Product Startup Podcast Episode 211: Plan Manufacturing Operations

00:00:00 Kevin Mako: Hello, product innovators. Today we learn about preparing your hardware startup for complex manufacturing

00:00:04 Kevin Mako: from a 17-year manufacturing engineering expert. This is the Product Startup Podcast, a show to learn from top leaders in hardware product

00:00:13 Kevin Mako: development, prototyping, manufacturing, product selling, and everything in between. Hosted by Kevin Mako,

00:00:18 Kevin Mako: the leading expert on product development for hardware startups. Welcome back, everyone. I'm very excited to

00:00:24 Kevin Mako: introduce Nikhil Joshi to the show. Nikhil is the founder of SNic Solutions. The company he has run for

00:00:30 Kevin Mako: 17 years helping scale product manufacturing operations. He has worked with almost 150 factories

00:00:35 Kevin Mako: across 12 countries. Today, Nikhil will show valuable knowledge for inventors, startups and small

00:00:39 Kevin Mako: manufacturers on how manufacturing has changed, the opportunities that exist, and how to ensure

00:00:45 Kevin Mako: you properly plan for complex manufacturing as a hardware startup. Now, on to the episode.

00:00:51 Kevin Mako: This show is produced by Mako Design, the original firm providing end-to-end consumer

00:00:56 Kevin Mako: product development services tailored specifically to hardware startups, small

00:01:01 Kevin Mako: manufacturers and inventors. Take your product from idea to store shelves at MakoDesign.com.

00:01:07 Kevin Mako: Now on to the episode. Hi, Nikhil, welcome to the show.

00:01:11 Nikhil Joshi: Hey, thanks, Kevin, for having me.

00:01:13 Kevin Mako: Well, we're excited today to talk to you about manufacturing. Now, as a hardware startup,

00:01:17 Kevin Mako: whether you're at the very early phases of ideation or further along into design for manufacturing

00:01:22 Kevin Mako: or even getting into manufacturing, at the end of the day, you've got a sell product. And in order

00:01:28 Kevin Mako: to sell product, you've got a manufacturer product to sell.

00:01:31 Kevin Mako: I'm looking forward to having you on the show today to talk about some of the best practices

00:01:35 Kevin Mako: that hardware startups can think about and can plan ahead for as they migrate from design

00:01:41 Kevin Mako: through to manufacturing and then from manufacturing to scale. So before we jump into all these good

00:01:46 Kevin Mako: things in and around the manufacturing question, just give us a bit of a background, how you became

00:01:50 Nikhil Joshi: the success story that you are today. I started off as an industrial engineer on the shop floor

00:01:56 Nikhil Joshi: in factories when I started the company. I was just 22 then. And I worked my

00:02:01 Nikhil Joshi: way up doing projects in the manufacturing plants and factories. And as I went further,

00:02:09 Nikhil Joshi: I could see that a lot of technology could be implemented in manufacturing plants. And operations

00:02:15 Nikhil Joshi: was my forte. So I kind of pivoted from being an industrial engineer more to starting to solve

00:02:22 Nikhil Joshi: information efficiency problems in manufacturing as to how information could pass faster

00:02:28 Nikhil Joshi: between people and how overall manufacturing efficiency could be improved in factories.

00:02:35 Nikhil Joshi: And that's what we do. We implement manufacturing software in the operation space. And I've pretty

00:02:41 Nikhil Joshi: much been doing that for the last 17 years now. Wow, 17 years and worked with hundreds of factories,

00:02:47 Kevin Mako: seeing it from the shop floor all the way up to these large systems that manage

00:02:51 Kevin Mako: information between all these key stakeholders at massive manufacturing plants and everything in

00:02:56 Kevin Mako: between. So what better person today that's talking?

00:02:58 Kevin Mako: about some of those manufacturing tips and tricks that you've seen, especially for

00:03:02 Kevin Mako: hardware startups, as they're getting into the world of manufacturing. So let's start big picture.

