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Is There a New Way Ahead for Electronics Enterprise? Part 5

In part 4 of this series of blogs, we were diving in deeper to the new way to create and sell products. It's an open access approach.

The product supplier must also sell, and the new scheme has a new view of sales. It is no longer a distinct company function, but is split between the supplier and the designer. Both participate in making known what is available in their own ways. So is user support, split between designers and suppliers. Both sales and support are augmented by the open-access community of users. The core-four traditional company functions are thus reduced to two and distributed within both of the remaining two.

Companies that are either designers or suppliers can concentrate on their respective functions. They also have a lower start-up barrier, both in complexity of operations and in capital risk. Because the barrier for becoming a supplier is reduced, multiple suppliers might offer a product from a free design. If the suppliers are small, then their relationship is synergistic more than competitive. They would be like commercial Linux suppliers and add value in their packaging, accessories, and supplier services, such as calibration and repair, for those desiring it.

Although there are still traditional companies that continue the H-P-Tek Way (Audio Precision, Inc., a Tek spinoff, is one), for many products the separation between designers and users continues to grow. The market is given an alternative with the new scheme, with a user community based on trust between designers and users, and products differentiated in the marketplace by the replacement of predation with a cooperative and synergistic community orientation.

The flagship precedent is the community which has grown around Linux. Prospective users of such technology are those attracted to a return to the H-P-Tek Way by designers and suppliers. They want open access to information about the products they buy, and they buy them with a different attitude, of technology-sharing, than in the predatory scheme.

The designers initiate a cessation of hostilities by exercising trust in releasing open-source designs with the intent of participation by users in both design refinement and construction. Some will see that and respond in kind to become users. Consequently, the rigid functional boundaries dividing design, supply, and use are reduced through an open sharing activity.

Some characteristics of the open-access scheme are as follows.

  • Open access by suppliers and users is made to detailed product information, so that a user or supplier could refine, improve, correct, or in other ways modify the design (just as Linux can be modified), and build, repair, or calibrate units of the design. Most will not, but all can.
  • Design optimizes product quality in multiple ways: long product life (decades), adequate reliability, safety, specification margins, and high performance per cost. Design activity can return to the milieu of H-P-Tek in designing the best product for the user, not the most quickly replaceable.
  • Replaceable components that are multiple-sourced, legacy parts that persist in the marketplace are emphasized in design. Ultra-small IC packages are avoided whenever possible to ease repair and modification of circuits. If a small soldering iron (such as an 18 W Antex or Weller) cannot be used to remove a part, it is too small. Pin pitches below 0.5 mm are too small for most users to handle. Sockets are used when applicable for ease of diagnosis.
  • Minimum use is made of customized or proprietary components. Board layout files are open-access. Magnetic parts construction is based on simplified methods requiring no specialized winding equipment, with detailed build instructions. Software is open-access for programming μCs and FPLDs.
  • Designs are modularized to the extent possible so that module mixing and matching increase functional versatility. Because the products are open-sourced, the modules comprising them are also made available from suppliers. The user then has the option of buying a whole working product or subsystems of it to use as “tinker toys.”
  • Mechanical packaging is minimized to maximize access to the circuit-boards for calibration, repair, or modification.
  • Users are a market niche of people who value a total ownership relationship to the technical products they have.
  • Users participate in a user community via a linked chain of Internet websites. As the user community grows, the word about community-driven products spreads, just as Linux spread. Prices can be kept low with adequate supplier margins by not having to pay as much because of distributed engineering and community-driven sales promotion.
  • Suppliers profit by the margins in their product sales.
  • Designers profit by support of the user and supplier community and by participation in the profits of suppliers.

In the next part of this series of blogs, we will summarize this new approach and consider the consequences.

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11 comments on “Is There a New Way Ahead for Electronics Enterprise? Part 5

  1. etnapowers
    December 2, 2013

    Usually the desigers and the supporting functions to the design team, have to analyze the returns from customer once supplier delivered the volume of production.

