How to Crack the Supply Chain Code for Any Product

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Welcome to today's episode. We're diving deep into the world of supply chain support with different types of product like formulated products, finished goods, food. And I'm thrilled to have the three incredible guests with us. First we have Joanna Ngo, a seasoned supply chain manager with 15 years of experience in food, apparel, formulated products and accessories. Welcome Joanna. And next we have Mary Jace Mensarato, who brings 10 years of diverse supply chain experience as a production planner, Shopify dropshipper, analyst, lead purchaser and logistics expert. And finally we have Jay Marvin Bobier with one year of experience, currently working as a new product development lead and sourcing specialist. Welcome Jay, Mary and Joanna. So let's get started with some questions to understand how you crack the code of supply chain strategy focused on new product development based on the type of products you're developing. The title of our podcast episode for today is the one when we crack the code of supply chain strategy for every product. Before we dive in with the questions, let's just have a quick introduction. If you can introduce yourself to Juana, Mary and Jay.

Okay, I'll start. So I'm Joanna. As mentioned, I have 15 years of supply chain experience. I actually started under procurement. This was actually my first job for a restaurant food chain in the Philippines. Mainly this is where I learned the fundamentals of supply chain. During my stay I also handed new products development team. So basically it covers vendor management, sourcing, project management and a lot of collaboration with the different cross functional departments.

So yeah. All right, thank you Mary.

So I'm Mary and before I started as a virtual assistant, I've worked as a production planner and IT and an operations coordinator in the Philippines. That was 20th, 2014. And then I dive into e commerce and supply chain in 2018 pre pandemic. So up to now I'm doing supply chain, new product development and E commerce.

And last but not the least, Jay.

Yes. So hi, I'm Jay. I'm actually a professional licensed therapist. So I transitioned to supply chain and e commerce industry during the pandemic. So yep. So right now I'm the new product development in an apparel company and a sourcing lead in another company which is a cleaning product company.

So yeah, thank you so much for sharing that so we can dive in with the questions. And, and the goal for us is to share as much experience that we have handling different kind of products. And so the first question is what are the key differences in your approach when developing different kinds of product? Like if it's a food or formulated products and finished goods. Anyone can start?

Yeah, I think I can. Go ahead. So first I, since I'm from the manufacturing industry, so most of the products that I have encountered are formulated products and we're building it from scratch up to the forming of ideas to finish goods. So the approach will be to have a clear product in mind first so that we can align the plans that we will have for that specific product and then the rest will follow.

Mary, when, when you were working with the manufacturing company, do you work closely with formulators or in the. Is that how you develop the formulation?

Yes. So with manufacturing and with specifically new product development, I'm working with formulators and R and D team specifically to get the raw materials or the exact raw materials needed for the ingredients or the, the formulation and then that those testings. Testings are very crucial specifically with chemicals. So yeah, working hand in hand with the formulation team and the R and D department is really an important part in the product development, specifically with formulations and chemicals.

Joanna, I'm curious about your food experience since that's the longest experience that you also have. How do you, if you can share your experience in the new product development for food?

It actually depends on the product that they're requesting. There would be products that are pretty straightforward. I mean, they have a specific product already or vendor in mind. So if that's the case, it's more of really communicating with the desired vendors. But for some instances wherein it's either, as Mary mentioned, it's formulated or it's more of an exploratory, let's say they want a sauce, a certain type of sauce. So the flavor look, profile would be very diverse. Let's say cheese sauce, you can tap different vendors. It's going to be a testing process where you really have to work hand in hand with the R and D team. It could be a series of testing. They submit a first sample and then you have to get initial feedback, like let's say increase this by how many percent or consistency wise, color wise. So it's not like one time submission and then you got the product correct already. So it's really working with the R and D team and with the vendor and making sure that we're working towards the desired product in terms of getting the profile and all the other aspects as we wanted it to be.

Yes, that's a. I could sense that what you've mentioned, Mary, and what you've mentioned, Joanna, with formulated products and food is a little bit related or close or there's a huge overlap. I wanted to hear your experience Jay for the apparel which is a finished goods and then we can discuss the difference later on.

So with regards to apparel or finished goods, usually our focus is on functionality, safety and comfort. So which means extensive material, fabric material research and usual testing for those finish or the treatment that needs to be put in the fabric. Those are the things that we usually focus on regarding about finished goods at the same time. Regarding about the. It's more of like a global with regards to the supply chain regarding about products or the parts or the items that needed to be placed for the apparel to be completed. Usually those are the things that needs to be coordinated with the suppliers or sometimes the delays are needed to be coordinated with them as well. Like with regards to fabric that need to be finished for us to be able to have that certain fabric or certain material would be used for that apparel. So yeah.

