping is
not your business’s main business, perhaps this
function is better left to others.
Hardware Considerations
Software Considerations
[03]
1
SYSTEMS PLANNING SERVICES
S
ystems Planning Services, the first stage
of an engineering project, defines the
physical and software aspects of the
computing platform and how the solution will be
supported throughout its entire life cycle.
From financial and technical perspectives
seemingly small matters will affect the big picture.
Your product/solution should be optimized for the
immediate need and be “future proofed” against
unexpected future occurrences.
Decisions made during this initial phase affect
many different people and many departments
both inside and outside of your business – and
are likely do so for many years. During this
stage, before-the-fact consideration is required
to mitigate complex issues such as reliability,
logistics, the coordination of different teams,
as well as both short-term and post-warranty
support, regardless if each seems consequential
or insignificant.
A. Custom Configuration
B. Process Control
C. Product/Component Evaluation
D. Configuration Control
E. Mechanical
F. Electrical
G. Firmware/BIOS
As the idium goes; failing
to plan is planning to fail.
1A:Custom Configuration
Customizing the configuration of your compute
engine is a matter of degree. The extent of the
customization ranges from building a completely
proprietary platform, to using standard, off-theshelf systems. Defining the configuration of
an optimized platform is done with respect to
technology building blocks, support availability,
integration, and life cycle considerations.
• Over time will it prove cost effective
to use a customized configuration, (as
opposed to the commodity, garden
variety) due to optimized performance
and better control of support costs?
• How much control will you abdicate
if you buy commodity-class materials
(components, subassemblies) from an
online store?
• You know that configurations, rev
levels, and the actual components/
subassemblies will change very quickly.
Will you know when? Will you know
soon enough?
1B: Process Control
Start by thinking of this as a yes/no question. Do
we or do we not have a process control system?
Then think of it as a series of concentric circles
since there must be a system in place to control
the entire process plus systems in place to control
each sub-process for every stage of the system’s
life, from design through post-warranty support.
If the answer is “no,” the task at hand is to create
one. However, is the undertaking of this task too
formidable to be viable? At a minimum this action
demands attention to each of the following and
more… and, as the saying goes, will be as strong
as its weakest link:
• A plan to be developed including
the costs estimated
• The plan vetted and approved by
stakeholders
[04]
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SYSTEMS PLANNING SERVICES
• Operations: to project and plan
how it will meld with the existing
processes and facilities
• Purchasing: to source and
price-out; create RFPs and place
purchase orders; establish credit
terms with new vendors
• Training: to be defined,
documented, delivered, and
sustained
• And more…
If the answer is “yes,” then an evaluation should
be made of the suitability of the entire process
and the suitability of each step within it.
Should an ISV decide to build their own system,
the solution may, for instance, include 10
separate products: a chassis, motherboard,
storage, memory, networking, special I/O, video
card, cables, power cord(s) and more. In this
example the complexity increases by more than a
factor of 10; not only must
each component go
through its evaluation, but
each must also be
evaluated in conjunction
with the others. Does it
integrate well with the
others? When combined,
do they function as expected? Are specifications
within targets? What happens if one of the
components changes?
• Assure that the current process is
suitable for the project at hand.
• Defined and controlled enough to
make a consistent product
Whenever one building block
changes, the impact is felt
through the entire product build.
1C: Product/Component
Evaluation
Depending upon the level of integration,
from one to many products (building blocks/
components) must be evaluated both individually
as well as in conjunction with all the other
products going into your solution. The evaluation
should include not only the current suitability
of each product but also anticipate/project
suitability over your solution’s projected life.
In its simplest form, when an ISV (Independent
Software Vendor) needs an appliance to run
their software, the application can be ‘imaged’
onto a pre-built system. In this case the product
evaluation is “Does the software run properly on
this system?” Your engineering and purchasing
departments will spec and source only one or
two highly-integrated products. The logistics
department need only manage receiving,
unpacking, repackaging, and shipping of one
integrated unit.
Every component change must be planned
and accounted for. Otherwise one unexpected
product change could cause a nasty ripple
effect through your entire build, impacting your
certifications, even shut down your assembly line.
1D: Configuration Control
Since we live and work in an environment of
constant change, effort should be made to
reduce the likelihood that changes will impact the
system. Software drivers will change, hardware
will be improved, and better/faster/cheaper
alternatives will arise. Without the plan and
process to address and mitigate these changes,
the impact will be greater and more disruptive
than need be.
[05]
1
SYSTEMS PLANNING SERVICES
The impact of configuration control is known to
be broad and deep – almost certainly broader
and deeper than anticipated. Any single change to
the configuration will have a cascading effect on
various people and departments such as:
• Purchasing
Will the price be right when comparing
new, replacement products with old
products; sourcing vendors; the
administration, placing, and managing of
purchase orders; dealing
with obsolete inventory
that may be in stock or in
the pipeline; projecting
future needs within the
dynamic customer/
prospect environment.
Perhaps even establishing new vendor
relationships. And making sure systems
are in place and functioning so that
Accounting is aware of inventory levels
and types.
• Engineering
Making sure the new configuration works
(software, hardware; independently and
together); integration aspects, software
imaging aspects. The list goes on and
must certainly includes attaining and
sustaining applicable certifications.
• Post sale support
Having the people, knowledge, and spare
parts to: know the exact configuration of
each system being addressed; understand
and actually resolve the issue; as well as
getting the information and correct rev of
the needed item to the right person, at
the right place, at the right time.
1E: Mechanical
and-of-itself and to the environment within which
it will be deployed. For example: if the system and
its embedded computer will be field-upgradeable,
can the computer be easily accessed, easily
disassembled, and easily reassembled? Attention
must be devoted to the mechanical aspects of a
solution before-the-fact; otherwise unnecessary
expenses, frustrated service technicians, and
dissatisfied customers will result.
Will your system be a part
of something even more
complex?
If so, what would happen if say, the footprint
changed? Would the system still sit properly on
the cart used to move it? By designing to and
with industry standards, it becomes less likely
that a cart built by a third party could have a
negative impact of your solution.
What is the operating environment for your
solution? Hot? Cold? Damp? Are there size or
weight issues that impact deployment by a single
person?
And as unimportant as it may seem to an
engineer, if the exterior of the unit is unattractive
or if changes cause the housing to need
modification, marketing materials may have to be
reproduced and redistributed.
1F: Electrical
Will your solution be used in countries using the
same power spec? If so, and if it will be deployed
in temperate, protected environments, its
electrical requirements will be relatively simple.
However, if your customer base is multinational
and/or the unit is expected to function in harsh or
electrically-noisy locales, these matters must be
addressed. Who will be responsible?
During the System Planning Services phase,
consideration must be given to the mechanical
aspects of the solution; that is the solution in[06]
1
SYSTEMS PLANNING SERVICES
Will your system share a power supply or power
source with an abutting or integrated device? If
so, the electrical aspects of each will affect the
other.
One of the biggest benefits an integration partner
can provide is mitigating the impact. Your partner
can’t prevent the change from occurring but can
help you foresee it, plan for it, manage it, avoid/
mitigate the downside risk, and perhaps leverage
the upside enhancements.
1G: Firmware/BIOS
Most system downtime is due to software issues.
And a ‘simple’ patch can prevent or resolve most
issues – if you have planned for the inevitability.
• Will your firmware be volatile and
updates addressed when needed?
