Easy Methods To Estimate The Manufacturing Cost For A New Electronic Product Case Study: Bluetooth Device
Today I’m offering a step by step guide for estimating the manufacturing cost for a hypothetical tracking device that incorporates Bluetooth Low Energy (BLE), GPS, an accelerometer, and a USB rechargeable lithium battery. When you have got a new product that you simply wish to develop, the very first thing you must do is have a look at the massive image earlier than you get bogged down in the main points. You don’t want to jump proper into fully developing a production prototype. Product improvement is costly, time-consuming, and dangerous so there are some upfront steps it's essential take first. Instead, first focus on what I call a preliminary production design (or sometimes just called a preliminary product design). The key is that it focuses on a manufacturable model of your product, and never just on a Proof-of-Concept (POC) prototype. One of crucial causes for making a preliminary design is it permits you to accurately estimate the manufacturing price for the product earlier than you spend the money to totally develop it.
A preliminary manufacturing design focuses on answering a number of the vital questions that you might want to know as quickly as possible. How troublesome is it going to be to develop your product? Is it possible to manufacture your product? What is the fee to develop your product? What's the price to scale from a prototype to volume manufacturing? How much will it cost per unit to manufacture your product? Ultimately, one in all the most important questions you wish to reply is how a lot will it cost to manufacture your product. The manufacturing value goes to find out how a lot revenue you'll make and how much you possibly can promote it for. Manufacturing value is one thing it is advisable know as early as attainable. Unfortunately, many entrepreneurs make the error of first fully designing their product for manufacturing. In any case that’s done, they go back and start determining how much it’s going to value to manufacture. That’s not the way experienced tech companies do it.
They answer all the big questions before they begin sinking sources into totally developing the product. There isn't any level in spending all the time to attempt to develop a brand new product if it isn’t possible to manufacture, or prices too much to manufacture. A preliminary production design offers you all of the knowledge needed to precisely estimate the manufacturing value for a new product earlier than the product has been totally developed. It also gives you early insight into the manufacturing feasibility of your product. By starting with a preliminary production design it permits you to more accurately estimate all of your costs, create a more correct timeline of milestones, and be able to better determine the manufacturing feasibility of the product. Ultimately, it permits you to develop a better product that is more probably to achieve success. Step one in growing a preliminary manufacturing design is to design the system level block diagram. Our hypothetical product consists of four main features: Bluetooth Low-Energy microcontroller, GPS, an accelerometer, and power management.
Figure 1 - System block diagram for a hypothetical BLE GPS tracking iTagPro smart device. The core of the product will likely be a Bluetooth Low Energy microcontroller. This includes both the Bluetooth Low Energy radio and the microcontroller running your firmware code. Those two features are embedded on a single chip referred to as a System-on-a-Chip (SoC). However, I all the time advocate that you just start off using a pre-certified module solution, as a substitute of a chip-based solution, for any wireless functionality, like Bluetooth Low Energy. This module will still be primarily based on a BLE SoC nevertheless it can even embrace the antenna. There are two reasons why it's best to begin with a module. First, the usage of a module drastically reduces your FCC certification cost. That can save you about $10,000 to certify your product. The second motive is that modules will simplify the design course of. Wireless functionality tends to be laborious to design correctly. The truth is, very possible, it would require several iterations to get things just right.
Using a module reduces your time to market which is always important. Even big tech companies start off using a module so they can get their product to market sooner. In the event you scale as much as producing 100,000 items or extra, then it could also be a very good time to switch to a custom chip design to maximise your profit margin. The other massive piece involved with this product is GPS (Global Positioning System) which communicates with the BLE microcontroller through a UART serial interface. As with BLE, we’re going to additionally use a module solution for GPS. The first purpose for using a GPS module is a bit different, however. GPS is a receive-only know-how. You’re not intentionally transmitting radio waves outside of your product. That is in contrast to Bluetooth Low Energy, iTagPro smart device where you're clearly receiving and transmitting data. The FCC is primarily involved within the electromagnetic vitality a product radiates (transmits), not what a product receives.