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How to Make It in America: Designing a Better Supply Chain for the 2nd-Generation Cuppow
By Ray Hu - Jul 03, 2012
While Kickstarter has lowered the cost of entry for young upstarts and industry veterans alike, there's something to be said for working hard and saving up so you have some 'liquid assets' in the ol' rainy day fund when inspiration strikes. That's what Aaron Panone and Joshua Resnikoff did to realize their wildly successful Cuppow, which has since proven its usefulness by facilitating the production of this very publication, via daily doses of caffeine.
Today marks the launch of the second model of the Cuppow, which has a smaller outside diameter to fit regular mouth canning jars—the original is designed to fit wide-mouth jars—as well as the new diamond-shaped "Straw-Tek" spout. (They've also got some sweet lifestyle shots to accompany the product photos.)
But it takes a lot of legwork to get a chicken Cuppow into the hands of a happy customer, as Aaron learned over six months of self-guided enterprise:
Joshua and I went into this project with a combined $3,000 to invest and without really knowing what to expect. Both of us are engineers/designers, and I had released a few small products in the past, but neither of us knew anything about really "producing" something in a sustainable way or running a business or high-volume manufacturing logistics.
We'd initially planned to produce Cuppow as a relatively short run product, but then when we sold out—in two days—of the initial 500 pieces, we realized that we needed to scale production very quickly. In scaling, we didn't want to lose any of the production quality or make anything overseas, or give up any of the elements of the supply chain that made it something that we were proud to produce.
When we started, we were manufacturing our Wide Mouth Cuppows at a short-run injection molding facility in Minnesota, and having all of our packaging letterpress printed by a one-man shop in Somerville, MA. Money was coming in and the demand for the product was strong and manufacturing and packaging production was bottlenecked because we didn't have enough money to really scale production appropriately—which required a complete re-design of the packaging plates and dies, more durable (steel) injection molding tooling, and a new high-volume manufacturing facility. We didn't want to lose momentum by suspending sales, and we couldn't get payment terms from any vendors, because we had no track record as a company. Our assembled product was costing us so much money that it was becoming difficult to finance any growth.
So what we did was only make as much product and packaging as we absolutely needed (we ran out a few times and it was terrible terrible terrible), and put the rest of the money into parallel investments in what we would need to start the process of getting our new tooling made. We did two of these development cycles back to back—one for the Wide Mouth Cuppow and one for the Regular Mouth Cuppow—and we are just coming out of the second development cycle this week with the release of the Regular Mouth Cuppow.
A side-by-side comparison of the first-generation, wide-mouth Cuppow (left) and the new regular mouth one (right)Our ideal supply chain involved sub-contractors/facilities that were as small as possible (1-50 employees) and as local as possible (within an hour drive) and in practice this produced exceptional results. On top of supporting our local economy and keeping industries alive in our backyard, the advantage of using small and local is twofold: 1.) We can call up and talk to the owner of a company (or someone important who knows us by our first name) in our supply chain at any time during the day; and 2.) We can drive out and touch and look at things in person, or talk face-to-face. When I called up our fulfillment center during week one after our initial product launch and left a frantic message about how we needed help shipping hundreds of Cuppows, I got a call back from the owner of the company at eight o'clock that night telling me that they would love to work with us and that they had the solutions to our problems, and that was great.
We had new two-cavity (produces two parts in one cycle) automatic (does not require a full-time operator) injection molding tooling cut in Norton, our new injection molding facility is in Sturbridge, we use a local trucking company from Chicopee, a fulfillment warehouse in Plainville, and we still make our packaging with the same one-man shop in Somerville. Through all of this we have also become much more focused on keeping local retail alive, and have come to really respect the process that occurs in the background for every product that we see.
The past six months have contained some of the best learning experiences of my life, and I have grown as an engineer and designer because of these experiences and the things that I have seen and the problems I have had to solve. The value is in learning by doing. I think that everyone should do something that is unfamiliar or uncomfortable because it is easy to get stuck in the processes that you are familiar with and it makes life more interesting.
Now to put it to the test... I don't know what the weather's like up in Somerville, but it's definitely iced coffee weather here in New York. Get 'em hot off the injection mold at http://cuppow.com/.
Ray Hu
Ray is a writer, editor, and researcher
7 Comments
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@Sam - I was comparing the per part cost of low-volume injection molding vs high-volume injection molding. The difference is that low-volume usually uses less-durable, and cheaper, aluminum tooling, and the minimum quantity for manufacturing is 1 piece. With high-volume tooling our minimum quantity for an order is 25,000, and the part costs are much lower, but the tooling is 10x as expensive. So it's all based off how many you want to make, which makes sense.
With thermoforming I think that the per part cost is greater than the high-volume injection molding, but probably around the same price as low-volume molding. I don't think that the quality of parts is as good as injection molding, and and the yield probably is not as good (with injection molding, once our tools are running we are getting 100% usable good parts, with no secondary operations required for finishing). I could be wrong about some of this.
!Report as spam -
@aarn - Did you mean thermoformed plastic is 10x more expensive? I was under the impression that injection molding was lower per part. Forgive me, I haven't been through the production process myself.!Report as spam
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Who knew that you could sell sippy cups to adults! I don't know what it is but I love drinking out of jars. I'm guessing different colors were out of the question because of the cost.
@anthony
I'm definitely going to try that with a mixer.!Report as spam -
@bar - I wish we could have afforded a 4-cavity. It was twice as expensive as the double (makes sense, right?). The double cavity has paid itself off already, and we built our second tool for the new product to use part of the 3-plate tooling from the first...if that makes sense (cut about half of the cost off of the price of the new 2-cavity, since we will never be running both parts at once and they are both coming from the same factory they can easily switch the plates back and forth). It was a very efficient way to scale, and I totally forgot that we did this until just now.
@Pericles - Originally we had designed this product to be either thermoformed plastic or hydroformed metal, but low-volume injection molding tooling is pretty cheap so we went with that. The downside of the low-volume injection molding is that the per part price is about 10x more expensive, and the quantity of scale price breaks plateau at about 5k pieces.
Aaron
!Report as spam -
Should've scrambled up to a 4-cavity to lower detail cost and improve your margins now. When you steadily build a reputation and trust you can lure more retailers in by offering them better margins. Then you get higher volume, and there you are again not able to fulfill orders.!Report as spam
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Injection molding seems(seemed) a bit "overkill" for this... If they`ve used thermo/vacuum forming, they probably wouldn`t have the early production issues and it`d be easier to scale up (up to a point)?!Report as spam
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Awesome! Did you know that almost all blender caps can be put on mason jars for making individual drinks, smaller portion mixing etc.!Report as spam
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