A long, long overdue update.

Hello, Terence here.  It’s been a while, so here we have a long overdue update.

First things first.  ZT Automations, of which Mike Ziomkowski and I share 50-50% ownership, had taken over the OpenBeam name and day to day operations.  The transition actually started last year.  This includes this website, our soon to be launched webstore, any of our merchandise on Amazon, etc.  I am aware of the outstanding pre-assembled machines owed to our kickstarter backers on the Kossel project.  As part of the transition, ZT Automations will be handling the outstanding kickstarter liability of undelivered, preassembled Kossel Pro printers as well.  I have dipped into my personal finances and am transferring to ZT Automations money to cover a full refund of each and every outstanding pre-assembled machine ordered on my Kickstarter campaign and we will be in a position to issue refunds starting March 15st, 2017. I'll go into why I made this decision in this update.

Now, the long story.

At the end of February in 2016, I left a very cushy, relatively difficult to get fired from “iron rice bowl” job at Thermo Fisher, and joined a hot Seattle startup called Glowforge.  I joined the team as one of the few people building their amazing, awesome hardware. 

I ended up leaving Thermo Fisher as I didn't really see myself moving up in that company, and needed a change of pace.  I was missing the fast paced product development world of a startup.  So, when the opportunity at Glowforge opened up, after some soul searching, I decided that it was probably best for my mental health to move on.  It was the best thing for my sanity to switch things up a bit and to go work at a company where one’s individual contribution everyday makes a difference.  It also is the next logical step in my career, working on a high volume consumer electronics product.

The thing one has to understand about product design and engineering, is that in a well managed, well equipped and funded team, the camaraderie formed between the members is quite strong.   Good, modern product design requires intense collaboration from a multidisciplinary, diverse team (and ultimately, it was crazy how non-diverse Thermo Fisher’s design team was - the 2016 Republican contenders for president was a more diverse group - I was the only non-white engineer, and we had zero females on the team) with each member contributing to the process.  Along the way, you have to be dependent on your fellow team members - their ability to deliver gates your progress, and vice versa.  And I work with some truly amazing coworkers - no one I’d want to disappoint, for sure.  Overnight I went from pretending to do useful work and sitting in unproductive meetings to fill out 40 hours a week, to working probably 60-70 hour weeks, and having the time of my life.  For my first few months at Glowforge, it felt like I only really saw my son on the weekends; I was eating all 3 meals at work a few days out of the week, and there were plenty of engineering catch up work to do.  (I had originally planned to try to finish the prebuilt machines in the break between jobs, but Thermo Fisher decided to terminate my family’s health insurance coverage on the day I walked out the door.  Given that my new Glowforge insurance wouldn’t kick in until the first full calendar month at the company, I set my start date at Glowforge to Feb 29th to minimize the amount of time my family had to go without health insurance).  

Now, busy seasons comes and goes, and when I joined Glowforge I knew that I was going to be busy for a while as a long hard slog to get products shipping..  However, a few more major events happened:

1)  My wife’s seasonal busy season started, leaving me as the single parent to care for my then <1 year old son.  
2) We had the opportunity to buy (upgrade) our house, which we jumped on.  We then rented the house back to the original tenants while they prepared for downsizing.  Eventually, when they were ready to move, it would coincide with my wife’s busy season.  
3)  Glowforge, due to its rapid expansion, outgrew the space that it was in.  (The neighboring beer brewery also had a drain rupture and flooded our old basement with sewage from their brewing plant, which during the summer made for a very unpleasant work environment).  So, on top of moving houses, I had to move offices - and our hardware and engineering lab, as well.

At the time of our move, Zachary was just learning how to walk, which bumped a whole slew of home improvement projects, such as installing tamper resistant outlets, baby gates and general cleanup to the top of the priority pile.

IMG_20161210_182724.jpg

Originally, the plan was to do a nice cleanup, move and sort, into our new home.  However, circumstances from 1-4 pretty much meant that it was “sweep everything into a box and sort it out at the new place”.  Even more unfortunately, we rented Frogboxes for the move and those had to be dumped out and returned.  Doing this severely degraded our ability to conduct any sort of engineering work on OpenBeam / Kossel project for MONTHS.

I might have been able to handle switching to Glowforge, and maybe one of the above items.  But all of those hitting at once, while still burning the candle from both ends at a startup?  Let’s just say I’ve been very unresponsive to lots of people for a while.