So if Mary's working with a formulator and Joanna is working with an R and D, who are you working with in terms of design?

Usually yeah, they first one would be the apparel designer or the fashion designer sometimes for the design of the apparels. Another one would be the fabric expert. Usually we need to coordinate with that one as well. With what is the fabric that needs to be used for certain apparels or certain like for a jacket or comparing to a jacket or to a vest. Those are different fabrics that needed to be used for that one. So those are the close coordination that I usually doing with different people in the industry.

How, how would you now that we have like different samples, food formulated finished goods. In terms of timeline, let's discuss one aspect first. In terms of timeline, I wanted to hear your thoughts on which one is more challenging in terms of developing the new product, the formulated, the food or the finish. Because there's no right or wrong answer here. This is going to be based on your experience.

Okay, so I'll go ahead. So with regards to apparels, there are a bunch of challenges actually that needs to be tackled. First off you got to be on top usually on the pulse of the fashion trends. So those are the things that needs to be checked always like the season, like is it, is it winter, winter season? So you need to have like a product that is best fitted for that one. Another one would be possible challenges that has that one would be the quality control. So making sure every street is perfect. The fabric should just feel right. So those are the things that needs to be closely coordinated with the suppliers. And usually I need to be more consistent in asking for updates regarding those things. So I think that's it sustainability as well. Those are the like waste management. Those are the things that needs to be tackled as well during these things.

Those factors. Jay, does that, does that affect the timeline of your. Like when you're using pert. The timeline of your new product development?

Yeah. Yes. Basically it's it. It some of the things that delays the timeline usually the delays with regards to the fabric. So it's more of the suppliers that I need to deal with with regards to that one usually trying to make sure everything gets to the factory so that they could finish it on time. And another difficulty is like the kind of fabric because the company that I'm working on is really mainly focused on the sustainability. So we really wanted to use fabric that is eco friendly. So usually that cuts down the waste whenever possible. So those are the things that we really need to consider. So it's not really readily available sometimes some of the fabrics that we wanted. So sometimes it delays the timeline for us because we really wanted that certain kind of fabric for that kind of apparel that we wanted to launch. And then sometimes that the hindrance also falls under the preferences of the clients or the customers usually. So either either the design is already there, but they feel like they don't like the color that the designer makes. So we need to make certain revisions time to time for that one. So it also delays or it also add another day or two for the designer to finish everything and then give a revision of the design and then we'll check whether is it really okay with the team on that one. So those are the things that usually delays us with regards to our time timeline.

So we were discussing, I think yesterday when we were together today we were discussing the difference because that's for apparel. But how was your experience in timeline compared to a formulated product that you have a client as well right now.

So while we have with the formulated goods, I think Mary and Mary and me an extensive research usually being done and trying to really find a specific supplier for certain things. Those are the things more of product research actually because the formulation should be like a specific one and then it should be a certain supplier that who can really make or has the customer the facility to make that certain formulation for that product. So I think Mary is agreeing with me that it's it. It's a whole. It's a whole new problem when it comes to formulated goods.

Yeah, just to add. Just to add with what Jay said. So with formulated goods, one of the things or main things that could affect lead time is sampling, testing, getting the right Formula with the right target result that the client is needing. So it requires a lot of testing, samplings, and there are specific countries or there are specific government wherein they are restricting a specific ingredient. So we need to find an alternative for that. So that is one of the main challenges in formulated products, if I may add.

Yeah, for formulated specifically, if the product is more of an exploratory product, product that really takes it longer, makes the timelines longer because it's not readily available across different vendors. You really have to work with different R&D's and vendors. It's really finding that specific product that you want and that the vendors can offer because it could be possible that you have something in mind. But then again, it's not really doable in terms of production with a different vendor. So it's finding that compromise wherein you still get the finished product that you want, but checking out the capabilities or what's really feasible in terms of manufacturing with the pool of different vendors across. Across the world, actually. And.

My takeaway with everything you've shared is that any product has its own different challenges when launching and also affecting the timeline, whether it's finished goods, formulated food or other products. Going to our next question, it's very, what do you call this? Very connected to the previous discussion. If you have a specific challenge, Mary, that you faced during working on the formulated products, how. How did you address them?

