Bharat in BetaLow-minimum-order manufacturing
Source
- Kae Capital, E-commerce enablers (opens in a new tab)Manufacturing: 4Published: 9 Feb 2024
The idea
Support small production runs.
Why this is interesting
- This is the essay’s most developed manufacturing argument. It says more numerous, smaller online-first brands in India need responsive factories that can make good products in small batches, cheaply and quickly, while manufacturers with heavy capital costs prefer large runs. Brands are left holding inventory and long working-capital cycles. Kae calls the response capacity modernisation, including on-demand manufacturing.
- The demand side is a source view of how Indian consumer brands are changing, not measured demand for low-minimum production. The tension the source describes, small orders against factory economics, is the hard part: a business here has to make small runs pay, not just aggregate them.
Possible starting points
Small-batch production for one category
Run or coordinate low-minimum production for a single product category where brand launches are frequent and tooling can be shared.
Order pooling across brands
Combine compatible small orders from several brands into runs a conventional factory will accept.
Questions to answer
- At what batch size does a small run cover setup and changeover, and will brands pay a premium for it?
- Do brands value small batches most for launches and testing, or for ongoing replenishment, and does that change who the customer is?