Published: 25.07.2017
Recently, we successfully produced the first batch of sensors in Ukraine. However, while producing the product we faced multiple difficulties. Had we known them our product would have been produced faster and our clients would be happier.

" It's a great retrospective on the trials and tribulations of building hardware products!"
Jenny Fielding, Managing Director at Techstars IoT

We're running Ecoisme. It is an energy monitoring system that can recognize devices in the house or apartment and can save on average 12% of electricity. In 2016, we received the Best Innovation award at CES in Las Vegas.

Spoiler: eventually we produced Ecoisme testing batch. Lessons were learned.

This is the story of the first manufacturing of our product. Hopefully, it's useful to first timers manufacturing hardware.
And you can simply follow this checklist to avoid our mistakes!

Ecoisme's key sales channels are through partners, including major players in the electricity market, telecoms and solar panel installers.

Our partners include Electricity De France, Deutsche Telekom, Virgin Media, and Dubai Electricity and Water Authority. The first step towards signing contracts with these big companies is to conduct pilot projects, giving the partner an opportunity to test the product and giving us a chance to test the product in a live environment in different countries. For this purpose, we produced the first batch of 100 sensors.

"Really small scale is something that is hard to make money unless it is a high priced high margin product. This is more prototype production. You'll have to redo everything for mass scale but a good way to test product market fit."
Paul Berberian, CEO at Sphero

Step 1. Selecting the country of manufacturing

Selecting the right country and factory is important so over the next few weeks, we spoke with several hardware companies who had this experience.

Through our various talks and exploration, we came to understand that preparing for a full-scale production in China may take more than 3 months and require more funding. Therefore, we decided to produce a small batch in Ukraine and to simultaneously work on the launch of full-scale production.

We divided the whole production process into the following stages:
1) Molding of cases;
2) Manufacturing and assembly of PCBs;
3) Purchasing of components;
4) Production of packaging and printed products;
5) Testing and packaging of sensors;
6) Shipping.

"Talk about WHY. I often advise to go small batch until it hurts because once you plunked down 100K for tooling, you committed your company."
Will McLeod, Co-Founder and CPO at Keen Home Inc.

Step 2. Molding of cases

We decided to mold Ecoisme's cases in China to ensure that we received good quality products. We have production partners in Kyiv that have worked with Chinese manufacturers in the past and saw the quality of the products that they received from their partner company in China. This factory also offered a low-cost solution, which is a mold made from raw steel, sufficient for 1,000 shells. The amount of a conventional high-quality steel mold is enough for 50,000 cases but the cost is several times higher and the manufacturing takes 30% longer. Our goal was to produce a high-quality mold, but with minimal time and expense.
As a basis for the future casting shells, we took a model that was used for 3D printing prototypes and adapted it to the new board. Our production partners helped us to finalize the shell for production.

After 51 days, we received the first castings (copies of the shells). We did not take into account the Chinese New Year and were a little bit behind the schedule. Make sure you understand local holidays or work stoppages to avoid missing dates unexpectedly. It took 14 days to coordinate and apply the texture to the mold and 6 more days to ship it from China. We received first final castings in 71 days.
During the T1, we saw small defects with the dimensions of the lugs under the plate, which were corrected within a few days. Also, we realized that we forgot to take into account a light diffuser on the mold, which had to be built into the body. The finalization could have taken another 5 working days, which we did not have, and milling the parts could cost around $700. We decided that we will be able to produce our own CNC in Ukraine. Eventually, we found a contractor in Kyiv that milled the parts.

Step 3. Manufacture and assembly of PCBs
We decided to order PCBs and stencils for soldering paste application in Ukraine. Please note that in most countries it is forbidden to use lead in electronic products. So make sure that you order lead-free coating.

We ordered the components from the American online store Digi-Key and the Chinese analogue of eBay, AliExpress. The delivery of all components took 4 weeks.
This was a fast and right decision, however the most expensive. For a large scale manufacturing, we will choose a cost-effective supplier.
We had no problems with the PCB assembly and we were completely satisfied with the results of contractor's work. We had no one to go to for a recommendation of a contractor so our choice was based solely on past reviews and a good commercial offer. And as it turns out, the cost of assembling one of our PCBs in the Ukraine is 20x cheaper than in China. However, when it comes to a large-scale manufacturing, the prices in China will be smaller.

Before you start working with contractors, it's worth getting acquainted with their top management. Also, it is necessary to go to the production site to check out the conditions where the assembly will take place. It's important to meet the team which will be working on assembling and to check they are following all the standards to minimize the number of defects.
When we started to assemble our sensors, poor soldering of the output components caused us problems. This was caused due to the poor quality of PCBs. In the beginning, we used immersion-tin coated boards, which rapidly oxidized and reduced the coupling of components during soldering. If you would choose to manufacture in China, this problem is solved radically. The production of boards and their assembly takes place in one factory.

We were advised to order PCBs with gold coating from the Chinese manufacturer Seeedstudio. The final cost of the PCBs manufactured in China was $4.50/pcs. with delivery. For PCBs with a coating of immersion tin in Ukraine we would have paid $ 4/pcs.
Step 4. Production of packaging and printed products.
While assembling PCBs, we were also designing packages and printed products. It took us about a month to design the package and all the internal parts.

Since we worked with verified contractors, things went more smoothly than with other processes. It is worth noting that the packaging design process has many stages and takes about a month. In our case, we went through the following stages:

1) Designing and manual assembly of the box;
2) Making corrections to the construction, taking into account the parameters of the cardboard and making the second prototype;
3) Cutting out the prototype on the laser and making final adjustments;
4) Manufacturing of a stamp and trial package cutting;
5) Defect checking
6) The cutout of the entire batch.

This process was not without difficulties. Machine blades ripped a cardboard ripped a cardboard during the cutout because of an error in a design, which was difficult to notice at a designing stage. We had to remove some of the knives from the stamp, which slightly changed the design of the inner box and took a few more days longer.
Step 5. Testing and packaging
We carried out testing and assembly in Ukraine ourselves. During the first week, we planned all the processes, including board testing, calibration, firmware and final testing.

When testing, we encountered another problem with the sensors. 30 sensors measured the data incorrectly. We used the STPM33 chips to take off the data. As it turned out later, the manufacturer had two models of this chip, which were sold under the same label from suppliers. The detection of the problem, delivery, and replacement of new chips took another 3 weeks.
In conclusion
The production of this small batch has given us tremendous experience in planning the timing and risks that can arise during the full-scale production.

You should always remember that the main thing is not the country, factory, or even production costs but the ability of your team. In our case, our amazing team had the ability to transcend all the difficulties involved and emerge stronger.

The first 100 sensors have now been shipped and installed in 15 countries around the world, although there is still tremendous work ahead of us launching the full-scale manufacturing.
We are happy to be a resource if you are building hardware products. Please use the comments to start the discussion.

Huge thanks to everyone who helped us to improve this article and provided us with the feedback: Jenny Fielding, Ryan Kuder, John Renaldi, Will McLeod, Paul Berberian, Jeff Mathews and Silas Adekunle.

Best of Luck!