There are many views on what the difference between a startup and a scaleup are. In my experience, the main difference is a company scaling up is slightly further away from failure than when they started. Scaleups typically have some sales traction and therefore need their manufacturing and supply chain to be ready to continue to satisfy these sales and grow at the same time.
In technical supply chain capability terms, scaling a hardware-based company is quite different than starting it. However, it is particularly important to know that there are lots of practical things that can be put in place during the startup phase that will make the transition from low to high volume less painful.
Read on for my top tips on how to prepare to scale!
1. Picking the right partners
Select manufacturing partners with a track record of taking other clients through scaleup. These manufacturers will typically have specialist NPI (New Product Introduction) engineering teams to support you. Ask for references and talk to their other clients about what went right and wrong and how problems were solved as part of your evaluation.
2. Map out your regulatory route
Map out in detail the regulatory route into new geographies and build in the cost and time to comply to this. For example, having CE certification for an electronics product does not mean it is approved for sale in the USA and this must be planned for at the start.
3. Carry out a component health check
Completing a bill-of-materials component health check will ensure that parts being designed into the product are not going to go end-of-life in the early years. It could save you costly engineering changes in the long term!
4. Consider low cavity
Consider using low cavity-soft tooling as a quicker and lower cost entry to market, but also negotiate a contract with the manufacturer to provide new tools at agreed volume breaks and build into the unit cost.
5. Use a modular subscription
5. If your going to use ERP (Enterprise Requirements Planning), select a modular subscription version so you can scale and pay only for what is required. Ensure a single database can support the expansion and can cope with multiple languages, currencies and real-time stock and accounts consolidation.