When developing a new and innovative product you need to get it to market and start getting a return on investment. Do you go as fast as possible to get products on shelves, worrying about issues later, or follow a methodical process where nothing is skipped and the product that reaches the market is as risk-free as possible?
There are a lot of new product manufacturing risks out there ready to trip up businesses or entrepreneurs with an innovative product idea that they want to bring to market. What are they and how to manage them?
To go fast to market or be methodical and maximize caution?
In some cases, such as with simple products, the former approach is probably safe and effective as the investment will be minimized and you can start selling quite quickly, but for more complex products there are many risks that occur when a comprehensive new product manufacturing process is not followed.
Assuming your product is innovative and somewhat complex, we can probably rule out rushing it to market because if you’re spending tens or even hundreds of thousands of dollars on developing and manufacturing the product (this is a feasible estimate), you have too much money in play to risk manufacturing a product that is defective, unsafe, or not compliant with your market’s regulations. In fact, there are quite a lot of new product manufacturing risks that need to be countered by numerous activities importers need to take.
I’ve organized the risks into 7 categories below along with some suggestions on what’s needed to manage them:
1. Market risk
- Has the customer shown early drawings & prototypes to target users, to collect feedback?
- Is there still a lot of uncertainty on the total unit cost? Don’t over-price it at this point.
How to manage this risk/s?
Doing the market research and getting an idea of what a reasonable market price would be for the product helps you to start off on the right foot as the unit cost will influence the design, development, and manufacturing of the product later on.
You may think that your product idea is amazing, but without feedback from potential consumers and an impartial perspective you run the risk of bringing a product to market that doesn’t fill a gap or solve consumer issues.
2. Technical risk
- Is the product concept quite innovative and complex?
- Low technology readiness level?
- Low manufacturing process readiness level?
- A lot of custom parts?
- Is there a plan to do feasibility studies and ‘proof of concept’ prototypes, in order to confirm/drop assumptions quickly?
How to manage this risk/s?
You need to simplify the product concept, use standard parts wherever possible, do ‘proofs of concept’ to test and iterate the design inexpensively, and rely on a specialized manufacturer to do some of the engineering if specific expertise is required.
Not doing so could lead to ‘feature creep’ or ending up with a product that is over-complex and easily runs over budget, hampering you from getting to market quickly from a very early stage.
3. Product reliability risk
- Have proven components been picked in the bill of materials?
- Was reliability taken into account at the design stage, if applicable?
- Was accelerated life testing performed on prototypes, to find the weaknesses of the design and address them?
- Was reliability confirmed with reliability testing, with parts off tooling, before mass production?
How to manage this risk/s?
You should aim to pick proven components, follow a ‘design for reliability‘ approach, probe the design for weaknesses by performing accelerated life testing, and run product life testing to assess and assure reliability. Parts coming off production tooling should be tested before the main production run starts so you know that the mass-produced products/parts are going to be reliable.
Not doing so could lead to a product that doesn’t reach customers’ expectations for lasting a reasonable amount of time without breaking, damaging your brand and potentially causing expensive recalls.
4. Product compliance risk
- Were pre-certified materials picked, when that makes sense?
- Do product designers need to take compliance into account?
- Have products been tested for compliance (and have certifications been applied to, if applicable) before purchasing parts for production?
How to manage this risk/s?
If you’re manufacturing certain types of products such as kid’s toys, medical devices, food service items, etc, you’ll probably need to choose pre-certified materials from suppliers you know have done the job correctly and can provide certification documents (such as batteries from a legitimate manufacturer, for instance), and remember to perform compliance testing on PP samples for compliance before going into mass production.
If not, you may end up with an entire production run of products that aren’t compliant and cannot be sold or, worse, a product that ends up injuring someone that is later deemed to be non-compliant and lands you in court with the threat of serious fines or even jail time hanging over you.
5. Supplier business risk
- Any source of concern about the manufacturers of critical components?
- Were manufacturers of critical components qualified with on-site audits and other approaches?
- Have component manufacturers signed the required contracts?
- Any risk with payment terms?
How to manage this risk/s?
Source low-risk manufacturers by doing your due diligence to assure that they have no red flags (such as financial issues, not disclosing that they are, in fact, a trading company, etc), also take time to qualify critical component suppliers in the same way. Also be sure that they will accept your NNN, product development and/or manufacturing agreement, and that they will accept a payment schedule from you that is fair but keeps your risks as low as possible.
The risks here are related to supplier reliability, honesty, and continuity of supply. If you can’t rely on your suppliers, are you sure you can get your product to market and they’ll keep on delivering it at the quality you need?
6. Manufacturing risk
- Has a quality standard been documented, and accepted by the manufacturer(s)?
- Was the product ‘designed for quality‘ from the start?
- If there are custom processes, is there an agreed-on plan to validate them before launching mass production (with pilot runs)?
- Are testing stations in place in the pre-production phase?
How to manage this risk/s?
You need to guide your manufacturer with a documented quality standard and follow a ‘design for quality‘ approach when designing and developing your product. Then take time to confirm the key suppliers’ quality systems and validate any custom processes before launching mass production (with pilot runs). Testing stations for the PCBA and other critical parts should be set up before assembly starts, QC insections should be carried out during production, and so on.
These documents and activities are in place to assure that the products are manufactured to your required quality. If your supplier is not fully aware of your exact requirements before production starts then it should not come as a surprise if the final products don’t measure up.
7. Counterfeiting & competition risk
- Is it easy for a competitor to copy this product?
- Have the appropriate legal agreements and IP registrations been done?
How to manage this risk/s?
You will need to research methods to hinder competitors (or your supplier!) from copying your product and putting it on the market first to undercut you. There are legal tools for this (NNN and development agreements, registering patents and trademarks, etc), and there are various other approaches to protect your IP (launching a simpler & cheaper version of the same product make the market less attractive to copycats, using hard-to-penetrate distribution channels, building brand awareness and press, etc.).
Working with any supplier without adequate IP protection in place increases the risks of IP infringement and being competed against with your own product, so rushing to market without the necessary agreements can almost be an act of self-sabotage if you have a unique and interesting product.
Conclusion
There’s no doubting that rushing to market and skipping the usual NPI steps, even if they seem extreme and likely to slow down your product launch, is dangerous.
The advice given will help you to mitigate or avoid the most damaging new product manufacturing risks and is particularly relevant for anyone with a unique and innovative product idea.
Remember, if you’re planning to bring your new product idea to market and are looking for help from an experienced product engineering and manufacturing team in China who’ve been there and done it before, we can help!
💡 P.S.
If you are concerned about being copied and this is influencing your decision to rush to market, listen to this episode of Sofeast’s podcast to explore why being first to market at the can lead to security risks in some cases.