• Will it be fixed at and to a specific
rev level, fixed on the release
of each new rev, or be fully
customized?
At what level and in which manner will you
delve into the inner workings of the software?
Understanding this question and preparing for
the virtual certainty of changes in the system’s
inner workings is essential. Depending upon
the level of integration, you may need a team
of programming experts. Will you design your
solution such that the Firmware and BIOS can be
upgraded in the field and/or from the Cloud or
by another means? Or will a change, upgrade or
error require that a technician be deployed to the
location of the unit?
It’s essential to have a functioning open line of
communication with every vendor that makes a
product you use. You should feel confident that
your vendor contact is aware of the matters most
important to you. Will you have the confidence
that every vendor will take the actions you need
most? By working with the right integration
partner, your line of communication is one-to-one
or perhaps one-to-a-few… but not one-to-many.
When you select the hardware, when the drivers
need to be upgraded, who will be responsible and
how will they deploy the new code?
During the integration phase
of a custom system build,
attention must be given to
managing the supplier/vendor
relationships. At almost any
instant in time, a supplier’s
product spec could change or
the product could be scheduled for its end-of-life.
Depending on the type, extent, and timing of the
change, one or more of a series of actions could
initiate.
[07]
2
VENDOR SELECTION AND MANAGEMENT
S
electing your vendor partner(s) and
managing your relationships with each
of them are two interrelated yet distinct
matters. The complexity of vendor selection
and management can be linear or exponential.
The OEM’s technology, the company’s focus, its
roadmaps, and its channel attitudes and programs
must be considered when selecting the vendor
products that will become part of the technical
core of your solution. Your sourcing (based on
the level of integration) will determine if your
vendor management efforts will be “Times 1,”
“Times a few,” or “Times many.”
Consider your relative importance from the
vendor’s perspective and recognize that change
and its impact cannot be prevented, but only
mitigated and managed. And the most valuable
service a vendor partner may supply to you is
their ability to help you simplify, prepare, and
adjust for:
A. End-of-Life Notification
B. Vendor Consolidation
C. Technical Considerations
2A: End of Life Notification
If a component of your system reaches its end of
life, will it affect many people and departments
inside and outside your business? Will it impact
your product certifications? Data must be
gathered and analyzed before decisions are made
and before actions are taken.
those are relatively distant in the future, perhaps
there’ll be no issue more involved than placing
another order.
However, if time is short and the project life of
the system being built is long, the actions taken
will use a different path. That might include
addressing an overstock of a now-obsolete part.
The technical team members responsible for
design, integration, and testing
will need to find an alternative.
It could be as simple as
upgrading along with the
vendor or changing vendors to
acquire a similar commodity (if
the product is a commodity),
under a different brand. But simple is relative.
While finding a suitable replacement could be
easy, the Scope of Work, testing, and
administrative documents still must be modified
or created and stakeholders notified of the
change and its impact. This is likely, perhaps even
required to meet compliance mandates… even if
the change will have no impact.
In the event an exact commodity replacement is
not available, an alternative must be researched,
vetted, tested, and entered into the build and
support processes and documentation. While it is
not exactly back to square one, finding and using
the replacement will be more like it than less like
it.
The people responsible for post-sale and postwarranty support will also be impacted, perhaps
The Purchasing Department will be impacted
not immediately; but once the new product
early-on. They’ll need to assess inventory and
replaces the old, your support staff will be
pipelines, and perhaps the availability of the exact responsible for the support of at least one more
commodity product from alternative sources.
version of your solution.
They’ll need to project when production will
Will there be other matters to address? Some
stop and weigh the (non-technical) alternatives
might be simple, such as adding another location
they have. If “last-time-buys” are available and
in the warehouse for the new item. Others may
[08]
2
VENDOR SELECTION AND MANAGEMENT
be very complex, including emotional issues that
could arise between suppliers and your staff, as
well as with your clients and stakeholders due to
the change.
A good partner can and will help mitigate the
impact of change by foreseeing, planning, and
acting sooner rather than later. The change in a
vendor’s technology may not have to impact your
product using that technology.
2B: Vendor Consolidation
Before researching, assessing and taking action
The concept of vendor consolidation is simple and related to a change in technology; information
about the pending change needs to get to the
sound. You get the benefits of multiple vendors
right people. And that requires a process with
but work with only one or a few. This directly
consistent and clear communication to address
reduces your costs in a number of areas. The
and mitigate this recurring certainty.
practice is so economically sound that each year
hundreds of billions of dollars flow through the
technology distribution industry.
Deciding to make in house or to buy from another
company is vendor consolidation in practice. The
concept is not absolute nor is it binary. Engaging
and managing fewer vendors is usually easier
than doing the same for many vendors. For a
small business, the act of working with fewer
vendors makes your business relatively more
important to the supplier, not only due to volume
but also the breadth of the relationship. A small
fish in a big pond is usually called “prey.”
2C: Technical Considerations
“It is knowing what to do
with things that counts.”
Attributable to Robert Frost’s 1936 poem “At
Woodward’s Gardens”. That quote applies to
the technical aspects of vendor selection and
management. However before anything can
be done with and to the product that could be
affected by technical change, those changes
must be communicated along with the potential
impact. Given that change is omnipresent, a
process acknowledging that change is near and
advising how it might/will/could impact your
product, must be established with each vendor.
[09]
CONSIDER THIS
Since change in the technology is
inevitable.
»»Is the change projected to be
severe?
»»Is it in hardware or firmware?
»»Will it affect any applications or any
aspects of the systems integration,
testing, deployment, support or
any other process?
»»Should the documentation be
modified to reflect it?
33
SYSTEM
BUILD,
INTEGRATION
AND
TESTING
SYSTEM
BUILD,
INTEGRATION,
AND
TESTING
D
o the skills, tools, processes, and time
exist within your business, and do they
exist at the needed level, to undertake a
manufacturing function? If the skills and tools are
available, will the team accept the responsibility
with enthusiasm or with hesitation due to existing
workloads or expectations?
letter for each and every build. It requires an MRP
application and likely, even an MRP/IT support
team.
Is the team schooled in integrating the solution
function in its final environment? Making it work
coming off the manufacturing line and making
it work in its final destination are two separate
considerations. Will the product work in the
client’s environment or ecosystem? For instance,
one solution may need to work in a very cold
environment, another in a damp environment,
another in a rugged environment.
Control means both having rules and abiding by
them and working within facilities that comply to
various manufacturing operational standards.
Working with an ISO 9001:2008 registered
company will establish a solid foundation.
Understanding the intent and
letter of their Scope of Work
(SOW) and Engineering Change
Order (ECO) documents will
lead to enhanced control and
protect against innocent
mistakes. Control means never
having to say you’re sorry for trying to do the
right thing, but erring say, by using a higher
performance device to replace the lowerperforming one used in the spec.
If it were only as simple as building a supercomplex electronic solution and fool-proofing
and future-proofing it such that it satisfies the
customer business need. As stated, each element
of this stage has engineering matters at the heart
and financial matters on the wings.
A. Controlled Processes
B. Customized Shipping Documentation
C. Customized Invoicing Documentation
D. Proprietary Hardware Installation
E. BIOS/firmware Control
F. Imaging (Software)
G. Testing
H. Branding
I. Custom Packing Materials
3A: Controlled Processes
Building a customized computing platform is a
manufacturing process. It requires that the steps
are understood, documented, and followed to the
Control must be maintained over the integration
process as a whole which, to be successful, means
control must be maintained over each of the subprocesses.