    The communication between designer and suppliers has to be very effective, it's very important to the business purpose.

     

  2. Davidled
    December 2, 2013

    I am looking an alternative way. Instead of contacting to designers, Field engineer would be better contacted at the first contact point from customer. Therefore, they could investigate the product in their viewpoint. For example, they could contact to supplier manufacture to get the product information and specification.

  3. Victor Lorenzo
    December 3, 2013

    Usually the desigers and the supporting functions to the design team, have to analyze the returns from customer once supplier delivered the volume of production

    There are cases where business models impose a severe isolation between the customer (subcontractor/integrator) and the design team. Some kind of analyst translates the customer's needs into a more or less rigid product design specification, where any later deviation when design starts is accounted and added to design costs.

    In my previous occupation I was responsible for the design (or part of) and support to several products. We (the R&D department) were always in charge of the first production run in order to get it all setup and optimised for manufacturing, guys from production also participated but it was our responsibility until the product passed to mass/regular production. In our case our custormers used to order medium-to-small quantities, so the manufacturing phase should be optimised to be able to start it in the smallest time as possible.

    Besides that, the customer was always in direct contact with us so any possible issue (production or design related) was properly handled and solved. In the same way we were always in contact and supervising the subcontracted providers (cables, cases, PCB assembly, etc.)

  4. samicksha
    December 4, 2013

    You keep up good point Daej, infact i keep same methodology, i dont think supplier will directly contact designer, it will be feild engineer who will collect the requirement from customer. That makes his role even more imporatant and relevant to understand things more precisely.

  5. etnapowers
    December 5, 2013

    @DaeJ: this is correct when customer have some issues concerning the assembly process of the electronic IC , but in case of bad working functionalities, only designers can give feedback to solve the problem.

  6. etnapowers
    December 5, 2013

    @samicksha: the field engineer is a necessary figure to provide an interface between customer and supplier, as you correctly said, he's in charge of collecting the requirements from customer, but sometimes he will have to interact with designers to solve some issues concerning the functionalities of the IC, that the design team has simulated and setted up.

  7. etnapowers
    December 5, 2013

    “the customer was always in direct contact with us so any possible issue (production or design related) was properly handled and solved. In the same way we were always in contact and supervising the subcontracted providers (cables, cases, PCB assembly, etc.)”

     

    @Victor: that's a correct business model , according to me. What I mean is that an issue concerning the design of the device has to be solved quickly by the design team, the communication has to be direct and quick , expecially during the first production run, otherwise the risk is loosing the business.

  8. Victor Lorenzo
    December 5, 2013

    @etnapowers: “that's a correct business model , according to me

    Yes, we both agree on that and that was the key for success in our team with respect to other competing suppliers. Perhaps there was some confusion because two consecutive paragraphs in my comment were not correctly related, sorry for that.

  9. etnapowers
    December 5, 2013

    Hi Victor, don't worry, I caught the meaning of your comment, and I am not surprised for the success of your team with respect to other competing suppliers, because a business model, like the one we agree on, is really effective and allows to give fast support to the customer needs. This many times means winning the business as first supplier of a customer.

  10. RedDerek
    December 30, 2013

    Don't forget the applications engineers – the ones that field the technical questions from within the factory. The field engineer is the man out there talking to customers face-to-face.

    During my time as applications engineer, I also go out to customer sites and played the “field engineer” role.

    During my time as applications, I was involved with over 20+ new product developments and expansions. Every company should get the top engineers out to see customers once in awhile to get the reality picture.

  11. etnapowers
    January 2, 2014

    RedDerek: I couldn't agree more on this point. The application engineer is a key interface between the customer and the supplier, I think that this figure has to communicate effectively with the design team to solve the technical issues on the field and to give a fast feedback to the customer. The Marketing people will appreciate this.

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