[Watch] Do we receive a final unit, like a consumer, before an initial order?

At Dragon, we're approached with manufacturing questions all the time. While our business is leveraging our expertise and knowledge directly for our customers, we also like to share the wealth more broadly for the manufacturing community. To this end, we'll be answering some questions we receive about the manufacturing process in this short video series we call: "Ask a Dragon"

Question:

When the prototype is completed and we approve it, assuming that the manufacturer will then tool up their manufacturing processes, is it common practice that we would receive one final unit which will be exactly the same as the ones purchasing consumers will get, before placing the initial order?

Answer:

The short answer is yes, sort of, but perhaps not quite in the way you describe. In essence, when you select the Contract Manufacturer (CM) you'll work with, that selection is based on a request for quote process; the 'quote' being an actual quotation that is based on the order quantities you plan to purchase. You will pay non-recurring costs (NRC) to the CM for tooling, set-up, etc. separately from the purchase orders (PO), and the terms by which you pay for the NRC are outlined in the Manufacturing Services Agreement (MSA) you sign with the CM after they've been awarded your business.

There are various engineering prototypes (EP) that you can receive/review at different stages in the mass production process (sometimes called EP1 & EP2, or, you may have heard the terms EV/DV/PV (engineering validation, design validation, production validation)), but it would not be common practice to withhold a PO until the final production validation stage, as this could, for example, result in significant delays in procuring the components to fulfill the PO.

Got a question of your own you'd like us to answer? Feel free to submit your question and we'll answer it in our series.