Foster Relationships with Technical Salespeople for Design Success

We’ve all been there.

With a Zen-like focus you are meticulously setting up a sensitive test apparatus, inspecting a crash dump caused by stack corruption, double-checking a 50 tabbed cross-linked spreadsheet to find an inconsistency, or analyzing multi-variate simulation results. Then…

RING! DING! BING!

An interruption. Another annoying call, text, or email alert from a technical salesperson just when you were about to make some progress. The momentary distraction disrupts your train of thought.

Now where were you..?

UUUUUUUGGGGGGGGGGGGHHHHHHH!

Whether they represent a manufacturer, a component vendor, a distributor, or a reseller, technical salespeople are the bane of engineers. They’re always calling at the most inopportune times, leaving voicemails, and persistently cluttering your inbox with inquires to set up meetings for only 10-15 minutes to demonstrate the latest technologies. They pry for details of upcoming projects and to try to sell you things that you don’t need or want.

Salespeople are wasting your valuable time!

Why don’t they understand?

If you need them, you’ll call them, right?

TRANSITION

At mid-career, I had the opportunity to change roles from embedded software developer to business development manager (a.k.a. “The dark side”). At the time, none of the component reps or distributors knew who I was. In fact, many asked if I had recently joined the company although I had been there for over eight years.

So I made a point of meeting with every rep who called and wanted a meeting. You want to meet early for coffee? Great. Do lunch? Sure. Come talk to me. Give me your line card. Tell me what the companies you represent do best. What is their competitive position in the marketplace? What are the emerging technologies?

In a few months, I was able to rapidly extend my network of potential electronics components suppliers and compile a virtual rolodex of who represented whom and what technologies each offered. Through these meetings I learned who really knew their stuff and who didn’t.

ESTABLISH TRUST

If you don’t trust them, why did you even let them in the door?

Execute NDAs (“Non-Disclosure Agreements”) with those suppliers with whom you trust. Mark relevant document confidential. Remind them of this obligation at the start of the meetings. Write confidential in the subject line of all email communications. Don’t sign NDAs with people or companies that you don’t trust. Remember, basically an NDA is a written legal promise not to share your information with other 3rd parties. The unscrupulous will not honor these agreements.

BUILD RELATIONSHIPS

Clearly, some technical salespeople are better at solving problems than others. You should be seeking only trusted advisers who know their products, capabilities, and markets. Then build solid relationships with these people before you need their help.

Those that are not responsive or don’t bring solutions to the table you should exclude. But, do them the courtesy of telling them upfront that you will not be doing business with them. That way they won’t call on you again.

Then you will receive fewer calls and emails requesting status updates; you’ll avoid requests to schedule unnecessary catch-up meetings. But when you do receive an inbound sales inquiry if you don’t have a current or upcoming need for their products or services, provide them guidance as to when there might be a future opportunity and when they should check back.

Do take advantage of convenient opportunities to meet for coffee, lunch, and occasionally drinks or dinner.

Also, if a technical salesperson is traveling with a high level executive or principal in his region, carve time out to meet with them. Not only does it help your local salesperson build credibility within the organization, but it is a great opportunity for you to increase the visibility of your company and its products. Establishing direct relationships early can be beneficial, especially if you use the meeting as a launching pad to network deeper within the organization. Then you’ll have internal advocates with more clout when you need to ask for a favor such as access to hard-to-get samples, expedited orders, and even preferred pricing.

SHARE INFORMATION

Share information. The more, the better.

Stop playing mind reading or guessing games that transform technical salespeople into detectives or worse, mentalists.

While you should always be cognizant of the appropriate level of information to share, too often companies use extreme measures to conceal information. Unless you’re working on a DoD (“Department of Defense”) type project where it’s necessary to compartmentalize information or on a project that is subject to a more restrictive covenant by your end customer, hiding information from your partners is unnecessary and unproductive.

ENGINEERS DO WHAT ENGINEERS DO

When assigned a project, many engineers put their heads down and immediately start researching solutions. These are the types that prefer to download and read hundreds of whitepapers, data sheets, and application notes from the web instead of actually talking to a live person. They prefer to work by themselves or to confer with a few trusted, technically astute peers in the lab. They create intricate Excel decision support spreadsheets that are parameterized for every permutation.