00:03:08 Kevin Mako: Just give us a high level of what it means in terms of manufacturing operations or

00:03:13 Nikhil Joshi: manufacturing efficiency, et cetera. Sure. Well, we had to start that manufacturing is no more

00:03:19 Nikhil Joshi: the way it was 30 years ago or even 10 years ago, right? And the biggest difference is the

00:03:26 Nikhil Joshi: bath size. If you went 30 years before the jacket that you're wearing, somebody would

00:03:32 Nikhil Joshi: be making a million of those same color, no difference. But fast forward to today, there are

00:03:38 Nikhil Joshi: factories who just want to make five of them or maybe one of them. The whole market is going

00:03:44 Nikhil Joshi: more to that people want very custom tailored products which are meant for them. There's

00:03:51 Nikhil Joshi: personalization. And that kind of creates a very big manufacturing problem

00:03:56 Nikhil Joshi: on the operation side, right? You are no more producing or doing mass manufacturing,

00:04:01 Nikhil Joshi: like how we had the car plants of the day many years ago producing the same kind of cars. You're pretty

00:04:07 Nikhil Joshi: much more in a zone where you're trying to do less, but at the same time, you are also trying to be

00:04:15 Nikhil Joshi: efficient. And the third aspect is that you're no more making one product, right? You might still

00:04:22 Nikhil Joshi: be making a car, but there are so many variations of cars.

00:04:26 Nikhil Joshi: you're making or you might be making a hardware product, but you're making so many variations

00:04:32 Nikhil Joshi: of it that when it goes to the factory, it's no more that you're making five products,

00:04:36 Nikhil Joshi: you're making 5,000 products. And that creates an additional complexity on the shop floor.

00:04:42 Nikhil Joshi: That, hey, how do I manage so many things at the same time be profitable? So that's like the big

00:04:47 Nikhil Joshi: picture, Kevin, as if I was explaining to you, like, you know, as a layman.

00:04:51 Kevin Mako: Well, it's really interesting that you brought that up, and I like how you opened, how manufacturing

00:04:55 Kevin Mako: really changed. I'm sure a lot of listeners are hearing the opportunity in that. So it's kind of

00:05:00 Kevin Mako: the gift and the curse. On one hand, yes, with the customization and the desire of the market,

00:05:06 Kevin Mako: essentially end users, are requiring products that more suit them specifically. Whatever that

00:05:11 Kevin Mako: opportunity is or that pain point is, they want it solved directly. They don't want something

00:05:16 Kevin Mako: somewhat solving it. They want it solving it right on the button. Now, on the flip side, that creates

00:05:21 Kevin Mako: complexities and manufacturing, but absolutely, especially for hardware startups out there,

00:05:25 Kevin Mako: we talk a lot about it on the show, especially as an early stage company,

00:05:29 Kevin Mako: typically lower funding than the big companies, less resources, less information,

00:05:33 Kevin Mako: etc. It's amazing to go after a very tight niche. So something which is under

00:05:38 Kevin Mako: serviced maybe by the big competitors in the market. And you focus on that and do a really good job

00:05:44 Kevin Mako: and it may have less volume than the competitors, but you're hitting a specific customer base

00:05:48 Kevin Mako: that needs exactly what you want. And you can do that very well as a startup because you're

00:05:53 Kevin Mako: focusing on one version of the product.

00:05:55 Kevin Mako: Now, as you get into the market and start to scale, you start to find other opportunities,

00:06:00 Kevin Mako: other segmentation, all variety of different opportunities for both your product and the product

00:06:04 Kevin Mako: business, the product business is brand, that you can scale and grow. Now, with that comes challenges

00:06:10 Kevin Mako: in manufacturing. So the next question is, we've talked a lot about the show, about the opportunity

00:06:14 Kevin Mako: of being very specific and really nailing it to the customers. But I want to talk with you

00:06:19 Kevin Mako: today about the other side, which is, well, how do you actually produce that? How do you plan to manufacture

00:06:23 Kevin Mako: that. How do you do that smart? So that you're not trying to play catch-up to your demand,

00:06:29 Nikhil Joshi: you're thinking about this ahead of those potential challenges. Yeah. So customization and

00:06:35 Nikhil Joshi: personalization should not be confused with, hey, you know, you're going to produce less and thereby,

00:06:41 Nikhil Joshi: you know, the price of the product is going to be very high. That's not a scalable structure. And the amount

00:06:48 Nikhil Joshi: of manufacturing operations, automation that you would put in, the cost benefit is not going to work.

