Real-Time Manufacturing Feedback in the MacroFab Platform - AltiumLive 2022

Design decisions impact manufacturing costs at all volumes; in this session, we'll cover the tools that the MacroFab platform provides to show the impact of each design decision on the final manufacturing cost for a product at any volume.

Highlights:

• How MacroFab platform was built to help you to save costs in your product manufacturing process
• Overview of the hardware product development life cycle
• Importance of time in manufacturing process
• Examples of hidden costs in some design decisions
• Picking components bearing supply chain in mind 

Additional Resources:

• Try the MacroFab Platform, download at: macrofab.com
• Connect with Joey Rodriguez on LinkedIn
• Macrofab: Modern EMS Solutions in North America - OnTrack Podcast
   

Transcript:

Joey Rodriguez:
Hi everyone. My name is Joey Rodriguez and I'm the director of product at MacroFab. I'm excited to be with you here at AltiumLive 2022. My presentation today is entitled Real-Time Manufacturing Feedback in the MacroFab Platform. And we'll cover the specifics about how the design decisions you make at various stages in the hardware development life cycle can impact of costs, not only at the beginning of that life cycle, but as the life cycle progresses and as you go into the production phase of your product, and we'll talk about how the MacroFab platform was built to help you in forecasting what some of these costs might be at scale and help you to save costs in your product by reducing some of the time inherent in the process which can sometimes be the hidden cost. But we'll talk more on that later.

I wanted to start by going into a little bit about me. My name is Joey Rodriguez as I said and my background, I studied electrical and computer engineering. I later crossed into the dark side and got my MBA, but my roots nonetheless are in electrical and hardware engineering. I took a few stops along the way. When I first got out of school, I went into software engineering. I worked at an early FinTech company before it was necessarily called that, but then that's when I transitioned into my first job on the hardware side of things, where I worked as a hardware systems engineer in the offshore oil and gas space.

If you're not familiar with Offshore Oil and Gas you may have seen rigs like this in the bottom left here, where they're just floating out in the middle of the ocean. The specific product line that I was working on was a bunch of IoT sensors and the cool thing about these sensors was that they actually went subsea, so there was a wireless communication element to it. And we were doing all sorts of predictive analytics, trying to understand is this structure about to fail based on measuring the temperature, the vibrations, the strain and we did all that on the device itself. And you could see a few pictures of some of the products that we launched. And I also sold to some of the major Offshore Oil and Gas operators.

But more recently, I'm leading product teams at MacroFab and we're basically building a digital manufacturing platform that helps you bring products like the ones I used to work on to life. And it's awesome to be able to marry the hardware side of things with the software side of things and it's a cool job. But on the agenda for today, so we're going to talk first about the hardware product development life cycle and we will cover the various phases from idea conception all the way to product launch, we'll talk about some of the things that happen early on in that cycle with the product requirements documentation, we'll go into covering as an engineer, what are the different things that you have to balance for a commercially successful product?

We'll talk about the importance of time in manufacturing, and then I'll give you an intro to MacroFab and tell you a little bit more about what we do and the best way I can possibly do that is with a demo so I'll of some specifics to get everybody on the same playing field in terms of the basics. And then I'll talk about some of the obvious and not so obvious hidden costs of some of the design decisions you make and there I'll compare and contrast and show you specific examples within the MacroFab platform of how you can use it to show you some of these hidden costs so that you don't add these costs to your product and that you can basically get to market faster.

And then finally, I'll summarize everything with some key takeaways. So when we think about the hardware product development life cycle, it all starts with some sort of idea or customer pain. Now, it's beyond the scope of this presentation to necessarily say whether you have a valid idea even worth building a product force, but I'm going to assume that you do. And once you have that pain, some of the earliest things that you do is test the feasibility of a certain solution. And in the hardware world, you may be doing this with some sort of hardware development kit via Arduino or Raspberry Pi.

You may have some breadboarding going on and just some very basic demos. And then you'll notice on the horizontal access there, I'll be showing you the number of units that would be typical of how many you might manufacture at each step in this process. So in this early idea phase, you may be doing one to three units as you develop your feasibility and your proof of concept. And as we mature into that, we mature into the engineering validation tests. So here's where you may start developing some of that hardware a little bit further, you may have some prototype boards built, you may start integrating the software elements with the hardware and the firmware, you're probably doing some benchtop tests in a lab environment, but still you're only producing maybe 3 to 10 units or possibly even up to 50 units as you progress in the engineering validation test phase.