A traditional manufacturer will probably not find
anything here surprising. They will focus their
attention at auditing prospective integration
partners to ensure their compliance both very
specifically and very broadly. An ISV, on the other
hand, may not be aware of the typical-to-optimal
conditions leading to the needed level of control,
and might overlook, for example, the necessity
of a static-safe environment or an MRP system
that controls inventory. How will the personnel
employed by an ISV respond to the new hardware
business entity inserted within the software
company?
[10]
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SYSTEM BUILD, INTEGRATION AND TESTING
3B: Customized Shipping
Documents
party in the event there is a problem? Do you
know the difference? A good partner will help you
avoid the downside.
While the creation of customized shipping
documents may not seem all that important, their 3D: Proprietary Hardware
creation is of high importance because it’s the
Installation
first glimpse many people will see of your
As a manufacturer, installation of all devices and
company.
their drivers, whether propriety or standard, is
your responsibility. Often it is the proprietary
It is likely that some or many of your
hardware building block (along with your
customers will require drop ships to
software) that differentiates one product from its
their customers?
competitors and forms the basis of their
company’s value proposition. The question at
Your processes and capabilities must account
hand is, “Is your facility suitable, and are your
for drop ship requirements. In the event your
teams knowledgeable and prepared to integrate
shipment crosses country borders, or the shipping and test the proprietary nature of your solution
container carries anything that must be disclosed as an isolated, discrete device?” And are they also
to handlers, customs people, inspectors, or
prepared and capable of doing the same as a
receivers, the shipping document must comply
component within the more complex solution?
with each requirement.
The actual installation of
proprietary hardware is no
3C: Customized Invoice
more or no less difficult
Documents
than the installation of a
commodity product. Success
Somewhat similar to customized shipping
documents, customized invoicing documents also depends upon the processes
and skills in place. However,
may not seem all that important since someone
the proprietary unit must be received and
else will be responsible. However, given that an
logged as any inventory item. That inventory
invoice is the gateway to payment, each invoice
must reflect exactly what the clients’ accounting/ item could be sourced from and sent by: a third
party, by another unit of the same company that
purchasing departments expect. If not, your
is integrating the solution, or by the customer
receipt of payment will be at best delayed and
possibly even denied. Either way it will likely cost themselves.
your colleagues and company time and money to The key point is to ensure that your proprietary
resolve the matter.
hardware becomes part of the overall controlled
processes, from receiving, to stocking, and to
The matter may become further compounded
its ultimate integration and testing… and maybe
when your customers require drop-ships to
even to its after-life disposal.
their customers… and you must provide proof
of delivery and acceptance by the receiver. Did
3E: BIOS/Firmware Control
you know that the difference making a shipment
under the terms of either “FOB Factory” or “FOB
Most system downtime is due to software issues.
Destination,” affect not only freight costs and
A simple ‘patch’ prevents or resolves most issues
ownership transfer, but also defines the liable
provided you have planned for the inevitability.
[11]
3
SYSTEM BUILD, INTEGRATION AND TESTING
At what level and in which manner will you
delve into the inner workings of the software?
Understanding this question and preparing
for the virtual certainty of changes in solution
components is essential. Depending upon the
level of integration, you may or may not need a
team of programming experts.
others. Efficiencies are gained
because time is too dear to
construct each instance as
you go and have a technician
perched over each system as
its operation system and aps
are loaded.
Will you design your solution such that the
Firmware and BIOS can be upgraded in the field
and from the Cloud or another online means?
Or will a change, upgrade or error require that
a technician be deployed to the location of the
unit?
Usually the customer creates the image and the
integrator partner loads the exact image the same
way for each unit being built.
3F: Imaging (Software)
3H: Branding
Imaging software usually refers to making a
precise copy of the operating system and the
application. Special tools are required for
software imaging – otherwise the software must
be loaded manually onto each system individually.
Once an image is constructed and saved, using
the image during the integration process is
straightforward and results in greater reliability
and efficiencies.
The term branding tends to connote giant
multinational companies. However a less acute,
less fanatical aspect embodies every product and
interaction you have with each
prospect and customer. The
first time the public sees your
brand could be when the
transportation company
arrives at your dock. As it
travels from your dock to its
destination, many people may see the outer
3G: Testing
Final testing can be done to specific components,
When you select the hardware, if the drivers need boards, subsystems, devices, and the system
to be upgraded, who will be responsible and how as a single entity. Routine tests are performed
will they deploy the new code?
on commodity components while special tests
are designed and conducted for a proprietary
The actual integration of
device or something special that is unique
the BIOS/Firmware is rote in
and customized for a specific customer. Test
that exactly the same code
parameters are defined and their procedures
is loaded in exactly the same
documented in the SOW (Scope of Work)
manner each and every time.
documents.
Clearly understanding and
Time and space may be the primary concerns as
carefully planning how your BIOS/Firmware will
it relates to testing. Do you have enough time to
be upgraded is the key. Will you always need the
latest version deployed? Will you be using a fixed test the units and meet delivery deadlines? And
is there enough floor space and bench space to
version for the foreseeable future? Or will you
handle the volume?
deploy customized BIOS?
Reliability improves because there is less chance
for error; less chance to mistype an entry or build
a system that is somewhat different than the
[12]
3
SYSTEM BUILD, INTEGRATION AND TESTING
packaging and any branding that it may project. It
could be a beige brown-box stereotype,
something dazzling, or something in between.
Once your system is received and deployed, the
outwardly appearing physical aspects of your
product will project an image. The image you
want/need to project can be accomplished, most
of the time, with custom painting, bezels, face
plates, and silk-screening. (Is
this something you want to
do? Do you have a paint shop
on-location?)
The vessel that delivers your unit carries a
precious object and must be up to the task both
in how it looks and how it works. It provides an
opportunity to promote your business and your
solution. Will you take the opportunity?
The user experience starting,
perhaps, from the moment the
unit is unpacked, powered up, and/or when the
first image appears on the monitor is a branding
matter and a branding opportunity. Regardless if
your documentation is printed, an electronic file,
or both; how it looks, what it says, and how it says
it are all branding matters that can work for you,
could work against you, or not at all be applicable.
It is an opportunity to promote your business and
the solution. Will you take the opportunity?
3I: Custom Packing Materials
While there certainly is a branding aspect of the
packaging used to protect your system on its
journey to the customer, this discussion point is
more focused on getting where it needs to be
quickly, on time, and in the same condition that it
left the dock.
Will you need to create a special container to
house the unit as it travels? For example, will it
be unpacked and then repacked and forwarded?
Will you need to display one or more certification
credentials, list contents, or provide other
notification on the exterior to comply with
regulations or specific customer requirements?
Will your unit cross international borders and
require something special… and/or include
multilingual messaging?
[13]
44
INVENTORY
MANAGEMENT
INVENTORY
MANAGEMENT
N
ot too much, not too little, but just right.
This could be written as a jingle named
the Ode to Inventory Management. It
would describe the lost opportunity that comes
with having too little inventory to meet the
quarter-ending period. It would lament the poor
results due to having an excess. And it would
celebrate the victors’ accomplishment when
supply and demand align perfectly.
Caution! Inventory is also a financial auditor’s
target of interest. There are strict rules for
reporting inventory. It depends upon a number
of factors include the type and stage of inventory.
Missteps or mis-accounting for inventory will
impact your financials. Be aware of this.