00:06:53 Nikhil Joshi: The challenge most manufacturers that we are seeing today are having is, I want to give

00:07:00 Nikhil Joshi: personalization and customization, but at the same time, I also want to scale. So the third element of

00:07:06 Nikhil Joshi: business model as to what is the kind of business model that you adopt also comes into picture. So

00:07:12 Nikhil Joshi: you see many manufacturing companies in the past have been more like B2B. They would supply to

00:07:18 Nikhil Joshi: another large manufacturer to another business. But a lot of manufacturers are realizing

00:07:23 Nikhil Joshi: that, hey, my customer is actually the end consumer. Think of a bicycle, right? Earlier,

00:07:29 Nikhil Joshi: a bicycle manufacturer would go and their customer was actually a franchise owner. But today,

00:07:36 Nikhil Joshi: the same bicycle manufacturer wants to talk directly to the guy who is buying the bike, who's riding

00:07:43 Nikhil Joshi: the bike, and they want to understand from them that, hey, what do you need?

00:07:48 Kevin Mako: Now, this aspect brings the need for

00:07:50 Nikhil Joshi: business model transformation, but the impact that is this.

00:07:53 Nikhil Joshi: has on the factory operations is that you need to be more agile, you need to be more flexible,

00:08:00 Nikhil Joshi: and you need to give what the end customer wants when he wants, but also at the right price. So

00:08:07 Nikhil Joshi: suddenly you have this massive explosion of complexity that now you're throwing at manufacturing operations

00:08:13 Nikhil Joshi: and it's no more basically a simpler problem to solve like it used to be. Yeah, absolutely. That's

00:08:20 Kevin Mako: why it's key as well, especially as a hardware startup, to really consider, be careful

00:08:24 Kevin Mako: with feature creep or too much customization or trying to make too many products too quick for too many

00:08:29 Kevin Mako: people. So the inverse side is, be careful with your growth, but also sees the opportunity

00:08:34 Kevin Mako: when it comes, have a healthy balance between those two aspects. And if you are going to increase

00:08:38 Kevin Mako: complexity, make sure you're planning ahead. And let's jump into what that looks like, because I know

00:08:43 Kevin Mako: you're a big advocate of using software and technology in order to really improve the ability to be

00:08:50 Kevin Mako: complicated and to hit more types of customers while also allowing you to scale.

00:08:55 Nikhil Joshi: So high level, what is the manufacturer looking to change, right? Like, in order to serve their customers

00:09:02 Nikhil Joshi: better. And if you think of your listeners, whether they are people who are startups who are building

00:09:08 Nikhil Joshi: basically hardware products, et cetera, essentially on the manufacturing side, you want the manufacturing

00:09:14 Nikhil Joshi: operations to ensure that you are not reducing your speed. So what you're looking for is very

00:09:20 Nikhil Joshi: fast and you're looking for agility, but at the same time you're also looking for efficiency.

00:09:25 Nikhil Joshi: So it's a combination of speed agility and efficiency that you're looking for. And that's what

00:09:30 Nikhil Joshi: manufacturing operations today is all about where every manufacturing shop floor or people who are

00:09:36 Nikhil Joshi: thinking of also getting into manufacturing or who are at a design stage and saying that we are going

00:09:41 Nikhil Joshi: to eventually manufacture our products, they are saying that, well, how do I get that agility,

00:09:47 Nikhil Joshi: flexibility, speed and efficiency. And those who don't know automatically would leave that

00:09:53 Nikhil Joshi: to, let's say, a contract manufacturer that I don't care how you run the operations, but I need these

00:09:58 Nikhil Joshi: many pieces on this day at this time. So there is that aspect of larger companies where if your

00:10:06 Nikhil Joshi: strength is, let's say, design and engineering, you're pretty much going to outsource speed,

00:10:11 Nikhil Joshi: agility and flexibility. And as you go in and become more matured, you can say, okay, you know,

00:10:17 Nikhil Joshi: I bring that. But the biggest advantage companies are having today are those who are able to do

00:10:24 Nikhil Joshi: design, engineering, operations, and customer service all together and break those silos and then

