Product Production Planning: Critical Factors to Produce It

Protect your brand, product or invention from the hazards of consumer product launching and go from idea to product to big brand. With guidance from retail product design and development experts, Tracy and Tom Hazard, get the insider secrets to put the right things in the right order with the right resources so you can out design, outsource and out profit your way to retail success.

Hey there, it's Tracy Hazard with Product Launch Hazards. And we're going to talk producing and, and producing is like the fun part, right? We're making it. We're finally making it. You've gotten it that far, you're out of that testing stage, you're out of figuring out how to make it, what to make. You're in the actual making it part. So it's just really satisfying, but it's also really daunting because there are so many things to trying to get something made right. Do I make it in the us Do I make it in China? Do I make it in India? Where do I make it? If I make it overseas, do I need a trading partner? Do I need a consultant? Like, how do I manage that? So it just raises all these questions and hopefully we're going to knock off a whole bunch of them. But remember, again, this is the biggest place because some of these things are so product specific for you that we can't really address them in this sort of general class. So remember, that's why the membership site is there for you. That's why you want to go to Product Launch Hazards and you want to participate in the weekly office hours. They're there for people who have been through this before, people who do this every day to advise you and give you guidance. So let's talk a little bit about US versus China or Asia in general. I get this question all the time. Every time I go to inventor's groups all over the country, they're like, oh, why aren't we making it us? And I'm going to answer it the same way that I do. I have absolutely nothing against making something in the U.S. in fact, I really want more business local. It's part of why we love 3D printing so much, because we're bringing manufacturing local again, but we're also making it cost effective when we do that. And so when there is a cost effectiveness involved, we have to do a full evaluation of where you're making it, how far you have to transport it, and does it make sense to make it there. The second thing we do is we really seriously consider material sourcing. So if we want some specialized woods, if we're making wood furniture and we want really specialized woods like rubber wood or something like that. It is not here native in most of the US So it's not the best place to make it. Now there are exceptions to that. There are some great, great wood products that are made out of North Carolina and other areas because the woods are plentiful there. So we really have to consider the material source. If I were going to make something of premium leather, I'd go for Italian leather and I'd go to Italy to have it made because you're now closer to the source. So really thinking about that source and where those materials should come from can also give you guidance on where to make something. And then I want to remind you again of my story about picking a manufacturer that just happened to be close to home, but they didn't have core competence in the particular product category. So you really want to make sure that whoever you do pick to make it understands what you need to make and have done it, been there, done it before. And the reason why we do that is because then they're not making rookie errors and learning on your dime. That's one of the most costly parts of product launching is having to do redos, remakes or having it get all the way to you, shipped to you and then shipped to a customer and then be returns and reflect badly on your brand. So we want to really circumvent those if we're going for speed to market accuracy. And we really want to be sure that we're not wasting our time or our money in the process. So that's kind of my big pitch on where to decide to make it. But it's really up to you at the end of the day. And if you feel really strongly you just want to make it in your back door and you want to build a local business, then go for it. Absolutely do that. Just keep in mind that you really may have to sacrifice some of your profit margins. You may have to look at alternative ways to produce things like 3D printing and be really creative in the process and or handhold. If you're learning on the job by building your own manufacturing facility or building up manufacturing with someone who it's not a core competence of theirs. So the next big question is how do you place an order? Are you ready to go? Do you have everything in place? And what I really want to walk you through is sort of our general process of order placing. Because we don't just go in willy nilly and start placing orders. I mean, we get excited about it. And we really want to go and the design's all done and the sample's signed off on and you're really good to go there. But there's a lot of documents and control factors we like to put in place prior to it. So when we have a client who's going to go to the next step of starting to place an order, we require two to three weeks ahead of time to prepare all the proper documents to prepare a spec package, a specifications package. And in that spec package might be tooling instructions, documentation required on all the details that are in the sign off sample. It might be quality control limits. So in other words, if, let's say we're making a blue color, it can go as light as sky blue, but not as dark as navy blue. And we actually put visuals and percentages and examples of good versus bad. And so it takes time to prepare these documents. We need documents that are in compliance, maybe we need time for testing. So we have to allow all of those things. And compliance are things like warning labels. You see them all the time on products all over the place. So we've got to make sure that we specify those, otherwise yours won't come with them. So we make sure all of that is in one specification package