Part 3 in the Product Disaster Series
Bait and Switch tells the story of a company that thinks it has its new product development and introduction (NPD/NPI) processes all buttoned up. And then it finds that all it takes is just one mistake — one line in a spreadsheet bill of materials (BOM), one missing part specification, one unrecorded instruction for a contract manufacturer (CM) — to turn a sure hit into the one that got away.
Tucked between the hills in a dense patch of pines halfway between Boise and Idaho City is the home office of Fogg Island Tackle. The brainchild of a cadre of entrepreneurial fishing enthusiasts who met as engineering undergrads at Stanford, FIT is a hip, young company frequently profiled in the trade press for its cutting-edge design and manufacturing processes and for pushing the technological envelope of recreational fishing. “Nothing else is FIT for fishing,” the corporate slogan, pretty much sums up the company’s reputation for confidence in itself, as well as its uncanny knack for hitting the market with products that exceed users’ expectations.
The key to the design and manufacturing process at FIT was tight control over everything. The company used Excel spreadsheets to maintain its bills of materials (BOMs), it stored them in a centralized location, and only a couple of people had full authority to make changes to them. Documents were linked to the BOMs, indexed, and stored in a manner that made them readily available to anyone at the company when needed, yet protected from unauthorized changes.
More importantly, the company had a standardized methodology for communicating among themselves and with their design and manufacturing partners. Each engineering change order (ECO) had to be double-signed before it could be appended to a bill of materials, then the ECO was routed to all parties through email. And when the final revision of the manufacturing BOM was released, it was standard operating procedure for FIT to personally visit with its contract manufacturer (CM) and go over a printout of the bill of materials, line by line, and review the drawings in detail so that everyone was on the same page with no questions left unanswered and no potential areas of confusion left unresolved.
This highly manual, paper-based, painstaking product development process had served FIT well. At least it did until the Fin-Angler magazine review of FIT’s new, highly acclaimed boat-mounted King Ranos Depth Finder was published.
FIT could barely keep up with demand for the King Ranos even before the summer busy season. At $499, the King Ranos had all the features of much more expensive devices — depth measurements down to 600 feet, image zoom and pan, fish silhouette identification software, water temperature sensor, and even a GPS with password-protected solid-state memory for coordinate recall of your secret fishing hole. But it was the screen that had everyone talking, and Celeste “CC” Celente was the design engineering genius behind the screen.
CC wanted the screen to be as sharp and brilliant as any laptop out there. And she did it at a price that kept the unit affordable. The King Ranos had an 8.9-inch, full-color, 1024x600-pixel LCD screen. Working closely with the FIT programming team, she found a way to incorporate leading-edge anti-aliasing algorithms into the King Ranos to minimize sonar image smearing and dropouts whenever a boat planed, bobbed, or trolled along the surface. Nothing like it was on the market. The first reviews in magazines and blogs positively glowed. FIT had another hit — perhaps a mega-hit — on its hands.
Then, summer was in sight. Marketing began promoting the King Ranos heavily: “Dads & Grads Will Love the FIT You Give Them.” The campaign worked so well that manufacturing brought a second contract manufacturer online to keep up with demand. It was about then that things started to go wrong…
First a trickle of units were returned, all of them because the LCD didn’t work correctly. Then it was a flood of units returned, all with complaints about the LCD. The final straw was when a major magazine’s review panned the King Ranos.
“Did you see this?” Adam Ridley, the CEO, yelled while waving a copy of Fin-Angler at Frederick Hong, the VP of Operations. “Read the last paragraph. Out loud.”
Frederick began:
“Thinking that the first unit was a lemon. I asked for and received a second King Ranos. It, too, was worthless in all natural lighting settings. You can’t see a blessed thing. So, I recommend the King Ranos only if you fish exclusively at night. Then it works. Maybe it’s good if you fish in your bathtub. I didn’t bother to test that. Do yourself a favor. Spend your $499 on a real depth finder. King Ranos isn’t one. It has bells. It has whistles. And it’s junk. This King has no clothes.”
“Got any brilliant ideas?” asked Ridley.
Everything — the bill of materials, disassembled units, complete units, random parts — was spread out across the conference room table as Frederick, a couple of manufacturing engineers, and Neil, the Quality Manager, sat down to try and sort out why the King Ranos was suddenly failing.
“Old Fizzywig” — Frederick meant the CEO — “is about to fire the bunch of us. We’ve got to figure out what’s going on here.”
“I’ve identified all the LCD failures as units coming out of Ackerly,” said Neil. Ackerly was the contract manufacturer that the company ramped after it maxed out the capacity at its primary CM in nearby Nampa.
“That figures,” said Frederick. “Our margins are a lot better with them. Their price is $10 less per unit. It has to be that they cheaped out something on us. Is it the circuitry?”