Although this research process is stimulating for the engineers, with the high cost of design engineering resources is this really the best approach to start developing your product?

Do you really want your engineers spending weeks and weeks researching to compile copious lists of options?

How can you be certain that they’ve covered every possible option?

ENLIGHTENED SELF-INTEREST

Many hands make light work.

Two heads are better than one.

What if you had 50 people working on solving your design problems instead of just your engineering team?

If there was no direct cost for these people would you take advantage of their help?

Would you like list of pre-screened solutions based on your product’s requirements for your engineering team to evaluate?

REVELATION

Technical sales people are the conduit to access a worldwide network of market knowledge and technical expertise. Alleluia!

MARKET AWARENESS

The first benefit to working with technical salespeople is that they have broad market awareness.

Because technology evolves at a rapid pace, it is impractical for busy engineers to keep up with all the latest developments. They are also reticent to meet with salespeople just for a technology briefing. Even if they did perceive some value in the presentation, management usually dissuades them from spending any unnecessary time on meetings that are not directly relevant to their current assignments.

Technical salespeople have a much more expansive view of the current technology market than most engineers because they have dedicated marketing and sales support teams that focus on emerging technologies and vertical market applications for those technologies. They receive detailed market and competitive analysis briefings. They are fully up-to-date on the latest industry press releases. They can cut through the media hype to candidly share insights into what technologies are really taking off and which technologies are merely vaporware. Most significantly, they engage daily with many potential customers with diverse product requirements.

TECHNICAL EXPERTISE

The second benefit to working with technical salespeople is that they provide access to technical expertise.

As soon as the high level product requirements are specified, you will want to facilitate direct engineer-to-engineer communication between your team and the suppliers to quickly assess which components and solutions will work and which ones will not.

Commonly, technical salespeople will bring in a FAE (“Field Application Engineer”) first to review component options for your product design. Through the FAE, your engineers can get access to an internal applications engineers with highly specialized product and/or vertical application knowledge who understand the lessons learned from previous experience with other customer designs. Most importantly, they have the tribal knowledge from their internal design teams that may not be generally available.

They can provide recommendations for optimal component selection based on your product’s technical requirements and perform design reviews to help catch any problems early. And, once they become familiar with your design, they can be invaluable to help resolve difficult issues that may arise later in the development or early manufacturing process.

MANAGE THE PROCESS

As soon as you’ve established a high level architecture, bring in any supplier that has a component that is critical to implementing your system design. Bring in competitors, separately.

Give an overview of the product. Provide background and context. Show a top-level schedule or at least a basic timeline. Provide the system architecture. Be clear about the performance and cost targets. Point out technical or business obstacles that your team is seeking to overcome. Share the expected volumes, the initial launch plan, and the production build plan.

Ask for candid feedback.

Because electronics is an exceptionally competitive business, all suppliers will attempt to meet or exceed the cost targets. Being secretive about your targets is counterproductive and will result multiple, time-consuming quote iterations. While unrealistic targets will be challenged, they may produce novel solutions from ingenious suppliers.

Once you have committed to an architecture begin to bring in other suppliers to help fill out the rest of the design. Share a high-level BOM (“Bill-of-Materials”) without MPNs (“Manufacturer Part Numbers”) that includes a generic description as well as performance specs, cost targets, and standard package sizes. Identify solutions that require less parts or less expensive parts to implement. You may be surprised that a low cost component may require more ancillary parts to implement than a more integrated, expensive component whereby the lowest cost solution is actually the one with the more expensive component.

Review the BOM with your distribution partners since they have the most comprehensive view of the market. Seek alternate, equivalent parts to build a large AML (“Alternate Material List”) to extend the product lifecycle, to improve component availability, and to drive component costs lower.

Before making a final selections share technical or other deficiencies with the salespeople. Challenge them to find a solution. You’ll be surprised how many times they can bring innovative solutions to the table, especially at the final hour. In fact, if you’ve invested time building a strong relationship, they may be able to get you access to solutions that are not generally available to other customers.

After you make the final selections, tell the winners where the product will be built so that they can use this information to ensure that they get credit for the design wins and parts registrations. Communicate clearly to the losers why their solution was not selected for cost, performance, or other reasons. Thank them for their help and keep them apprised of when the next opportunity will arise. Again, not only is extending this courtesy professional, but it will stop the losers from persistently calling you to check on the status and enable them to mark the opportunity closed in their sales funnel so that they can move on to other opportunities.