So, where does that leave us?

OpenBeam, as you may recall, raised about $120k from the Kossel kickstarter campaign.  While this seems like a princely sum to a lot of people, $120k does not go far in hardware development AT ALL.  

At the time we did the Kossel kickstarter, a very well funded group out of Singapore, Bucaneer / Pirate 3D, launched a similar kickstarter.  Their machine would have been built on a much simplier and much better understood CoreXY mechanism.  Their team received a half million dollars grant from the Singaporean government to front load their R&D and they outraised us by an order of magnitude.  Despite this, they failed to complete all deliveries.delivery.  Most of their backers lost money - there was no shipment, no product, no refunds.

OpenBeam was able to deliver a vast majority of its rewards because of the existing business in selling aluminum bars.  Without the steady influx of income from OpenBeam sales, we would have  ran out of money long ago, and there wouldn’t have been a Kossel Pro 3D Printer either.  But we’ve not been diligent in keeping up our marketing, our web presence, or our product line refresh, and sales have suffered as a result.  We’ve put a tremendous amount of engineering resources into Kossel - resources that really would have taken OpenBeam to a new level if we had spent it wisely on its core products, and sales have suffered as a result.  Today, as ZT Automations take over the OpenBeam brand and operations, my first order of business is to revive and strengthen our core product offerings.  

 

Kossel Pro and its related development will still continue, but at a much slower pace as before.  (I will share progress at the end of this post and more in depth in the upcoming months).  It is our hope that Mike Z will be able to take over most of the business day to day operation and I will handle R&D, product design work and blogging where I am much happier and where my strengths lie.

I’ve finally dug myself out of most of the hole from moving.  My computers are now finally back up and running.  I just rebuilt the optical inspection fixture for K-heads (having to order new parts to replace what was lost in the move).  I can actually find my calipers and thread gauges and inspection tools.  As part of the move / upgrade, I’ve moved back all the prebuilt machines and all of Kossel’s R&D back into my garage.  It’s been hell trying to find time to go to our shop in Lynnwood, while caring for my son.  More than once I started transporting goods, only to have to unload the car to make sure that a stray 3D printer subassembly won’t bash him in the face when he’s in the car seat in the back and I take a corner a little too aggressively.  

We’ve been building out our infrastructure for documentation and testing as well.  The home office is finally somewhat organized, and we now have dedicated photography area to facilitate technical documentation.  (Before, this had to be set up and torn down at various parts of the house that was deemed “not in use”).

Where we are going with the Kossel Pro Platform:

As far as Kossel kits are concerned:  We delivered a kit that can be assembled into a printer.  People have assembled and printed successfully with it.  Of course, it's not perfect, and the documentation could have been better.  But as far as commitments for Kickstarter rewards goes, I considered them fulfilled.  

However, with a preassembled machine, the user has every right to expect that the machine would work, flawlessly, 100% of the time.  And, to be honest, this is where I feel that we fell short.  Our machines print, but this is not the user experience I would consider acceptable as a turn key consumer electronics product.  (Working at Glowforge had skewed my perception as to what constitutes a *good* user experience.  I wouldn't feel right releasing what I have right now to someone who may not have had any experience with a 3D Printer at all)).  

Some of the biggest frustration with the Kossel Pro lies in the following areas:

  • We engineered our own controller PCA for motion control.  While electrically the board performs well, we chose an off-the-beaten-path processor and as a result for some people, the USB communications can get a little bit wonky.  On top of that, the code base for Marlin is a freaking train wreck, the moment you stray off the beaten path.  
  • Knowing what we know about delta robots in general, it is very difficult to achieve perfect parallelism between the end effector and the build plate unless the underlying mechanical subsystems are built to tight tolerances. Our mechanical auto levelling probe, which sits offset to where the end effector is, exacerbates this problem.
  • The world had generally moved on, and we engineered a very tightly integrated and pretty closed off system.  To do what is right, we need to make it so that 3rd party parts are more easily integrated with the Kossel Pro.

Here are a few things that our existing Kossel Pro users can do to mitigate some of the issues that we’ve identified above.

1) We've been testing our preassembled machines with a Raspberry Pi configured with Octoprint.  We noticed that the USB communications issue seems to be hardware dependent, this way we can at least mitigate the hardware risks by controlling both ends of the USB communications.