00:10:32 Nikhil Joshi: directly work with the customer and asking that, hey, what do you want? And then kind of being agile,

00:10:38 Nikhil Joshi: fast, as well as efficient across all these aspects and just not manufacturing operations. So it's a big

00:10:45 Nikhil Joshi: picture agility, but then you also basically translate it down whether it is to design,

00:10:51 Nikhil Joshi: whether it's to operations, whether it's to engineering, any part of your function. I love how you put

00:10:56 Kevin Mako: that together because you're really thinking about that full cycle feedback loop. And from a design

00:11:00 Kevin Mako: firm's perspective, that's amazing because as a hardware company scales, they start to get really

00:11:05 Kevin Mako: important information, especially from their first few products off the line in the market with real

00:11:10 Kevin Mako: customers that have paid for them. Now you get some really interesting information. You start to

00:11:15 Kevin Mako: get what they don't like. You start to get what they love. And you start to get what they

00:11:19 Kevin Mako: think could be added or improved or removed from the product in order to service maybe another

00:11:24 Kevin Mako: group of people or maybe to grow or whatever else. That feedback, you can start incorporating

00:11:29 Kevin Mako: back into the design process. And if as you mentioned, you've got really good seamless integration

00:11:34 Kevin Mako: between your customers all the way through to your production house, the more seamless that information

00:11:40 Kevin Mako: can be. And the more you're actually thinking about it consciously as the founder, the better

00:11:44 Kevin Mako: that flow of information is going to be. And the more you're going to be likely to really

00:11:47 Kevin Mako: take that feedback and incorporate it the right way into a good quality product. And as you mentioned,

00:11:53 Kevin Mako: if you build in those efficiencies as well, you're going to have a great product that's also

00:11:57 Kevin Mako: built at a fair price. And that can really help, especially at the scale level of a company going

00:12:03 Kevin Mako: from a one skew product, their first version of the product, to figure out how they're going

00:12:07 Kevin Mako: to expand. Maybe it's a higher quality version. Maybe it's accessories. Maybe it's just

00:12:10 Kevin Mako: different versions for different geographies or markets. But there will be an expansion

00:12:14 Kevin Mako: profile. And the more customers that you get, the more you're going to start learning about what

00:12:19 Kevin Mako: those potential expansion opportunities might be. Absolutely. So talk a bit about how the actual

00:12:25 Kevin Mako: technology and how information technology is best woven between everywhere from design through

00:12:30 Nikhil Joshi: to your end customer. Yeah. So that's where traditionally everybody, including us not so many years

00:12:38 Nikhil Joshi: ago, have been working in silos, right? So we were very good at putting technology

00:12:44 Nikhil Joshi: in the factory. You've been very good at adopting technology, for example, on the design

00:12:50 Nikhil Joshi: and engineering side, etc. Now, there's one aspect of bringing all of this together, as you

00:12:55 Nikhil Joshi: just said, that, you know, it all has to come together. But particularly for companies who are starting off,

00:13:01 Nikhil Joshi: what we are seeing is that you can tremendously bring down lead times, either to put up a new factory

00:13:08 Nikhil Joshi: or to start operations to scale. If you think of manufacturing operations,

00:13:14 Nikhil Joshi: at the design level. Traditionally, we have seen that anybody in product design goes up

00:13:20 Nikhil Joshi: to engineering. So they're thinking of design, but they're also thinking of engineering. But then

00:13:24 Nikhil Joshi: the moment they actually go on the factory floor and try to implement, you see this whole host

00:13:31 Nikhil Joshi: of problems that are coming, which is just making the whole thing inefficient. And sure,

00:13:37 Nikhil Joshi: you can buffer that in your product cost, but just imagine that if you could reduce that buffer,

00:13:42 Nikhil Joshi: then the kind of advantage or the competitive advantage it gives you is massive. That's something

00:13:49 Nikhil Joshi: that I am really encouraging startups that we are working with to incorporate. Some of the massive

00:13:54 Nikhil Joshi: visionary startups that we are working with, they are realizing this and they are saying, we're just going

00:13:59 Nikhil Joshi: to bring all the tech stack together, whether it is from design, engineering operations. And essentially

00:14:05 Nikhil Joshi: from day one, we would be a digital company rather than doing half the things on paper, have the things

