Lessons from Supply Chain Challenges

Going from a larger organisation executive to a small business owner is challenging in so many ways, but especially because you can’t really delegate many things. You just have to figure things out as you go.

As an example, in business school, you learn a lot about supply chain challenges. One of the most critical components is timing – making sure you order everything just in time to ensure that you aren’t carrying too much inventory, but also enough so that you don’t hold up the manufacturing process. However, it’s a lot easier to do on paper than in reality.

Most of my career has been in service based businesses or organisations. I did own a physical products business about 5 years ago called The Great Australian Tea Company. I can’t say that I learned enough from that business though as we were only market testing 2 SKUs, and I outsourced the product making.

Now with Harvestcare, and my hotel line, Notions – I’m learning a lot about supply chain challenges.

As I write this, I have plenty of inventory, but not necessarily the right things. And as I add more product SKUs, this seems to be a constant challenge too. I try not to order too much when I’m testing ideas, but sometimes I can’t get enough of what I need, when I need it especially for anything requiring to be imported during the Covid-19 crisis.

In the restaurant industry where I grew up, they tend to rely on just a couple of suppliers to provide most of their ingredients. And because most of it is perishable, they have to be an efficient supply chain. Furthermore, they can often substitute things like vegetables to make a certain dish.

I’m in the middle of creating my supply chain now, and it is NOT efficient yet. While my ingredients are perishable, generally I have at least a 12 month shelf-life or more. So, while I won’t often lose ingredients due to spoilage, it is still a waste of money if it’s just sitting around, and especially if I never use it. In addition, I can’t just change the ingredients without ordering new labels.

Challenge with Product Labels

Product labels in particular are proving to be a nightmare for my supply chain, but I can’t figure out a better, cost-effective solution at the moment. I’d love to get some recommendations for how to do this better.

It often takes more than a week to get them made even though I do the print-ready design work myself. If I don’t use all the stickers I ordered, like in the case where I change the ingredients in a product, the individual cost per label goes up significantly.

This has happened when I had to change the ingredients in my hand sanitiser products three times. Then the demand dried up as supply became more available. So, a label went from 30 cents each to over $1 each because I didn’t use them all.

I’ve found that paper labels with an inkjet printer won’t work because the ink becomes runny with water – obviously an issue for products used in the bathroom. There are more options with a typical laser jet (which I’ll need to buy – ugh!), but they don’t make blanks at the right sizes for some of my products like the 15ml round tins for lipgloss.

Also, I have found it difficult to line up the labels properly so that they print on the stickers correctly even when I use the Avery template.

I’ve already tried a Brother’s label maker which also costs about $1/label to use. However, I’m also limited in sizes and right now they are not printing with the right colour tone i.e. orange instead of yellow. The Brother’s support person was useless.

In the long-term I think I’ll either print directly on the aluminium packaging or buy a professional labelling machine. For now, I just need a more flexible, cost efficient yet good quality option. Any ideas to help me for now?


Speaking of lip gloss, I have a bottleneck with the tins right now. The tins are stuck with the carrier as it hasn’t moved since it was first picked up over a week ago in Melbourne. Normally, it only takes a day or two. I’ve been bugging the supplier to push the carrier as there’s no obvious reason why it hasn’t moved.

So, for the moment I’m reusing my current tins for trials and testing. It can be time consuming to clean them. My main reason for doing this is because I don’t want to recycle them when there still is good life for them. Still, I can’t reuse them for the purpose of selling which means I can’t launch the product as I had intended this week.

Reusing tins for trials and tests
Reusing tins for trials and tests

My lessons learned about supply chain challenges so far?

I’m still new to a products-based business, and the therefore I’m learning a lot as I build out the supply chain for these brands. Here are some of my lessons learned so far.