A.
B.
C.
D.
E.
Make no mistake; you’ll need to have an eye on
the direction of the market, the needs of the
prospects, and the actions and products of your
competitors.
4B: Lead Time Management
The BOM (Bill of Materials) is the buyer’s
playbook. It can be used to plan and manage the
purchase and receipt of all the elements used to
build your customized computer platform. It
requires an understanding of the vendors’
manufacturing and lead time, a good MRP system
to automate and communicate a lot of detail. And
include the fail safe plan to engage should there
be a disruption.
Maximized Product Life
Lead Time Management
Finished Goods
Last Time Buys
Options Management
CONSIDER THIS
4A: Maximized Product life
Maximizing the life of your purpose-built
computer requires that just the right amount of
inventory is on-hand and in the pipeline. It also
requires foresight to project how hard-to-get or
soon-to-be obsolete products can be replaced/
re-sourced with the best viable alternative. Above
all it requires close communication among the
buyers and the sellers and the builders.
The right partner can help you mitigate the risks
that come with unpredictable product life cycles.
Some vendors have published road maps and
some do not. However, the hard to manage does
not mean it is unmanageable.
[14]
»» Do you have processes in
place and people assigned the
responsibility to track product
lead times?
»» Is there a communicati open
among all the people who
could be affected by small
blips, massive shortages, or
disruptions of any type?
4
INVENTORY MANAGEMENT
4C: Finished Goods
4D: Last Time Buys
In the technology supply chain within which we
work, the term “finished goods” is relative. What
constitutes a finished good to the shipper/
supplier may become raw material upon receipt
of, and in the eyes and books of the buyer. It is an
accounting term first and foremost. Who will own
the finished good… and when will ownership
transfer… and where will it be located?
Knowing WHEN to make a last time buy is
critical. Last time buys usually fall into one of two
categories:
At what level is a finished good
a finished good in your eyes
and the eyes of your financial
teams?
Often it is the technology aspects of the Make
vs. Buy decision that are most dominant.
However, inventory management and related
financial services may be underappreciated
and undervalued services available from your
outsourcing partner.
• You knew about it in advance and
planned for it.
• It was a surprise…
Last time buys will most directly affect the
Purchasing Department. They’ll need to assess
inventory, pipelines, and the availability of the
exact product commodity from alternative
sources. They’ll need to project when production
will stop and ensure that replacements arrive
prior. If last time buys are available and
availability will continue into the relatively distant
future, perhaps just placing another order will be
all that needs to be done.
However, if time is short and the project life of
the system being built is long, the actions taken
will be more complex and broader. Those actions
Seek out an integration-partner or vendor-partner might include steps similar to those listed above
that can assure a finished goods inventory that is but will also include finding a suitable
replacement. Information about the replacement
available to you on demand. Consider partners
that will invoice your business when your system must be added to documents and noted within
procedural steps. The matter will also affect
ships… not when it reaches its finished goods
stage. The accounting benefits will be significant. support as the support team will need to know
about and know how to service the unit with the
Perhaps a technical benefit
replacement component or device. Replacements
could manifest should a
will have a significant impact
technical change be needed
on any certifications as well.
after the inventory is finished
Typically a new component
but before it is shipped and
requires re-certification and
invoiced.
the costs associated with that
Further, if the finished system
may run in the tens of
ships to you, do you have the ability to receive it, thousands.
a location to store it, a system to find it when it is
needed, and the ability to send it?
4E: Options Management
“All for the want of a nail” is the last line of
a poem with a similar name written in the
1300’s (unattributable). It tells the story of a
kingdom being lost due to the lack of, quite
[15]
4
INVENTORY MANAGEMENT
literally, one, single nail. Many, many years ago
people understood how what seemed to be an
insignificant matter, when mishandled, could have
devastating results. Could the lack of availability
of a single optional component derail a sale…
which could result in missing a quarterly number
(or losing a customer), which could result in
missing a yearly plan… which could result in
something worse?
The MRP system will provide the platform to
manage planning and receipt of each option; but
an almost fanatical attention to detail will provide
the insight and energy needed to make the
system work. Do your plans and processes allow
for after-shipment installation or are there
alternatives available to you? Are the optional
aspects of your system limited and simple, or are
they broad and complex.
Who will be responsible to
ensure that “the nail” is available
when and where needed?
While you might like to be everything to
everyone, stocking a lot of “everything” is not a
viable option, nor is it prudent.
Should you build a one-size-fits-all platform?
Perhaps stock just the base unit or use a different
alternative? Or plan and execute a different
strategy?
Generally speaking, one way
is not necessarily better than
the other. Each company must
make a determination by what
is most important and most
viable… to its stakeholders and
to its customers.
Managing options takes money, space,
documentation, support and time. It is best
accomplished as part of your process and plans.
[16]
For the Want of a Nail
For want of a nail the shoe was lost.
For want of a shoe the horse was lost.
For want of a horse the rider was lost.
For want of a rider the message was lost.
For want of a message the battle was lost.
For want of a battle the kingdom was lost.
And all for the want of a horseshoe nail.
55
L
LOGISTICS
MANAGEMENT
LOGISTICS
MANAGEMENT
ogistics is not as simple as receiving one
box from one carrier or delivering one box
to one location…
In the simplest example of the economic impact
of logistics: if you have ten vendors you pay ten
shipping costs. If you have one vendor, you pay
one.
A. Scheduling shipments
B. Custom Packing/Packaging
Materials
C. Drop Shipping
D. Asset Management
5B: Custom Packing Materials
There definitely is a branding aspect to the
packing used to ship your system on its journey
to your customer. This discussion, however, is
focused on getting your system where it needs
to be quickly, on time, and in the same condition
that it left the dock.
5A: Scheduling Shipments
Scheduling shipments will likely include ongoing
discussions and agreements among you, your
customers, and your vendor(s).
It often requires that an MRP
system is in place and that
your final system be built,
packaged, systematically
scheduled for shipment,
and include all necessary
paperwork. You must
determine, agree and document when and how
it will be shipped and who will be responsible for
cost and liability. An understanding of shipping
terms and conditions is essential since the terms
define when ownership transfers and who is liable
in a legal sense. It involves the coordination of
getting the shipping and receiving documentation
and ensuring they are sent to and received by all
appropriate parties.
Will a shipment trigger an invoice, or will you
invoice as soon as the system is built?
It is important to understand basic shipping costs
- both in-bound and out-bound – as well as the
shipping requirements of the ‘ship to’ and ‘ship
from’ locations.
Will you need to create a special container to
house the unit as it travels? For example, will it
be unpacked and then repacked and forwarded?
Will you need to display one or more certification
credentials, lists of contents, or provide other
notification on the exterior to comply with
regulations or customer demands? Will your unit
cross international borders and require something
special and/or include multilingual messaging?
The vessel that delivers your unit carries a
precious object and must be up to the task.
And it may have to conform to “Package testing
standards” (APS or ASTM) for matters such as
drop test, environmental, shock and vibration,
and perhaps compliance or disclosure mandates.
5C: Drop Ship
It’s likely that some of your customers will
require drop ships to their customers – your
processes and capabilities must account for this
requirement.
The physical and administrative aspects of drop
ship are relatively simple. However, in the event
your shipment crosses country borders, or the
shipping container carries anything that must be
[17]
5
LOGISTICS MANAGEMENT
disclosed to handlers, customs people, inspectors,
or receivers, the shipping documents involved
must comply with each requirement.