00:14:12 Nikhil Joshi: in software, have the things in our mind. We just don't want to do that. And it's also

00:14:17 Nikhil Joshi: relating Kevin to the talent shortage, right? Like, we have a very big problem when it comes to

00:14:24 Nikhil Joshi: manufacturing in terms of talent. So you don't want a case where you're doing things basically in a traditional

00:14:30 Nikhil Joshi: old way and you already have less resources. And when it comes to transform or when it comes to

00:14:37 Nikhil Joshi: adopt automation, new aid stuff, now you are pretty much taking a lot more time. And you are,

00:14:42 Nikhil Joshi: in order to cross the bridge, it just slows you down tremendously. And one of the things

00:14:49 Nikhil Joshi: that startups don't want to do, our initial companies don't want to do, is that they don't want

00:14:53 Nikhil Joshi: to be slow because they are also trying to compete with the big giants out there.

00:14:57 Kevin Mako: Love how you mentioned that. Speed to market and thinking about manufacturing early. One of the big

00:15:03 Kevin Mako: things that is critically important in design, one of the main mottosos of macro design in

00:15:09 Kevin Mako: industrial design, mechanical engineering, prototyping and onto production,

00:15:12 Kevin Mako: is thinking about what we call DFM design for manufacturing extremely early in the process,

00:15:18 Kevin Mako: even into your first CAD models, even using the same software that you're going to be using

00:15:22 Kevin Mako: and flowing those CAD models through into prototyping, into manufacturing, and then bringing

00:15:26 Kevin Mako: manufacturing, manufacturing, engineering, manufacturing, logic into the process in design. As you're going

00:15:31 Kevin Mako: through design and into different rounds and scales of prototyping, more and more manufacturing

00:15:36 Kevin Mako: logic and advisory and actual manufacturing engineering needs to be put into those designs,

00:15:42 Kevin Mako: into those prototypes, into even the tests of those prototypes to ensure that once you get

00:15:46 Kevin Mako: to that point of manufacturing, you've done most of the heavy lifting. It's already largely built,

00:15:51 Kevin Mako: designed, engineered to then be produced. So we hear these horror stories of going

00:15:55 Kevin Mako: between prototype and spending years to then get into production. Well, that's because you

00:16:00 Kevin Mako: designed entirely for just some pretty looking prototype, and you completely ignored

00:16:05 Kevin Mako: how you're actually going to produce that prototype. Remember, at the end of the day,

00:16:08 Kevin Mako: you're not actually designing a product. Yeah. You're designing something.

00:16:12 Kevin Mako: something to be manufactured. That is the only way that a hardware company is going to make money

00:16:17 Kevin Mako: on parts that are sold and produced. So bringing that logic earlier into the process

00:16:22 Kevin Mako: will certainly maybe add a little bit of heavy lift in terms of cost or upfront engineering or time

00:16:29 Kevin Mako: or money, etc. But that a little bit upfront is going to save you a heck of a lot of headache

00:16:34 Kevin Mako: downstream. And I think if we can combine the efficiencies of great design with the efficiencies of

00:16:40 Kevin Mako: design for manufacturing, as well as working with manufacturers, good at working on new

00:16:44 Kevin Mako: products and understand the nuances that every new product has. You put all that package together,

00:16:49 Kevin Mako: like you said, put the tech stack all into one room, let them solve the problems together, and that smoothes

00:16:53 Kevin Mako: out a number of those processes, including time to market, but it's not just time to market.

00:16:58 Kevin Mako: It's the quality of the product, the reliability of product, which leads to the amount of quality

00:17:02 Kevin Mako: feedback that you get, return rates, everything smooths out. If you can think a little bit more

00:17:07 Kevin Mako: advance, do a little bit more quality up front so you have to do significantly less and make

00:17:12 Nikhil Joshi: significantly less mistakes downstream. As an industrial engineer, when I go in factories, a lot of

00:17:18 Nikhil Joshi: people ask me that given that I've seen the design engineering side as well as the operation side,

00:17:24 Nikhil Joshi: when we say that, hey, you know, if everything can be really engineered, what is really the difference

00:17:30 Nikhil Joshi: than, you know, in manufacturing operations? And I tell them is that, look, you're going to be able to