Now the third phase is typically the design validation test, and here we're maturing our product along, we are potentially also maturing the hardware side of it, the mechanical element of it, if there are enclosures, so you may have industrial design and you got to fit the board into a certain footprint, you'll start developing a lot more of your testing, you'll start thinking about how do things look as you scale up to production, so maybe the box and the packaging design, and here your prototypes are still quite expensive because you're maybe only making 5 to 20 units as you get into the more mature stage of that, you may be up to the hundreds of units stage.

And then we potentially pick a manufacturer so we want to do a pilot run, and this is essentially like our beta prototype and you may have to design some of your tooling that you'll use in the production as you scale up, you'll do some validation testing, you may have some early product testers if it was a crowd funding or a kick-starter sort of set up, but here you'll be having batches of up to potentially 500 units when you reach this stage and we're just progressing a long that chain there.

And then finally we reach the volume production phase. And this is where it's released out to the world and you're producing thousands of units and hopefully you have robust sales. You'll start to look at that bill of materials with a fine tooth comb and really hone in on the component costs and try to optimize every specific aspect of that. And as it is further in production, you may have revisions of boards or parts. And at some point down the road, it may reach end of life and you have to manage that part of the life cycle. But hopefully, depending on the type of industry and product you could be in the thousands, tens of thousands, millions of units, it really just depends on the specific industry.

Now, going back to the initial phase of that in the early idea, prototyping phase, one of the critical documents that you work on, not just in the engineering group, but as a business with many different stakeholders is that product requirements documentation, and in that we list out all the features that will be in the product, we'll talk about what sorts of performance metrics the overall product needs to meet, we'll talk about maybe a specific feature we actually want to have some criteria around performance, then we'll look at, "Okay. What do we think are the potential production volumes?"

And you may collaborate with your marketing team or product marketing team to estimate out so that you can make some informed decisions about what sorts of comp owns you pick hopefully, and then one of the most important parts is obviously the cost because if you want to be competitive in the space that your product solves, you have to meet a certain price point. We can't build necessarily an ultra luxury product for a market that's very cost competitive so that we always have to keep those costs in mind.

And then finally the roadmap, so we may not necessarily build all the features into the product on the first go around so we may need to develop a roadmap in terms of how we stage the release of the commercial product. And finally of course, what sorts of timelines and time being a key metric in terms of getting to market fast, to not only compete but before frankly your competition outperforms you and hardware matures and things are obsolete. So it's something that we always keep in mind and this is what we capture in the product requirements documentation.

Now, as an engineer you have to play this delicate balancing act, especially for a commercially successful product and there's three different aspects that go into that. The first one is price. Like I said, we have to hit that price point. Secondly, we have to achieve the right quality for the product. We're going to risk the reputation of the company if we release a product that starts failing in the field with your customers so that has inherent reputation costs and costs for recalls so we got to get the right quality in the product and then finally lead time. And this is something that has been very apparent in the news lately, you're hearing a lot about the supply chain crunch in a lot of different industries where you have car makers not able to ship cars, various home appliances.

I know I was trying to buy a dishwasher recently and couldn't get one with all the features I wanted, so designing a product that can meet the lead time requirements and can actually get to market is a key concern. And just to drive home that point, I wanted to show you a few pieces of data from a study from the Aberdeen Group. Made back in 2010, this initial analysis but nonetheless, it's still a very valid study in terms of what's on the mind of hardware product companies. And in this study, they sampled 536 different companies and they looked at what are the top objectives for PCB design and overwhelmingly, the largest contributor was improving time to market. It goes without saying just to be competitive, you want to sometimes have that first mover advantage if it's a new category or just the pace at which technology is evolving, your product could be obsolete by the time you get to market if you take too long.

And then secondly, there was reduced product costs. That goes without saying, the more cost efficient you can solve a customer problem or pain you're going to get more and more happy customers and also meet the goals of your business by it being able to achieve the margin you want. And then finally, everybody has quality on the mind, but it ranked third in this particular study. Looking at another aspect from that same report from the Aberdeen Group, they classified different hardware companies into different percentiles of performance. And looking at who are the best in class at electronic hardware design, there was the top 20%, the middle 50% which industry average, and then the laggards, which is the bottom 30%. And on the right, you see the different parameters for the mean performance.

