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142 Manufacturing

Quality must be designed in right from the start; it cannot be added on by manufacturing. A start-up should focus on a simple first product, since this approach allows the company to get to market quickly and increases the probability of its having a really well-designed product. Attention should be paid to minimizing components, not only to decrease cost but also to increase reliability (parts that aren't there can't fail). Quality is a discipline that concerns both engineering and manufacturing, and engineers must understand the manufacturing process by which their product is fabricated in order for the firm to produce the best product.

An example of a company that has emphasized the relationship between engineering and manufacturing is Sequent Computer Systems. It has taken a simple step to en-sure that manufacturability is a key part of the design-namely, Sequent permits any-one to stop the manufacturing line for any reason. The manufacturing and design engineers responsible for the product can only restart the line after the problem has been remedied. By giving so much power to those building the product, Sequent ensures that engineering delivers perfect specifications, and that if it doesn't, problems are attended to immediately. Under this system, design engineers quickly become expert manufacturing engineers.



Today's start-up should invest in manufacturing only when the manufacturing process is an essential and proprietary part of the company. Examples are firms manufacturing complex electromechanical devices, semiconductors, and some proprietary parts of a larger product. In contrast, computer systems ventures should minimize their investment in manufacturing processes and seek high-quality subcontracting sources instead.

It is common for a start-up to want to make everything it can in order to have 'I control" over its destiny. For most new ventures, however, buying manufacturing capabilities from outside sources not only is a better use of resources but also is likely to yield higher quality and lower costs, because the subcontractors specialize in all the necessary testing and fabrication steps. Since the volume of products is likely to be low at first, the best use of resources is to buy as much as possible from outside sources to avoid investing in new processes.


In addition to the decision regarding in-house manufacturing versus subcontracting, additional make/buy decisions must be made with respect to all parts of the enterprise, including product design, design processes, sales, service, and support. The start-up may find it cost-effective to buy one or more of these capabilities from an external organization.

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