So, yeah, I mentioned, I mentioned earlier that. So most of the challenges that the new product development facing under new formulation is the ingredients or the raw materials that is needed for that specific product. But it's, but it's restricted to that country or it's not available or is. It's out of stock. So we need. So a lot of research and a lot of. Yeah. Checking with other vendors if they have alternatives. So more on research on what can we do to replace or substitute with that ingredient or raw material. So that is the main. Or yeah, the main problem in formulated products is the ingredients. And yeah, we need to have an alternative source, alternative vendor, alternative ingredient for that or if we can replace it, we need to coordinate with the R and D or the formulation.

Aside from the coordination, Mary, how are you solving that challenge? Any other tactic or project that you've done to make it easier with alternative sourcing of raw materials?

Actually, it will depend on the business owner what will be the goal if he wants to do a new or a similar product that is related to the product that he wants to sell or he's selling. So that is, that is something or an option or we can do.

A.

Lesser formula or a much lesser or a different ingredient than what we're using right now.

And Jay, for you, for the finished goods or apparel, what did you encounter in terms of a challenge in developing a new product and how did you address it?

As I said. Oh. So in apparel the usual problem that we're encountering is the delays in some of the materials needed for the apparel to be produced. So what we usually do or solve it is really thinking ahead with regards to certain things. Like if we really need, we really need this kind of fabric, we usually put it in a manner like we already tried to source it out, try to find an alternative suppliers for certain materials for that one already so that if in case we are expecting some delays, we could actually help them out, the manufacturer could actually find an alternative fabric supplier for them to be able to finish the orders that we have. Another problem is the design. Exactly. So mainly it really depends. It's really subjective. Sometimes in the team, some of us might feel that this design is really okay already, but some of us felt like it lacks color or sometimes. So to avoid having like a long discussion regarding about this one, we usually ask already the designer to give us more designs like a minimum of three to five designs already for us to be able to compare and decide on it already once we saw the design from the designer and then move forward to it so that we could at least minimize the delays with regards to identifying the designs that we will be using for the apparels.

So yeah, thank you for sharing that Jay. So we've tackled a little bit about lead time and in timelines earlier, but moving to the next aspect of or category in supply chain is quality assurance. Joanna, how do you ensure quality and consistency in different types of products? For example, if you can compare your experience in food or from dated or finished goods.

I guess at this point, well the good what should be the starting point is really to have like specification or guidelines that the vendor should follow in terms of producing the products that we want just to make sure that we are aligned in terms of expectations on the finished good. So that could be a technical specification or product specs that we are looking for as a starting point just so we know we are looking at the same page in terms of the product that we want. But based on my experience, it is really important to have a quality assurance team to double check the finished products because as we all know, if it's from just from the vendor side they would normally say that it's good. I Mean they produced it, it followed the specs that we want. But still we want to make sure that everything is in accordance to what we what we requested from the beginning. So the qat may be of. I have experience having a third party QA team where inspections are done at the suppliers facility. So what. What's good with that is that we are able to capture probable mistakes or these are unexpected, well uncontrollable in terms of supply chain side because this is mainly because of the vendors production, but at least we capture them before these are delivered or shipped to us because of course we want to avoid customer complaints at the end of the day so or but I've also experienced having a QA inspection done upon delivery to our warehouse. So all the same the key is to capture any variances in terms of the specs or anything that's non conformance to what we want. And then normally if we find something, we communicate this to the vendor. May it be if there's a. Well, as much as possible there's a formal QA report, a supporting documents and then we provide this to the vendor and then we require correction and preventive action plan from them. So normally they try to correct this. If it's very minor, they can easily do a rework. If it's not sometimes really have to redo everything or there would be times where they have to really sort out through the batch. So depending really on the findings of the qa. But based on my experience this is an important step just to make sure that the product that we are getting is really, especially if it's a new product. Because for new products, imagine it's also the first time that the vendors will be doing this specific design or formulation or profile.

So.

There'S really a big chance or a probability that something might go wrong. So it's really important that we have that QA step to filter out any possible concerns or issues that may arise after production.

Yes.

One, if it's raw material, if it's raw material, if we actually know the raw materials we have, it's really coordinating with the vendor, making sure they use the correct raw materials, no substitutes or no new. Because there would be times that we did try out something new for the first time that in the end it would have an effect on the final product. So it's really communicating with them all throughout the production, making sure everything is in accordance to what was initially agreed upon. And then normally right after production.

We.