2,3 )  I’ll write another update on what we are doing to fix some of the parallism issues in our machines, and the design changes that we are hoping to execute in the molds to bring the existing install base of machines closer to open source hardware standards.  These changes include designing out some of the tolerance stackup in the mounts, releasing again our machined end effectors to allow for 3rd party parts to be integrated with Kossel easier.

4)  Mike had been doing a bang up job keeping stuff in stock on Amazon; and hopefully in a few weeks we can put more inventory for Kossel spare parts back onto Amazon. 

5)  Matthew Wilson, one of the original team members, have been experimenting with FSRs and running Reprap Firmware on the new Duet controller board, with great results.  You can see pictures of his machines.  Matthew administers a fleet of 4-5 Kossel Pros (spread across Google's sites here in Seattle) as well as at home.  

We’ve had a rough 2016, for sure.  I’m not out of the woods either, as we prepare to ramp up at Glowforge for our product launch.  Mike and I, however, are in this fight for the long road, and we’ll keep at this.  
 

New Products!

With the trainwreck that was Tully Gehran's Factory For All behind us, we are happy to be hitting the ground running on R&D again.y

One of the things we've been doing, before, during, and after our supply chain disruption, is to continuely test and qualify new manufacturing processes by small Mom and Pop shops in China.  One of the areas we've been doing work is finding ygood quick turn sheet metal vendors; after all, good sheet metal work is the foundation of many consumer electronics.  

In order to quick turn sheet metal parts, we found a laser cutting vendor that does reasonable quality work for reasonable prices.  The advantage of laser cutting is that there are no NREs (Non-Recurring Expenses) and no need to buy expensive stamp tooling.  The part cost is a bit more, but not prohibitively expensive.  Laser cutting also allows us to form fine features that wouldn't be traditionally possible with punch tooling - the rule of thumb is that the smallest feature (hole diameter, etc) have to be at least the thickness of the material that it is punched into.  OpenBeam long ago had standardized on 2mm thick brackets (in order to keep the screw lengths uniform).  Some of our newer motor mount brackets have holes drilled for M1.4 socket head cap screws.

Here are some of the new kits for various different brackets that we have developed:

Servos:

We've traditionally carried a stamped metal bracket for full size metal servos; we revisited the design and made the mounting of the servo a little bit more secure, and we created the servo mount in two directions - one having the long edge of the servo parallel to the length of the extrusion, and one having the long edge of the servo perpendicular to the length of the extrusion.

We then designed a total of 6 new servo brackets for micro, mini and full size servos respectively.  

That's it for this update!  We are trying to get into a habbit of pubishing more often and frequent.

48 Hours in Hong Kong - A Multi-Part Series (Repost)

In November of 2015; I made a “weekend” trip to Hong Kong – spending slightly over 48 hours on the ground there.  An absurdly short amount of time, for sure, given that each leg of the trip involves 15 hours of flying and a 4 hour layover in fairly spartan section of Beijing Capital International Airport.  I’d like to take this opportunity to share with some of you my travel experiences.

Air Koryo - North Korea's national carrier.  Now that's a sign you don't see every day.  (Beijing International Airport, Terminal 2)

 

As we have now revealed, dealing with Tully Gehan's Factory For All had been nothing short of a big giant train wreck.  Determined not to get screwed again, I've decided to start looking at taking back over control of my sourcing operations.

The primary objective of this trip was to renew my Home Return Permit.  This is a special travel document issued to Hong Kongers – and prior to the availability of the new 10 year Chinese entry permit, was worth its weight in gold for me, as it allowed me to travel to China at the drop of a hat. 

Yep, this is the last time I'll let this permit expire on me.  Oops.

Even with the availability of 10 year entry visas, Home Return Permits are still great for getting through immigration faster – all major ports of entry are equipped with biometric based automated passenger screening systems and a home return permit meant not having to wait in the slow line with all the visitors on foreign passports).  Unfortunately, I had stupidly let my Home Return Permit lapse, and failed to account for the nightmare that can be Chinese government bureaucracy.  These permits are issued by the Guangdong Province Public Safety Bureau and can only be applied for in person in authorized offices in Hong Kong, or in the case of a loss during travel in China, a special office in Huang Guan in Shenzhen.   So after some debate, I decided to make the trip and make the best of it, cramming as many meetings with potential partners and current suppliers as possible, and doing as much as we can to unjam the current logistics mess and prevent it from happening in the future.

