BOARD GAME BIZ podcast – EPISODE 8 – The Biggest Mistake In Selecting Games Factories & How To Manage Your Factories

To listen to Episode 8, just click here, or you can read the transcript of the Episode below:

• Hello and welcome to Episode 8 of the Board Game Biz podcast.
• I’m your host Steve Reece
• And welcome to Episode 8, where we’re going to be looking at how to find and manage effective Games factories
• Before we get onto that though, just wanted to give you a quick run through of Our Game business Consultancy services in case we can be of help to you:
  1. Consultancy calls
  2. Retainer
  3. Factory finding
  4. Sales rep – we work with a limited number of Games originators and developers as international sales reps, get in touch for more details – but please, no unsolicited game submissions, just drop us a line and tell us what you need help with & we’ll guide you through our process from there.

https://www.boardgamebiz.com/index.php/board-game-business-consultancy-services/

• Anyway, that’s enough of all that…let’s get on with today’s podcast which is looking at what you need to know about Games factories

THE BIGGEST MISTAKE PEOPLE MAKE IN SELECTING GAMES FACTORIES

• OK, so let’s start with the answer to the headline question – by far the most common and most distracting mistake people make in selecting factories is just going with the factory with the lowest quotes.

• Now clearly the sums all have to add up, and if you can save 10% on your manufacturing, that’s a significant amount across your entire production.

• Manufacturing is by far the biggest cost we have in the board games business normally. You might be paying 20-30% of your sales revenues to your factories, so it’s obviously important to make sure you are getting competitive costings.

• The challenge though with chasing lowest cost manufacturing as the primary driver or selection factor is that it ignores several other factors which are arguably equally, and in some cases MORE important than the cost.

• What are those other factors? Well by far the most important criteria for success in your Sourcing function is your ability to ensure effective supply. I.e. if you find a factory who is 10% cheaper, but who is always 2 months late with their shipments, that’s not going to be very helpful as you try to react to demand in the market.

• Moreover though, from a strategic perspective, right now many of the world’s Games are manufactured in China. There is a perception, especially in the USA currently, that relying heavily on China in uncertain times from a geopolitical perspective is risky. Walmart (& other retailers) are actively telling their suppliers to source more products from outside of China.

• If the unthinkable happened, and conflict flared across the Taiwan strait, supply from China could be heavily disrupted, sanctioned or at worst prohibited.

• So clearly securing production capacity is more important than maximising profits down to the finest degree – if you can’t produce your products you aren’t in business, or to put it more bluntly, if you can’t make ‘em, you can’t sell ‘em!

• The other factors to consider of course are technical capabilities, audit and regulatory compliance (you know, the really exciting stuff!), port location, resupply timing, free capacity at peak periods, equipment used, reputation and honesty and probably a few more points.

• The bottom line on factory selection though his don’t get distracted by chasing the lowest ever cost. For sure you may want to haggle, and negotiate on pricing, but you have to keep an eye on the other factors.

MANAGING FACTORIES

• In terms of managing your suppliers, there are some things I have learnt across the years that might help you. Believe it or not I have actually sat on the Board of Directors of major factories as a Non-Executive Director, so I have seen both sides of how Games companies work with their factories, and have learnt a lot about what allows factories to work better for you.

• Firstly, it’s best to let your factories know as far in advance as you can about how many Games they will be asked to produce, details of the Games and your approximate ordering vs delivery timelines.

• The major element which is very problematic for factories is to manage is the right level of seasonal labour. Because production tends to peak in around July-August- in the Games business, Games factories have to get most of their annual production churned out in a vary frenetic limited period of time.

• And if you are playing about not confirming your orders, you are making it hard for the factory to hire in and train up enough people in enough time to be ready for your peak production period, but also every other customers peak period.

• The other key point to make here is that if you do not visit your factories you have no idea of the conditions and environment from which your products come. That’s just a big silly risk to take. What if your factory have really sloppy discipline, but tend to pull together and clean their act up around audit times? That means you will get the right certificates, but be non-compliant most of the time without realising it.

• If your producst go from your factory to the warehouse to your customers with no inspection by your team then you are putting your business longevity entirely in the hands of the factory.

• And most of the time that might be all right, but when you have been around a while like I have, eventually you see what happens when things go wrong on that front.

• One thing to watch for is the slow slipping away of factory standards and or viability. Sometimes when you buy from the same factory year after year you don’t notice changes that creep up on you.

• No factory in the world in this business calls you and says, hey, our business is getting a bit touch and go in terms of viability, we’re probably going to go out of business in the next 1 to two years. Instead, they just go bust one day & stop supplying. If that happens to you in the midst of peak production season you are in big trouble.

• Which brings me to the last major point in this episode – one of the most critical areas in Games manufacturing is having the right amount of active factories, and an idea of who else you could go to in an emergency. When container shipping costs went through the roof a couple of years back, many companies had to scramble & chase already constrained capacity in nearshore manufacturing locations to get around the issue.

• There is no reason to leave things to chance in this way. Regardless of the size of your company, you should know what your options are if you need to make changes, and you should NEVER have all your eggs in one basket. There are plenty of good Games suppliers out there, so you need to split our your production across more than one of them. If you only manufacture 5,000 units per year, you can’t really do this, but if you are beyon that level you should be looking to split production. Yes that means a bit of logistical fun and games to consolidate shipments, but it will be worth it to reduce the risk of factory failure.

OUTRO

• So, that brings us to the end of Episode 8. I hope this episode was informative for you.
• If you enjoyed this episode, please consider rating or reviewing Board Game Biz on your podcast platform of choice. And remember, for consulting, manufacturing support, or general inquiries, visit BoardGameBiz.com.
• Thanks for listening, and as always, Game on! We’ll be back with more soon!

To listen to this episode, just click here: https://sites.libsyn.com/556277/episode-8-how-to-find-manage-reliable-games-factories-avoiding-major-production-disasters