Designing for mass manufacturing is essentially impossible to learn without actually building several products. The challenges of negotiating with suppliers, verifying components, orchestrating supply chain logistics, and maintaining quality standards will swiftly kill a cash-constrained startup. But there's good news: unless you're on the cutting edge of a specific technology (like Apple with displays or metalwork), the problems you encounter at scale have very likely been solved by others. So the task then becomes to find those individuals or companies and hire them quickly.
PCH International is probably the most well-known of these firms. They notably make Kindle, products for Jawbone, and all the accessories for those dudes in Cupertino. Because they often work with big players, they're able to leverage large contract manufactures' (CMs) quality standards and economies of scale for smaller production runs. Currently PCH is also aggressively going after hardware startups and recently launched PCH Accelerator, which is essentially a strategic investment group to fund partnerships with startups.
Another option is Dragon Innovation, who works with Pebble, Makerbot, Sifteo, Leap Motion, and others. They're based in Boston and have recently partnered with the brand-new hardware accelerator/investor BOLT. They're certainly less flashy than PCH, but still know how to deliver.
HAXLR8R (Shenzhen) and Lemnos Labs (San Francisco) are other startup "accelerators"-- kind of like a hardware-flavor of YC. They seem to be more focused on the R&D stages (pre-Kickstarter) than production. For some personal anecdotes by others, see What startup incubators exist for hardware companies? [link]
One way to think about contract manufacturing in China is with the "smile curve" popularized by Acer in the early 90s. It's essentially a graph of a product's extractable value as a function from creation to sale. On the left is brand, high-level design (IxD, ID, PD) and any specialized R&D. In the middle you have component sourcing, supply chain management, manufacturing, assembly, and shipping. And then on the right you have distribution, retail sales, marketing, and partnerships.
... it goes on with more examples. Full post: http://www.quora.com/Michael-Grinich/Posts/Product-manufactu...
Funnily enough, Liam Casey actually often calls PCH the "APIs for manufacturing."