SUMMARY

Former engineering colleagues always ask if I miss designing embedded electronics.

Nope.

The engineer inside me just desires to solve customer problems on a different level that relies on developing relationships instead of code or electronics.

Be smart. Build relationships with technical salespeople before you need them for your next project.

Minimize Launch Risk for New Electronic Products with Rapid Prototyping

Projected vs. Actual New Electronic Products

Launching New Electronic Products

Rapid prototyping services are typically used only during development, but there are good reasons to consider them for early production as well.

For new electronic products that are just being introduced to the market without an established order history, it can be daunting to forecast the initial order quantities and the related timeline.

You’ll need to develop a high confidence plan that minimizes the risk of building too many units, too soon versus not building enough units. If you build too many units, you’ll have a ton of cash tied up in inventory. If you build too few, you may lose potential orders since you won’t be able to fulfill orders fast enough for anxious customers.

The basic business goal is to minimize finished goods sitting in inventory while having the ability to rapidly respond to new orders.

You’re optimistic that the orders will come rolling in…

The product will sell itself, right?

BUILDING A FORECAST

If you have customer pre-orders booked, you can establish a minimum quantity for the first build.

You may also need:

  • Marketing units for press reviews
  • Sales units for product demonstrations
  • Trial units for early customer evaluations
  • Replacement units for warranty claims

For subsequent builds, you will need to answer some not-so-simple questions such as:

  • How many units are expected to be built per lot? 10, 50, 200, or more?
  • How many units are expected to be built per month or per quarter?
  • How many units should be kept in stock to quickly fulfill orders?
  • At what minimum inventory threshold should another lot of units be built?
  • Will customers order units one-at-a-time or in 100 unit quantities?
  • How many warranty returns are expected?
  • Will the orders be bursty?

You’ll have to answer these questions carefully and plan accordingly.

STANDARD APPROACH

The standard approach is to engage a traditional contract manufacturer with the necessary equipment and services to build your new electronic product. The contract manufacturer will generate a quote to build your product using an internal financial modeling process based on the expected annual unit volume with the number of builds at a certain lot size.

The contract manufacturer will expect you to provide a rolling forecast so that the production plan can be updated frequently in order to make the necessary adjustments to outstanding material orders and staffing plans.  Unanticipated delays, canceled orders, and/or order shortfalls (or spikes) can have negative financial consequences for you depending on the terms of your agreement with the contract manufacturer.

If your actual orders do not match the forecast, you may have to pay for material in inventory in advance of units being built or you may be charged expediting fees for material to meet unplanned demand.

Additionally, not meeting your order volume and timeline commitments can sour your business relationship with the contract manufacturer.

For a new product without an established order history, it is very difficult to predict the size and the timing of the early orders. Therefore, the likelihood of not meeting expectations is relatively high.

ALTERNATIVE APPROACH

Instead of engaging a contract manufacturer to launch a new electronic product, you should consider using a rapid prototyping provider initially until your orders stabilize.

A rapid prototyping company’s business is structured to build products in small lots in just a few days or weeks. This capability can help you swiftly fulfill new orders while minimizing unit inventories and reducing the corresponding working capital requirements. Also, because there is no ongoing commitment beyond the current order, you’ll have the flexibility to change the timing or size of future orders as necessary.

While the rapid prototyping provider’s business model works well for early prototype development, it has some shortcomings for production runs. For example, a contract manufacturer will inventory and manage excess parts between builds. Therefore, you will likely only pay for parts consumed per build.  However, the firm will build in the total cost of all the parts, including the excess parts, per build. Most significantly, you will pay a premium per unit price using a rapid prototyping service.

PARTS MANAGEMENT

Often rapid prototyping providers will not hold excess material between builds unless there is a subsequent build planned in the near future. Any excess parts are either discarded or shipped back to you.

While it might seem appealing to store the parts at your location, you will be responsible for inspecting the parts upon arrival, counting the remaining parts, and ensuring that they are handled and stored properly.

