"Supply chain management has always been the top priority of hardware entrepreneurship and the key factor determining the success or failure of hardware products. The ability of the hardware entrepreneurial team to control the supply chain is the key factor affecting the success of the product. Whether for successful hardware listed companies or today's hardware start-ups, supply chain management and control has always had a variety of problems waiting for the team to solve step by step.
1、 General information of supply chain management of hardware company
1. Cooperative R & D of product & Engineer
Different from app Internet online products, whether hardware products can be developed is one thing, and whether products can be produced is another thing. Engineer thinking is different from product thinking:
Engineer thinking: we should make the technology to the extreme and give full play to the technology to the satisfaction of engineers on the basis of existing R & D capabilities.
Product thinking: it emphasizes appropriate research and development, that is, some excellent technical strength may not be fully displayed in the products, because some technical points may not be suitable for large-scale mass production or the just needs of consumers.
Part of the business.
2. Hardware production process
The generation process of intelligent hardware products is basically as follows:
External strategy: find out that there are some opportunities or problems in the market and there is economic value here;
Internal analysis: judge that we have resources, can solve a problem and seize the opportunity to earn this market share;
Product design: define the product function and the technology to realize the product function;
Engineers make a brilliant debut: Hardware Engineer, structural engineer, mechanical engineer, software engineer and industrial design. The development of a hardware product requires three types of talents: hardware, software and structure, and they need efficient cooperation. Without any one person, it is impossible to complete the R & D of a consumer hardware product.
Product testing: the next step is to enter the process of testing, finding bugs, modifying schemes and requirements, and product iteration. This process may be more painful than initial research and development, because each bug may be a re review of the whole scheme.
3. Engineering prototype stage
The developed machine is called engineering prototype, or demo. The future market-oriented intelligent hardware products will do function optimization, performance test, trial production and mass production on the basis of engineering prototype. Most hardware start-up teams are generally not stuck on the engineering prototype, but fall into the pit of production.
4. Control of production links
Let's start with a bloody case: in the past three or four years, crowdfunding for intelligent hardware has been quite popular, but according to the data reported by Netease, the skip rate of crowdfunding for intelligent hardware may exceed 70%. A classic case is an intelligent bracelet. In mid-2013, this smart Bracelet launched a vigorous crowdfunding. At that time, it was promised to deliver by the end of 2013. However, on the delivery date, the manufacturer delayed the delivery date by one and a half months. At the delayed date, it still could not deliver. Finally, it was delayed until May 2014, and the first batch of goods had not been completely delivered. At that time, the founders issued an apology statement, but even so, they were ridiculed by the industry and consumers and said, "I bought a watch last year". The brand reputation and performance of this smart watch can be imagined.
5. Solve the yield
In the above cases, the yield of the first and second batches of bracelets is only 20%, and that of the third batch is only 50%. If it were not supported by this wave of capital investment in recent years, if it was before 2010, it would be conceivable that enterprises would usher in this situation, and the possibility of capital chain fracture is very large. However, under the tide of capital, it has given more buffer space to start-ups, so that this bracelet product can still be sold in JD.
6. Sell
A complete hardware product supply chain is a series of complete value chains from supplier sourcing in R & D to procurement, manufacturing, warehouse management, logistics network, market sales, after-sales service and so on.
The reason why hardware entrepreneurship is difficult is precisely because the resources, capabilities and endurance required for hardware entrepreneurship exceed many entrepreneurial fields, and there may be big holes in each link. At the same time, the life cycle of hardware products is also changing with each passing day, so we say here that "sales is one thing, continuous sales is another thing". Consumers' preferences are changing all the time. Everyone was wearing smart bracelets yesterday, but no one may use them today. How to deal with inventory? How to dispose of waste? What is the next step of R & D? These will affect the vitality of enterprises.
7. After sale
Moreover, the after-sales repair system will also occupy supply chain resources. For example, how much material should be prepared on each part of a batch of products for repair? After sales repair data need to be fed back to R & D and production end, which is linked to each other, and no link is enough. On a deeper level, the supply chain not only affects the success or failure of products, but also may involve internal problems of enterprises. Therefore, even for some domestic very successful intelligent hardware enterprises, the big boss will directly manage the supply chain. For example, Lei Jun made it clear in his email to Xiaomi employees on May 18 this year that he will manage the supply chain, which may be due to the capacity demand of the new Xiaomi mobile phone. In many successful hardware companies, the founders attach great importance to supply chain management. The founders also directly manage R & D and supply chain, and are very familiar with the supply chain.
