Every disposable sanitary napkin manufacturer knows that the most difficult machine to buy is always the first one. Based on their earned experience with their first machine, sanitary napkin manufacturers become more knowledgeable and more cautious when buying their second or third machine. If only this level of knowledge was available to them from the beginning, they would have saved a million rupees.
New Manufacturers must review some of the important steps that need to be checked before they rush with their hard earned money. There are basic details one should know before you purchase your first sanitary napkin machine. Let’s review the common mistakes usually committed by most first timers. Do you really want to be a sanitary napkin manufacturer? Be absolutely sure, most times there is no way to go back once you pass the point of no return. It is amazing how many excellent traders end up being lousy manufacturers just because they did not understand what they were getting into, or nobody told them. Do you have all the facts? People often say that the grass looks greener on the other side. Make sure it is really green before you move to the other side. Analyse your market well. Sometimes it may be easier to make a sanitary napkin than to sell it, especially with a new brand that nobody knows, or when you end up offering a sanitary napkin with the wrong set of features for your market.
Trust your own marketing instincts above your machine vendor. They only make sanitary napkin machines, but they don’t sell sanitary napkins. In this case, the market is the king and your only boss. Before you can choose a good sanitary napkin design, you have to understand how your competitor’s sanitary napkins are constructed. Start with a sanitary napkin performance benchmark, and then continue with a professional and detailed reverse engineering report. To reduce costs do it for those brands that look most promising, or choose only one size and then select more brands. Understand what features are truly needed and why one brand may be better accepted in your local market than the others. If you don’t know how to do a sanitary napkin performance benchmark or a reverse engineering analysis, seek expert help. Being a consultant, I am here to help you, but other consultants can also do it for you. You decide what product to make or which machine you may want to buy. If you don’t know the exact composition of your competitor’s products, how do you expect to know their manufacturing costs and your own potential margins ahead of time? Then, how will you know it will be a good profitable business?
So now you are ready to define all the product features that you want to order from the machine vendor, next what you need is to define your required Machine Speed. You should look at the potential data of your market and your budget limitations. A simple way to fix the speed is by estimating your sales volume after 6 months from start date, considering that you can sell at least one shift of the production capacity of the machine you plan to buy.
If the required speed of the machine is slow against modern machine speed standards, for example, if you need less than 200 sanitary napkins per minute; chances are you will never be able to buy directly from the raw material suppliers. Your slow production will cause low purchasing volume thereby increasing the cost of raw materials and hence reducing your profit margins. There is always a minimal critical volume you need to pass. This quantity depends on your location. Mature markets require much larger volumes (in Crores each month), Emerging markets require much less (in lakhs per month). Below this critical volume, the business will be a total failure.
You must think carefully if you want to become a micro-manufacturer (small garage size machine). Your chances for survival by buying machines from intermediaries are less. It is advisable to go visit industry relevant expo or shows to familiarize with equipment suppliers and all the raw materials. Make sure you ask for the same exact items or the same sanitary napkin machine models from all potential vendors. Make sure each machine model is similar in terms of the technology and process control. The acceptable performance for your equipment has to be well defined as part of the purchasing contract.
Actually it is easy for any vendors to give promises. Some vendors do whatever it takes to try and close a deal, but to deliver against a well-defined contract is something else. Only a few will take the necessary efforts and the risk to deliver what is promised. I always recommend buyers that it is better to visit an actual factory with running equipment and making production instead of just visiting the equipment manufacturer. Of course, this is not always possible, but at least try. In this industry, the variable cost of production is more important than the investment capital. So it is okay to spend a little extra if needed for the right equipment. Then you will be able to manufacture exactly the same product at a lower unit cost with better quality.
That is the reason why existing manufacturers try to get rid of their old machines in exchange for a new one. For example, depending on the number of working shifts, a high-speed machine working just 10 minutes more per hour, with 3% better conversion efficiency may pay for itself in just 1.5 years and this is just from the savings. In addition, it also ends up with better standards on the variables of sanitary napkin performance thus your savings could be even higher. Based on this fact, price differences between equipment may be less relevant that you imagined. While successful manufacturers know these smart dynamics, new players will make loss without deep knowledge
If you ever wish to buy a second hand machine, then make sure of the these points – a) that the equipment runs well at an acceptable efficiency, 2) that there is a good fit between the technology offered and the quality of the electrical power source 3) good technical skills of the operators 4) that you will be provided with the required operational training and technical documentation.
I will say buying a used line without knowing what you are buying, or without a formal basic training is foolish and utter recklessness. Sometimes, a well-maintained machine may be better than a “look-like-new or refurbished” machine. Some people just change a few important bearings and belts, apply fresh painting etc., to give an appealing look and sell it at a higher price without any meaningful guarantees to the machine. So, be extra careful.