And best in class, obviously these are the best run companies and 88% of products launched on time, possibly even faster than that, they meet their product target costs. But once you start getting to that middle 50%, only 75% launch on time, that's pretty good, pretty to principle there almost 80% few have increase in development time. 80% meeting the costs, targets, maybe some increases, but still room for improvement. I mean, there's a substantial amount that are performing in this manner, and then you get to the bottom laggards and then half of the products launch on time, 12% take even more time, half only meet the product target costs so a good chunk of the industry out there is not necessarily performing when it comes to the hardware product development. So something to keep in mind.

So thinking about that, one of the common themes in these companies' performance is time and that you're going to hear me repeat on that notion of time quite a bit in this presentation, because it's one of the hardest things to necessarily capture as an engineer when you're focused on a lot of times just the performance and the quality of the product, it's easy to forget about time, but I wanted to show you this great quote from the late Henry Ford of the Ford Motor Company, just really kind of drives the point home. And he was the person who really drove home the whole concept of the production line and manufacturing, and the quote says, "Time waste defers from material waste and that there can be no salvage, the easiest of all waste and the hardest to correct is the waste of time because wasted time does not litter the floor like wasted material."

And I think that just captures it just so well, it's hard to manage something that you can't see and you don't feel that pain as if there was materials on the shop floor or just wasted parts or burned out boards or whatever it may be and that's something that's really important. And as an engineer is to think about not only the efficiency of how you prototype and get the product launched, but when it goes to manufacturing how much time does it take when the people on the line are physically making that product. So I just wanted to put that quote out there before we move into the next section, because it's just such an important concept to drill into your thought process as you're making design decisions.

So I wanted to pause here and talk a bit about MacroFab, which is the company I work at for those who are not familiar, we call ourselves a digital manufacturing platform for electronics and it's as simple as a way to get quotes for your electronic products that you're designing and your EDA tools like Altium, and that's just at a basic level. So we ingest your design data and we give you pricing and lead time all in real time and we're tapping into real time supply chain networks to understand whether you're making prototype volumes or production volumes, how much it will actually cost and that will be largely what I demo today. And I won't be able to cover every specific aspect of the platform but suffice it to say it's quite extensive.

But what may not be as apparent and just something to keep in the back of your mind is we have this great digital interface so you're designing your products and digital tools like Altium, and you're send sending it to MacroFab and getting the quotes for things. But what we have power in the background is this manufacturing network, of right now over 75 plus factories in North America, the US, Canada, Mexico and we're actually tapping into the capabilities of those factories and looking at your design and matching you to the right sort of factory for the given product that you're doing and the given volumes that you're doing, and just putting you in the best factory at that specific moment in time.

And we're always constantly measuring the performance of these factories, and we know who's the best for your specific design and we manage the whole relationship for you and you don't really need to think about when you're placing these orders on our digital platform. And we also give you the tools not only to prototype with us, but also to do that at scale so we may help you in minimizing tariffs if you are manufacturing somewhere in Asia, and basically just giving you all those tools at your disposal to potentially manufacture in multiple factories at once without necessarily having to manage all of that complexity.

So I'm going to pause here and exit out to the presentation and I'm going to show you a little bit about the platform, I figure what better way than to actually show you. So let me pull up my browser here and make sure you can see that. So I wanted to start off just on our main website to point out it's just macrofab.com. We've got a lot of resources in case you want to learn more about us. There's a great podcast for engineers that it's targeted at, but to sign up for everything I'm going to show you today it's simple as just making an account. So you would click this, get instant quote button and it would take you to a signup page and feel free to put your name, your business email, phone number and just password and it's as simple as that.

It's a free platform, doesn't cost you anything to sign up. I'm going to go ahead and log into my demo account just to show you what it would look like. So this would be the main screen, which is the dashboard. This is a demo account so I don't have a lot of live production things going on, but if you had orders and things in flight or if you had inventory with us, you would see that all from one streamlined place. But for most of what I'm going to show you today, it's going to be the actual design tool and the process of uploading files and getting a quote for your PCB.

So if I click the PCB section of the platform, I'll see some of the PCBs that I've previously uploaded. For purposes of this, I'm going to hit create new PCB as if I was trying to get a quote for a new PCB. And you'll see here that we support a number of different EDA tools, be it Altium, Eagle, KiCad, you could upload gerbers, we accept Excel, xlsx bill of materials and it's basically a drag and drop interface. Now, when you drag files, it could take anywhere from 30 seconds to a minute or two to process all of the raw files so I don't want to necessarily take up the time of everybody watching something load so I'm going to jump to a board that I've previously uploaded, which is this MoCo development board.