Above:  Roadside cell phone repair stand.  Apliu St, Shumshuipo, Hong Kong.  It is estimated that 1/5 of sub-Sahara African cell phones passes through Hong Kong

Above:  This roadside stand specializes in CCTV cameras and automation gadgets

In this mini-series on our blog, I’d like to share with our readers the whirlwind 48 hours that I’ve just spent in Hong Kong.  We’ll touch on what the next steps for OpenBeam will be as we step our our international market presence, and why we chose Hong Kong as our remote base of operations.  I’ll take our readers through the electronics shopping district in Shumshuipo, and go over how we are building out a relatively inexpensive photo and video studio for doing better documentation for our product line.

(Tools, tools tools!  This store specializes in measuring equipment; scales, dial indicators, even low end inspection microscopes).

Trip Planning:  Flight planning, Where To Stay, etc

My primary requirement for flights is that Seattle is my port of entry into the US; since I will be carrying commercial merchandise back to the US, I expect to be fully searched by customs.  Put it to you this way:  I’ve never made my connecting flight flying through SFO and I’ve missed my share of connecting flights flying through LAX.  Nowadays, the only other port of entry that I would consider is YVR (where you could clear US customs on the way in); this way if I missed the connecting flight I have the option of hoping onto a bus and getting home without much delay.  There are also other advantages of picking this route, we'll touch on that later.

Tight quarters aboard the Hainan 787 enroute to Beijing.  A few more trips like this though and we'd have multi-material support for the Kossel figured out.

Delta has a new SEA <-> HKG nonstop flight, but unfortunately it doesn’t fly every day (and my vacation / sick days have already been wiped clean, no thanks to Thermo Fisher screwing me on my unpaid paternity leave).  Eventually I settled on Hainan Airlines; as a huge bonus, I’d earn half the flown miles as elite qualifying miles on Alaska.  Sure, there are a few oddities with the inflight entertainment selection, but for $800.00 round trip, there’s a power outlet in every seat (which meant I could actually get some serious design work done), the food was decent and it was on a very comfortable Boeing 787. 

A civilized way to fly.  City Check-In allows you to cart your luggage and check in for your flight 24 hours ahead of departure, so on the day of departure you just have to show up with the boarding pass and breeze through immigration and security.  Not available for US bound flights due to "security" concerns

A civilized way to fly.  City Check-In allows you to cart your luggage and check in for your flight 24 hours ahead of departure, so on the day of departure you just have to show up with the boarding pass and breeze through immigration and security.  Not available for US bound flights due to "security" concerns

There’s another bonus with this route selection as well:  Hong Kong Railways offers a city check-in service where up to 24 hours in advance, you can take your luggage to the Airport Express rail station and check your luggage in, obtain your boarding pass, etc.  The plan was to carry back, at the allowable weight limit, 2x 23kg of fastener packs, and two robotic screw dispensers in my checked luggage. 

This is why Seattle is my port of entry into the US.  Customs is going to have fun with me...

My flight’s boarding time was at 07:00, and I was in no mood trying to schlep over 100lbs of cargo in one trip with public transportation.  Thus, City Check-In is quite invaluable – but unfortunately due to security concerns, it’s not available on US bound flights.  So, on the day before my departure between trips to visit vendors, I carted my two bags to the Airport Express rail terminal and checked in for a flight to Beijing – with the bags checked through to Seattle.

Dad and I having a celebratory bowl of beef brisket noodles in soup, with a bowl of fish-skin dumplings, right before visiting the local hackerspace, aptly named "Dim Sum Labs", night before departure.  Traditional wonton noodles are made by repeated pressing of a dough with a bamboo stick in an up-and-down motion to develop the gluten and gives the noodle a very springy texture - reasonable substitutes exists in the US, but the real thing is impossible to find.  The fish skin dumpling hails from Chiuzhou - the skin is made by mixing minced fish meat with tapioca starch, while the filling is actually pork.  Also impossible to find in the US

Because of the tight schedule and all with meetings all over the map, I decided to stay somewhere centralized.  I quite like the Mong Kok / Prince Edward area, and the MetroPark Mong Kok had decent rates (~$100/night) and for that price you get a decent sized room.  I’ve seen the closet-like rooms of $80.00 budget motels (where you literally had to put the luggage in the toilet in order to close the main door).  The hotel’s seen better days – the signage wasn’t lit, the wallpapers are peeling, the carpet is lumpy and uneven, and it was where they quarantined people from the last SARS outbreak 10 years ago, but the bed is clean and $100/night for a decent sized room is pretty hard to beat.  The MTR station is 3 minute walk away and from there I can hop onto both the green and red lines, which covers all my meetings.