Still check on them on how, how or even during the production how it's Going if they're encountering anything, any possible delays or any difficulties or anything that's not expected during production so easily. Because sometimes I've had experience also, let's say in embroidery in apparel, they wouldn't. They initially during sampling stage they'd get it right but during mass production they'd say it's harder, it's more difficult than for their workers, so it's taking longer or they're seeing it's harder to do a specific design. So from there on we try to capture it, address it or maybe see what we can do to avoid any further delays or changes in the design. And really it's really continuous monitoring coordination across with the vendor and still with the cross functional department if needed.

Thank you for sharing that, Joe. And so for our next question, so we've tackled quality. Next is communication and collaboration. How would you describe the difference in collaboration between different types of product? Like Mary, you've mentioned about manufacturer manufacturing formulated goods, connecting with formulators, J, with designers, fabric designers, what they call that apparel designers as well fashion or what do you call that? Like fashion designers. And then Joanna, for you it's more of like the R and D in food and other team members. But how, how do you describe the difference in collaboration between different products?

Collaboration with different products. So it will depend on. So yeah, like you've mentioned, Jay is coordinating with designers, Joanne is coordinating with rmb, and I coordinating with formulators. So there are multiple steps in building a specific product. So it's not just those teams that we're collaborating with. It's just that that is mainly one of the first things that we do when we're working with. For example, on my end I'm working on formulated. So the I should collaborate with the formulation team first. But that is not the end. There are still quality assurance. There are also the testing, the, the warehouse, all of that, as well as the owners or the business owners as itself. So yeah, it will definitely depend on the product that we're launching.

Did you feel like there's a specific approach that you need to do when you're dealing with formulators versus normal designers? Do you adjust?

I think I could, I could discuss some of it because I'm both in apparel and with Mary in the formulated goods. So with regards to the team regarding apparels, you are more on the subjective or creative manner when it comes to discussing things with them because you want them to at least feel the essence of what you really wanted for certain apparels that you wanted to launch. So it's more of trying to make sure that you could give them the most possible inspiration for them to be able to capture everything that you wanted for that certain apparel. But with regards to formulated goods, you are more objective and more straightforward when it comes to discussing with them because you wanted the formulation or the percentage of certain ingredients to be really exact. So a deviation of certain number or percentage on that one would actually differ a lot when it comes to the end product of the formulated goods. When it comes to. When it comes to the apparel, at least they have that freedom in a way, like certain freedom to express themselves. When it comes to showing us. That's why they're always giving us a lot of designs or certain numbers of it for us to be able to compare. Unlike with the formulated goods, we are already focus on that certain formulation or certain number of ingredients or percentage on that one. So whether they manage to reach that kind of formulation or not, like, with regards to what we're doing right now, we are focusing on improving certain formulation. So as for Joanna, she always keep on asking our supplier regarding did you manage to change this certain ingredient? Did you improve it? So we're asking what's the percentage for this one? Maybe it's already on 2%. Then Joanna will follow it up. Can we try it on 5%? So it's more of direct when it comes to discussing with them. So I think that's the difference between the two for finished goods and formulated goods.

For us, if I may add. Also with the formulator, if we're going to collaborate with a formulator, there are specific keywords that you would like to ask, like for example, percentage in key names. So in key names are the generic name of the ingredients. So there are also trade names of the ingredients. So we should know if that is a trade name. So if that is a trade name, we can search for the inkey name or the generic name of the ingredient. So we can have alternative of the products or of the ingredients or the raw materials that we're using. But with designers there, it's, it's. There is an option, but. But that will be. Yeah, like what Jay said, it's more on the creative side, but with the formulators, it's direct to the point in terms of the ingredients and the formulation itself. Yeah, yeah.

And also to add. Yeah, for formulators or R&DS, they tend to be a bit more technical. So at some point they know more about the technicalities compared to us. So we need to really listen, we need to do research to really understand what they want. And Be able to communicate that also to the vendors because that's our expertise. So on our end we have to catch up. We just need to understand what they want, what they need to be able to really give or to source whatever the product or improvement that they want.

Sometimes to a point, sometimes to a point. We need to like Google some of the terms that they're using so that we could just catch up. What are they saying about. So yeah.

It'S really understanding it, it varies per industry. You really have to adjust, you really have to catch up and to do research on terminologies, on technicalities of each.

Product even with the size of the product and the concentration of the ingredient that is on the product. Even if it's really small for, from, from a bar to a powder to. Yeah. For, for example, that, for that kind of products it's really.