Throughout the above process, from engineering prototype to trial production, and then to mass production, if it is an entrepreneurial intelligent hardware team, it is best to plan for half a year to one year. It is not easy to do batch. The materials in the bill of materials (BOM) Bill of materials cannot be shipped without any. It is particularly important to grasp the procurement cycle. Even if it is planned, it is also necessary to be prepared for suppliers to skip orders. It should be said that it is inevitable for suppliers to skip orders. Even if they do not skip orders, they may fail to pass the incoming material yield. Squatting in the supplier's workshop to urge goods is also a common thing. Once a friend who started a hardware business often squatted in the factory of the hardware supplier and watched the production until three or four o'clock in the middle of the night. More accurately, he forced the supplier to produce until he got the materials. Get up early the next day and rush to the next store.
There is a certain gap between the actual hardware supply chain and that seen in the books, because many of the books are written about the successful models of large companies or some principled things. The real operation status is generally different from the principle framework. Moreover, large companies have several characteristics: strong bargaining power, relatively mature products and perfect logistics and sales system. For example, some large enterprises can achieve zero inventory, which has basically reached the top management of the supply chain. However, the hardware entrepreneurship team is different. The production capacity and output need to be explored step by step, because the hardware entrepreneurship is to make innovative products, grab the estimated unknown incremental market, replace some original model, and provide additional benefits for consumers. This means that in the first two or three years of entrepreneurship, many links need to be from zero to one.
2、 Pit of hardware Entrepreneurship
For an entrepreneurial team that makes consumer hardware products, it is generally necessary for the team to have the ability or resources to solve the supply chain to a certain extent. Otherwise, it will experience layers of hardships from engineering prototype to consumer purchase and use, just like learning from the West.
According to the problems encountered and being solved in the R & D and production of agricultural intelligent monitoring equipment after the establishment of Agricultural Expo technology, there are many pits in each process. In the process from zero to one, hardware entrepreneurship will mainly face supply chain problems and Countermeasures:
1. Chip procurement
Starting from R & D and design, in fact, the supply chain has begun. After understanding the requirements, the hardware engineer selects the key components, determines the scheme, produces the engineering prototype, tests and optimizes the cost. Engineering prototypes generally use better electronic components and imported components. When optimizing the cost, cheaper components will be selected, but non key components must be replaced, such as resistance, capacitance and non key chips. The cost of chip optimization is mainly reduced. The level of chip is mainly civil, automotive, military and aerospace. The difference of the first three levels lies in the temperature parameters and the difference at different temperatures.
2. Cost & profit control
Cost is very important to the output and sales of hardware, because there is a big difference between hardware entrepreneurship and Internet entrepreneurship, that is, hardware products must make money. In fact, hardware entrepreneurship is essentially selling things to make money temporarily. Single product sales should be profitable. If there is no profit in single product sales, the company as a whole must be at a loss. Generally, the gross profit margin is maintained at 30% - 60%, which can reserve enough operation space for operation and sales. Therefore, even if a single product makes money, the overall loss of the enterprise may be caused by factors such as promotion cost and operation cost.
In addition, in the process of cost optimization, the key point is to consider the product stability and performance. For example, the receiving sensitivity of a brand of RF receiver can meet the requirements in the engineering prototype stage, but after the high and low temperature cycle test, the receiving sensitivity can not meet the requirements. Later, after repeated test and inspection, it is found that the reason is to replace the impedance matching capacitor of a Japanese import. This is the problem in the process of cost optimization. When reducing a certain part of the cost, it causes other problems.
Therefore, when optimizing the cost, we must be careful and do enough tests before considering the production line. For example, power chips, single chip computers, plates, etc. when making material substitution, we should be more cautious. For example, last year, a hardware start-up company replaced the plates when purchasing cost down in the mass production stage. There were no major problems in the test production. Until the goods were delivered to consumers, there were a large number of repairs and complaints. It took some time to find the root cause of the problem. Finally, the product stopped shipping for more than a month. Enterprises should re place orders and deal with a large amount of waste. This is caused by the material switching in the mass production stage.