Peter’s note clarifying the polarization requirements of the King Ranos LCD.“That’s what I don’t get,” said one of the manufacturing engineers, grabbing a unit and idly switching it on. “A couple of us have gone over the manufacturing BOMs from both CMs and compared everything — all lines are the same. They match perfectly. I don’t get why the units from Nampa have no problems and the ones from Ackerly supposedly don’t work. They look like they work just fine. See for yourself. This is an Ackerly unit. Does that look like the dead of night to you?” He said showing everyone what appeared to be a perfectly functioning screen.
Just then CC walked in from lunch, characteristically late and wearing flip-flops and sunglasses. “So, that’s one of the busted units. Yeah, look at that. Dark as night,” she said.
Everyone in the room just looked at her. Neil broke the silence. “Take your sunglasses off.”
“Oh, dear,” said CC, flipping her sunglasses on and off. “It’s not polarized correctly. The glass is supposed to be polarized at a 45 degree angle. This is 90 degrees like the LCD on a car radio and most sunglasses. That’s what’s happening. They cancel each other out and the fishermen can’t read the screen.”
“But why is that? Why doesn’t this LCD have the right polarization? And how come the guys in Nampa got the right LCD and Ackerly didn’t?” asked Frederick.
Therein lies the tale.
Once user testing of the King Ranos Depth Finder was complete and the final manufacturing BOMs were released, CC visited FIT’s lead CM in Nampa to sit down and go over the bill of materials line by line. Not only was the CM just 50 miles away, but the two companies had a long, friendly, and prosperous relationship — CC was on a first-name basis with Jim Leonard, the owner, and Peter Altobelli, his purchasing manager — so everything was relaxed and casual.
During the course of the BOM review, CC noticed that the bill of materials was unintentionally ambiguous when specifying the LCD. This sort of thing happened now and then because CC found it easier to use her own shorthand when working with Excel during her product development. Sometimes she missed a couple of these shorthand entries when she cleaned up her BOM later on.
So, CC explained that what she wanted for the King Ranos when the BOM said “polarized LCD” was the unit with the glass polarized at a 45-degree angle, not the less-expensive standard model of the same device polarized at 90 degrees. Peter annotated his printout of the BOM with this information so that he’d remember it. CC made a mental note to herself to attach this clarification to the master BOM when she got back to the office. Nothing else out of the ordinary cropped up during the next two hours of the review, so the rest of the meeting went smoothly with frequent breaks for updates on kids and plans for the weekend.
A few months later, CC was busy designing the King Ranos II when manufacturing ramped up Ackerly, the second CM. They forwarded Ackerly the same bill of materials released to the lead CM in Nampa, since there had been no modifications to the product. Or so they thought…
When the problems with the LCDs were first linked to Ackerly, Frederick reasoned that the problem had to be with the bill of materials even though the records indicated that both CMs had the same one. The only differences between the two CMs were that CC had met with the Nampa CM to go over the BOM and manufacturing had emailed the bill of materials to the Ackerly CM without meeting them. So, he issued a work stop order and asked both CMs for a copy of the manufacturing BOM they were using. But cross-checking proved inconclusive, which led to the meeting in the conference room where CC walked in late and inadvertently exposed the polarization problem.
Still, even after determining what was wrong with the one set of LCDs, all the FIT team really knew was that Ackerly was somehow using the wrong LCD for King Ranos and that the lead CM in Nampa was not. So, Frederick and CC sat down with printouts of the manufacturing BOMs and the approved manufacturers list (AML) from both CMs to compare the LCDs’ components. Almost immediately they saw the difference — one number. Peter in Nampa had selected the model number of the LCD with the correct specifications while Ackerly had selected the standard model.
It was then that CC remembered the fuzzy wording she uncovered in the Excel spreadsheet during the BOM review meeting in Nampa. She also remembered her forgotten vow to clarify the specifications when she returned to the office. Because the clarification of the words “polarized LCD” had never made its way back to the master bill of materials, FIT handed the second CM the opportunity to misinterpret the LCD’s specifications. Consequently, the two CMs were able to use the same manufacturing BOM to build the King Ranos with slightly different versions of the same part simply because FIT failed to make its intentions perfectly clear.
Memory is a tricky thing. You’d think that you’d remember such a simple yet crucial correction as making sure that you fix a vague specification for a key part. But a lot can cross your mind in a casual meeting with friendly associates and even more can occupy your mind on a long drive home on a sunny Friday afternoon. Here are three tips to keep your communications flowing freely AND ensure that all the parts listed in your bill of materials are specified clearly so no one misunderstands what you want.
Define unique part numbering, naming and documentation conventions and stick to them. Acronyms, abbreviations, and short forms are the enemy. Don’t let spreadsheet cell size and formatting limit your documentation, item names or descriptions.
Clearly define the parts and part numbers in your bill of materials and link each one to the corresponding part in the approved manufacturers list. Linking your BOM and approved manufacturers list ensures that no one can mistake which parts were approved, and you’ll never get the wrong part from the wrong — or right — vendor.
Share the linked approved manufacturers list and bill of materials directly with your contract manufacturers and keep them up-to-date with the latest information they need to see.
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