Toy Manufacturing

[arbit]

There are a lot of questions on the boards about MOQs, licensing and manufacturing costs.

I thought that we could share our real data here to get to the bottom of it.

I will start with these responses I received from a premium toy manufacturer that is often discussed on this board. I wont name them for confidential reasons, but suffice it to say they are a medium level premium brand, not the best, not the worst:

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What is the licensing fee: For the licensing cost, it will be ~4-6% of selling price in Japan. 

What is the manufacturing cost: Depends on item, but ~55% of selling price will be the production fee (including prototype charge)

How many units have you manufactured of different items? MOQ 3,000-5,000 pcs. If too cheap item, 10,000 pcs is necessary.

How many units do you need to sell to be profitable?  if over 3,000 pcs, nearly all items we can start to get profit

 

 

[Pedro2k6]

Finally some real info and not speculation like we use to see in this board. I hope you can get more info in the future. Thank you.

[Sildani]

That's interesting. I'd love to hear about QC processes and tolerance for failure if possible!

[arbit]

1 minute ago, Sildani said:

That's interesting. I'd love to hear about QC processes and tolerance for failure if possible!

Mr. K had a long post about that. Its very interesting because it seems a lot goes to waste during QC.

[hachi]

2 hours ago, arbit said:

Mr. K had a long post about that. Its very interesting because it seems a lot goes to waste during QC.

 

Was there an English version of this post? I'm curious since Japanese manufacturing is known for quality control stuff and there are ways to minimize waste. I worked in a factory once and some waste is due to carelessness or old/defective molds. And even when a part is defective we find ways to salvage it and make it usable.

[Cowboy17]

1 minute ago, hachi said:

 

Was there an English version of this post? I'm curious since Japanese manufacturing is known for quality control stuff and there are ways to minimize waste. I worked in a factory once and some waste is due to carelessness or old/defective molds. And even when a part is defective we find ways to salvage it and make it usable.

oh god japanese quality control. Even in the software world some of the well-known principles are applied and certain areas of management have hyped them up so much its become a meme in the office.  

[barurutor]

except the toy factories Arcadia uses aren't Japanese anymore... they'd probably repurpose the defective parts for KOs

[jenius]

While it's good info, it's important to remember this isn't Arcadia and trying to apply it to Arcadia would just be another forn of speculation. 

[fenrir72]

8 hours ago, arbit said:

There are a lot of questions on the boards about MOQs, licensing and manufacturing costs.

I thought that we could share our real data here to get to the bottom of it.

I will start with these responses I received from a premium toy manufacturer that is often discussed on this board. I wont name them for confidential reasons, but suffice it to say they are a medium level premium brand, not the best, not the worst:

------------------------------------------------------

What is the licensing fee: For the licensing cost, it will be ~4-6% of selling price in Japan. 

What is the manufacturing cost: Depends on item, but ~55% of selling price will be the production fee (including prototype charge)

How many units have you manufactured of different items? MOQ 3,000-5,000 pcs. If too cheap item, 10,000 pcs is necessary.

How many units do you need to sell to be profitable?  if over 3,000 pcs, nearly all items we can start to get profit

 

 

MOQ?

[jenius]

Minimum order quantity

[Slave IV]

Good stuff! Here is a link to the Mr. K interview.

[arbit]

1 hour ago, jenius said:

While it's good info, it's important to remember this isn't Arcadia and trying to apply it to Arcadia would just be another forn of speculation. 

True. I wouldnt apply it to Bandai or Arcadia. But if we share our data, its starts to paint a picture.

[hachi]

14 hours ago, Slave IV said:

Good stuff! Here is a link to the Mr. K interview.

Quote

Injection and paint apps:　　”If we’re talking about scrap, when you factor in plastic molding and the painting processes, it’s around 65-78%.”

Mister K　 “So more than half of the entire production are parts we can’t use!!!”

That's a huge waste right there. I am aghast they tolerate such waste. They could use some quality circles, but then again it's a Chinese manufacturing company I doubt they care about improving quality that much...

[ArchieNov]

I made a similar point a long time ago when that thread first came up. I'm not happy with Arcadia's method of making the customer pay for their factory's inefficient quality issues. They should instead work on reducing the waste in the process. 

In my business, we don't charge our clients double the normal rate just because we mess up 50% of the time.

[dizman]

Don't they melt and reuse the scrap parts in the next batch of plastic injection? I think Mr.K wrote this up when they were making the 0D which has a bit of painting work on it so I could see the error rate being high on that end.

[hachi]

9 hours ago, dizman said:

Don't they melt and reuse the scrap parts in the next batch of plastic injection? I think Mr.K wrote this up when they were making the 0D which has a bit of painting work on it so I could see the error rate being high on that end.

But time and money was already wasted on making those that became the scrap parts. It would have been better to minimize that in the first place.

[hachi]

16 hours ago, ArchieNov said:

I made a similar point a long time ago when that thread first came up. I'm not happy with Arcadia's method of making the customer pay for their factory's inefficient quality issues. They should instead work on reducing the waste in the process. 

In my business, we don't charge our clients double the normal rate just because we mess up 50% of the time.

Somehow I felt some deja vu about this thread...Looks like it was already discussed then.

[Slave IV]

You know how other companies deal with what Arcadia considers waste in order to be more efficient?  Pack it up, sell it and just expect customers to deal with it. 

[Rodavan]

The whole process is based around the mold - how good it is and the process around it .

Maybe slightly off center to this topic - Arcadia and Other companies uses old established methods of production that has not changed in many years same process , same waste and same issues . We , us the customers pay for all the processes used even hidden ones - R&D , mold design and even the guy that removes the  waste is factored in by a "bean" counter ( financial ). They would not start a project if there was any indication of marginal profit , we still pay for injection molding machine , even if it is paid for because it then becomes cheap profit .

What would be interesting would be to look at the old versus something like 3Dprint , manufacturing on demand ...  That is future where small companies  will manufacture on demand. Any just my thought.

 

[Slave IV]

3D printing and on demand or even just produce what you want right at home is the future. 

[Firefox]

I'm appalled by the waste Arcadia made. Perhaps this is the reason they put up such a high price?

I think they really needs to work on the QC process. Passing on wastage cost to customers is not the way for long run. China makes most if not all toys. Thus, if the particular manufacturer can't reduce the waste, shouldn't Arcadia get another one?

Hopefully Arcadia can reduce the waste and then reduce the price.