And before I go into the details and showing you how the design decisions impact the cost, I just wanted to show you some basics around the platform. So once we ingest your EDA files, you'll see your board represented, and you'll be able to zoom in and look at various aspects of your board and you can see the top, you can see the bottom. And one thing to keep in mind with this platform is it's really what you see is what you get, you want to make sure that everything you see here looks correct, that there's no sort of anomalies in how it's visualized, because we're literally going to take this design and program machines for that all in an automated fashion so you really want to make sure that everything here looks up to spec.

You'll be able to manage the different layers of the board, you'll see the solder mask, you'll see the copper, just loading here a little bit slow and you'll be able to manage that. So really check out every layer of your board and make sure everything looks good when you're using that. We can drill into the PCB specifications and we try to extract out of the metadata of your file and fill out all this information but some of it we necessarily cannot, but you've got your layer, your solder mask, your silkscreen, copper weights, some specific options around UL, ENIG different manufacturing types depending on the drill sizes that you need, you can manage your stack up, determine the thickness of it, you can configure it in different ways. You'll see your, your vias, whether you have plated back drill, micro drill, some of that you'll have to fill manually, of course.

Another view for your layers. If you have impedance control notes, that'll be something you can add there as well, and that's the PCB side of things. And I'm going to briefly jump over the bill of materials because I'm going to do most of my presentation and deep dive into the bill of material sections, but suffice it to say, we'll extract your BOM and put it here and find all those parts on the open marketplace. We have the part placement tab, which is going to overlay all of your parts onto the board. And again, what you see is what you get. I have a lot that I did not populate here just for this demo, but you could see the footprint there. One of the cool things is you can click on each part and you can add a note for people in the production line to see if they potentially are constantly placing the part backwards, you can put some notes and then anytime somebody manufactures it, they're going to use the MacroFab platform in their assembly process and see those notes, something to keep in mind.

And then the quote and order tab, which is where you'll see all of the costs at an aggregate level all summarized neatly for you. We have this handy chart here that shows you from small volume numbers, when you're early in the product development life cycle to as you reach those later stages that I told you about, as you go into thousands or tens of thousands of units, you can see your per unit costs and really hone in on things. And we offer four different levels of service. So we have a 10 day service, and then some that vary anywhere from two to five weeks, at the time I'm recording this demo, we're actually approaching the Lunar New Year, which can drastically affect the prices of boards and lead times so you're seeing some slightly inflated lead times at the time of this demo, but typically these other three tiers would be anywhere from two to five weeks or so.

And the cool thing about all this is that it's all dynamic. So it's tapping into the real time supply chain and getting information from our factories and the real time component availability and just getting you the latest and greatest information. And you can basically pick any number of boards you want quantity wise and you'll see that it takes a few seconds, but all the prices will recalculate and you'll see different options and it's all dynamic. And I can go out to tens of thousands of units, so you can go all the way from prototype all the way out to production. And it told me there that a part wasn't available at that quantity, but we'll get into more of that, but just to keep things simple, I'm just going to put it back down at one for purposes of a lot of this demo.

So I'm going to switch back into my presentation here, what I wanted to focus on right now is as an engineer some of the design decisions that we have to make have direct implications on the performance of the product, whether we meet the bill of materials, cost targets that we want, but those are some of the obvious things in design decisions that we do that affect the cost and production skills. But I was talking earlier a lot about the importance of time and I talked about that quote from Henry Ford how time doesn't litter the shop floor. I wanted to point out some not so obvious hidden costs of design decisions or just practices that your company may have in the design process that add to the cost of the product in not so obvious ways, but first I'll cover one of the more obvious ones which is like I alluded to selecting cost effective components that meet your performance metrics in the product requirements and documentation.

The impact of not doing so obviously is underperforming product, premature failures or a product that may be too expensive and maybe not as competitive in the market. And the specific ways that the MacroFab platform can help you address the cost effectiveness of your product and meeting the specifications is... This is the bill and materials tabs that I'm going to be using for these examples, just that second tab here, you'll notice that we have these pie charts here that you can sort by parts, populated parts, form factor, origin, and availability, and you can click on specifics to zoom in, and I'll be using that functionality as I demo this to you.

