Manufacturing

 

Overview : In order to mitigate financial risks in the business to the furthest extent possible, there’s no point establishing our own manufacturing facilities overseas but rather contract these services out to qualified and capable EMS and SMT partners.
 
Sub-Contract Manufacturing : At Tattoo Audio®, we utilize sub-contract manufacturing sources, EMS and SMTs to facilitate production of our products and product-line extensions, which includes development of Authorized Suppliers and Preferred Vendors for all components and sub-assemblies and possess one manufacturing source to facilitate final assembly,testing and quality control, packing, boxing and shipping orders out to its U.S. and international distribution centers as well as our; Country Sole Agents, Distributors, Dealers, Importers, Exclusive Agents, Key Account Managers, and more under cash or letter of credit payment terms x-factory or FOB.
 
Certifications, Testing & Approvals : Any product Tattoo Audio® sells globally must come with required Certifications such as; UL, CE, FCC, Bluetooth, REACH, RoHS, and others to ensure products designed and manufactured indeed operate within a defined frequency spectrum and standards for every Country our products are sold. As such, all products must be tested and certified prior to production and shipment.
 
Product Adaptation : Various forms of hardware, software, firmware, and middleware must be designed and configured in accordance with the baseline specifications required for sales into the U.S. and international markets. The baseline products have to be modified in order to meet multiple countries specifications, standards, testing and approvals processes before they can be imported and sold there. These adaptations have to be modified internally, externally and incorporated into final technical drawings, and specifications provided to our Electronic Manufacturing Supplier, EMS, for commencement of production.
 
Import Duties : We look into all related import duties, customs fees, tariffs, that may exist related to the manufacturing and importation of all products from overseas. Apart from the concern of quality and timely delivery, overseas manufacturing is mandatory in order to maintain the necessary profit margins that must be achieved from the development of the business and intellectual property, IP created.
 
Customs & Shipping Relations : Our management seeks to establish and maintain close relationships with customs and shipping brokers in order to ensure the turnaround time from delivery of products to a specified destination is processed and facilitated out of the ‘customs bonded warehouse(s)’ and in the hands of buyers in the shortest possible turn-around time.
 
Performance Standards : Performance standards for all products will need to be established. These Performance Standards must be established and maintained to ensure all products produced by EMS suppliers meet field specifications to ensure optimum life. Any party that does not comply with our standards will be terminated. These performance standards must be passed on to all Authorized Vendors and Preferred Suppliers to ensure the highest quality of service is attained and maintained for the duration the relationship and put into agreement form.
 
An EMS Product Development Process Flow Chart – is provided below as a reference for understanding the process an invention and new product goes through for its product life cycle management from; product concept, definition, specification, implementation, qualification, production, and end-of-life.
 
 
Warranty, Service and Repair : Unfortunately, every product produced within the technology field is designed-for-obsolescence. Warranty, service and repair has all but evaporated with 90-days warranty terms from manufacturer’s or company brands and if an item is found to be defective, now days it costs less (in terms of labor costs) to ship the customer a new item rather than attempt to fix or repair it and return defective units back to the overseas manufacturer for future order credits or cash payment. The same will hold true with our products and product-line extensions. Plug-and-play design configurations will make it easy for technical personnel to troubleshoot any defective unit and determine if the issue is software or hardware related. If hardware related, replacement is the only solution.
 
Logistics : Logistics plays an important role in the cost effective management and distribution of our products initially within the United States of America, Canada and People's Republic of China ( PRC ) markets and later globally. Careful planning will be taken to reduce G&A and OH costs on the business and maximizing shareholder value.
 
 
Languages : Although English will be the primary language used for products sold into the U.S. market, all of our products will need to be configured to support a plurality of other languages around the world if the business hopes to derive the most revenue and value of the intellectual property created, noting that sales of the products in international countries will require more work than that of the U.S. market. We will need to contract out language services not only for the User Interface and associated content for our products , such as User Manuals, product brochures, packaging and much more to meet the global demand-generation for each products and associated intellectual property and for the company and its shareholders to maximize its Earnings, Revenues, EPS, CAGR and shareholder value in the business.
 
 
Competitive Strengths : The key to Tattoo Audio's® manufacturing base and supply success will be in establishment of strong, long-term relationships with solid original equipment manufacturers, OEM, and surface mount technology, SMT, vendors, many of which could be leaders in their respective markets. Our relationships depend on continuing to provide superior performance products to specialized vertical niche markets, and regions of the world, rather than long-term contracts with only one specific EMS provider.
 