With flight and lodging taken care of, I'll go over some of the goodies I picked up at Shum Shui Po, as well as a visit to some of our vendors, in the upcoming blog entries.  Stay tuned.

Hong Kong's only Stratasys Fortus MC900 - big enough to print a car seat in one go, out of Ultem, no less

Hong Kong's only Stratasys Fortus MC900 - big enough to print a car seat in one go, out of Ultem, no less

A cargo consolidation complex, near the Kwai Chung Container Terminal.  Lacking real estate, Hong Kong builds upwards, even cargo storage facilities

A cargo consolidation complex, near the Kwai Chung Container Terminal.  Lacking real estate, Hong Kong builds upwards, even cargo storage facilities

 

 

 

 

FactoryForAll - a case study on everything that can go wrong with offshore sourcing

TL;DR:  Our experience with Tully Gehan’s FactoryForAll.com bordered on fraud and extortion and significantly impacted our ability to do business.  We are sharing our experience here with others in the Maker community on the pitfalls of offshore sourcing.

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First of all, let me get this out of the way.  We debated for a long time on whether to write this article.  Business, by its very nature, involves risk.  Bad things happen to good people..  We don't come onto the blog every time something goes south to throw a vendor / re-seller / supplier under the bus, because we recognize that there are two sides to each story and factors that are out of control for both parties involved in any transaction / relationship gone bad.

That being said, despite checking their references, the level of communication, transparency, and professionalism that we experienced with Factory For All bordered on outright fraud and extortion.  And, even more unfortunate, when I sat down with friends in the Maker community and lament about all the issues and struggles we've had, multiple people have told me that these guys were not reliable, yet not a single negative review (that would have saved us a lot of grief) can be found.  We note that Factory For All was mentioned in Make Magazine's "Shenzhen for noobs" article and we would like to leave our experience for the record for fellow Makers as another data point to consider, when selecting a vendor.

We approached Factory For All in June, placed purchase orders and wired 100% of the money the first week of July.  We were purchasing items that should have been roughly 2-4 week lead time, from vendors that we have already vetted and have pre-existing business relationships with.  We wired the money based on vetting Tully’s references; someone that I know personally and respect from the Maker community reported a good working relationship with Tully and we wrongly assumed that it would have been relatively straightforward to purchase these parts, arrange for them to be delivered to Tully’s location, and then shipped out via ocean freight, since they claim to do all of MPJA.com’s Chinese  sourcing.  

We chose to do things this way for two reasons:  

1)  by issuing a single PO to one company we were hoping to keep our accounting clean, and

2) we’ve ran into problems in China before where companies trying to act as a freight forwarder and found out that they cannot export our goods after all the goods have been purchased because they were unable to show a paper trail of the money and goods transaction; without which they cannot make the proper export tax declarations.  

I first met Tully Gehan at Bay Area Maker Faire in 2015.  They  had a sign offering Chinese sourcing, contract manufacturing and kitting services.  At the time I made contact, I already have vetted Chinese suppliers for packaging for both OpenBeam and ZT Automations as well as located and qualified suppliers for every line item on Kossel’s 200 line item BOM.  However, we were hoping to move some of the kitting and repackaging overseas to simplify the import paperwork, and we were hoping to find a single source agent to help consolidate our shipments.

What we didn't know at that time was that our funds were diverted from day one into another business's account because Tully and his girlfriend had broken up; the FactoryForAll business was registered in his girlfriend’s name, along with the bank account, so Tully had us wire the money into his “friend’s” account, who promptly became unavailable and who later was afraid of tax implications and decided to wire the money back. This wasn't made known to us until our vendors, a month in, started communicating with us directly that they weren't getting paid, and Tully let it slipped out that he was having issues accessing the bank account because it wasn't his.