But when we think about finding cost effective parts, so you may have a bill of materials and you may have identified a part that you already speced in your EDA tool but if you had not yet, what you could do is actually look and see the performance of the parts. So you'll notice here I have this 10 microfarad capacitor and right embedded in the platform when you're looking at it is you can drill in and see all the details of the component. So you can see the various attributes of that component and we can go find the data sheet for that component and have all of that readily available so that you're not jumping back and forth between your EDA tool and then potentially sending something off to your contract manufacturer and maybe they suggest a different part to you, you can actually use our platform and search for different parts on the marketplace.

Let's just say I wanted a 10 microfarad capacitor, just keep in mind for this demo I may not be picking technically correct parts, I just wanted to illustrate the various points to you, just keep that in mind. But with each part I can go in and see the market availability, I can drill into each part and look at those same attributes and quick access to the data sheet for each part. And that's just for the most obvious element of picking cost effective components that meet certain performance metrics, everything is built right into the MacroFab platform to be able to assess the parts that you're picking.

We talked about the cost effective components, let's move over to the not so obvious decisions that affect cost that production scales. And one of these is picking parts that have minimum order quantities that you can't necessarily meet, because maybe you were just focused on the electrical performance aspects of the components, but not necessarily looking at parts that may let's say have tens of thousands required to purchase to make a batch run. But let's say you're in an industry where you have a low volume of products at production, production to you is low volume, which was typical in the oil and gas industry, where I came from where there's not too many offshore oil rigs out there and we only had, let's say 10 sensors on an oil rig. And you had maybe 102 contracts per quarter so we're making all of 10 to 50 sensors and charging a lot of money for them.

But you may pick a part that you got to buy 10,000 of them and you don't really need 10,000. So if you didn't consider that when you were making the design decision, it can kind of pin you into a hole when you go to production. And one of the ways that it does is that if you do stick with that part, you're going to tie up capital for your production or your ops team, because they're going to have to buy that minimum order quantity if there's no way around it. And you're going to have to hold that inventory to get that better pricing but, you may be incurring the cost of just buying something you don't need at the end of the day.

And obviously once you have it in your facilities, then there's the cost of storing that which is non-zero, and then the worst potential thing is that the part becomes obsolete and you rev your product and you can't use that anymore so not only did you tie up the capital with the inventory and you paid money to store it, but then you just have to scrap it. So really important to consider minimum order quantities especially if you're in an industry where you're not doing mass volume production. So another non-obvious design decision that that has some hidden costs is picking components that are hard to place on a board, especially ones that need hand placement.

And the classic example of this is at the prototype stage, you may have picked let's say a capacitor or some sort of component that has a through-hole because you think, "Oh, I'm just doing prototype and I can fix that later. I can do some sort of surface mount version, I just need to get something out and cheap for the prototype." but then it just inevitably makes its way into the final production design because you forget about it or you don't have the luxury of time to go back and change the design. And what was a small inefficiency at prototype volumes becomes a major cost adder when you scale up to production due to the added assembly time.

And the way that the MacroFab platform helps you to notice this if we go back into that bill of materials and I drill down into let's see, form factor surface mount and then I have through-hole and I've got three through-hole components in this specific design and one thing to notice that's really cool, so I showed you those graphs at scale where it's 1 to 10,000 and we do that for each component line item and we actually are transparent in that we show you the labor costs, not just like labor costs as a whole for your given volume, but we actually show you the labor costs at the component level, which is pretty neat when we show you the fractional cost, but you see not only the part cost, but you also see the unit cost as I was mentioning the labor cost involved.

So this is a part that is a through whole component and you can see that as you're scaling, it starts at 34 cents and it kind of drops off to about, let's see, 22 cents about 17 cents. But then you could see like if you start scaling it up a 100, 1200, 10,000 per unit economics in terms of labor for that specific part, don't really go down because you kept it through-hole. I know this example is maybe not the greatest example, but you could see this for certain classes of passive components, but just something to keep in mind, just always if you're in the platform look at the per unit graphs at scale and compare that. And you may want to go back to the drawing board in terms of your design to look at a different potential form factor that may have less labor costs.