In my opinion, it may be better to buy from the original owner if the machine is still in good running condition. Keep in mind that as soon as a machine is stopped or disassembled, it loses at least 60% of its original market value, if not more. Check for restarting after reassembling before committing to full payment.
Keep a surplus amount for working capital after the machine is purchased. Remember that the sanitary napkin machine and the factory building are only half of the total investment. You will need to operate your new business until you make profits from the machine. Starting up a new sanitary napkin factory without surplus funds for operational expenses is clearly a bad idea. But many new players realise this very late. Make sure you have a good technical team, with solid manufacturing experience. Choose each profile carefully. Appoint people who are not only skilled but also whom you can trust. You must have them ready before starting to take orders from your customers. Hiring key personnel for your factory due to time pressure is a bad business decision. It is very important that you accept orders only with a good technical team in Production, Maintenance, Electric & Electronic, and Quality check. Any carelessness in these areas can cost you dearly sooner or later. The philosophy of learning from experiences will not apply to manufacturing sector unless you have a enough funds at your disposal.
It may be a good idea to hire an industry consultant to help you during the acceptance test at the OEM. At least for the first few days the industry expert will help you make sure the machine complies with your requirements. He will also point out critical areas of poor performance to protect you from loss caused by the equipment. Make sure that the acceptance test at the machine vendor’s factory takes into account all your basic training needs, like product size changes, electronic calibrations, PLC calibrations, maintenance and spare part changes. Buy enough material to complete the run test according to negotiated performance at least for two full hours.
While buying a machine, the contract must be written properly which will distribute the onus equally on both the vendor and the buyer. A common scenario we see is the vendor indirectly creating a pressure to sell the machine without passing the acceptance test. You might have run out of material and sometimes they might have misused the material due to complicated machine start up processes. Penalties must be considered as part of the contract to avoid you having to pay for damages that you didn’t make.
Do not believe those widely used promises like – We’ll fix the machine issues later during installation at your own factory. Most times this is never the case. If a machine was not fixed at the vendor’s premises, with all resources available nearby, then common sense is that it is very less likely to be fixed later. In some extreme situations, the machines never even worked after it was installed.
Keep aside a special budget for your installation and auxiliary equipment like air dryer, compressor, ducting, wiring, dust reclaiming, laboratory equipment, etc. Make a plan for the time required for your learning curve. Make sure that the team sent by your vendor to your factory for initial set up and calibration is able to communicate with your technical team clearly and understandably. In case of language barriers, have a good translator at your disposal.
Quality Control is like your security guard. It will always seems of no importance until the market fires back at you with complaints on poor quality. So ensure that you have a decent quality control laboratory with well-trained staff who knows what it takes to make a good sanitary napkin. Don’t be tempted to accept any new product unless it satisfies all product quality parameters. The machine should never be started if you don’t have a quality manual, with product specifications.
If you already have a private label brand and are planning to substitute with your own production, you should be extra careful or you may lose your brand in the learning process. In other words, you can’t afford a learning curve. It can be extremely expensive unless you start with another brand. Another good reason it justifies to hire an expert consultant. Starting a successful sanitary napkin plant is a complex process, but not impossible. It is not just a matter of money in your pocket but also having the right ecosystem. Being in the right place at the right time and with in-depth knowledge about the market, there has been success stories too.
As a private label manufacturer, you must ensure that your current building and the equipment layout not only take into account your present client size, but also gives option for future growth for at least the next 5 years. It’s a huge business advantage if you have a trustworthy machine vendor with an excellent working relationship. Every lesson comes at a cost, but it’s better to spend more formal learning than learning from mistakes as far as manufacturing is concerned. Don’t be afraid to learn from scratch or shy away from new and updated learning about the industry. Considering the size of the industry and the amount of your investment such expense on learning will be the size of your petty cash.
In this industry of feminine hygiene, many players have failed. But many have also created empires that are huge and sustainable. Most of these successful industrialists have one thing in common. They are all very passionate about what they do and they invested their time and energy heavily into learning what they needed to know. A sanitary napkin factory is an absorbent business, but it can also be very rewarding if you are connected to the right industry experts. Serving myself as an example for 12 years in this industry through its thick and thin, I still enjoy my work every day.
I envision India to be one of the top manufacturers of good quality sanitary napkins with best industry practices and a nation of “menstrually-healthy” women. I consider it my duty to help new investors in sanitary napkin industry because once when I was eager and clueless, someone helped me too. Just like how I was taught, I wish to highlight the true facts about the business rather than offering empty motivation. I believe that getting our facts right is the first step to be motivated for bigger and important decisions