There were other issues as well.  Because Tully’s Chinese skills was questionable at best, he had to rely on a string of different translators, none of whom have any basic technical background.  I found myself having to WeChat, QQ and Skype multiple people to explain to them in Chinese what we are trying to accomplish, only to watch a frustrating game of telephone unfold 6000 miles away.  This was brought to our attention when one of our suppliers contacted us thinking that someone was masquerading as OpenBeam's "purchase agent" to try to get them to produce OpenBeam parts under the radar; our supplier even went as far to ask if Tully was a "rented foreigner" because he couldn't field even the most basic answers regarding what was being ordered.  What’s also worse is the team in China is overly reliant on WeChat, QQ and Skype; there was hardly any documentation on what was actually being ordered, a highly problematic situation when ordering CNY$100,000+ worth of goods.  At my insistence, we had written contracts and BOMs drafted up in Chinese which I double checked against our English BOM.  (One of the things that came out from this fiasco, is OpenBeam now releases its engineering drawings bilingually).

It wasn’t until mid September when all goods would arrive at the warehouse - communications got dropped with our cardboard vendor, and even though PO was placed and the money was wired the first week of July, our “two week lead time” cardboard boxes didn’t show up until mid September.  There another nightmare started; despite us repeatedly asking for them to prepare for ocean shipment when the boxes arrive and despite repeated Skype messages telling us that they were “working on” our shipment, it wouldn’t be until around October 21st when we received an “invoice” for their services, and a proposed shipping plan that was by far the most expensive freight bill I would see in our company’s history.  


The invoice that we were presented with contained thousands of dollars more in fees that were previously agreed upon.  Upon reading the invoice and shipping manifest, it was found that an entire purchase order worth of goods was missing from the shipping manifest, and the invoice contained multiple, unreasonable line items.  For example:

1)  We were charged close to $1000 in Skype talk time, including accounting time for calculating Skype time.  At no point were we told that talking to them would incur a fee.  

Even lawyers don't charge for accounting time when billing their customers.

Even lawyers don't charge for accounting time when billing their customers.

Now, some amount of payment to compensate for time to clarify engineering requirements is perfectly reasonable, but most of the Skype calls were follow-ups and problem solving in nature (as in us helping them figure out how to do their jobs). One call dealt with the fact that they couldn't figure out how to transfer money from the bank account in Hong Kong to a Chinese vendor in Shenzhen and ended with me vetoing Tully’s suggestion of “walking” a backpack containing CNY$120,000+ in CNY$100 notes.  (The largest note in circulation is a $100 note; we purchased over $120,000 from one vendor alone.  We’ll leave it up to the reader to figure out the volume and weight of 1200 bank notes and how long Obvious Foreigner Who Can’t Speak Chinese would last walking that across the border before getting mugged).  Other calls involved us following up on order status, being told that things are ordered, only to find out weeks later that the order never went through because they didn’t have money for the order in the first place (due to troubles with accessing the bank accounts).

2)  We were charged US$334.00 for a UPS shipment, AFTER we had sent a prepaid waybill for.  

How incompetent do you have to be to spend 20 hours shipping a package?

How incompetent do you have to be to spend 20 hours shipping a package?

The cost was supposedly for their commute time to their facility, to place the call to UPS to arrange for pick up, and for the labor to package these for masterpieces for us:

For comparison, it’s typically $100.00 per carbon box in UPS shipping fees (including pick up) for a carton box of this size filled with engineering sample parts, on my negotiated UPS account.  When we raised the concern, the response came back that because the shipment had went out on a holiday, they should have charged us 3x more than what they already gouged.

3)  They wanted to charge us close to $600.00 for 8 pallets (the actual pallets themselves), and a total of $2300.00 to place pre-packaged material into a 20ft container.  Included in this is a $150.00 "research charge" for them to find a place to rent a forklift and pallet jack.  Note, this does not include the actual ocean freight charges or any export charges, this is just for loading a container.  

$67.00 per pallet - Bespoke pallets made by hipsters in Williamsberg, NY, from wood sustainably harvested from the Whole Foods shipping dock won't cost that much.  

$67.00 per pallet - Bespoke pallets made by hipsters in Williamsberg, NY, from wood sustainably harvested from the Whole Foods shipping dock won't cost that much.  

Here's a link to brand new, heat treated wood (that meets ISPM15 fumigation requirements, required for any wood packaging products used in export - $24.50 each.  And that's assuming that you're buying brand new pallets - these things are the workhorse of the shipping industry, any decent material handling company would have a stack of them on hand as goods move in and out - all on pallets.  And on top of that, for a company that claims that they do lots of ocean shipping, it sure is funny that they have to charge 9 hours to figure out where to rent a pallet jack and forklift and pallets for ocean export.