And I scaled this up to a 1000 and you'll notice that we've recalculate the part costs and we recalculate the total labor costs for that part. But it can be quite substantial if you're picking parts that need hand placement. I'm going to scale this back down to one. And just to show you as an example so that was one that had a lot of manual placement if I take off the through-hole filter and I go back to, for instance, a surface mount part you can see that you start at about 6 cents per capacitor, and then at 10 you drop down to 0.007 per part and just the economies of scale, you're talking fractions of a cent in labor at thousands of units. So something to keep in mind is making sure that you think about your part selection and how it scales, especially if somebody's going to be hand placing those things.

So another one of the not so obvious design decisions that you can make is selecting components that don't have robust supply chain availability. Now, this is just forefront in just everybody, even the grandparents and whatnot are talking about how they can't get their favorite product because it's out of stock. I gave the example of the dishwasher, I couldn't get the right dishwasher that I wanted, my HVAC went out the other day and the board just wasn't available so I actually had to replace the whole system so it's a really big problem and it's not going away according to industry experts for another potentially two to three years. So you want to make sure that you pick parts that have robust supply chain availability. Classic example, and we see this every day at MacroFab is part goes out of stock and you scramble and you got to find stock and you may have to buy it from multiple different vendors, hopefully not, but you may go to a gray market, hopefully not black market to secure stock of a particular component.

It may cause you to have to buy up a ton of inventory in that part more than you possibly need so you're spending all the capital to actually buy up a bunch of that. But going back to the minimum order quantities, hidden cost it has capital costs for holding inventory, storage costs could go obsolete but one of the ways that the MacroFab platform helps you in terms of finding availability, it's very simple. So for every component in your bill of materials, we actually show you the stock out there in the real world and we tap into all the big distributors, Digikey Mouser, Avnet, Arrow and we search availability for each of these vendors and can basically tell you what's out there in the market.

So when you're uploading some of your prototypes, you start seeing products with not a lot of stock. For instance, this capacitor here actually has zero stock in the market and also we show you the lead time so that if it does go out of stock, how much time is it going to take to actually get more. And typically when you see red here like 50 weeks or unknown, that just means that you're never going to get that thing so you might want to make other plans, but we'll show you. So for instance, this one has 2.3 million parts and if those 2.3 million went away overnight, it would take about 28 weeks to get new stock.

So upload your bill of materials early on in the process and make sure that everything you're picking has really robust availability so that when you get to even prototype when you're trying to get them manufactured, that it doesn't go out of stock even at the prototype stage and certainly at the production stage, you really want to make sure that things don't go out of stock because you're just going to spend all sorts of time, your production people are going to be calling you last minute just saying, "Hey, we need to find more of these or you may have to go redesign." that would be the worst possible outcome, so something to think about.

Now, transitioning to another one of the areas where you've got some hidden costs in your design decisions, making sure that there are... So if I talked about availability on one hand, then there's a strategy in specifying alternates and we all know this and hopefully we're doing this, but a lot of times you may not have taken the time for each bill of material item to suggest, I don't know, two to five alternates for your product. And the consequences of that are similar. A part goes out of stock either during the prototype or the production phase, you're scrambling, you're having to specify alternates and it just a lot of time wasted going back forth and you basically don't get to market as fast as you want.

In the worst case scenario your product could require a redesign and unfortunately we're seeing some customers have to go back to the drawing board with a product and it just adds months to the process. So you really don't want to get into that situation. And one of the ways that we help you do that is through the use of lists of alternates. Some of you guys may call this AVLs or parts alternate list, different nomenclature but at the end of the day, what we help you do is we allow you... And you can do this upon import or you can do it manually once everything's in the platform but I have my primary here, which is this a 100 microfarad capacitor, but what we allow you to is search for, using that marketplace availability, search for different alternates.

And I'm going to search here and again, I'm not necessarily going to pick anything technically compliant, just emphasizing a point here. But if I wanted to, I can research these parts, make sure they're technically the same in terms of performance metrics, similar unit economics and then make sure they have robust stock and availability. And basically I would add the component to this list and what you're seeing here is, for this designator C16, I've got a list of allowed parts that shows up here and so I've got now two and let me add another one here, so I added a third there and now I've got a robust list of parts that I can not only have at the prototype phase so that if one goes out of stock... You can see this one here, it's only got 2,500, that thing's probably going to go out of stock.