3. Mass production & various rates
In mass production, first of all, we need to make reasonable expectations for the market, put forward expectations, purchase materials, go to the production line, and test shipments. This is the basic process. Without considering the shortage of materials, how much should the market expect to do? It is more difficult. If the market expects less, it means insufficient production capacity, and if there is more, it means inventory backlog. At the same time, it is also important to ensure that the production line can start normally. The planned production line may stop production due to the lack of some materials. In the same sentence, we can't do without a screw or a resistor or capacitor.
In addition, the risk of switching materials in the mass production stage is relatively large. Try to adjust the products in the trial production stage. The material switching may be the replacement of old materials with new materials. This is generally due to the consideration of reducing costs. Both materials can play similar functions. The other is to switch immediately. In this case, problems are generally found and new materials are used immediately to solve some bugs.
Yield, straight through rate and upph are also important factors. If the yield is low, the output will be low and the cost will rise. There may be several cases of low yield, which most often occurs when new intelligent hardware products are imported, because new products often have fresh and special functions, and the production difficulty may be too high. At this time, engineers need to adjust the technical scheme in time to reduce the difficulty and improve the production capacity. Production is simply a process of one in and one out. Material in and product out, and cost control should go deep into every link.
4. Supplier selection
Next, let's talk about the relationship between the R & D team and suppliers. For the hardware entrepreneurship team, it is extremely important to find suppliers, which should be prepared from the beginning of R & D. As we said just now, hardware products must have three types of technologies: hardware, software and structure. Among them, structural parts are the most difficult to control. The hardware cost has been basically transparent in the market, but hardware and plastic parts involve proofing and mold opening. The water in the industry is very deep, and it is normal for start-up teams to be trapped.
Suppliers can be basically divided into several categories. I take Guangdong Province as an example:
Workshop type: labor, equipment and production environment are very low. To what extent? In short, I stayed there all afternoon waiting for materials. I basically felt that my life would be lost. The workers inside couldn't work until they were 30 at most. However, the cost is low, and the proofing materials are not necessarily poor. Start-up teams with little background are more suitable.
Small and medium-sized factories: with a scale of about 100 people, they are generally more experienced, suitable for mold production and small batch production, and also suitable for start-up teams, but they need to be cautious in the search process.
Finally, there are large factories: standardization and process. This should be considered after development, because supplier scheduling has priority, large customers have priority and small customers have priority. However, when the enterprise develops to have the bargaining power, it should also improve the supplier level accordingly.
Therefore, suppliers also choose manufacturers. They do not necessarily take over the work when they find suppliers. Sometimes suppliers refuse for various reasons. The suppliers who take the initiative may not be able to meet the technical requirements and produce qualified materials. Hardware companies should take more suppliers and find more suppliers. If there is enough manpower, they should supervise production in time. Because it is common for suppliers to skip tickets when entering the supplier production and supply phase. Even if they do not skip tickets, the material yield may be too low, resulting in failure of production. Therefore, it is very important for the R & D team and suppliers to cooperate well. Complaining about the unreliability of suppliers can not solve the problem. It is better to take positive action and find more alternatives, so as not to fall into the pit of the supply chain.
3、 Opportunities in the supply chain
Finally, in view of the existing problems in the current hardware supply chain market, the possible market opportunities are as follows:
The first is the upgrading of the Internet.
There are more and more start-ups in this field in the past two years. They solve the needs of small and medium-sized hardware enterprises seeking suppliers and supplier management through the Internet, and provide solutions to make the service, price and quality more standardized. There is a certain market space for entrepreneurship in this field, because they are indeed solving a large market demand and can optimize efficiency. They see such a huge opportunity in the field of agricultural hardware. However, they also need to have a long way to go. The market of to B is large enough. How to win this market is a test of the ability of the team in all aspects.
Management system upgrade.
The management system itself is a relatively mature product in the existing market, which can realize fine management. Large enterprises either purchase the management system from outside, of course, the price is very expensive, or develop it by themselves. However, for small and medium-sized start-ups, they also need an efficient supply chain management system, but neither development nor outsourcing can meet the practical needs. Considering the factors of cost, confidentiality, efficiency and practicability, the system is used to replace excel office.
The third is financial services.
Help enterprises solve difficulties such as shortage of production funds. It is very difficult for domestic enterprises to achieve zero inventory, and each batch of materials is a capital backlog. Although some products solve problems through crowdfunding, crowdfunding is not a long-term solution and is only suitable for the initial operation of the product. There is a market demand for supply chain financial services established in the credit information system.
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