Moderator – Wayne Layugan – Project Manager, Innovate Hawaii – wlayugan@htdc.org – 808-539-3702

Panelists: 

  • Angie H – Sky Dreams LLC
  • Dylan B – Manoa Chocolate  (no show)
  • Blaine A – The Original Maui Crisps: Artisanal Beef Chips
  • Wayne I – Innovate Hawaii

 

When you get a big order, how will you fulfill it?

  • Supply Chain, $$$, Equipment, Workforce  AKA  4 M’s – Materials, Money, Machine, Man power

 

Supply Chain

  • FTZ – Low cost storage warehouse for foreign shipments
    • Available for domestic shipments too, but higher cost
  • Maui Crisps
    • Order 6 weeks out, gets stored at HFM freezers for free which has saved a ton of money
  • Sky Dreams
    • Stores supplies in garage + has 2 sewing machines in there
  • When thinking about scaling up, make sure to consider inventory storage costs, upfront cash costs
    • Build up the amount you need, but try not to overproduce
  • Keep in constant contact with your supplier
    • Ex: If you go to a tradeshow, let your supplier know, otherwise they won’t know the huge demand or P.O. that will come in the 2 weeks after the show finishes
  • Sky Dreams
    • At her first show, she went over-prepared for the huge order she was expecting but never came
    • At the Tokyo Gift Show, don’t expect huge orders the first time you go. Give it 2-3 times before really expecting to get those types of orders

 

FTZ9.org – look for David Sikkink 

$$$

  • Great you got the order, now you have to buy the materials and get the work done
  • SBA has some loan guarantee export financing options
  • Qualifying for a loan can be challenging, so when you go to the bank, make sure you have your export plan set up, good financial statements, and good financial management system
    • SBDC provides FREE services to help businesses with setting that up
  • XM Bank in Washington DC offers loan guarantees and insurance
    • Easier for large businesses to take advantage of this compared to small ones
  • Sky Dreams
    • Nomi (Bank of Hawaii) – great knowledge on export loans
  • Maui Crisps 
    • Have a connection/friendship with your banker, get to know each other, so when you go to pitch to the bank it’s not fresh and they understand you and your business
  • Manoa Chocolate
    • Meeting SBDC was one of the greatest stepping stones made
    • You tell SBDC where you want to be and they will really work to get you there
    • As long as you become a numbers person or get a numbers person, you’ll be ok
    • Did a Kickstarter, which really helped kickstart the business
    • Go to the bank when you don’t need money and get as much out of them as you possibly can for when you do need money down the line
  • Local packaging companies?
    • Sky Dreams uses Islands Marketing – basic cellane packaging
    • Manoa Chocolate
      • Electric Pencil (part of HonBlue and Hagadone)
      • Savor Brands – owns part of a factory in China, but they ensure quality

 

The Value Stream

  • Value-added activity
    • An activity that changes the fit, form, or function, done right the first time and is something the customer is willing to pay for
  • Non-value added activity 
    • Those activities that take time or resources, but do not directly contribute to the product/service
  • Lean – eliminating the Eight (8) Wastes – DOWNTIME
    • Defects
    • Overproduction
    • Waiting
    • Non-utilized talent
    • Transportation  
    • Inventory
    • Motion  
    • Excessive Processing
  • Focus on waste to increase VA and lower NVA
  • Process flow – spaghetti layout
    • Follow the path your product follows in the office
    • If there are any crossovers, it will lower the efficiency

 

Equipment

  • Innovate Hawaii – 1 of 51 national centers across the U.S
  • Maui Crisps – used to manually slice meat, 120,000 swipes a month → wanted an automatic meat slicer to last years
    • Took a machine designed for baking and worked with an engineer to re-engineer it and make it work for their product
    • Currently does 38 slices per minute, can go up to 400 slices per minute → ready to scale up whenever needed
    • It was expensive but it was so worth it – no payroll, no sick day, no benefits
  • Manoa Chocolate – always buys machines that are way bigger than what they need, but know they will grow into as they scale up
    • Find a company you like that are a bit bigger who just exited your phase, understand your scale, and can end up being the best consultants for you
  • Need to go out for yourself to see the machine or bring on someone who knows what you need
  • Bill Scott – balling, filling, material handling, packaging – help find your needs and in your budget
  • The more smaller stuff you have, it’ll take up more space than getting one bigger piece of equipment – remember efficiency
    • Manoa Chocolate – remember to take electricity into account when buying new machines

 

Manufacturing Assistance Program

  • $1 million funding for State FY18 reimbursement award, up to 20% of cost of qualified manufacturing expenses
  • July 1, 2015
  • Minimum grant – $1,500
  • Maximum grant – $100k
  • One grant per company per year

Qualified Manufacturing Expenses

  • Purchase of manufacturing equipment
  • Training on the use of manufacturing equipment
  • Energy efficiency projects in manufacturing process
    • PV Solar don’t count
    • Installation of LED lights don’t count
  • Studying or planning a new manufacturing facility

Eligibility Requirements

  • Conducts manufacturing activities in the State
  • Categorized as a manufacturer as defined by the federal North American Industry Classification System (NAICS) codes 31, 21, and 33
  • Duns and Bradstreet (DUNS) number
  • If awarded, will own and operate manufacturing equipment in the State for a minimum of two years

How to apply?

  • www.htdc.org/money/#map
  • Talk to your legislators to help them push the MAP grant! It’s an economic development grant, not a charity grant

 

Workforce

  • Sky Dreams – don’t share sewing contractor source because those contractors are so rare on the islands
    • May not be able to compete on price or scale of large manufacturers, but will kill it on customer service
  • Maui Crisps – if you really want good workers, you have to be willing to pay for them
    • Make sure you do testing and quality control checks occasionally to make sure you don’t have to do product recalls
  • Manoa Chocolate – if the business is busy, the workers they have will invite their friends to help for a day or a week. If Manoa Chocolate likes their work ethic, they will offer them a job.
    • Always try to have this hierarchy of people who know what they’re doing and keep to the quality standards
  • Wayne – Good to have SOPs – will help make training more efficient
    • POC training to help your workers scale up

 

Collin Kobayashi (3D Innovations)

  • Great for doing one-offs that you can use as a model to send to your supplier
  • CAD expert – can do a 3D image which you can use to send to a manufacturer