If that were my primary, I'd definitely want to make sure that I had a few specified there, but if something goes out of stock, if you upload your list of alternates that's great because Macrofab when it gets to our strategic sourcing team and we're purchasing all these components through automation or manually if it's not available, we'll know and try the next one on your list without having to do all the back and forth and that's wasted time. And we give you two options and we call this our strategic sourcing tool, but you can do it by price, so the list will automatically sort by the lowest per unit price and we'll always pick the cheapest that is in stock or you can do a fixed strategy where if you really want a certain part to be number one all the time, you would set that as one and then you would manually manage your list and our team will always respect that for you.

But I can't emphasize enough especially in this environment, go through your bill of material and make sure you specify multiple alternates for every line item to the extent you can, it's just a good risk mitigation strategy to make sure that you get to market in quick time. So we're talking about alternates and specifying alternates as a risk mitigation strategy, going a step further and this is kind of the next level of that would be maintaining a parts' library of substitutes for your whole company. If you're a startup and you're developing your first product, this may not be as relevant but as your product and company matures, you may have multiple engineers working with each other and managing alternates at scale becomes a bit of a challenging problem.

There are good tools for managing parts' libraries, but your contract manufacturer may not necessarily have access to know what are your alternate parts that you specified so we've built a way for you to do that in the MacroFab platform. But the implications of not building out a parts' library or that you're wasting all this time re-reviewing and specifying alternate parts for a new product that may potentially use a similar design or subsystem that you would want to just reuse the parts and reuse all the alternates. So we've built a way to help you manage that and ensure that you're not having inconsistent alternate lists.

So I'll do that over here and let me go back to that part that I had, which one was it? I think it was C16, yes. So I added those three alternates there so I've got these two Panasonics and one of the MacroFab house parts and what I want to do is say, let's say that this C16 it's a common 100 microfarad capacitor and I may use it in five or six different designs and I always want to use these three alternates anytime. So you may have a parts' library where you have a part number and what we call that in MacroFab parlance is the custom part number.

And so if you click this button here, let's say just for argument's sake that you call this internally cap 004. I don't know, I'm trying to pick one that I haven't used before, so I'd hit enter and then it saves it and as a custom part number and anytime I have a bill of materials that references cap 004 as the MPN, as opposed to the part that I had in there before, which was the a 100 microfarad capacitor, it will automatically just pick this list of alternates and off you go, you don't have to specify that every single time.

And what's cool about the MacroFab platform is we've built this with your team in mind. So you can go to the section of the platform called my organizations and when you jump over to the, my organizations, I'm going to open this up in a separate tab here, you'll see your company name and you have an address book and some other functionality, I'll show you here in a second, but if we jump to the custom alternative part list, here's where at a company level you can manage all of your alternate part list. And you'll see here that I have this cap 004 which was the one I had just made and here are the three parts that I had. And so at a company level, I can come in here and add even more.

And I may not necessarily be in one individual PCB design, I may just do this as an engineer and maintain this part library and I can search for additional parts and add them just as I would in the actual PCB BOM and I can add even more components. So let's just say that I add another one of these Panasonic parts so I add a fourth one there. And let's say that I make another CPN here, let's say I make it cap 005 and I put let's just say another a 100 microfarad and let's just pick a completely different part. So I made these changes on the custom alternative part list and so let's jump back to my design and I'm going to hit refresh. And if I go to my cap 004, you can see that I added a fourth part, and I did that on the central company manage page, and it automatically updated.

And let's say for argument's sake that I wanted to use that cap 005, instead I can actually search for my company parts here too and I see my cap 005 with the parts that I had added to it. And let's say I just wanted to swap it to the 005, I can do that right here and it replaced that list of four with the list of one. And if I wanted to go back, I can switch it back to my cap 004 and have my four parts back just where I had them. So that's a really important thing to do as your team scales up.

Now, another one to think about as your team is scaling up is making sure that your team members don't mistakenly modify your design or order the wrong version, potentially somebody could make an unintentional change and it slips out into production and then you have a quality issue, and you're going to spend a lot of time correcting that mistake. So one of the things that we allow you to do in the MacroFab platform is to lock a design down. So with that you can... Let's see here, make sure that you don't have people changing things. So if I go back to that organization's page, which was my organizations here, you'll notice this tab here of roles and permissions and with the roles and permissions if I'm an admin or an engineer, I can have certain permissions that allow me to modify the technical specifics of a PCB, but perhaps if I want to send it to my purchasing team and maybe I don't want them to be able to edit the PCB so I can lock things down and I can then invite more people and I can specify a certain role for that person.

