Level 2 Manufacturing

After I finished shipping the Glowtie Kickstarter, I had a conversation I had with my friend Alex Madinger about the different “levels” of making (and selling) a product. We defined them as follows:

  • Level 1 – Someone at home in their pajamas making something on a Saturday morning with tools and materials available to someone with a hobbiest budget. 
    • Scale: 1-100 units.
  • Level 2 – Someone using some outsourcing and some in-house fabrication techniques to make things at a much larger scale, representing a sizable amount of money and effort. 
    • Scale: 100-5000 units.
  • Level 3 – Traditional mass production, hiring a contract manufacturer and getting things made at a factory, most often overseas. 
    • Scale: 5000+ units.

Of these three, Level 3 is how almost everything you own is made. Huge factories making parts by the thousands or millions, with a huge supply chain and logistics team. Processes like injection molding and pick and place machines that allow things to be manufactured at a breakneck speed, but with an upfront cost that only justifies their purchase at absurd quantities. And that’s how consumer products were made since the First Industrial Revolution.

In the last decade or so, we’ve hit this beautiful point where anyone can prototype anything in their apartment with PCB mills, low-volume PCB orders, FDM 3D printers, free CAD packages, and a ton of other recent changes in the market.

But in between? It’s a no-man’s land.

The wave of “desktop-ifying” industrial machines take an expensive technology (Level 3), and make it cheap and accessible (Level 1). Making plastic parts used to only be a Level 3 technique with Injection Molding, but now we have cheap FDM machines that let you make them at Level 1. What about Level 2? What if you want to make more than 5, but less than 500,000? Do you empty your bank account for an injection molding die, or buy a bunch of printers and run them nonstop? Either way it’s a stretch. There aren’t great solutions to take a prototype to the next level of scale, without biting the bullet and going straight to full scale Level 3 techniques.

As a quick aside, I’m not considering software in all of this. The difference between making an application for one person versus 100,000 is relatively small, and can easily be scaled up with awesome services like DigitalOcean or AWS. Of course I’m oversimplifying, but in comparison to hardware, the Level 2 gap is satiated pretty well in the world of software.

So, what are the fabrication techniques that still have this Level 2 gap? Plastic parts for sure. Things like Form Cell adapt additive for Level 2, but it’s at a Level 3 price point. It only really makes sense for bulk custom parts that traditional Level 3 techniques don’t account for like Injection Molding, like in the case of Gillette Razor Maker. You can pull a Prusa and set up a bunch of FDM machines for mass production, and while that’s pretty viable, it’s not tremendously automated. Lots of techs are necessary to run, monitor, and remove prints. I think the current best thing is outsourced urethane casting. It has a very low upfront cost while maintaining a pretty cheap per-unit cost that makes it a great choice for Level 2 sized production runs. While this works, I think there is still room for growth in this area.

Another area that has a Level 2 Gap is PCBA assembly. This was the real pain point for the Glowtie Kickstarter. I soldered almost 2000 components by hand (the Level 1 approach), but having a board shop assemble them for me was prohibitively expensive, time consuming, and risky if they fabricated them incorrectly (the Level 3 approach). There was nothing in between to speed things up, but not cost a ton.

Lastly comes organization and logistics. How do you track stock, production rates, and yield? Kanban ordering/fabrication of parts? When you’re only making a few of something, it’s easy to keep track of how many boards you have in stock. When you’re making hundreds of thousands, the Contract Manufacturer can own supply chain and stock management. But what about Level 2? How can you easily track stock flow and production at larger quantities without paying someone to handle it full-time?

There is space for growth here. People with an idea and a working prototype shouldn’t have to refinance their home or go to investors to start selling their product. There should be tools and processes in place to allow someone to move past Level 1 without having to take a leap of faith.

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