Typically for small amounts of goods like what we are trying to ship, we ship using LCL (Less Than Container Load).  Included in an LCL shipment are CFS fees - this is where they handle the material, palletize and pack the goods onto a cargo container, etc.  To give an example, our last shipment, which involved over 4.5 metric tonnes and close to 200 carton boxes?  The overseas CFS charge portion is less than $230 - ten times less than what Factory For All wanted just to pack the container.

In fact, when we finally got the goods out of Tully’s warehouse, trucked it to Hong Kong; here was the total damage.

There were many, many other whiskey-tango-foxtrot moments, but I think I've made my point loud and clear.

Aftermath:

We ended up paying the invoice from FactoryForAll in full; not because it was the right thing to do, but because they made it very clear that without paying for all their bullshit charges, they wouldn’t release our cargo to our supplier who stepped up to the plate and helped arrange for the export to Hong Kong so that our goods can be ocean freighted to us.  Even though Tully had agreed to a different compensation scheme, what can we really do?  They had been holding US$40k of inventory hostage for almost half a year.  The dollar amount they were extorting is not worth an international lawsuit over and both of us knew it.  

From what we can tell, Tully and his girlfriend got back together; his girlfriend was the one that sent the invoice and the packaging work.  It is a conscious decision on my part not to name Tully’s girlfriend here in this blog post; I am giving her the benefit of a doubt; after all, she wasn’t the one that diverted the funds into another bank account in the first place and was stuck in the position of cleaning up the mess that Tully created.  With some attitude adjustment, and lots of coaching in the areas of business management, customer service and logistics it is plausible that she could actually run a sourcing business some time in her life, and I didn't feel like condemning her online for the situation that she didn't help create.  For what it’s worth, despite being CCed on every email during the invoice dispute, we never heard from Tully again.

Most people, when I tell them this story, are shocked by the timeline: placing the order for 2-3 week lead time items in early July, not seeing anything until January of the next year.  It’s pretty apparent that the team at Factory For All is incompetent at 1) sourcing, 2) exporting and 3) running a business and providing customer service in general.  However, the damage done here is way more than just time lost.

$40,000 is not a small sum of money for us; for comparison, we only purchase about $100,000 of OpenBeam per year for resale.  This meant that a HUGE amount of our working capital was tied up with nothing to show for - we were hoping to land some of this inventory quickly and resell them to bring traffic to our web store.  This obviously couldn’t happen, as the container boat didn’t dock until the day after Christmas and we didn't take delivery until the first week of January.  (Of no fault to Factory For All; US Customs also decided to X-Ray and inspect our container.  You can see in the picture the original container seal as the container left Hong Kong and the CBP inspection seal - both had to be cut off with bolt cutters to open the container).

On top of that, virtually every product across both ZT Automations and OpenBeam was affected.  Back in May I redesigned the packaging and content of the OpenBeam Construction Kit - by far our most popular item. The redesign assumes a custom sized box and was driven by a plan to push OpenBeam into brick and mortar stores.  The box size selected isn’t covered by off-the-shelf box suppliers such as ULine or Tharco.  We knew in May we had enough stock to last until October and we’ve already had great working relationships with this box supplier, so there was no reason to expect such a delay on sourcing something as simple as a box.

Yet, due to these delays, I have 4 pallets - 500 sets of each color of our construction kit, sitting on a pallet since the the end of August.  Our extrusion vendor faithfully executed on our redesign and delivered, our plastics injection molder delivered the brackets and our new hardware vendor delivered the fastener packs.  But without a box, and without the ability to buy an off-the-shelf equivalent, we were forced to hang an “out of stock” sign for a few weeks on our Amazon webstore, miss the launch window for launching the kit at Seattle Mini Maker Faire (where we were ultimate sponsors) and completely missed the window to launch the kit in retail stores this year.  (We ended up spending some money to UPS boxes over; that’s what FactoryForAll charged us $334 for their work in “shipping” the boxes) that they dropped the ball on ordering.  The four pallets of construction kit extrusions are worth another $40,000, and blocked off access to a good chunk of our new warehouse for a long time.  And with the Kossel project still in high gear, we didn't have enough free cash flow to just go out and order a box cutting die (3 dies, domestically, for probably $1000 each), purchase the MOQ of a box stamping in the US, and write off our inventory that we've already purchased in China.