These relationships with original equipment manufacturers, OEM, are built on several specific services that we should demand, and insist in receiving as related to its products and product lines, including the following:
 
World Class Engineering Capabilities: Utilize existing EMS engineering professionals in the electronics manufacturing services marketplace that can provide us with world-class engineering and product design services. EMS engineering staffs are very expensive in nature to have in-house, not to mention the hundreds of thousands, if not millions of dollars in testing, and design equipment that is required by such in-house team of engineer professionals. Outsourcing many of the engineering capabilities enable us to control Research and Development costs for conceptualization, create specifications, design, and prototype, validate and ramp product lines to growth production requirements in the shortest possible timeframe.
 
At Tattoo Audio®, our business seeks outsourcing expertise in a variety of design applications, including mechanical and electromechanical engineering, software, firmware, application specific integrated circuit design, printed circuit board design and industrial design. In addition, we would seek to outsource extensive custom test and automation equipment design and build services. These product design, custom test equipment and automation capabilities enhance the design and manufacturability of our products, reduce time to market and allow us to provide a seamless transition to commercial volume production.
 
Comprehensive Manufacturing and Fulfillment Services : We seek EMS engineering capabilities with a comprehensive range of manufacturing and fulfillment services that support our products from initial design and development through prototyping, assembly, test equipment build and automation, customized final system assembly and fulfillment services, such as supply chain management, product packaging, worldwide distribution, and aftermarket support. These capabilities will enable us to reduce and optimize our own labor requirements by leveraging the EMS suppliers in providing to us a complete solution for all of our electronics manufacturing service requirements that will streamline and simplify the development, manufacture and delivery of products through core suppliers, thereby reducing overall costs to our operations.
 
Global Scale and Infrastructure : We seek out EMS providers who operate engineering and manufacturing facilities and a presence in the dozen or so strategically located countries for production, and operations, that reduces to the furthest extent import duties, tariffs, and other related taxes, permits, or regulatory conditions that exist within a given country. There are always strategic countries having favorable alliances to reduce external costs on products affecting our final price. A global presence will provide a diversified manufacturing platform depending upon where the end markets are located, reduce the time and cost required to bring our products to market.
 
Manufacturing Strategy : Our objectives are to enhance our position with electronics manufacturing services EMS providers, and eventually original equipment manufacturers worldwide. We intend to achieve this objective by continuing to deploy the following strategies:
 
Leverage Worldwide Engineering Services : We leverage worldwide engineering services from the highest quality sub-contract suppliers to meet its requirements as related to outsourcing front-end product design, prototyping and test services. We leverage these engineering services to with electronics manufacturing services EMS providers in new product design and development process, and provide integrated engineering, manufacturing and fulfillment services for our new products. In addition, we seek from these EMS providers engineering expertise in the design and build of custom test equipment systems, which most hardware design companies have historically been unable to outsource. All of these efforts further reduces capital expenditures, not only for labor requirements but also equally as important testing equipment, and a much larger scale facility to accommodate our needs.
 
We seek custom equipment design and build services along with other components for comprehensive electronics manufacturing services solutions. We intend to continue developing new advanced engineering, custom test equipment, and process automation services through our relationships with key EMS providers that will meet the changing needs of our unique and specific vertical niche markets in a cost efficient and timely manner.
 
Provide Comprehensive Engineering, Manufacturing and Fulfillment Service Offerings : We seek to continually increase a broader range of advanced services from electronics manufacturing services EMS providers. We need to develop engineering, manufacturing and fulfillment procedures that provide comprehensive electronics manufacturing services solutions that best support our products from initial product design and development through prototyping, testing, manufacture, logistics and operations. We use these capabilities to increase our EMS providers’ services we receive and to expand the scope of services these EMS groups will provide to us in launching and bringing new products to market.
 
Focus on High Growth Market Segments : We focus on establishing profitable and strategic business models that hold the most promise for achieving high growth such as the wireless, and communications industry. We need to continue capitalizing on these EMS groups engineering and manufacturing capabilities if we are going succeed in simultaneously increasing our sales from diversification into multiple vertical niche markets, while at the same time, expanding existing vertical niche markets across the U.S. and globally.
 
EMS Providers That Can Provide Global Scale and Infrastructure : We seek to expand our relationships with strategic EMS manufacturing provider that can best provide services that strategically enhances our ability for timely delivery of products and at cost effective manufacturing solutions basis.
 
Focus on Quality Management : We are committed to excellence in the engineering and manufacturing of our products and will need to deploy and adopt an extensive quality management system that best focuses on continual process improvement that best achieves the highest quality standards. We operate with EMS providers who maintain certifications of quality systems such as ISO 9000, 12000 and 14000 to ensure quality in all aspects of the EMS providers design and manufacturing processes. We believe that these quality systems are required to maintain the highest level of quality and standards in our products so that these products will function as they have been designed for. We will utilize advanced statistical engineering and metrics control techniques to achieve and maintain these high quality standards.
 