The matter may become further compounded
when, on behalf of your customer, you must
provide proof of delivery and acceptance
by the receiver. Shipping requirements and
shipping terms must be clearly understood not
only because of freight costs, but also because
of ownership liability in the event there is a
problem.
5D: Asset Management
Will your end user assetize their systems? Will
you need to apply asset tags
on your customer’s behalf?
Will you need to track serial
numbers? Where and to
whom the systems were
shipped and installed?
Will your end users require a spreadsheet cross
referencing serial numbers and asset tags that
s/he can upload to their financial asset tracking
system to facilitate depreciation?
Food for thought. [18]
66
POST
-SALE
CONSIDERATIONS
POST
-SALE
CONSIDERATIONS
W
hat is the cost of downtime should
your system crash or need service?
What is the cost to you? What is
the cost to your customer? Who is liable?
The answer to those questions may actually
define your Service Level Agreements (SLAs) –
that which you provide to your customer and that
which your integration/service partner provides
to you.
After your solution arrives at its destination, you
have reached the threshold of another step in
the journey, in many ways the most important
step that you’ll undertake. The first thought in
the engineer’s or entrepreneur’s mind was how
to help a customer solve a problem. And now you
and the customer are poised to begin.
Do you have the right processes in place? The
right people with the right tools in the right
locations? Do your customer’s expectations align
with your plans? Are you and your customers
prepared for “what ifs”?
A.
B.
C.
D.
E.
F.
Training
Installation
Technical Phone Support
Hot Swap and Repairs
On-Site Repair Programs
Special Circumstances
6A: Training
Training will likely NOT be the responsibility of
your integration partner. But it is worth exploring
how your integration partner can help you soon
after (or possibly even before) your solution
arrives at your customer.
deliver certain training modules that pertain to
the hardware. Perhaps they can help you with
the creation of the documentation. Your partners
may have training materials and most likely have
knowledge and skills that can help you and your
user-customer during this critical phase of your
relationship. Can one aspect of your training be
as simple as having your integration partner insert
or embedd printed documentation or electronic
files?
6B: Installation
The manner in which your system will be installed
has likely long been thought out and thought
through. Will it be as a simple as switching the
power switch to “on”? Or will it require technical
support delivered in person, over the phone or
online?
Will the system need to be
integrated with any other
devices, systems, or processes
used by the customer? Who
will be responsible for making
it work?
What does the customer expect? What were
they told and what did they hear and believe?
Are these one in the same… or not? Will your
business alone be responsible for installation or
will you work with a delivery partner?
Does your installation include integration with
other devices, systems, or processes already in
existence at the customer’s site(s)?
Will you have a test or procedure that defines
that the installation is successful? Is invoicing tied
to installation/functionality?
It is likely that the new customer will need
training and that the training in the use of the
system will be part of the value you provide. But
perhaps your partner can help you prepare or
[19]
6
POST-SALE CONSIDERATIONS
6C: Technical Phone support
Phone-accessible Help Desk services help ensure
that when a customer needs help, they can talk
to another human being. It will require one or
more people to have access to a system that takes
and routes the incoming service request. It will
require that the technical people be available at
that moment to help the customer resolve their
issue. Those telephone technicians certainly need
the technical skills and tools to address the need
which will likely include a web conferencing/
screen sharing service.
Will phone support resources be responsible just
to diagnose the issue or to diagnose and resolve
the issue? Will there been language barriers to
overcome?
Since phone support implies
24 x 7 availability (and if it
is part of your SLA) it is a lot
more complicated than it
appears. Can you find talented
people who want to work
at 3:00 a.m.? Do you have the HR resources to
staff call center facilities… or as work-from-home
employees?
Perhaps your integration partner has the call
center infrastructure. Perhaps you can use it
full-time, part-time, or on an as-needed basis
(for example if a large new client required more
support than you can provide.
6D: Hot swap and repairs
Depending upon your solution and your SLA,
you may need a national or international
service provider. There are programs from one
or a few vendors (global brands) that allow
warranty services to be “passed through” to the
end user. This alternative may be restricted to
integrators and OEMs using a primarily singlevendor configuration… And be viable when the
OEM’s value exists as software. Explore this
matter with your integration partner to better
understand the details as they pertain to your
specific requirements. This type of “pass through”
warranty is available from only a few elite
integration companies.
At what level does your SLA define “Hot Swap”?
Does it pertain exclusively to complete systems;
does it include board-level or device-level, or is it
defined differently?
If you need/want your service programs to
include hot swap and/or a repair program you
will need a knowledgeable, well-trained staff,
with documented procedures to follow, including
escalation instructions should an impasse be
reached. The documented procedures should
begin at the advent of a service request and
address service requests initiated by people by
phone or online and even perhaps by machine
-to-machine (M2M) interfaces.
You will need to understand the rev level and
exact configuration of the unit requiring service…
down to the device level.
Will you stock some or all of the needed spares
and/or will your integration partner maintain
inventories of complete and tested systems,
subassemblies, devices and miscellaneous spare
parts?
If you do stock, you will need the inventory and a
location to stock and will probably need to isolate
it from the same component building blocks that
you use to build. Or, should you build and stock
certain subsystems or assemblies?
If some of all of your service terms involve “return
to depot” your technical team must be equipped
with the proper instrumentation as well as spares
and be schooled in repair processes. Your logistics
team and MRP application will be vital.
[20]
6
POST-SALE CONSIDERATIONS
6E: On-site repair programs
“Now do it backwards, and in
high heels”
This seems like a fitting analogy if your services
will be delivered on-site. Not only will you require
every procedure, skill, and product referenced in
the preceding Hot Swap and Spares section, you
will need the ability to dispatch people who can
perform the services while on-location.
In addition to having the skills and spares,
consideration must be given to environment
of the home base of the unit. For example, will
repair techs need certain physical, cultural,
language capabilities, or security clearances? Will
they need to maintain passports?
6F: Special Circumstances
After your system arrives at your customer’s dock,
there could be a host of special circumstances
that you and your customer encounter. When
your solution requires something special will you
plan for, address, and resolve that unilaterally or
do so in conjunction with a business partner?
Consider selecting a partner
that has foresight and is
flexible. Your integration
partner can help you plan and
deliver out-of-the-box ideas
and the related services
needed to keep your customers happy. Perhaps
your integration partner can help you make
post-warranty needs in a profit center… new
service biz unit… just to help your customer.
[21]
Appendix
A
The Process Impacts Multiple Departments
The various elements of the manufacture of custom systems impact departments
throughout your entire organization, use the chart in this appendix to see which
processes of each element impact which departments.
