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The Sanders Guiding Principles for Manufacturing 141

The essence of manufacturing is being able to plan the output. However, many start-ups go through dramatic changes in their plan during the market development stage. At first, there maybe no demand for the product whatsoever; then, demand may suddenly increase beyond manufacturing's production capability. The manufacturing organization is necessarily slow to respond because the typical lead time for materials (semiconductors, disks, printed circuit boards, etc.) is sixteen weeks, followed by four weeks of process time for the product In other words, a total of five months normally elapse between when the company places orders for materials and when it can deliver its product. The slowness of manufacturing's response time may tempt a new firm to rush headlong into mass production so that it will be able to meet all its orders, but this is often foolish. A few guiding principles for start-up manufacturing are therefore in order.



Matt Sanders1 offers two general principles for manufacturing: emphasize quality, and minimize the use of the start-up's resources (capital, time, and space). These two principles form the basis for eight guidelines, which are examined in detail in the following subsections.


The only acceptable engineering, product, and manufacturing strategy is to build products of the highest possible quality. Anything less than the highest quality is likely to prove extremely costly in the long run. At the front end of the manufacturing process, using or accepting poor-quality components is costly in terms of increased inventories and additional work. Likewise, implementing a poor-quality design is costly because redesign and rework will continually be required while the product is being produced. Finally, if the product fails in the field, an expensive service organization will be needed to maintain it. Any product yield of less than 90 percent at customer sites represents a serious product design and quality problem. A 95 percent to 99 percent yield should be the target for the initial products, with 99 percent (or better) the target for steady-state production.


1 . Matt Sanders is a founder of Convergent Technologies and Ardent and was the principal responsible for establishing the manufacturing organization and operations of both companies.

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