Provide Superior Supply Chain Management : We seek the highest quality supply chain management to reduce total costs and time to market and increase our flexibility to respond to changing market requirements. We will need to implement Web-based supply chain software that will allow us to communicate with its supply chain providers in their ability to provide real-time information on specific orders, and product demand, inventory and component lead times. We need to continue to utilize and develop advanced electronic data interchange and Web-based e-business systems to assist us and our EMS providers in managing all aspects of the engineering, manufacturing and fulfillment processes and streamline the supply chain systems.
 
Services : We seek out and attain a comprehensive range of engineering, manufacturing and fulfillment services that support our products from initial design through prototyping, design validation, testing, ramp to volume production, distribution and aftermarket support. We will seek EMS providers who can provide the necessary support for all service offerings with a comprehensive supply chain management system, superior quality management program and sophisticated information technology systems.
 
Engineering Services - New Product Design, Engineering, Prototype and Test : We engage with the EMS providers a full spectrum of new product design, prototype, test, and related engineering services that shorten product development cycles, resulting in faster time to market and reduced our costs. We work with multi-disciplined EMS engineering teams in providing expertise in a number of core competencies critical in achieving our planned product introductions into the U.S. and global markets, including; industrial design, mechanical and electrical hardware, firmware, and software. We work jointly with these EMS providers to create specifications, design, and prototype, validate and ramp our products into high volume manufacturing. We leverage these EMS providers’ personnel in the areas of technical expertise for electronic circuit design as it relates to analog, digital, radio frequency and microwave printed circuit boards and application specific integrated circuits.
 
Custom Test and Automation Equipment Design & Build Services : We work with EMS providers in the establishment of a comprehensive range of custom functional test equipment, process automation and replication services. These EMS providers will be required to have substantial expertise in;


- tooling
- testers
- equipment control
- systems planning
- automation
- floor control
- systems integration
- replication, and
- programming
 
The custom functional test equipment, process automation and replication services provided as part of the EMS providers full service product design and manufacturing services package or on a stand-alone basis for products designed that may be manufactured elsewhere in the world. Our ability to continually receive these services from identified EMS providers will enable us to capitalize on its custom manufacturing solutions and comprehensive engineering and manufacturing services requirements.
 
Manufacturing Services - Printed Circuit Board Assembly & Test : We require a wide range of printed circuit board assembly and test services, including printed circuit board assembly, assembly of subsystems, circuitry and functionality testing of printed assemblies, environmental and stress testing and component reliability testing.
 
Flex Circuit Assembly & Test : We need to be provided with a wide range of flexible circuit assembly and test services. We require utilization of specialized tooling strategies and advanced procedures to minimize circuit handling and ensure that consistent processing parameters are maintained throughout the assembly process by our EMS providers. We need to ensure that the EMS providers monitor all manufacturing activities to comply with strict environmental controls and to maintain the product quality standards for our products.
 
Systems Assembly & Test : We require a wide range of systems assembly and test services that enhance product quality and product life cycles form the EMS providers. Manufacturing capabilities include; the design, development and building of test strategies and equipment for our products which utilize manual, mechanized or fully automated production lines to improve product quality, reduce costs and improve delivery time to meet our growth needs.
 
Over time, we seek greater functionality in smaller products that will require more sophisticated systems assembly technologies and processes by the EMS providers. We will seek the highest quality EMS expertise in advanced precision and electromechanical technologies as well as the EMS providers’ ability to continually invest in technology that enables us to meet our changing needs and provides access to a wide variety of advanced manufacturing solutions without having to make substantial capital investments directly ourselves.
 
We seek services from EMS providers in the areas of;
 

- systems assembly and test services
- sub-assembly build
- final assembly
- functionality testing
- configuration and software installation, and
- final packaging services

 
Precision Electromechanical Assembly & Test : We require a full spectrum of precision electromechanical assembly and test services that can be utilized in a variety of advanced applications in the development of our products. EMS groups are required to provide design, develop and build product specific manufacturing processes utilizing manual, mechanized or fully automated lines to meet our product volume and quality requirements. All assembly and test processes will need to be developed according to our specifications so that the EMS providers are able to replicate these standards during the manufacturing process.
 
Plastic Injection Molding : We require plastic injection molding services for the external casing of each product, and product line. We will provide plastic injection molding specifications in disk format, so that these specifications can easily be programmed into the EMS providers tooling machinery. All molding services are intended to be performed by hands-free robotic systems in a humidity and temperature-controlled environment to maximize product quality.
 