Yeah. Working with a personal care product before, before doing remote work is that there's a consumer testing involved. So after the rigorous formulation and quality check, you'll hand out samples to different users and they will. And of course they have to use the product for a certain period of time. So that adds lead time because you have to wait like for example, if it's a skincare and you need to wait for a result like a week or two, sometimes one month, then out of 10 participants, one will have a breakout. So you have the, you've tried to do it for a year, formulating a product for a year and then because of that one you have to check the formulation again and it's going back to the drawing board and doing different research on how to accommodate the issue or alternative raw material. Sorry I cut you off. You were saying.

No, what I'm saying is there's like differences on industries but at the same time there's like similarities to some point of it. Like the terminologies. Yeah, the designers has their own terminologies as well. So you need to really catch up with them as well with regards to it.

And I agree with you Lara, with those testings and there are also some like it's the formula is done but the manufacturer is not doing OTC for example, is not doing like it's not certified for that specific product. Then we have to search for another manufacturer or adjust to the manufacturer that we currently have. So yeah, that were just some issues of doing formulated products and yeah.

So if, if most of our listeners are small to medium sized businesses starting up startups and also they are the first supply chain of their company or their brand, what would you, if you can give one advice to the business owners and assuming that they don't have the team yet, they don't have the new product development team, supply chain manager, sourcing, and they're doing their own sourcing and working directly with the vendors. What is your advice on how they will make the new product development more effective? I would like to just mention what you've mentioned. It's all about research. That's one of the key takeaway that you've shared. It's understanding the type of product that you have, the different terminologies. What else can you share or advise.

To our business owners aside from what you've mentioned? It's really knowing the product that you want to launch to start with because that will really help in terms of sourcing. Because if you know the product at least we're very specific into sourcing the correct vendor for the product that we want because it really varies. Some vendor would have a certain capability, but any tweaks that we want on the product, we have to find a new vendor for that. So to start with, it's very helpful if we have the product in mind already so we can find the correct vendor. Also, it's having a good vendor relationship. I don't know if this is more applicable to more established businesses already, but having that partner vendor, especially if it's a similar line, you're just changing a design or a similar product line that they have, maintaining this good relationship with the vendor would really help because it would make your life easier. Sometimes if you're working with a vendor that for the longest time, like changing a design would be faster because they already know your standards. They they already know what you expect from a product or your. You know what you need and what are the specifics that you want. So changing a specific part of it or a logo or a design would be faster.

Also.

Sometimes their R and D team or their technical team or engineering team can also help you with something that you're developing because along the way it's not always going to be smooth in terms of what you want. There will be times where you have to adjust also. So having someone from the technical side of the vendor would be really helpful in terms of helping you out with a new product that you want to launch.

Well, just to add, I think, to that one would be another advice I think that business owners should have is to be able to remain flexible to adapt to certain market trends and certain customer feedbacks so that at least they could actually prepare themselves when it comes to creating new products. For their product lines. So more or less they need to have that scale to be more flexible to those kinds of things. So I think that's it for me.

Agree to that, Jay. Especially now, trends are really changing every now and then and it's really fast, so you have to catch up. Otherwise you'll miss that opportunity to sell a specific product.

Yeah, when it comes to apparel, there's like seasons, holidays and anything. So you need to be on point on those things. So you need to really make sure that you at least have research on that one for certain seasons. So that's it.

The worst thing that could happen is you've spent a ton of money, effort and time developing your product and when it's ready to launch, the season has passed for a parent. Right. Launching a winter clothes on spring or summer or fall.

We already have like in the company that I'm working on right now, we have certain new products already that we need to put it on hold and just place it. We'll do this next year because we don't have enough time to really launch this on the exact season that we were looking on. So we just put it on hold. So. Yeah, but we already have like, we already have samples of it. We are already trying to figure out who will be the manufacturer for this one. So. But yeah, apparently if we really need to stop, we need to stop that.

So on my end, I think the advice that I can give is an intensive, like you've mentioned, an intensive research not only on the product, but also with the vendors that you're going to deal with. Especially there are a lot of vendors that are offering the same product, but there are differences with those products. Like they're using the picture of a different vendor, but the product that they're selling is different. So be mindful of the description of the products of the vendors. Also the, the reviews or how long is the vendor in the market and do they have their own factory? Do they have their own plant? Are they the one manufacturing the product? Because it will also affect the lead time. Especially if it's like, for example, if it's from China, they have the main manufacturing company and they are selling, or there are vendors that are selling those products and they're just ordering it from the manufacturing company. So it adds lead time.