  • When you’re experimenting, order as little of an ingredient as possible until you’re sure that you’ll use it in a product – even if the per unit cost is expensive this way.
  • Don’t order ingredients unless you have a clear formula in mind where it could be used. I don’t have the budget for “nice to have” ingredients on the shelf right now.
  • Proper storage is critical to extend shelf-life – i.e. avoid sun and oxygen.
  • Shop around for prices. It might be easier to order from one supplier, but there can be significant differences in prices as you go up in bulk quantities.
  • For me, the origin of the product is also important. If it doesn’t say Australian made, it’s probably imported.
  • Beware of shipping costs which can significantly increase per unit costs especially in smaller orders.
  • Larger quantities doesn’t always reduce unit cost that much. Do the math first to decide as it might make more sense to order smaller quantities to minimise inventory costs.
  • Keep track of typical delivery times for each supplier. I know that I can get products within 24 hours from one company because they use Toll as a carrier and they always ship fast. Others are less consistent.
  • Give yourself an extra week minimum for a product launch knowing that supplies will come in later than expected.
  • A product in country is more valuable than a promise of a cheaper product coming from overseas.
  • Prepare to buy extra products (especially for non-perishable items) during end of year sales as the prices can be significantly discounted.
  • Don’t feel the need to remain loyal to one supplier if they are not meeting your needs – such as with delivery times in my case.
  • Sitting inventory is like cash stuck in a safe that can’t be spent. Use it, sell it or find another purpose like promotions as soon as possible.

What other lessons learned from supply chain challenges lesson do you have to share for a new business? I know that I have a lot to learn.

Hotel Amenity Pilot is a Go

It’s a go for our non-plastic hotel amenity pilot! While I won’t make a dime from this 1 month pilot (and will likely lose some money), it’s worth it to test the solutions that we are considering right now.

There are so many little things to consider such as how easy it is to dent our aluminium tins. About half of the tins from one sample pack that came in via Amazon.com.au showed up with dents or scratches.

I’m also considering the labelling requirements. I want to print right on the packaging from the start, but it costs a lot more to do this with small volumes. However, using a compostable paper labels isn’t possible because it’s not waterproof – a “no no” in bathrooms where they might discard unused tins only because the wet label makes it look used.

Right now, I think I’m going to have to order two lots of tins. Some that are blank, and then I buy plastic labels to hand place on them. And others that have the printing on them from the start. This will allow us to test the printing capabilities during the pilot itself.

The buzz of winning work

It’s strange that when I used to win multi-million dollar contracts back in my IT days, it never gave me a buzz like it gave other sales people. I was more proud of the proposals I turned in that solved a customer’s problems, and therefore it didn’t mater it we won or lost to me even though I would only be rewarded if we won.

For this hotel amenity pilot, I’m excited even though it will likely cost me more than I make to do this. It’s the fact that a hotel is willing to take a chance on my crazy idea that can really reduce the amount of single-use plastic in hotels locally and nationally if I move fast enough. It’s the potential impact down the road that is giving me a buzz. How awesome would it be to literally change the hotel industry’s practices to benefit the environment!

First prototype tests failed

It was an incredibly frustrating day as my first prototype tests failed. While I didn’t expect the prototype to be perfect, I did believe that any failure would be a fault in my specifications, not because it wasn’t made properly.

As mentioned last week, my new prototype won’t stay together because the connector piece is still failing off. I thought I solved it last night by putting painter’s tape around the pin to make it slightly larger, but it didn’t hold.

The only good thing about today is that I did learn some new things about what the customer needs. The product itself also showed all promise that it would solve the intended problems with their pet. Oh yes, I also got a lot of doggie love.

Robert the Dog as Prototype Tester
Prototype Tester – Robert the Dog

Nevertheless, I’m clearly going to have to come up with a different solution over the next few weeks to avoid another prototype test failure. I only have a little bit of time left to demonstrate it properly on video for the crowdfunding campaign.

What if my prototype fails?

I had an “oh shit” moment yesterday when I suddenly thought, “What if my prototype fails?” In reality, that’s why you have a prototype – so that you can fully test it and make adjustments. However based on my schedule of events, I won’t have time to properly test the prototype before I need to make the video for the crowdfunding campaign (though it would be fully tested by the time we manufacturer the product itself).

