An Official Service Provider

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Yesterday afternoon it was confirmed our little fulfilment business became an official supplier for Walmart. Our company has been registered and the only remaining part left is a audit through an official visit later this year. The other part of this is that we can now supply other products and we have been slowly testing the water on other lines. This we are already doing and last week within 1 hour we sold 5 items which are not available in SA highlighting there is a definite need for that item.

The lucky break was when the previous supplier had a knife found in his products and his contract has since been cancelled. I suppose this is what happens when you take the eye off the ball and you are not hands on. His loss is my gain and now there is no looking back.

The punch bag business is not massive in South Africa, but there is still decent money to be made if you are smart. I know the projected numbers and what we are expected to supply each month which is roughly 90% of the local market requirements. There is one other supplier and from reading between the lines after speaking with another client they will have their orders blocked going forward possibly by January next year. This will not be profitable for them having such small numbers and they should disappear leaving us with the entire market. This supplier undercut their clients price supplying someone else so this is entirely their own doing and these are the repercussions of being too greedy.

Assemblies lines is my forte and the challenge I enjoy because it is a constant learning curve until you have mastered that product. The previous bicycle assembly line grew from a few hundred daily into a few thousand and when I walked away could do this with my eyes closed and could tell if the plant was working correctly by the noise it created.

The first punch bag orders are due in less than 3 weeks and I do not expect the first few months to be smooth sailing mainly because I need to work the plant in order to make savings. If we can break even on the August orders I will be more than happy and only expect to start seeing profit by around November, December or possibly January depending on how much needs to be reinvested.

I have some ideas in my head and those items now need to be manufactured by an engineering firm or something that is similar ready made being adapted. This is where the investment is required as this will reduce the numbers of employees required speeding up the assembly line process which ultimately equals more profit.

This assembly production line is capable of paying for the entire business if done correctly and why paying careful attention to detail is required. If you can get your costings and purchases correct then that is where the profit is and this is what I am currently working on. By the time I am finished there will be no wastage and this will be a lean mean machine offering a superior product whilst making very good profit.

The next 3 weeks will be very busy putting things in place and then the learning period will start once the assembly process kicks into gear. This will be a constant period of change until we find the sweet spot of 1 completed item every 5 minutes and until that happens there is serious work that needs to be done. If we consider we know we can do 1 every 20 minutes now so this needs to be 4 times faster without adding extra staff members. I need to get this right as this is one business idea that I plan to replicate in Europe within the next 2 years where the market is far bigger.

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