They need to be mindful if the supplier is just like a trading company or really a manufacturing company. So they really need to check on those things.

For me, before I go to, the last question for me is go to China or go to your vendor Wherever that is, Vietnam, Cambodia, India, Europe. I think we, we are past the situation wherein we cannot travel and the reason of its pandemic is over and cannot use it anymore. Joanna and I share the long history of working together with the food brand that we both and I, it's our first job after college. So in that experience, and it's a multinational company, in that experience, we cannot accredit a vendor without talking to them multiple times, visiting their production plan. If, even if it's, even if it's outside the country or out of town, you really have to be there, build relationship, check the production, check the capacity, talk to the owner, sales QA, formulators, R& D. It's not done remotely. I know that supply chain can be of course can be done or can be supported remotely, but there are advantages of really going out there and building relationship and checking it yourselves. Other options are if you cannot, like in 15 years ago, every time there's a situation or an issue, we go there. But right now you can have a schedule wherein you go first and then your team member can go after or hire a third party. There are so many options right now. That's actually the learnings and positive impact of what the pandemic has given us in supply chain is we have additional resources, we have additional solutions to our challenges in supply chain. But for me, go out there and visit them at least once and understand. You'll know how intricate the production is if you're, if you can, if you can visit. And I think that's why Mary Jane, Joanna will go with me in China on October. It's because of that, right?

Go. Let's go.

That's an impromptu invitation, shotgun question for the team. But the last question, and we can be quick here is what is your biggest mistake in supply chain or new product development that you wanted to share with our audience and what's your learning and how are you using it currently? So I have a huge learning that I would like to share and this is a huge news or huge issue in the Philippines back then. It's a dessert for this food chain, very famous food chain that is that should be launched on a Vermont. So it's a holiday launch for BTC brands and e commerce. It's your Black Friday Cyber Monday thing. So in this industry it's food, it's a big fast food chain. We decided or accredited to launch a dessert like a chocolate cake dessert for Christmas and we did like then the all of the necessary tasks to activities to accredit this vendor, this vendor is also a very famous bake shop in the Philippines. However, the capacity is the question mark. And so we saw the effort of the vendor wherein they really changed the supply chain. They really changed the planned requirement because of our QA is very. It's very strict with that. They. They invested a lot of money buying more machines, changing the pitch and hiring more manpower. So it's like we. We captured that they might face so that they. We work with them to solve and improve. However, come lunchtime they started producing. It's a homemade type of dessert and not mass produced. So we still encountered a huge issue on production. Instead of receiving 1,000 pieces a day, we are just receiving like 1/4 of it because a lot has been produced. But it's a cake, it should be presentable. So a lot of items are rejected. So at the like, like fast forward to the solution we like a year of working after college I was sent with my manager to the owner's office to explain how are we going to launch or how are we going to sell the dessert or the holiday product of this food chain without enough cake supply. And we eventually diverted into the solution. We've changed from cake to brownies, which is our main product anyway. But the brownies we did something special about the design, Christmas design. So it was. We were able to sell and also because the cake sold so much during it's very delicious and affordable cake. So it was all sold out in the beginning of launching it. At the same time we get. We couldn't catch up with the demand and so we changed in transition. So it was a, it was a huge learning from me and the way that I'm, the way that I am using that learning is making sure that not just we are understanding the possible challenges that this may give us, but also making sure that the solutions and the solutions that they are providing, your vendors are providing will be checked first or there's a test because at that time we didn't have the time to test the new solutions that they have shared. So it's more of like yes, we have identified challenges. There's a solution, but let's try it first. Let's do how much pieces you really can make in a day before really launching and making ads about it and then putting that in your. In your. In your website, for example. So that's, that's. That's a first year like 14 years ago mistake that I've done and I'm still up to date using it as a, as a, as a learning experience. Who has the, who has something to share about supply chain.

Well, let me see. Top of mind. It's not actually. Well, similarly, we were supposed to launch a new product. It was supposed to be a simple bread, but we did something to it that made the product a bit controversial, which made it a hit. So demand was good, but since it's a new product and I don't know how if I can see it here, but the thing is it was harder to produce than expected. I mean, the vendor can produce it, but QA wise it's rejected. So there's a challenge. Yes.

There'S a challenge.