along with the purchase order, along with a contract that is translated. If it's in a different language, it's translated and is also of course in English in our case. And so we do that and we put the whole thing together and we have all parties sign off on it. And it's not because we expect this to be a legal document, because it's really hard to enforce a legal document and this kind of contract overseas. But it's really almost like a memorandum of understanding. It's an understanding of these are the specifications we expect. Everyone understands them, everyone signed off on them. There's no misunderstanding in that process. It's all documented in the process, but it also is there as a follow up. So did we ask for that? Oh, it was a mistake in the documentation. So it holds every part of the party accountable for reviewing those. A couple of other things that we put in those are instruction sheets, package designs, like everything has a detailed out specification. From there we always put in a team. We have a team on the ground. Part of the reason that we do that is because we want to build a long term relationship with our suppliers, our vendors, our factories. We want to build a relationship in which they know that we want more business with them, that we want to grow our business with them, that we trust them, but we also have to put in place the systems to verify them. And with that we put in third party quality control experts, people we've used at various times in regions, and we just reallocate them to a different factory to review everything. For the most part, the cost of those things should be less than 10% of the overall order that you place. And with that we don't really worry because that 10% is way, way, way, way worth it compared to waiting the length of time it is to have it fully produced, shipped to you, received by you, and then find out that there's an error. You've lost way too much time in that process. So that 10% is worth the speed to market time of being able to catch things sooner in that quality control. They are supposed to review products in whatever way we spec if we want them. 100% inspection on a product, which we rarely do just because of the amount of time it takes and how much it annoys a factory. We like to do spot inspections and then if there's problems, then we'll do 100% inspection. We like to do incoming material inspections or anytime there's a circuit board or something electronic test them before they go into the product and before they go through the whole production system and come out too late and find out they don't even work. So we like to have various checks in the process. And again, this is something that is established with each different product and with each product specification package. So controlling the quality, the shipping, the warehousing, all of those things are also a part of it. So we also set up our warehouse, our logistics and all of those things. And so if it's not someone you've used, again, there's a whole specification in the process of how it works and, or working with partners who have a very standardized system and process that they use so that they'll share it with us. So we know very clearly who's responsible for making sure that the labels are right, for who's responsible for making sure of organizing the transport. Is it the factory? Is it our logistics people? So we really have to be clear in the whole process, because that's where delays happen. We also have to make sure who's responsible for duty documents, customs, that kind of thing. And so by controlling all the documentation in the process and clearly laying it out and making sure all parties are very clear on it, we have a much more streamlined, much more smooth production process and we save money and time in the process. I want to go back again and just Talk a little bit about how we handle sourcing and relationships with factories and what we do that's a little bit different, we handle the sourcing of products. So how we find factories in three ways. Number one, we just go out there just like you do, and we check Alibaba and we check around and we find competitive products. And we just make sure that we're comping so that we know, hey, we're going to buy a microphone, and that microphone is going to cost us $5 a unit. Okay, great. So average amount of features we want, we should expect that we should expect $5 a unit. And so that's great. It just gives us a benchmark to go on. But it also gives us an indication because in China, things are set up in an economic zone. So if you want bamboo products, there's a very specific zone that produces everything related to bamboo, from floors to towels, all in one region or one province. So it's really great. It makes it really easy for you to know where to go in the country, because it's such a big country to know where to go to shop for these things. And so sometimes if we don't have a contact in a particular product area, it's really great for us to be able to just use the directories like Alibaba and search for that and come up and find where those are. But here's the trap. If you use Alibaba exclusively, what happens is that you get stuck into what is likely to be a sales rep or a trading partner, and not necessarily the factory. And so we like to check that before we go and place any orders, except for buying samples. Sometimes we just buy samples that way, just to be fast about it. But when we're ready to go and place significantly sized orders, things beyond the very minimum of 500 units or less, and we're serious about bringing something in and continuing with it for a year to 18 months, to longer, then we really want to make sure we have a source that we can rely on, especially one that we might be able to grow with to do an original product. So we start with that private label product that A product, and then we move on to the B product of our original product. We want to make sure this is a really great factory that we can grow all the way through to mass market, retail with, or at least make it through the initial phase of that and then maybe second source. So we really want