You have three options for ordering and managing parts:

  1. Have the rapid prototyping company order and manage the parts. Most do not directly charge the shipping costs of parts, but they will usually add a material handling fee based on a percentage of the total parts’ cost.
  2. Order the parts from suppliers and distributors to be shipped directly to the company. You pay for shipping charges for parts once.
  3. Order the parts and them shipped to your location. Then kit all the parts and ship them to the company. You pay for shipping charges for parts twice.

If you choose to have the rapid prototyping firm return the excess parts to you, then you will pay shipping charges for parts once again!

Sometimes you will need to order and manage the parts directly for a variety of reasons, however, IMHO Option 1 is almost always the best choice. Although you’ll pay a slight premium on the parts versus ordering them directly, the rapid prototyping company will be responsible for resolving any problems.

Remember. It only takes one missing part to prevent a build from being completed and delaying your orders.

OPTIMIZE FOR LOT SIZE

Ideally, you should calculate an optimal build lot size during the design phase so that excess material can be minimized. The smaller the optimal build lot size, the better since it will provide you the flexibility to incrementally adjust the build sizes as needed.

However, there is one financial constraint that you should consider when attempting to minimize the lot size. Every build has setup charges. As the lot size shrinks, the portion of the setup charges that are amortized into the unit cost may become a more significant factor than excess material. Ask the rapid prototyping provider to break out setup charges on a per build basis so that the impact on the total unit cost can be evaluated.

PART SELECTION PROCESS

Start with focusing on the high-cost components such as ICs (“Integrated Circuits”) that tend to be unique parts. Seriously consider whether the design requires a unique part, especially if it is non-stocked with long lead times, or is only available from a single distributor or directly from the manufacturer. It is advantageous to have multiple options from several vendors, not only for cost considerations but also for lifecycle and availability reasons. Select as many parts as possible that are stocked and available from multiple distributors. Finally, be aware of large MOQs (“Minimum Order Quantity”) for high-cost components if there is no option to re-reel parts to obtain smaller quantities.

For many other parts, it is possible to select alternates with the same package and similar performance characteristics. Strive to build a large AML (“Alternate Material List”) for each of these components and to identify the ones with the smallest MOQs.

Clearly, you shouldn’t spend time optimizing for sub-penny parts. For example, if a single SMD resistor only comes in reels of 10,000 pcs @ $0.002 each, the total cost will still be $20 even though only a couple of hundred parts will be used. Unless your product design requires specialized parts with unique characteristics or high-performance requirements, a better strategy is to allow open substitution for passives since these are the least expensive commonly available parts.

YIELD CONSIDERATIONS

Realize that 500 parts sets will not yield 500 working units. There will be attrition of parts during the build process.

How many parts do you need for PCB assembly?

Plan for lower yields when using a rapid prototyping firm instead of a contract manufacturer. In general, a provider’s process is not as refined as a contract manufacturer’s process. A contract manufacturer will iteratively improve the product’s manufacturability over multiple builds which will increase the yield over time.

Rapid prototyping companies may provide informal feedback or even a post-build report on the manufacturability of the product. It’s important for you to review this feedback and to remedy any deficiencies in the product design before the next build.

Always attempt to select parts that are reeled or in trays to optimize for automated assembly. Loose parts or those packaged in tubes will increase the risk of loss, mishandling, damage, and unnecessary wastage.

Even with careful packaging and handling, some components will be discarded during setup of the equipment and possibly lost during assembly. Check with the rapid prototyping firm on the what percentage of component loss per setup should be expected and plan accordingly.

Don’t despair! There are ways to help your provider increase the yield.

While test options offered by the rapid prototyping provider are typically more limited than those offered by contract manufacturers, many suppliers offer AOI (“Automated Optical Inspection”), x-ray inspection, and flying probe test. Each of these test and inspection services requires some level of programming or setup charges, but they don’t require any investment in custom test fixtures.

If possible, provide a basic functional test procedure with specific instructions and objective pass/fail criteria. Preferably, the procedure should not require any specialized test equipment. However, it is fine to require commonly available test equipment such as oscilloscopes and multi-meters.

These inspection and test processes facilitate identifying defective units during the build process which will give the provider an opportunity to rework them thereby increasing the yield.

SUMMARY

As your orders stabilize for your new electronic product, you’ll be in a better position to select a contract manufacturer that can the optimize cost, quality, and delivery of your product for its remaining lifecycle. But, in the short-term, you may be well served by leveraging the flexibility of a rapid prototyping provider.