I mean, capacity wise they can do it, but output wise, in terms of acceptability, more than half is rejected. And the product is so controversial that it's gaining more followers. People want to try it. So, you know, the demand shoot up and then we're having problems in terms of Apple deliveries. So it seems. Solara it came came to a point where we had to visit not only once, I think several times, just to monitor production, just to help the supplier really sort out this is acceptable. This is not. Just not to waste everybody's time because normally the rejection happens when it gets delivered to the warehouse. So good thing is we had built that relationship with the vendor. They had to operate 24 hours just to accommodate all our orders. Actually there were lots of rejects so they had to absorb it at that time. I think that that's really huge. But since we've established that relationship, everyone just immediately tried to fix the problem first and later on maybe just see what happened. But I think a learning there is anticipating what could go wrong really. I mean, there was a new product, we've sampled it, they've delivered, they got it. But at the end of the day, it's really before launching, you should anticipate any problems that may encounter just so you're prepared also in terms of if this happens, we have a plan A for that, so we're ready. So moving forward, really it's for launching new products, especially if it's kind of tricky. I learned that it's best to have action plans in case this problem occurs or problem B occurs because it's really unavoidable in this industry. There would be really times as much as you want everything to come out perfect when it comes to mass production, it's really. Sometimes there's just something that arise. So yeah, we had to stay in the factory for. We just wanted that launch to finish, you know, that promo, that campaign.

Joanna Now I am realizing how lucky our current brands are with all the learnings that we've experienced experience from that food industry. So sorry for that food industry.

But.

But we've learned. It was a really good learning learning ground for, for us.

But.

But again that's a, that's. That's a good learnings that we can adapt. Any for you, Jay or Mary?

I'm. I'm the newest in the industry but good thing I have good mentors, good team. So Joanna, Lara has really been good. So they already made the mistakes.

In.

The past you don't have. So they did the mistakes and they already are the one who's really telling me like oh you need to have this certain things that needs to be done or even I to a point that there's like a bullet list that I need to really check on it because Lara is giving these things that I need to really check. So basically when it comes to mistakes it's always being checked already by Lara. So to a point that there's a really, really big mistake when it comes to me handling certain problems when it comes to npd, I think there's nothing I could tell because you guys are there. So thank you. Thank you so much.

That's a good point. I mean throughout our experience I think it's critical also because you encounter problems along the way. But it's best if we communicate it as early as possible because at the end of the day this new product launch is cross functional and aligning everyone on what's happening, aligning everyone if there's delays or if we're encountering problems or if we might need to move, that's very critical. We've experienced that also several times that if you don't communicate, I mean like let's say the sales and marketing team already gearing up to launch and then at the last minute they find out you cannot launch it. So that's more problematic or chaotic for everyone. So that's a key learning to really communicate, even over communicate just to make sure the team is aligned in terms of new product launches.

Yeah, I'm really over communicating. That's that it became more of a more of that problem to them already because I bombard them too much with information. So Lara was like telling me that I need to learn more on trying to figure out what is the prioritized information that they needed to know and everything.

Gotcha. Hey Mary, do you have.

So for me, fortunately I don't have or I don't think of any big mistakes or mistakes in npd. But with sourcing, since I've done sourcing and production planning first before npd. I think I tend to avoid those mistakes with NPD since I already encountered it with sourcing and supply chain. So the thing that I can share is with ingredients that we keep on sourcing but we're sourcing the trade name, the formulator. Give us a trade name for that formula, not the general or the generic name. So the due date is almost there and we don't have any product or ingredients for the production team. So yeah, the lesson that I got there is we need to really coordinate with R and D and formulators with those ingredients or specific formula that we need for that products so that we don't have to exert more time and it will be more efficient for us. So we need a detailed one, not just a general information that the formulation team or the RND team can give us. So we need a more detailed explanation or a more detailed information of what the product or what are the is the product that we're launching and yeah, all of the things alternative for sourcing that is as well for the np.

Okay, thank you so much for all those very juicy and helpful information that you've shared. I know that for every mistakes and learnings, for every mistakes that we've done, there's a huge learning that other like for Jay. So you business owners should learn from these mistakes and avoid from happening again by, by making sure that you are you. You followed what we've advised as well. So very quick before I let you go, just making a fun twist to our discussion with a game segment we call Guest Cogs. In this game I'll describe a product in our talented guests will guess the cost of goods sold or cogs to make that product. And so I'll share, I'll quickly share a screen so that I'm prepared for this. So product number one, it is a high quality leather wallet like a two fold or trifold leather wallet with RFID protection. So we want to know, we want you to guess the unit cost first and then followed by like shipment cost or tariff or packaging and warehousing and then eventually the total for the double fold leather RFID wallet. Maybe we can have a flow. So Joanna, if you can guess the.