to make sure they're reliable, they're cooperative. And so we have a whole process that we go along the way and part of it is asking for quotes, finding out what their scalability in terms of like, how much does the price drop as we get up to 100,000 units, making phone calls, having people on the ground who go and see the factory at some point, us making trips so that we can build a relationship with the factory owner and their quality engineers and the people in their design and development or might be making samples for us. So we really want to put a face to that. Because when you're not just an email address, when you're a voice on Skype or a picture on Skype, if you're video chatting or video on Skype, or if you're there in person, you have a higher likelihood for a lot more cooperation and a lot better pricing, a lot better quality. They want to perform for you because they know you. So this is really critically important in our process of doing it. And we start really early on in it, making connections with these factories and building relationships and heading that all the way into this production model. So when we go to production, they feel like they're producing something for someone they know for someone. They want to be proud of what they're producing for you. And it makes the quality better, it makes the system better, it makes the flow better, it makes your priority, even if you don't have a very large initial order, makes your priority in their production schedule better as well. That's another reason why we want to have an additional three weeks on the front of any first order, because production schedules get established that way. So while you may have gotten a quote before, sometimes you have to get a final quote with a lead time assessed to it around the time that you're placing that purchase order. Because production schedules change at different times of year. So if you got a quote in September, but you actually don't place the order till November, you could be in a lot of trouble or difficulty with people getting production towards the end of the year. And so your schedule might go out or your lead time might extend out. Same thing happens around Chinese New Year. So you really want to make sure that you have a little buffer in your launch schedule and your launch timing to plan for that. And that's why we really start, because we want to find that out, especially if your product is timely. So in other words, if you were planning something that needed to come out in the spring, because it absolutely was a spring related product, and you place the order after Chinese New Year, if it slipped by even a week, you might not get it in time. So we want to be really careful with that. So that's a whole reason why we also do. Because I would rather kill a product and make it go out till the next year than miss the window of opportunity by a week or two and miss a holiday or miss a seasonal opportunity. So again, we really want to build that relationship. We want to have really strong documentation and we want to really have great follow up. So on the flip side of that is really making sure that you are checking things yourself. Get a unit shipped to you from your logistics warehouse, ship it in from Amazon, make sure you're checking everything yourself because no one's better to judge whether or not it turned out the way you expected it than you. I find too often that people are very hands off about their product altogether and they just, the warehouse touches it and the warehouse brings it in and they're like, well the box was fine, there was no damage. And then they send it right into Amazon. And it isn't until lots of returns come back from customers that they realize it didn't do what it said it would do or it was missing something or the instruction sheets weren't clear and the time to fix that is at the warehouse level, if you can, or right as you bring it in from the logistics warehouse. So if you can go there, if you can have them ship you one, it might be worth a day or two delay just to double check that yourself. It's totally up to you as to how you're building your brand. But you really, again, if your brand and your quality and all of that really matters to you, then you really want to make sure that it is achieving those goals. Because remember, brand is all about perception and how the customer is perceiving you and your product and it will come back to you in bad reviews and or lots of high returns. So I hope this really helps you kind of get a framework on producing it. And remember, this is so product specific that I'm sure you have hundreds of questions like does my product need testing and do I have to send it to a third party test lab and how long does that take? And of course it's different for every product. Do you need UL testing or do you need BIFMA testing or all of these things. I know I'm throwing acronyms out at you, but if you need them you should know that. So remember that that's what the membership site is there for. It's your safety net. We are your hazard protection plan. That's why the members is there for you. That's why you need to utilize the office hours. We have people who've been receiving products in and warehousing products for decades and we have people like Tim Bush who helps rep products and get them into mass market retail. All these kinds of people there to help you. The tens of thousands of dollars you'd have to pay in consulting fees or retainers to get their information is well worth your participation in this membership. So we want you to get the most out of them being there for you and utilize the Product Launch Hazards membership group.

Thank you for joining us on this episode of Product Launch Hazards. To get the most out of your membership, visit productlaunchhazards.com to join the Expert Office Hours Live and ask us your burning questions. Check out the resource library for document templates and guides and get exclusive articles and shares each day. Don't forget you can always book a private consult with any expert so you can out design, outsource and out profit your way to product launch success.