Speaking with my manufacturer this week, it also looks like the company that’s making the prototype doesn’t have enough 3D printing feedstock in the same colour to do it right now. It will delay things by three weeks if I insist that all the panels are in the same colour of white/cream.

Mismatched 3D printer plastic feedstock for my prototype

We’re going to see if they can make it in a different type of plastic – PP #5 (like a detergent bottle) versus the originally ordered ABS #7 (like legos), and perhaps they might have enough in the same colour then. Apparently, this is not an issue even though we had actually planned to manufacturer in HDPE #2 (milk jugs) because of the additives that need to be used. If your confused, more info about the different types of plastics can be found here.

Regardless, we can’t afford any delays in receiving the prototype. So, I told my manufacturer that I accept the fact that we might have to paint the prototype if it arrives in mismatched colours. It’s just a last resort though.

I also told him that after the videotaping was over, we were going to take the prototype to his house to give it a good workout to make sure that it does pass all of the tests prior to making it. If the prototype fails, it better be then. I’m sure that too will be a good video.

Meeting with my manufacturer

Today I spent the day in Brisbane to have a meeting with my manufacturer. The primary objective was to finalise the design on Product #3 as I need: 1) to know how much I need to raise with the crowdfunding campaign; and 2) we need to apply for the provisional patent before the campaign starts.

This gives us a deadline of design completion and costs calculated by end of August and the prototype complete by mid-September. I know that we are really pushing that deadline, but it is doable as there really is only one final design feature to decide.

Moving forward!

I need a warehouse solution

I’m heading to Brisbane next week to meet again with my manufacturer. As we get closer to having a physical product, I recognise that I have a logistics challenge. I need a warehouse solution very soon.

My products aren’t that heavy, but big. In fact, they’re so big that they will arrive via pallets – lots of them. If I lived in a house, perhaps they could have everything delivered there to store things in my garage. But, I don’t. I live in a multi-story apartment complex.

I looked into getting a storage unit locally. The smallest one costs about $100/month. However, it doesn’t allow me to have 3rd party transportation trucks deliver there. I need a warehouse solution with a physical address that does.

A couple of the government-funded accelerators in town might be able to provide me with cheaper co-working office space, but I still don’t have a storage space for inventory. Furthermore, where would they drop off my huge deliveries?

I looked at renting a private office-space in a co-working environment. I figured that if the office was big enough I might be able to store some products there. However, the one I chatted to yesterday wanted nearly $3000/month. That’s the price of an entire warehouse in my home city (like this one) excluding utilities and any fit-out requirements.

$30k warehouse solution option

As a new start-up, there’s no way that I want to add $30k+ of overhead to my expenses when I’m not even paying myself yet, nor have any employees to house in an office space.

After realising all of these options will not work at this stage of the business, I feel that I only have one or two possibly other options. The first one is to ask a friend if he might sublease me some space in his wood-making factory. Though, in reality I’d be surprised if he said yes since he would also have to deal with my deliveries.

The more viable warehouse option is to consider a fulfilment company where I outsource this function. While I have thought of this earlier, I wasn’t planning to do it at the beginning because I wanted more control over the quality of customer service and frankly to save on costs. Now, I realise that I might not have a choice in the matter as it will likely be my most affordable option.

Therefore, it looks like my job now is to find the right fulfilment partner that I can trust to treat the customer right.

There doesn’t appear to be any in Canberra. Therefore, I’ll look for one in Brisbane. It only makes sense to me to find a company in the same city as my manufacturer to save money on transportation, as well as to reduce emissions.

On Monday, I’ll call a bunch of companies. Then, I’ll ask for a meeting for Wednesday where I can see their warehouses in person. Fingers crossed that I can locate the right ones at the right price.

How I chose a manufacturer

I flew to Brisbane today to meet with a manufacturer (amongst another meetings). It’s been a long process, but I finally did chose a manufacturer for two of my products. Yay!!!

