Project Everest

[Experiment Results]: Exploring options for importing pre cut sheet metal

Reference the Experiment Design Post:

Exploring options for importing pre cut sheet metal for local assembly of Buka 5.0/5.1

 

Reassert Lean Phase: Channels

Reassert Assumption: That it is feasible to source the Buka 5.1’s by importing the metal pre-cut and assembling them in Fiji.

  1. That the total cost of materials and manufacturing will be below $40FJD per stove.

  2. That it is possible to source sufficient materials from an imported source to manufacture over 200 stoves per month in Fiji.

  3. That local manufacturers have the capacity to manufacture over 200 stoves a month.



Results:
our green light point was that we could verify that it would be possible to manufacture stoves from pre cut sheets for 40fjd and be capable of processing over 200 per month. To try and validate this the team looked into importing precut sheets from china, and Australia. Australia was initially looked into as a short-term supply solution considering when the team entered in the month with no buka 5.1 stoves to work with for prototyping and value prop testing. Australia was seen as a reliable short-term supply of precut sheets, and was also seen as a potential place for long term future manufacturing. China was seen as a more viable long-term supply however, so there was more emphasis placed on exploring this option. So for this experiment the team looked in contacting 8 Chinese manufacturers and 8 Australian manufacturers to attain quotes. Quotes were collected and complied into the spreadsheet linked below:

https://docs.google.com/spreadsheets/d/1uw5WKC6mHFidMMkoFqmxjxfvD5GXEaRk7O1c3pt67Dg/edit#gid=2035130348

 

summarized results can be found in the table below:

Chinese Suppliers

outer/piece (USD)

inner/piece (USD)

qty

transport

total/piece

price in FJD

Dalian Baichao Metal Manufacture Co.,Ltd.

$4.27

$3.31

100

$259

$10.17

$21.56

Hofen Machinery (Shanghai) Co., Ltd.

$12

$12

20

$359

$41.95

$88.93

Laizhou Tianjia Hardware Co., LTD.

$9.08

$7.16

100

 

$16.24

$34.43

Shenzhen Peng Feng Precision Hardware Co.,Ltd.

$9.10

$3.70

100

$400.00

$16.80

$35.62

Qingdao Suntech Machinery Co., Ltd.

$5.54

$4.62

100

$250

$12.66

$26.84

Shenzhen Yaopeng Metal Products Co., Ltd.

$17.50

$6.20

200

 

$23.70

$50.24

Xiamen Goldcattle Plastic & Metal Products Co., Ltd.

$9.20

$11.50

200

 

$20.70

$43.88

 

Australian suppliers

quote/stove (AUD)

Qty

price in FJD

RCR Laser

$116.31

1

$176.79

Sonnex

$38.49

30

$58.50

Metaltex

$227.24

1

$345.40

West Coast sheet metal

$66

1

$100.32

Darwin sheet metal

$220

1

$334.40

All Plates Sheet metal

$44.70

10

$67.94

 

from the spreadsheet it can be generally determined that importing laser cut sheets from Australia does not achieve a green light as the price to supply and cut sheets alone from all the laser cutters contacted in Australia exceeds 40fjd with the cheapest option being $38.5AUD per stove unit, which from the exchange rate at the time of the quote translates into $58.5fjd. On the other Hand, the Chinese sheet metal cutters do seem more viable with two suppliers; “Dalian Baichao Metal Manufacture Co.,Ltd.” And ”Qingdao Suntech Machinery Co., Ltd.” Being able to supply and cut sheets for one stove for less than 30fjd, which achieves the 40fjd cap quite conformably while maintaining suitable margin for assembly (still not yet confirmed). Additionally, from the quantities given on the more expanded spreadsheet on the Gdrive there were many manufacturers that were comfortable given quotes at up to 200 pieces for each, so the capacities appear to be suitable, if the scale demands it.

 

Validated Learning:

 

In regards to supply form australia, the analysis and validation of it is somewhat incomplete. Initially Australia was only seen as a short-term supply solution just so there could be precut sheets available to given to local manufacturers. However, as the project went on, a pivot was made and local manufacturing from local supply was deemed a more viable short-term supply chain after a trip to Suva determined that “Mechanical services limited” could potentially be a viable short term, and potentially long term, larger scale manufacturer. As a result of Australia being only looked into as a short-term supplier, the price quotes for large quantities of sheet metal were not obtained. This resulted in skewed data, that isn’t completely relevant when looking into manufacturing 200 stoves a month as the price of sheet metal cutting/unit decreases considerably when large multiples of sheets are getting cut at a time. Additionally, since only short-term supply is considered the cost of actually shipping sheets to Fiji was not considered, only the cost of supply and cutting so the cost obtained is overall not very reflective what a fully autonomous supply chain would cost.

 

A major roadblock in the validating of this experiment, was finding the price quotes for assembly of the precut sheets. With the visit to Mechanical services limited to get a 5.1 prototype manufactured, resulted in a pivot to local manufacturing from locally sourced materials (in the short term at least), as a result confirming the viability of precut supply chain was put on the sideline in favor of solidifying the relationship with mechanical services limited. So in the visits to mechanical services limited we were unable to attain quotes for how much simply assembling a pre cut sheet would be, as it wasn’t the focus of our visit.

 

Additionally, another roadblock was the fact that there were no pre cut sheets of the stove that were available to show to manufacturers that could be capable of bending and welding/riveting as necessary. If the precut supply chain was pursued this would be essential in communicating with manufacturers the requirements of assembly to get quotes, and would ultimately broaden the range of available manufacturers

 

Another issue with the pricing found was that the design is not finished and as a result is still subject to change, after testing with the 5.1 it was deemed that the outer skirt made of galvanized steel could be problematic as the galvanization would deteriorate and potentially become airborne which could cause a health hazard, as a result the outer skirt material needs reconsidering, if this becomes an issue. Also, the initial thickness investigated was .7mm however after talking to local manufacturers in Suva this was deemed too thin, however most of the quotes had already been attained were for this .7mm thickness. Additionally, The lack of understanding of technical details when first asking for quotes led to one of the pieces of the stove, the tray, not being included for quoting form manufacturers.

 

With the focus pivoting, trekkers being reassigned positions and places, the continuation of this experiment was not a high priority for the team. The trekkers specifically working on this experiment were reassigned to other areas of the project, leaving the follow up to this experiment difficult, especially when work on local manufacturing from local materials was determined viable.

 Next Move:

Despite these hurdles and inconveniences, this supply chain may be viable if local assembly is determined to be possible within the required budget, as of right now this experiment is deemed ongoing and further testing of this will need to be performed by future teams with updated design.

 

Ultimately supply from Australia under the current 40FJD per stove budget does not appear to be viable and is likely not worth following up on. For the continuation of the experiment focus should be directed at the contacted Chinese manufacturers and exploring possibilities with them and establishing the viability of local assembly from the precut sheets. To do this it may be required to order some sample pre cut sheets to give to local manufactures to see if they can successfully assemble a stove, so arranging for the cutting of some test sheets may be necessary.

edited on 24th January 2019, 22:01 by Tariq Uddin

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