System Application Engineering
Departments Impacted
PROCESSES
Purchasing Operations Financial Manufacturing Engineering
Custom Configuration
Process Control
Evaluation Product
Configuration Control
Mechanical
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
Electrical
Firmware/BIOS
Integration Services
Controlled Processes
•
•
Customized Shipping
Documents
Customized Invoice
Documents
•
Proprietary Hardware
Installation
Bios Control
•
Imaging
Testing
Branding
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
[22]
Marketing
•
Technical
Support
•
•
•
•
•
•
•
•
•
•
•
•
•
Logistics
Quality
Assurance
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
Appendix
A
The Process Impacts Multiple Departments
Vendor Management
Departments Impacted
PROCESSES
End of life Notification
Vendor Consolidation
Purchasing Operations Financial Manufacturing Engineering
•
•
•
•
•
•
•
•
•
•
•
•
•
Technical Inventory
Management
Maximized Product
Life
Lead time
Management
Finished Goods
Last time Buy
Options Management
•
•
•
•
•
•
•
Marketing
•
Technical
Support
•
•
•
Logistics
•
•
•
•
Quality
Assurance
•
•
•
•
•
Logistics
Departments Impacted
PROCESSES
Scheduled Shipments
Custom Packaging
Drop Ship
Asset Management
Purchasing Operations Financial Manufacturing Engineering
•
•
•
•
Warranty Services
Technical Phone
Support
Hot Swap Spares
•
On-Site Repair
Programs
Special Circumstances
[23]
Marketing
Technical
Support
Logistics
Quality
Assurance
Appendix
B
Test Your Readiness
Take the DIY vs. Outsource quiz to see if you are ready to take on the challenges
of manufacturing your own computer-controlled device.
FOR FASTEST RESULTS,TAKE THE QUIZ ONLINE BY CLICKING HERE.
If you’d like to print and fill it out manually, just answer the questions below and
scan and email your completed test to: [email protected]
1. I need to ship: (Select all that apply)
5. I am currently working with a contract manufacturer:
(Select one option)
‡‡
USA (local)
‡‡
USA (national)
‡‡
Yes - Satisfied
‡‡
International
‡‡
Yes - Dissatisfied
‡‡
No
2. My End Users/Clients require ISO certification: (Select
one option)
‡‡
Yes
‡‡
No
6. We are currently manufacturing the product ourselves:
(Select one option)
3. We are considering the following options: (Select all
that apply)
‡‡
Manufacturing ourselves
‡‡
Working with a contract manufacturer
‡‡
Not applicable
‡‡
Yes - Satisfied
‡‡
Yes - Dissatisfied
‡‡
No
7. The following areas are sensitive to changes in the
computer/controller systems we use:
(Select all that apply)
4. Our product requires the following custom software
loads: (Select all that apply)
‡‡
Software Development
‡‡
Hardware Development
‡‡
Support
‡‡
Custom BIOS Load
‡‡
Certifications
‡‡
Software Image Load
‡‡
Product Development
‡‡
System Specific Software
‡‡
‡‡
Operating System Load
Changes in the computer/controller system
don’t matter
‡‡
Application Image
‡‡
To be determined
‡‡
To be determined
[24]
Appendix
B
Test Your Readiness
8. My customers expect delivery: (Select one option)
11. Our customers expect the following type of warranty/
service on our computer/system: (Select one option)
‡‡
Same Day
‡‡
Within 24 hours
‡‡
Return for repair
‡‡
Within 48 hours
‡‡
Advance unit replacement
‡‡
Within 1 week
‡‡
In field/onsite repair
‡‡
Within 2 weeks or longer
12. When it comes to device hardware engineering we:
(Select one option)
9. Our product requires the following packaging/
accessories: (Select all that apply)
‡‡
Use our own in-house design team(s)
‡‡
Branded Boxes
‡‡
Rely on external supplier
‡‡
Custom Packaging (Internal)
‡‡
Rely on outside consultant
‡‡
Custom Labeling
‡‡
Other
‡‡
Customized Accessory Kits
‡‡
Custom Manuals
‡‡
System Branding
‡‡
To be determined
13. Our current physical space has: (Select all that apply)
10. Computer/controller/hardware end-of-life issues:
(Select one option)
‡‡
It doesn’t matter. Component change does
not affect us.
‡‡
Surprise! It’s been discontinued, we weren’t
notified and we’re racing to find substitutes
‡‡
Surprise! Our supplier changed components
and didn’t tell us.
‡‡
Office space
‡‡
Engineering lab
‡‡
Manufacturing space
‡‡
Warehouse space
‡‡
Loading dock
‡‡
Professional shipping and receiving
‡‡
Expansion possibilities
14. Our manufacturing infrastructure is equipped to
handle: (Select all the apply)
‡‡
Static sensitive devices
‡‡
We receive change notifications with a lasttime-buy option
‡‡
Software loads and configurations
‡‡
We utilize/receive product road maps and
EOL planning
‡‡
Hardware testing and/or burn-in
‡‡
Systems integration
‡‡
To be determined
‡‡
Systems assembly
‡‡
No manufacturing capability
[25]
Appendix
B
Test Your Readiness
15. Our product will be regulated by: (Select one option)
20. My company already has ERP/MRP systems in place:
(Select one option)
‡‡
FDA compliance
‡‡
Standard US conformance
‡‡
Yes
‡‡
Compliance for international use
‡‡
No
‡‡
ISO quality standards
‡‡
UL
‡‡
No regulation required
21. My company already has financial accounting practices
set up for a manufacturing environment:
(Select one option)
16. We require____version(s) of our computer/controller.
(Select one option)
‡‡
One
‡‡
2-4
‡‡
5 or more
Yes
‡‡
No
‡‡
Yes
‡‡
No ‡‡
We build the computer/controller ourselves
19. Our preferred shipping channel is: (Select one option)
To have my supplier ship directly to my
customers
‡‡
To ship product directly from my facility
‡‡
To be determined
‡‡
No
[email protected]
18. The computer/computer module/CV/engine/controller
we use requires modification after we receive it from
our supplier: (Select one option)
‡‡
Yes
If you’d like to print and fill it out
manually - just scan and email your
completed test to:
17. We incorporate a computer/controller into our
product: (Select one option)
‡‡
‡‡
[26]
Appendix
C
Financial Considerations
Invariably there are financial implications to every decision made during the planning, building,
deploying, and supporting stages of a Make vs. Buy project. It is essential to understand that a good
design is more than a technical masterpiece. And, that those financial implications are either for the
better or for the worse.
That potential impact will certainly extend beyond the engineering department and broadly and
deeply into the company. Let’s take a moment to consider some of the ramifications impacting each of
nine departments.
• Purchasing
◊ The Purchasing Department will need to vet the vendors in coordination with engineering.
They may need to administrate the acquisition of tooling; evaluation of components
and subassemblies; final product price negotiations; alternate vendor and sources for
“commodity” products; address RMA (Return Material Authorization) policies, and more.
◊ Purchasing may be responsible to administrate the acquisition of certifications needed to
meet compliance mandates or market demands.
◊ Purchasing will also be responsible to ensure that inventory, orders, and forecast are aligned.
Is the Purchasing Department equipped to perform all of the above? Do IT systems and processes
exist… or will they have to be developed, enacted, and the personnel trained in their use?
• Operations
◊ The Operations department must ensure that the tools, processes and systems are in place
or can be brought into place without disrupting on-going operations. This holds true from
every stage of the effort… from planning to post-sale support. They must also ensure that
the information systems are suitable for each department and suitable for the effort and
company in the entirety.
◊ In companies where HR is within Operations, the department is then also responsible for
staffing. Should the design of the product require it to have a 24 x 7 SLA, then Operations/
HR will need to find technically-skilled people who enjoy working the 11:00 P.M to 7:00 A.M.
shift… and those people need a place to work and the tools needed to do their job. This just
begins to scratch the surface.
◊ Operations may have oversight and ultimate responsibilities to ensure that the product is
safe to build, safe to ship, safe to use, and safe to dispose of.
Each of these factors MUST be considered, and all come at a price.