And that's just an important little trick to making sure that people aren't... If it was a traditional contract manufacturer, that they won't send the wrong files to the contract manufacturer. So it's a way to lock things down and have more control. So talked about modifying the design by mistake, and then along that vein is controlling what version of the product gets sent to production. You might send potentially the wrong design files, this could have a lot of wasted time going back and forth or worst case get the wrong thing built. Maybe not always, you may change the BOM, but then somebody ordered the wrong version of the product and it's not reflected, can be quite troublesome.

So one way we allow you to avoid those kind of mistakes and hidden costs, once let's say that I have the same MoCo board and I like it, we have this concept of storing it for production. So as an engineer, you can come in, you can see a change log of all the different things you've worked on and let's say that this is the BD2315 and it's version, I want to up rev it to two point... I might have done this one already, but let's say 2.5, review that changes, I like them, I'm going to update it for production. And then it's creating a sealed encapsulation of this particular product with these particular specs with my alternates and everything.

And then if I go to the purchasing side of the platform and I go to the products, and this could be your supply chain team member doing this, they could go in here and see the BD 2315, the version 2.5, they can go in and order the exact product that you technically specified and set up, they don't have to manage with all the technical specifics and they just put in the quantity they will want and they can create a spot order on the open market. There's also a path if you clicked order now, you would be taken to an e-commerce experience, which I can load up on the side here, but then you can actually send that particular product so that your purchasing person could go to the exact product and make sure that they're buying that correct one.

Here I'm going to just pick a shipping time and I'll be able to... There we go, then I'll be able to use a credit card and I actually don't have a team member on this account, but you'll see an option pop up to send this order to the teammate so that's just another way to ensure that you're not ordering the wrong product. And then for my final point on the not so obvious design decisions that affect costs this is kind of a tricky one, but time spent selecting a factory be it for prototype volumes or for production volumes and then going through the process of onboarding them. The big impacts there, if you're qualifying multiple factories that can take months just from a technical perspective, and then you get into the commercial side of it and setting up commercial agreements with each factory just adds to that time.

And let's say you go through those two steps and you've done all that and you've got a good set of factories or maybe one, the factory you chose today might not always be the right fit as your product changes. It's one thing for a specific factory to specialize in prototype volumes if you have certain components or manufacturing processes that you need, factory may not be the right fit and that's one area where the MacroFab platform can really add a lot of value is I talked about the factory network that we have at our disposal, and right now it's over 75 factories. So as you're using the platform and uploading your designs and changing the quantities these prices you're seeing are looking at your specific design, looking at the components and then it's looking at our factory network and saying, "Okay, of all the factories we have, we know that these ones have these certain capabilities that are a good fit based on this specific design." And because at this particular point in time this factory has good availability and has the right quality, we can use that particular factory to manufacture the product.

And so using digital tools to select that factory and match you really gives you the quality you're looking for, the lead times you're looking for without you having to go out and necessarily certify that specific factory. And then as you grow into production volumes, you can work with our sales team and they are using the power of our platform as well. And if you have a mass volume product, we can potentially through a few clicks just manufacture that at multiple factories and ensure the quality that you're getting across all those factories and you don't have to do all that manually managing so really powerful tools at engineers' disposal nowadays.

So I wanted to leave you with a few key takeaways before we leave here today. We talked about how design decisions at all stages, be it prototype as you go through the validation phases, they all have an impact not only at prototype volumes, but as you go into the production phase of your build. We talked about how time to market and cost reductions are top of mind for a lot of hardware companies, in that survey it was the largest business initiative for these hardware product companies. And we talked about that quote of Henry Ford, about how some of the time is the largest contributor to waste and you can't necessarily see it and it's hard to manage. And we talked different examples of hidden costs in some of the design decisions you're making and how they lead to wasted time.

And as I showed you those examples, we talked about how the MacroFab platform shows you the impact of each of those decisions in real time. As quantities scale up, you can see the impact of just parts selection on labor and the hardware elements of your build and see where might some of those hidden costs crop up as you're going through the hardware development life cycle. So I hope this was a helpful presentation to you. Again, if you want to try out the Macrofab platform, just go to macrofab.com and you can sign up for a free account, but just the next time you're developing a new hardware product, keep these principles in mind and you're going to have a smooth ride or as smooth as can be when you get to the production stage. Thank you everyone for your time today.