Unit cost first it should be us. Joanna is more expert level so she should be doing the other things. That's the easiest one. Mary and me could do the unit cost and then Joanna will do the rest.

J is working in Alibaba.

Yeah, I'm already checking it. That's why, that's why.

This is a Very quick game like estimates.

Okay.

Joanna, estimate. $7.

Okay. How about shipment cost? Mary?

Around 3.5 to 3.7.

Okay. Wow. How about packaging? Jay?

Packaging. It's a. It's a small one, so maybe around 0.10 to 0.30 range for the packaging.

So that's via C. And then warehousing Joanna, back to you. 0.2, 0.2 and tariff. Grace. Mary, 10 cents. All right. Okay. And others, I'll just add a dollar for other costs. So we're at. Your guess is at 12. Your COGS is at wealth including everything landed cost, etc And I will show you what the actual, the actual computation that I got. This is from Alibaba. Of course it is around 15. 14 to $15. So it's very close. 12 probably. If you want your packaging to be more like high end. High end, that's where the change will go. And then if you wanted to go via air for some products and then the comps is around 14, $15. Your guess is at 12 to $13. And let's see how the E Commerce and DTC brands are setting this. It's 69 for this.

Around 70.

125 for this and like $50. This is the cheapest one that I saw. It's a personalized bifold wallet. So it's at the margin. If you can compute it, it's a lot for. For this. Given that you have like maximum 15 comms and you're selling it for 100. Even for $100, the margin is high. All right. Second. Second product. Fashion smartwatch, fitness tracker. Wireless and water resistant. Let's start with J. Unit cost. But I didn't have time to time you up.

I cannot source it. It's the tracker. It's the one.

Yes.

The.

The whole watch.

Around 55.

20.

Yeah.

5, 050. Let me see the watch.

It's. It's the watch itself, right?

Yeah.

The production.

Let me present your view. Let me share again my screen so I can see the cost. Five zero for you, Jay. And how about packaging?

Three dollars.

Okay. Shipment Mary?

650.

Tariff J.

Sorry, no idea.

That's my third.

Five.

Percent.

The only thing that I could really check is around unit cost. And I will, I. I will usually ask Joanna for the rest.

You should give us more time. We do research.

Jay, you answered 50. 50.

It's an. Mine is a high end.

Yes, yours is a high end. The one that I found in Alibaba is around $5.

$5.

Yes. You have. You. You can Buy.

I've already.

You're already doing Apple compatible?

Yeah, no, I've checked also there's like a high end which is around 50.

Yeah, I'm checking also their, their product.

But there's like, there's like a cheap one that's around $5. Yeah.

So we there for the cheap ones. They're selling it. This is an Amazon by the way. So earlier I showed an e commerce site this or a Shopify 25. 25 for this is Amazon and then 39 and then 47. So these are the lower end type of watches that you can find. All right, last product. Biodegradable eco friendly bamboo toothbrush. Per piece. Mary, unit cost.

This is per piece, right? Not.

I'll do the unit cost.

Really?

How did.

No, you're the tariff guy. Oh yeah.

I think it's around 0.5.

Okay. 0.5 packaging though.

Packaging. So several pieces in a box. But if you look at it, if it's 0.5 I'd say 0.1.

0.1 shipment cost via CJ the cheapest option shipment.

0.3.

0.3 and warehouse warehouse Maryland.

Joe tariff tariff. Actually I have no idea. I'd say 15%.

15%. We're at $2 per piece and based on my checking with Alibaba, you're very close with the unit cost. It's 0.2 ranging from 0.2 to 0.5. Total is around 1.1 to 1.5 dollars for everything. So maybe you have some budget to do via air shipment with the budget that you have $2 and they are selling this for 5.99 or one piece from a dollar and then for this it's like a four pack 20 so it's like $5 each.

Same price but.

This one is a bit more expensive. Zero waste curtail at 900 peso. Around $15 for this product. So Hausa, thank you for playing guest.com with me. It's very helpful. I love this portion. I always tweet about this and ask my guests about guest.com so that we can play around the numbers, the data and it's very enriching and helpful to understand how we are viewing our new product development by also considering the cost that we have. Thank you so much Joe Jay and Mary. I know that this request has been really a surprise and don't forget our trip to China on October. Plan your visa ahead of time and tell your family about this. So thank you so much and hopefully our guests, our listeners have learn something in this episode and looking forward to do more episodes with you separately or group as well. Thank you. Bye Bye.