[27]
Appendix
C
Financial Considerations
• Finance and Accounting
◊ It is essential not to underestimate the need for financial accounting systems that match
the processes used throughout the product’s life. For example, if the company considering
the Make vs. Buy choice is not a manufacturer by trade, but plans to build part or all of the
solution in-house as a new venture, the cost to acquire and support an MRP application
could be staggering. Its costs will include applications, warranties (maintenance agreements
for the applications/product), personnel, systems, and lots of time.
◊ Furthermore, this department will produce the year-end financial reports which include a
declaration of inventory type and value. Miscommunication on this type of matter can have
extensive implications. So, even if people agree that “a widget is a widget,” the systems must
report “widgets” valued at the right amount to ensure the books make financial sense.
◊ In staying a bit closer to traditional departmental roles, the departments will need to budget,
audit, and reconcile funding for each stage of the effort.
• Manufacturing
◊ If your business is already a manufacturer, you most likely have the needed ERP systems
and financial accounting processes in place. With this said, an understanding of how
existing capabilities will align with the new product(s) in development is necessary. And the
needed actions must be planned and executed to address what, if anything, needs to be
addressed. Keeping manufacturing costs as low as possible will be essential and will likely be
a determining factor in the success of the endeavor.
◊ Will the activity be as simple as adding one more product into a smoothly flowing exact
process? Or will the new product cause a disruption to the status quo or even a whole new
discipline to be defined, understood, and practiced?
• Engineering
◊ Do the staffing levels and engineering skill sets match the need at hand and the need at each
stage? Do the people on the current team want the new added responsibilities? Will there
be a need to hire new full time employees or temporary, contracted labor?
◊ Design tools, evaluation/testing tools and processes, and documentation will all be needed
in the correct form and at the correct level. Is there a skilled work force available? Will there
be language or cultural matters to understand, address, and resolve?
• Marketing
◊ How extensive will your market research need to be? Will there be a person or team
responsible to monitor the competition? How extensive will the marketing efforts be? Will
you need new systems or new employees to conduct those efforts? Will your effort be
unilateral or conducted with a business partner? Are their MDF or co-op funds available? If
so, what are the usage guidelines?
[28]
Appendix
C
Financial Considerations
• Technical Support
◊ What SLA will be assigned to the new product? Is it the same or similar to those of your
other products? Do you have the people, facilities, and capital equipment at-hand or will you
need to define, access, and acquire a little or a lot to support the new product? Is there an
isolated inventory of replacement parts and systems? Will your technicians be able to access
the precise rev level and version of the product they are supporting? At what degree, and
by whom, will they be trained? Will they be responsible to identify the issue or resolve it as
well?
• Logistics
◊ Will the incoming components and subassemblies be handled in the same manner or will
there be a new wrinkle to address? How much unpacking and repackaging is needed? Will
the packaging require special labeling or special transit methods? What shipping terms will
be used?
• Quality Assurance
◊ How many quality assurance check points will exist within the process? Which department
will be responsible at each stage? Do you currently use processes and adhere to standards
that are applicable to the new endeavor? What will be the warranty and SLA levels?
[29]
Glossary - General
ASIC
An application-specific integrated circuit (ASIC), is an integrated circuit (IC) customized for a
particular use, rather than intended for general-purpose use. For example, a chip designed to
run in a digital voice recorder or a high efficiency Bitcoin miner is an ASIC.
Appliance
A computer appliance is generally a separate and discrete hardware device with integrated
software (firmware), specifically designed to provide a specific computing resource. These
devices became known as “appliances” because of their similarity to home appliances, which
are generally “closed and sealed” – not serviceable by the owner. The hardware and software
are pre-integrated and pre-configured before delivery to customer, to provide a “turn-key”
solution to a particular problem. Unlike general purpose computers, appliances are generally
not designed to allow the customers to change the software (including the underlying operating
system), or to flexibly reconfigure the hardware.
BIOS and Firmware
BIOS: In IBM PC compatible computers, is the Basic Input/Output System (BIOS), also known as
System BIOS, ROM BIOS or PC BIOS. It is a de facto standard defining a firmware interface. The
fundamental purposes of the BIOS are to initialize and test the system hardware components,
and to load a boot loader or an operating system from a mass memory device. The BIOS
additionally provides abstraction layer for the hardware, i.e. a consistent way for application
programs and operating systems to interact with the keyboard, display, and other input/output
devices.
Firmware: In electronic systems and computing, firmware is the combination of persistent
memory and program code and data stored in it. Typical examples of devices containing
firmware are embedded systems (such as traffic lights, consumer appliances, and digital
watches), computers, computer peripherals, mobile phones, and digital cameras. The firmware
contained in these devices provides the control program for the device. Firmware is held in
non-volatile memory devices such as ROM, EPROM, or flash memory. Changing the firmware
of a device may rarely or never be done during its economic lifetime; some firmware memory
devices are permanently installed and cannot be changed after manufacture. Common reasons
for updating firmware include fixing bugs or adding features to the device.
Branding and
Co-branding
Brand is the “name, term, design, symbol, or any other feature that identifies one seller’s
product distinct from those of other sellers.“ Brands are used in business, marketing, and
advertising. In accounting, a brand is defined as an intangible asset and is often the most
valuable asset on a corporation’s balance sheet. Brand owners manage their brands carefully
to create shareholder value, and brand valuation is an important management technique that
ascribes a money value to a brand, and allows marketing investment to be managed (e.g.,
prioritized across a portfolio of brands) to maximize shareholder value. Although only acquired
brands appear on a company’s balance sheet, the notion of assigning a value to a brand forces
marketing to be the long term steward of the brand and managing for value.
Co-branding associates a single product or service with more than one brand name.
[30]
Glossary - General
BOM (Bill of Materials)
A bill of materials (BOM) is a list of the raw materials, sub-assemblies, intermediate assemblies,
sub-components, parts and the quantities of each needed to manufacture an end product. A
BOM may be used for communication between manufacturing partners, or confined to a single
manufacturing plant.
Contract Manufacturer
A company that produces goods, under the label or brand of another firm.
Drop Ship
Drop shipping is a supply chain management technique in which the seller does not keep goods
in stock, but instead transfers customer orders and shipment details to either the manufacturer
or a wholesaler, who then ships the goods directly to the customer
eBook
An electronic book is a book-length publication in digital form, consisting of text, images, or
both, readable on computers or other electronic devices.
Embedded
In computing, an embedded system is a special-purpose system in which the computer is
completely encapsulated by the device it controls
End-of-life notification
End-of-life (EOL) is a term used with respect to a product supplied to customers, indicating
that the product is in the end of its useful life (from the vendor’s point-of-view), and a vendor
intends to stop marketing, selling, or sustaining it
ERP and MRP
Enterprise Resource Planning has the intent to provide visibility of all resources in a company
and provide planning tools for them. From this perspective, the whole enterprise is taken into
account.
Manufacturing Resource Planning is similar to ERP except MRP focuses on manufacturing.
With this in mind, the tools provided by an MRP app are more powerful from a manufacturing
perspective however they lose perspective on the overall enterprise (i.e. business priorities,
strategic planning, etc.)
Hot swap
A hot swap is the replacement of a hard drive, CD-ROM drive, power supply, or other device
with a similar device while the computer system using it remains in operation. The replacement
can be because of a device failure or, for storage devices, to substitute other data.