00:17:36 Nikhil Joshi: really design the plant, you're going to be able to design the manufacturing processes,

00:17:40 Nikhil Joshi: etc. And that's all engineering, right? You're also going to be able to design how the product is

00:17:46 Nikhil Joshi: going to behave, where it is going to go. What is missing out is that when you go on the manufacturing

00:17:51 Nikhil Joshi: operation side, okay, what is getting added is, okay, how are your raw materials going to come

00:17:58 Nikhil Joshi: in? If you are producing 50 different parts on the same line, have you taken all those parts into

00:18:03 Nikhil Joshi: account and the biggest spoiler is basically demand. Let's say if the demand increases 10x,

00:18:09 Nikhil Joshi: how is the manufacturing operations going to respond? How's the supply chain going to respond? These

00:18:15 Nikhil Joshi: aspects basically come as part of manufacturing operations, whether it's scheduling,

00:18:21 Nikhil Joshi: whether it is feedback from the shop floor to engineering or whether it is a compliance,

00:18:27 Nikhil Joshi: right? Like if you see medical device factories that we visit, there's this huge aspect of

00:18:33 Nikhil Joshi: compliance. You have to do it. And that's when you get to know that, oh, you know, I have to be

00:18:38 Nikhil Joshi: compliant in these 30 things. That's great. And talk a bit about the software that you guys are building

00:18:43 Nikhil Joshi: to do this whole integrated system. As a company, SNic Solutions, we call it SNic Solutions. It just

00:18:51 Nikhil Joshi: sounds cooler. Our customers call it. As a company, we are solution providers where we use OEM platforms

00:18:59 Nikhil Joshi: from Siemens and Rockwell. And these platforms are

00:19:03 Nikhil Joshi: much made to connect large aspects of manufacturing operations. They pretty much cover the

00:19:08 Nikhil Joshi: entire portfolio. So we resell them, we implement them, but then we have a lot of intellectual property

00:19:14 Nikhil Joshi: that we've built on top of that, which allows adoption of these platforms basically very quickly.

00:19:20 Nikhil Joshi: So if you took the vanilla version, it would basically, you know, take you longer than what it would

00:19:25 Nikhil Joshi: take with some of the integration capabilities that we've built. Essentially, that's what we take

00:19:30 Nikhil Joshi: to manufacturers, but from an output standpoint, we are pretty much improving or just in

00:19:36 Nikhil Joshi: layman terms, we're just making every day better in manufacturing operations, whether it's

00:19:41 Nikhil Joshi: efficiency, flexibility, agility. All of those are caveats of just making everything better

00:19:47 Nikhil Joshi: every day. Powerful stuff. What's the website for folks that want to learn more about what you're

00:19:51 Nikhil Joshi: doing? It's SNICSolutions.com. That's SNICSolutions.com. You'll find us everywhere.

00:19:59 Kevin Mako: Perfect. I appreciate it.

00:20:00 Kevin Mako: And as always, I'll put the links in the show notes below for anyone who wants to click through.

00:20:04 Kevin Mako: Nikhil, much appreciated for all your wisdom today on manufacturing, especially for emerging hardware

00:20:09 Kevin Mako: startups of their planning to both manufacture and scale into a global brand. Thanks again for being on

00:20:15 Kevin Mako: the show, and we'll talk again soon. Sure. Thanks, Kevin.

00:20:18 Nikhil Joshi: Thanks for having me.

00:20:19 Kevin Mako: Thanks and take care. You do.

00:20:21 Kevin Mako: Thanks for tuning in to this episode of the Product Startup Podcast. If you found some value in the show,

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00:20:36 Kevin Mako: podcast at MakoDesign.com. This show is hosted by Kevin Mako, North America's leading expert on product

00:20:44 Kevin Mako: development for hardware startups. And the podcast is produced by Mako Design, the original firm

00:20:49 Kevin Mako: providing end-to-end consumer product development services tailored specifically to hardware

00:20:54 Kevin Mako: startups, small manufacturers, and inventors. Take your product from idea to store shelves at MakoDesign.com.

00:21:00 Kevin Mako: That's M-A-K-O-Design.com. Thanks for joining and see you again soon.