So much of our industrial tooling has been optimized for mass manufacturing. It's incredible what can be done to push unit prices down for large volume production.
Because of the focus on mass manufacturing, hardware is incredibly expensive to change. The industry seems to have centered around doing more planning up front.
But we (software people), learned 20 years ago (from select Hardware companies) that this is backwards. If the cost of change is high, and that's where your pain is, change more frequently. Mitigate that pain and make it a strength. (See: Toyota Production System)
I have a product with an addressable market of something like 300 to 500 units per year. That puts me in the Defense/Aerospace/Medical area, where unit economics are completely insane.
And yes. It does feel like being ripped off when someone puts ~30 minutes ($20 max) of Western labor into something and then turns around and charges me $800 for the privilege of supporting an American company.
> I have a product with an addressable market of something like 300 to 500 units per year. That puts me in the Defense/Aerospace/Medical area, where unit economics are completely insane.
I have manufactured in that area and while you are not going to be in the mass volume pricing levels, you don't have to be in the defense level either. You just have to build the product with the right trade-offs and design the appropriate manufacturing processes. Few seem to know how to do this.
Edit: let me expand. Don't injection mold if you can avoid it. Do resin castings or thermo-forming, neither require as expensive of tooling. 3D print parts with a good material like PC CF. Metal fabrication is easy and cheap these days. You can get a shop to laser cut, form, insert PEMs and powder coat for very reasonable prices. We are starting to get a lot of machined parts from China. You can source wire harnesses from China also. Do assembly with a small team. Use as much off-the-shelf electronics as possible, but don't be afraid to make small and simple PCBs if it makes your product cheaper and simpler. Leave the complex boards to a vendor initially because while they might seem simple to design, they can be complex to debug and production test properly.
I've burned tens of thousands of dollars with them. They have tons of sales, little to no support. They have zero ability to stick with a vendor who does good work. They're a total crap shoot on quality and no responsibility when it fails.
You aren't just paying for a half-hour of time, but for someone who knows where to put the X.
"The Handyman's Invoice" is apocryphal in the details, but almost certainly true in that something basically like it happens all the time.
"
The Graybeard engineer retired and a few weeks later the Big Machine broke down, which was essential to the company’s revenue.
The Manager couldn’t get the machine to work again so the company called in Graybeard as an independent consultant.
Graybeard agrees. He walks into the factory, takes a look at the Big Machine, grabs a sledge hammer, and whacks the machine once whereupon the machine starts right up.
Graybeard leaves and the company is making money again.
The next day Manager receives a bill from Graybeard for $5,000.
Manager is furious at the price and refuses to pay.
Graybeard assures him that it’s a fair price.
Manager retorts that if it’s a fair price Graybeard won’t mind itemizing the bill.
Graybeard agrees that this is a fair request and complies.
The new, itemized bill reads….
Hammer: $5
Knowing where to hit the machine with hammer: $4995
"
>And yes. It does feel like being ripped off when someone puts ~30 minutes ($20 max) of Western labor into something and then turns around and charges me $800 for the privilege of supporting an American company.
So as a senior expert in your field, you make $20/hr? Because I don’t know any field that charges by the half hour, and I don’t know any senior engineers that make minimum wage to do their job but maybe you’re the first.
That’s not including the markup the company would need to add assuming you aren’t dealing with an independent contractor.
> I don’t know any field that charges by the half hour
Not that it detracts from your overall point, but some of the best paid knowledge workers on the planet - lawyers - regularly bill out in 6-minute increments.
Yes, but while the increment is 0.1 hours, but that is not the minimum project size/billing, so you can't generally just order six minutes of advice.
Beyond that, just the average documented phenomenon of task switching is 20 minutes or 0.3hrs, so your "only six minute" project really costs the engineer 0.3+0.1+0.3 hours.
But sure, if you are in a long-term project (here defined as more than an hour or two total), you may see line items on your bill of 0.1 or 0.2 hours in a day for a quick call or something.
Are you such a knowledge worker? Could someone actually describe to you a problem worthy of your consideration, give you time to think/calculate, then describe a response in only six minutes? Sure, there might be some such edge cases, but commonly?
People who do electrical work are much underpaid when compared to software engineers. If you are one of those usd 300k FAANG interns you probably dont understand that lots of smart engineers rot doing difficult jobs.
Drive to analyze a broken electrical box at customer. Analyze what is wrong. Read the schematics. Repair it (without getting fried). 15 minute repair. 2 hour drive. Zero glory, just a shitty job.
Or exchange something that was manufactured wrong and test it. Climb to a wind turbine, open the box. Exchange a component. Test it. Climb to another 50 towers to fix same problem.
Testing short batches of custom products. The testers are paid more when compared to blue collars, but still earn shit. Also everyone assumes that they are "factory workers" while they program their elecronic testers in C++. Paid a fraction of what the FAANG intern earns.
Life is unfair to many many people. Looking at your post and above - it feels like you are some guys in IT who dont know how hard it is in other areas.
