Titoma vs. factories & consultants, how are we different?
Tier 1 ODM factories in China & Taiwan: Pegatron/Wistron/Compal..
ODM factories specialize in a certain kind of product, say laptops, for which they make a basic design which they then customize and brand for whomever is interested.
They have many years of experience with their product category, which is great. Development cost and unit cost are likely to be low, and for a complex product this is can be the best way to go. Trying to design an LCD projector or phone from scratch would mean many cycles of trial and error.
A disadvantage is that they just as easily make the same product for your direct competitor, or even their own brand. You do not get to own the design, especially in China this can feel like being taken hostage, losing control of pricing.
Another big issue is that when you’re not a large brand promising 100K units a month in sales, you tend to be low priority, and the process can take a very long time. We ourselves tried working with ODM’s for quite a few years and learned some valuable lessons.
Tier 1 Electronic Manufacturing Services (EMS): Foxconn/Flex/Jabil
OEM factories basically make whatever electronics you ask them to make, and in the last years they have also started to incorporate product development teams. When you start talks with them you tend to meet an awesome set of engineers who really know their stuff.
But these tier 1 factories are really focused on clients who do at least $50 million per year. Upper management tells their underlings that up and coming companies are important, but typically their PM’s work on 3 to 5 clients at the same time, and if HP has a problem there will be little attention for your smaller project. Every factory has his own P&L responsibility, and so every manager is mostly interested in their own unit’s current sales and profitability. For them putting 30 engineers on an order of 3K pcs is not good for their numbers.
Another issue with the big international firms such as Flex is that they often claim that transition from their American plant to their factory in China will be seamless.
This is unfortunately not the case, transferring a program can take a year. One client said to us recently that they would rather first have Jabil do the DFM in Canada and just accept the higher cost for the pilot run, and once that is done they would transfer manufacturing to their Shenzhen factory to achieve the target cost they needed. This doesn’t make sense, DFM is not some universal standard, but rather the optimization of a design for 1 particular factory plus importantly the many suppliers of custom parts. If later you move to China you’ll be dealing with a completely different set of vendors, and you will need to all the customization and validation again. Except that at this point your design is likely frozen and certified already, so many options to optimize are gone.
Smaller ODM factories in China & Taiwan: tens of thousands
One of the most important things in manufacturing is to find a right sized factory, small enough so the boss will show up when you visit them. Your importance to the factory correlates directly with the speed they will resolve issues. So if you want your emails answered you need a right-sized factory, but the problem is that a factory which gets enthusiastic about a 3,000 pcs order tends to have very limited engineering capability, and while they’re often very willing, communicating with them is not always easy if you don’t master Chinese.
US/Europe based product design consultants: Synapse / Lemnos Labs /
High-end electronic design consultancies charge US$ 1 to 3 million per project. Part of this cost is explained by the fact that they fly their $200/hr engineers over to China for months on end to implement the design to the China factory. As with any consultancy, their business model is to sell hours, so getting things done quickly unfortunately is not in their interest.
China Manufacturing Consultants: Dragon innovation e.a.
The consultants from Dragon are very good, but they expect you to have a mature design which is 95% complete, and they then will help you find a suitable factory and interface with them. We feel doing DFM (Design For Manufacturing) when you’re already at 95% is way too late to make meaningful adjustments, at that point the vast majority of the design choices have already been made. Changing for a more economical MCU or camera module can easily imply half a year of re-work.
Titoma – the Time To Market company
To be competitive in electronics you need to use the components and parts of the greater China supply chain. Designing in a vacuum in the West, and then sending over your design to Asia will not help much, because at that point it’s much too late to change active components such as say a camera module. We select the best value for money components, and generally involve all manufacturers very early on in the design. This avoids endless iterations which will cause you to miss your market window.
Our clients pay a fee for the design and development, and so fully own the IP, and are not locked in. This keeps us very motivated to make sure you’re happy with our service and competitive pricing.
We have some 45 engineers and do all design and prototyping in-house in our design center in Taiwan. Most of the firmware design is implemented in our lab in Colombia, in the same time-zone as our US clients. Our Taipei office focusses on integrating the electronics with the mechanical housings, our Mandarin speaking Mechanical Engineers discuss mold design directly with the mold makers in China.
Our design fees are very reasonable and we generally quote fixed budgets, so we have zero incentive to drag things on. Quite the contrary, our goal and that of our cluster of partners, is to get to mass manufacturing of your electronics as quickly as possible. At the same time, Reliability is even more important to us than speed, because, unlike a design firm, we will actually be responsible for any returned products.
We make it our business to fully understand our client’s core technology, once we have developed a first generation product we continue to develop many different permutations and application of that same core principles. We act as our client’s IP custodians and take on only one client per product category.
Getting a new electronic product designed & manufactured reliably requires a lot of time and a lot of expertise.
The big manufacturers are generally not interested enough in small orders to give you that kind of attention, the smaller factories are often eager, but severely lack in engineering talent and communication.
Westerns electronic design consultancies are very good but not cheap, and even though they claim they know a factory in China, in reality they often work very much in isolation. You can then hire China Manufacturing experts to improve DFM, but doing it this late in the process wastes valuable time & resources.
To be fast and cost effective, electronic design needs to be done in Asia, in close cooperation with the factories.
Titoma combines world-class engineering talent on-site with a right sized factory in Taiwan or China.
Who do we work with?
- Titoma partners with established B2B companies who want to focus on sales, and entrust everything hardware to us.
- Order quantities range from 200 to 50,000 pcs., as long as the total value of the order is at least US$ 150,000.
- We focus on embedded devices using microprocessors such as STM32 or PIC32 and often add wireless connectivity with Bluetooth (Nordic), Wi-Fi (Espressif), RFID, GPS and custom RF.
Sounds like a match? Book a free consult with our CEO Case Engelen now.