If you have a single source vendor for any of your critical supply needs, this is your “Achilles Heel”. What if your vendor disappears? Will it drive you out of business?
That is the problem that Paradise Galleries had around 2008. They had a single source in China for their doll production, and that source had all of their doll molds. Then one morning that vendor simply disappeared. Since that vendor had all of Paradise’s doll molds, Paradise didn’t survive and went out of business. A little while later the assets of Paradise was purchased by Marie Osmond, and the company was resurrected (she later sold the company).
Watching what happened to Paradise Galleries was a great concern to Denise and myself (at Bountiful Baby). We realized we had a business “Achilles Heel” of a single-source supplier for our kit production, and I started looking for a way to mitigate it.
We first investigated doing our own in-house manufacturing, but soon came to realize why all of the doll manufacturing had left the United States (a significant part of the reason was government regulations).
My next reaction was to expand our list of vendors that we were manufacturing our kits. At one time we had four different kit manufacturers, including one in Germany. Expanding to multiple suppliers made it so we no longer had a single-source supplier problem, but this solution had it’s own problems. One of the problems was maintaining consistency in our product line across multiple manufacturers— specifically with color and vinyl softness.
We tried to mitigate the color consistency problem by specifying our vinyl color via Pantone® color specifications. We even bought a special color scanner that would report exactly the Pantone® color of the vinyl.
This approach did not work. Color variations between manufacturers continued. Furthermore, the “softness” continued to vary— not just between manufacturers, but even between separate manufacturing runs with the same vendor.
At that time, various artists were having their kits produced in Germany, and to justify their higher kit prices, they were claiming German vinyl was higher quality. I have a nephew who has lived in Germany since the mid-1980’s, married a German girl, and has a German family. With their help, I researched German doll kit manufacturing, and arranged for Bountiful Baby to begin manufacturing in Germany. I later flew to Germany to visit the German factory, and witnessed not only our own kits being manufactured, but the kits of many other artists. We kept it secret which kits were manufactured by which vendor, partly to see what the customer thought was the highest quality. And guess what? It was not the German kits.
What we found was that when you expand to multiple suppliers, invariably one of those suppliers gives the best overall value for the money. And that left us feeling like we were wasting our time and money on the others (including the German factory).
What to do?
About that time, a friend at an Construction Engineering company showed me the following video (this was before the video was uploaded to Youtube, so I saw it before the date shown on the video below):
When I saw the video, a light went on in my head. This looked to me like a possible solution to our “Achilles Heel” single-source vendor problem was to scan the sculpts, print a 3D replica of the sculpt, and send the replica to the vendor. That way if the vendor later disappeared, we could simply reprint the sculpt, and send it to a different vendor. We could then consolidate back down to a single vendor, but increase our “Days Of Stock” so that if the vendor went away, we had ample time to switch to another vendor before running out of stock.
That was the idea. But actually implementation of the idea was fraught with problems. It turned out to not be an easy path. At all.
Jay Leno used the NextEngine 3D scanner in that video. It’s cost was only $2995.00, and NextEngine had a 30-day money back guarantee. So I bought one. It didn’t take long to realize it was insufficient for our needs, and so I sent it back for a refund.
We also looked at the 3D printer in that video. It was only $14,995.00, but it didn’t take us long to figure out that the resolution of the printer was far too low for our needs.
So neither the scanner nor the 3D printer in that video was going to work.
This in turn led to a huge amount of research into the technology, including flying to different manufacturers and testing out their products in person. During this time, we learned that 3D scanning technology was divided into two main categories: (1) laser scanning, and (2) photometric scanning (which is similar to flash photography). Realizing that we could scan babies with a photometric scanner (you can’t do it with a laser, for obvious reasons), we soon modified our vision to not just scan the sculpts, but to scan real babies.
What we eventually discovered was that, at that point in time, the technology to do what we wanted simply did not yet exist. It was very close, but not quite there. We had to wait about four more years for the technology to catch up with the vision before we could actually release something that used this technology.
That’s a bit of the history behind our efforts to create our Realborn® brand of kits that are based on scans of real babies.
As we consolidated our vendors back down to fewer vendors, we simultaneously tried to increase our available “Days of Stock” for each kit. I know our results of this have been inconsistent, but we were really trying to not only keep everything in stock, but have an ample amount of stock. Our “Days of Stock” target was (at the time) 270 days, which meant that we wanted to keep at least 9 months of available stock on each and every kit.
Then the recession hit. Yes, we are in a recession, regardless of what the government may otherwise say. And with the recession, sales slowed. So our calculated 270+ “Days of Stock” soared to two years or more of stock, based on the slower sales rate. It also made us realize we needed to trim our offerings to a more sustainable core.
Which is why we have had so many “Closeout Kits”.
And, with two or three years of stock on many of those Closeout Kits, you can see why some of them have been advertised as “Closeouts” now for several months.
But at these steeply discounted closeout prices, they are moving. About 2/3 of our kits targeted for closeout have now been sold out, and of the remaining, a significant portion have been sold, even though they are still in stock.
This won’t last forever. So if you want any of these remaining fantastic closeout deals, you will need to act. If you are not sure which ones they are, just click the “CLOSEOUT KITS” link in our menu bar.
Nevin Pratt, CEO