Incoterms
The Incoterms rules (or International Commercial Terms) are a series of pre-defined commercial
terms published by the International Chamber of Commerce (ICC) that are widely used in
international commercial transactions or procurement processes. A series of three-letter
trade terms related to common contractual sales practices, the Incoterms rules are intended
primarily to clearly communicate the tasks, costs, and risks associated with the transportation
and delivery of goods
Independent Software Vendor
(ISV)
An independent software vendor (ISV) is a company specializing in making or selling software,
designed for mass markets or niche markets.
[31]
Glossary - General
Level of integration
The degree to which disparate component subsystems, networking, and software is assembled,
configured and tested – ensuring that each building block functions as part of a total system.
The process of linking together different computing devices, systems and software applications
physically and functionally, to act as a coordinated whole.
Logistics
Logistics is the management of the flow of goods between the point of origin and the point of
consumption in order to meet some requirements, for example, of customers or corporations.
The resources managed in logistics can include physical items such as equipment and liquids, as
well as abstract items, such as time, information, particles, and energy. The logistics of physical
items usually involves the integration of information flow, material handling, production,
packaging, inventory, transportation, warehousing, and often security. The complexity of
logistics can be modeled, analyzed, visualized, and optimized by dedicated simulation software.
The minimization of the use of resources is a common motivation in logistics.
Make vs. buy
The Make vs. Buy decision is the act of making a strategic choice between producing an item
internally (in-house) or buying it externally (from an outside supplier). The buy side of the
decision also is referred to as outsourcing. Make vs. Buy decisions usually arise when a firm that
has developed a product or part; or significantly modified a product or part; lack resources or
have trouble with current suppliers, or has diminishing capacity or changing demand.
M2M
Machine-to-Machine: machine-to-machine communications
OEM
An original equipment manufacturer, or OEM, manufactures products or components that are
purchased by another company and resold under that purchasing company’s brand name. OEM
refers to the company that originally manufactured the product.
Supply Chain
A supply chain is a system of organizations, people, activities, information, and resources
involved in moving a product or service from supplier to customer. Supply chain activities
transform natural resources, raw materials, and components into a finished product that is
delivered to the end customer.
System integration
In engineering, system integration is defined as the process of bringing together the component
subsystems into one system and ensuring that the subsystems function together as a system.
In information technology, systems integration is the process of linking together different
computing systems and software applications physically or functionally, to act as a coordinated
whole.
The system integrator brings together discrete systems utilizing a variety of techniques such
as computer networking, enterprise application integration, business process management or
manual programming
[32]
Glossary - Job Titles
Engineering
Works to analyze, develop and evaluate large-scale, complex systems. This can mean improving
and maintaining current systems or creating brand new projects. Engineers will design and draft
blueprints, visit systems in the field and manage projects
Finance/Accounting
Plans and executes the financial strategy, including its planning, monitoring, management, and
reporting, including the development of policies, systems, processes and personnel involved.
Executes reporting and accounting actions as per regulatory and legal requirements including
taxation, dividends, annual report and accounts.
Logistics
Involves the flow of materials and goods through a business. Logistics workers, or supply chain
managers, oversee the departments that receive materials and supplies into a business. The
manager supervises the warehousing and stocking departments, and shipping operations.
Businesses rely on the efficiency of the organization’s supply chain to meet customer demand
and deliver finished products on time and within budget
Manufacturing
Evaluates manufacturing processes by designing and conducting research programs; applying
knowledge of product design, fabrication, assembly, tooling, and materials; conferring with
equipment vendors; soliciting observations from operators. Develops manufacturing processes.
Improves manufacturing. Assures product and process quality. Provides manufacturing
decision-making information by calculating production, labor, and material costs; reviewing
production schedules; estimating future requirements.
Marketing
Plans and implement sales and marketing activities in order to meet company targets for
retention growth and profitability, and to contribute, as a board member, to the executive
management of the company.
Operations
Design and manage the daily operations and activities in a way that the productivity of
the employees raises. Also must ensure that the physical and the human resources of the
organization are achieved … and also ensures that the organization produces quality and goods
and services are produced on time to meet the client’s time or deadline.
Purchasing
Sets purchasing policy; responsible for planning, recruiting team members, developing, and
training of staff. Establishes project prioritization and management; manages purchasing
information and systems. Manages purchasing staff, suppliers, relationships, SLA’s (service level
agreements). Is the proactive liaison with other departments as necessary to forecast, plan,
and meet demand to relevant. Also the proactive liaison with other departments concerning
operations, resources, and services as necessary.
Quality Manager
Develops and implements quality management strategy and plans, including resource, systems,
timescales, financials, to support, contribute to, and integrate within, the organization’s annual
business plan and long term strategy
Technical Support
Ensures proper computer operations so that end users can accomplish organizational tasks.
This includes receiving, prioritizing, documenting and actively resolving end user help requests.
Problem resolution may involve the use of diagnostics and help request tracking tools, as well
as require that the individual give hands-on help at the desktop level.
[33]
About Continental Resources
Credits
Continental Resources (ConRes) is a technology company
that helps clients achieve goals through the expert
application of technology products and services.
This eBook is based on the knowledge, experience, and
thoughts of Mr. Christopher Hubert. Chris is the Business
Development Manager for the OEM Group at ConRes and
Businesses, government and academia count on ConRes for has over 15 years’ experience working in purpose-built
technologies that streamline processes, improve efficiency computer manufacturing environments.
and increase productivity. OEMs rely on our OEM group to Chris was interviewed by Tony Serino the Managing
build, test and support software appliances and computer- Director of Serino Channel Services; a channel marketing
controlled devices/instrumentation. Combining over 50
services company established in 1993. Tony listened,
years of high tech know-how and financial stability, ConRes interpreted and wrote about the typical issues Chris
is a low-risk option for companies seeking to strengthen
resolves each day working with ConRes’ OEM clients and
the return on their technology investments.
vendor partners. Finally, Ms. Ann Dempsey, Director of
The Systems and Networking Integration Division provides Marketing at ConRes edited the document for pertinence
to businesses contemplating DIY vs. Outsourcing (aka
information technology solutions that build better data
Make vs. Buy) decisions related to purpose-built computer
centers and IT infrastructures. ConRes provides the range
solutions.
of products and technologies offered by a distributor,
combined with the depth of professional services
and support expected from a value added reseller. IT
professionals across the USA rely on ConRes for unbiased
enterprise-class solutions ranging from virtualization,
disaster recovery, unified computing, private/public cloud,
security and networking; to UNIX, Linux and Windows.
Continental Resources, Inc. | 800.937.4688
www.ConRes.com/OEM-Embedded-Computers
Worldwide Headquarters: 175 Middlesex Tpke Ste 1 | Bedford, MA 01730-9137
Local USA Contacts: Boston | Chicago | NH | NJ | NYC | Philadelphia | San Diego | TX | Washington DC
International: Toronto | Liverpool | Hong Kong
© 2014 Continental Resources, Inc. Specifications subject to change without notice. Continental Resources is not responsible for typographical
errors. All product and manufacturer names are trademarks or registered trademarks of their respective companies. Printed in U.S.A. The information contained in this paper is for general information purposes only.
The information is provided by Continental Resources and we make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability or availability with respect to the
information contained in this document for any purpose. Any reliance you place on such information is therefore strictly at your own risk. In no event will we be liable for any loss or damage including without limitation,
indirect or consequential loss or damage, or any loss or damage whatsoever arising from loss of data or profits, arising out of, or in connection with, the use of this information.
ConRes 140098-1014