Fulfillment Services - Product Configuration and Distribution : We need to arrange for product configuration and global distribution services that complement our engineering and manufacturing needs in order to be responsive to changing market demands and reduce our time to market. We require utilization of sophisticated software that allows our EMS support providers to customize production runs to configure the products made to the specifications of each order requests. Our global distribution relationships will allow us to distribute products to our planned products. We require from our EMS suppliers, inventory programs that allow us to manage the shipment and delivery of our products. As part of these inventory programs, we will be able to request its inventory be stored at a site closer to our business prior to distribution, which will streamline the distribution process and decreases delivery times for our business.
 
Aftermarket Services : We require sufficient warranty programs with our EMS suppliers to the term of our long-term concession rights agreements to ensure we do not incur unforeseen financial losses in the later years of our long-term agreements. In addition, we may require EMS suppliers to provide to us a range of aftermarket services, including repair, replacement, refurbishment, remanufacturing, exchange, systems upgrade and spare part manufacturing for storage of related subsystems. We would then have the option to expand our aftermarket services through these other providers. This can greatly reduce the capital expenditures we encounter, as well as providing an additional form of support to our corporate networking alliances.
 
Value-Added Support Systems : We require the support from EMS suppliers in the areas of engineering, manufacturing, distribution and aftermarket support services with an efficient supply chain management system and a superior quality management program. All these EMS value-added support services will need to be implemented and managed and will enable us to collaborate during the manufacturing and order fulfillment processes.
 
Supply Chain Management : We will put into place a supply chain management system with EMS suppliers reducing total product unit costs in the selection of components during product design stages to ensure advantageous sourcing and pricing from preferred suppliers to us and the EMS suppliers have mutually agreed to utilize. We require from these EMS suppliers a certification process to ensure sub-component suppliers have predictable and stable manufacturing processes capable of supplying components that meet or exceed our quality requirements.
 
We actively engage in building strong relationships with a broad range of materials and component suppliers and distributors based on these suppliers track record in reliability for the sourcing of quality made parts and components, that are delivered in a timely manner, and have the lowest long-term reject rates. Based on the predetermined criteria, preferential treatment will be given to the sub-component suppliers who can provide the most all in conclusive package to meet our short, medium, and long-term requirements. In addition, our EMS suppliers product design and volume procurement capabilities will enhance our ability to secure supplies of materials and components not only at advantageous pricing, but more important ‘on-time delivery’, and the highest quality components that can be sourced in the marketplace.
 
We work with our EMS suppliers in order to utilize a full complement of electronic data interchange transactions, or EDI, with the sub-component suppliers to coordinate forecasts, orders, reschedules, inventory and ‘realistic’ component lead times. Our engineering personnel will utilize Web-based products that will allow these personnel to collaborate with our supply chain partners in real-time on product content and engineering change management.
 
We need to establish a Web-based system by implementing a suite of real-time supply chain management software products that can connect to the EMS suppliers facilities to enhance our ability to oversee the EMS suppliers in rapid scale operations to meet customer needs, shift capacity in response to product demand fluctuations, reduce materials costs and effectively distribute products to meet our growth needs.
 
Quality Management : We believe that sourcing and procuring of quality management is paramount to providing quality engineering and manufacturing services to the Company. We will utilize several key quality management systems, which ensure the highest quality products to be produced.
 
**All EMS and SMT assembly and test activities will need to be supported by advanced statistical engineering and metrics control techniques, including yield-management and failure analysis, in order to improve product and service quality of our product lines.
 
We review statistical information on a regular basis by our technical management team to ensure that we are be able to achieve and maintain our quality goals required for the company to achieve its financial objectives. We need access to the EMS and SMT suppliers' quality data information through our Web-based program management system so we can monitor the daily activities of the EMS suppliers for meeting their commitment to quality assurance to us.
 
Information Systems : Information systems will be a critical element for us to achieve our business objectives. We will need to deploy enterprise resource planning systems, or ERP systems , in order to provide product and production information about the EMS and SMT suppliers supply chain management and engineering change management systems back to us. These ERP systems provide real-time financial and materials management data. The EMS suppliers' information systems also control serialization and quality data for all of their facilities around the world utilizing state-of-the-art statistical process control techniques for continuous process improvements.
 
We need to make continued investments in Web-based collaboration tools that will allow us access to the EMS suppliers own software technologies and will leverage the speed and technology of the Internet to facilitate the flow of information by and between us, the EMS suppliers, as well as any and all sub-component providers, resulting in superior quality products, quicker response time, and reduced time to market for us.
 
Working with Equipment Suppliers : **We work with equipment suppliers for developing next-generation products and product-line extensions for worldwide markets utilizing our core IP and related technologies through electronic manufacturing systems product development processes provided in ‘chart form' below.