Here’s my weekly video update that explains my decision:

This manufacturer is smaller than the other ones, but it seems to be making them much more flexible with lower overheads. This is obviously really important for start-ups like mine with a smaller budget.

For next steps, they will review the brief and designs I sent before and then get started on the “Manufacturing for Design” phase. From that, I should be able to get firm prices for moulds and units. That’s what I need for the business case to investors.

While I’m waiting, I need to chase some leads for intrusion manufacturers for Product #1. I’ve also been given a lead for someone who appears to be a world-class product designer to see if he might be able to give me some advice for the same product.

Overall, it’s been a very productive week at The Refoundry!

How a little bit of plastic can do so much good and bad

Have you ever wondered how plastic products are made? They begin as a petroleum liquid or gas, and are turned into these pellets or microbeads below:

Virgin plastic pellets

I took this picture at one of the manufacturing plants I visited this week. These pieces are about the size of a rice kernel, and the few black ones in this batch will make the whole mix that colour. Because of the size of the beads, they’re easy to melt and then mould into something useful.

Now imagine shipping containers full of these microbeads spilling into the ocean. This is what was found in 2017 on beaches in the UK after that occurred.

Nurdles on a beach
Credit: Deborah Fuchs

The reality is that any plastic product will eventually break back down into these rice size pieces and even smaller over time. Yet, it will be centuries before they can degrade back to petroleum.

This is why there’s so much talk about plastic in the news these days. This is not new knowledge. It’s just that the physical impacts to our environment and wildlife have finally reached such high levels that it’s hard to ignore.

Plastic isn’t a bad product by itself. It’s light, durable, flexible, and lasts forever – the same traits that are also causing harm to Mother Nature. The challenge for product manufacturers is to design their goods for the full cycle of life, not just the making stage.

If everyone thought about the disposal of the product and not just the making and using stages, they would probably make it very differently.

At The Refoundry, we will have a take back system in place where any used product can be sent back to use to be donated for reuse or recycled back into the same product. It will no doubt be expensive do to this with storage and transport costs, but I don’t see how we can consider ourselves an environmental social enterprise and not do this. I can only hope that our customers will value this too.

Melbourne – meeting manufacturers for the first time

I got into my car at 5am this morning to drive to the airport when I realised that I left $60 of perishable groceries in the back seat from the night before. Ugh! The first sign that I’m trying to do too much. At least the car didn’t stink yet.

My flight to Melbourne was to meet with a manufacturer (cancelled another meeting with Mfg #4), as well as a publisher regarding a side-hustle.

There were so many learnings from the mfg meeting that I will summarise in a blog post after I meet with the final company on Thursday in Brisbane. For the moment, let’s just say that it’s pretty incredible to see their capabilities in person. The video below shows millions of dollars in machines. Imagine starting this business from scratch!

After a morning of meetings, I raced back to Canberra to attend a networking event tonight for an accelerator program. I always meet so many interesting people when I goes to these, and this night was no exception. I have the business cards of an engineer and a private equity company to follow-up on tomorrow.

Another Day in the Life of an Entrepreneur!

Looking for a mentor in plastics manufacturing

One of the most difficult things about starting something completely new is when you don’t have a coach or mentor. While Google and YouTube has been decent in giving me an understanding of the recycled plastics manufacturing process, it hasn’t been so useful in answering my specific questions – like around pricing.

As much as I’ve asked around for the last few months, I still haven’t found a mentor or coach locally with plastics manufacturing experience. This is partially to do because I live in Canberra, Australia which is the nation’s capital. Here, most people work for or with the local and federal government rather than in industries like manufacturing.

So, I’ve expanded my network to outside of Canberra – first to Brisbane. Next week, I’ll be meeting with the CEO of a social enterprise accelerator who has already invested in circular economy type businesses like mine.

I’m more interested in meeting the other companies than I am in the program itself. It would be amazing to find a peer group of complimentary businesses all trying to do great things for the environment. With that type of network, I know that learning curve will flatten sooner too.

Fingers crossed.