Other alternative are bookkeepers, who run books for multiple small customers. Get easy to impossible questions about tax law - all day every day. From your 200+ clients to whom you provide advice by phone. For which they dont want to pay.
A team of few accountants tries to book invoices and fill taxes from their clients, while being bombared by questions. Often super tough questions. Literally 0/10 experience for a knowledge worker. Every day.
Yes, this is the flip side, and it is very unfair.
While it is very unlikely that you'd be able to get and pay for only a six-minute increment of service from a professional, those pros put in a LOT of time outside the six-minute increments for which they are billed out.
An attny in the family has a specific external billing rate and required yearly billable hours to produce. Yet she is burdened with literally hundreds of hours of extra admin, firm, "culture & innovation", interruptions, etc. work (much of which should be done by paralegals, clerks etc.), for which no credit is given. I've seen similar in mech/elec engineering.
This is exactly true. These jobs can be very difficult and rarely pay well at all.
This is what I find so profoundly offensive when so many Western companies charge insane labor rates. I know for a fact that very little of that money is going to the person doing the work.
I'm not taking about hiring senior experts in their field.
I'm taking about working with someone who repeatedly moves materials through a long established process.
It can be arduous and unpleasant and rarely pays very much. We can debate the ethics of all that, but it's not reasonable IMO to pay pennies and charge 40x.
I love this, because of course there are specific opportunities when one must build many thousands of the same thing.
This doesn't detract at all from Toyota's ideal batch size of 1, or from the lessons they learned and shared on the way to such huge scale.
My claim is that we (the West) are failing to succeed in manufacturing (and have been for decades) because our focus is on quantity and the very people who could solve the core problems will be so busy planning out the next 2 years, they will not see the wave cresting above their heads.
There are ways to repair, but even with more repairable methods, labor is so expensive that you likely totaled the car if you get to that level of damage.
There are plenty of different fabrication technologies to suit different scales. Some listed by other commenters.
I agree iteration is good, and good hardware companies do iterate hardware. It's something I have always been a proponent of as a hardware engineer. But also the reality is that everything in hardware land costs 10-100 times as much and takes 10-100 times longer.
To properly develop and iterate on hardware, you need to do upfront investment. You need:
1) Tools for the hardware engineers (scopes, spec-ans, tool shop, test equipment). [In software parlance, download the IDE, debuggers and libraries. You're not going to ask your developers to work without those. That would be ludicrous.]
2) You need to iterate EARLY in the product cycle process and this costs money (but still much less than changing your final tooling). [Software parlance again: You only ever really edit the source code. You would never ask a developer to binary patch a compiler to fix issues in your source code. This is what you're doing IMO when changing final tooling on a product.]
3) You need to account for lead times for fabrication and shipping of a physical thing. [Software parlance again: Compiling takes days to weeks. QA weeks to months.]
I think software majority companies struggle with these because (when compared to hardware):
1) Software tooling is essentially free.
2) You can stop and go back to the source code to re-iterate at any time and the down stream processes to "finish the iteration".
3) Time for iteration is seconds, minutes maybe hours while you wait for a compiler to run.
Speaking about Toyota Production System: This has many misconceptions as nobody ever seems to actually read the source material. One of these myths is iterations. Toyota iterate often and EARLY. You get the part right and THEN you can THINK about final tooling. They don't iterate on final tooling, that is expensive and time consuming.
I would say with some work and trade offs you can save on your product in the 300-500 range. You shouldn't be in the Defense/Aerospace/Medical area unless you are doing something quite esoteric.
As others have stated on the final point (but I will reiterate) no senior software person in the US would be happy with $20 for 30 minutes.
>It does feel like being ripped off when someone puts ~30 minutes ($20 max) of Western labor into something and then turns around and charges me $800 for the privilege of supporting an American company.
If you are just looking at it as labor then yeah, you are going to feel ripped off.
But it is not just labor, it is labor + overhead:
Office space
Tools required for job
Paperwork associated with the job
I suppose it's possible we've reached the end of history and there's just no way anyone is ever going to meaningfully improve on the production systems that we have today.
They're basically perfect, right?
There also really aren't any small markets worth serving. Like people with disabilities as one example.
Perhaps we'll just stop trying to build small batch products inexpensively because it's so hard and also those CEOs need 40x markups on labor to make ends meet.
Maybe I'm wrong about the direction, maybe tool and hardware companies should double down on big design up front and extend the time it takes to do their job.
Because of the focus on mass manufacturing, hardware is incredibly expensive to change. The industry seems to have centered around doing more planning up front.
But we (software people), learned 20 years ago (from select Hardware companies) that this is backwards. If the cost of change is high, and that's where your pain is, change more frequently. Mitigate that pain and make it a strength. (See: Toyota Production System)
I have a product with an addressable market of something like 300 to 500 units per year. That puts me in the Defense/Aerospace/Medical area, where unit economics are completely insane.
And yes. It does feel like being ripped off when someone puts ~30 minutes ($20 max) of Western labor into something and then turns around and charges me $800 for the privilege of supporting an American company.