Tens of thousands of dollars worth of inventory, none can be moved because it was missing a fastener pack, a box, etc.

Tens of thousands of dollars worth of inventory, none can be moved because it was missing a fastener pack, a box, etc.

Cash flow is king in a business, and this little episode was highly detrimental to our cash flow.

There was a huge psychological impact as well.  Business continuity was at stake here; we *needed* the goods from this shipment to continue shipping products and stay in business.  Given how unprofessional these people have been, and their propensity to stop responding, there was a very real fear that we may just never see our cargo.  So, as much as I had wanted to hop on a plane and go knock on someone's door, we really had no choice but to go along and beg, plead and repeatedly, politely ask for status updates.  For months, it was impossible to do any long term planning; unjamming this logistics mess was the #1 priority.  There were nights that I’ve set aside for engineering and project admin that got blown completely because we ended up having to spend it verifying shipping manifest, talking to vendors and generally fighting fires.   All that stress had left me drained and burnt out.

We’ve finally received our cargo, after 7 long months.  On the stepper motors that Tully had packaged for us; 1/3 of the boxes were folded wrong (inside out).  He went ahead with packaging not having the Amazon FBA labels (this was our fault but at the time that decision was made, we just wanted our goods out of his warehouse) - so we'd have to rework 100% of the kits anyway.  We were charged (and paid) a total of $575 for the labor involved in packaging 250 stepper motor kits.  Suspiciously - we paid 7.5 hours @ $10.00/worker/hr of 4 workers packaging motors, but we paid for 11 hours @ $25.00 per hour for a "supervisor" - supervising these workers.  As a comparison, here in Seattle, I pay my packaging contractors $25.00 per hour (well above Seattle's proposed $15/hr minimum wage) and they can generally pack more than 12 kits per hour (1 kit every 5 minutes assuming $2.00 per kit labor cost).  In other words, the "cheap Chinese labor" turned out to be more expensive than Americans earning a living wage - and that's not counting the rework time we have to put into it.

We have taken steps to mitigate against this sort of fiasco, which we'll share when it's appropriate.  Supply chain is hard work for sure...

-=- Terence

 

State of the OpenBeam Project (2016)

TL;DR:  OpenBeam sales will be handled by ZT Automations, a company jointly owned by myself and Mike Ziomkowski of Z-Designs, created to handle the Kossel Pro project.  This move allows me to focus my energy on OpenBeam R&D work while bringing new help on board to help with critical organizational improvements, keeping the shelves stocked, etc.

--

Hello everyone!

2015 had been a challenging year for OpenBeam.  First and foremost, I accepted life's ultimate promotion to fatherhood, when my wife and I welcomed our son Zachary into the world.  

Mr. OpenBeam, Mr. OpenBeam Jr. and Mr. OpenBeam Sr.

Mr. OpenBeam, Mr. OpenBeam Jr. and Mr. OpenBeam Sr.

Fatherhood certainly brings its own unique sets of challenges; it certainly gives me a different perspective on things and teaches me to be a better person.  Well, it also helps that we have a really cute kid, and his happy giggles makes cleaning up 3am diaper blowouts more bearable.

He's almost catching up with me in the mess making department.  Almost.

He's almost catching up with me in the mess making department.  Almost.

On a professional side, things have been pretty rough.  We got screwed big time by our contract manufacturer / sourcing agent - long story short, after checking their references and wiring a significant chunk of money, it took them months to order what should have been 2 week lead time items.  We wired the money in July 2015 and didn't get our goods until early January of this year; during this time we were constantly lied to about progress and on top of that, they had the audacity to hold our goods hostage until we paid them thousands of dollars in fees that we never agreed to in the first place.  We will be writing up a full expose and publishing it far and wide as a warning to other Maker businesses about what happened, but in the mean time, we are focused on rebuilding the business, taking care of customers and our workers.

On the organization side, we have a big organization change coming down the line.  In order to focus my energy (and my diminished amount of free time) on product development, I have decided to entrust the daily operations of OpenBeam to my good friend, Mike Ziomkowski of Z-Designs / ZT-Automations (of which I am 50% owner).  We have already commenced the transfer of sales of all OpenBeam items to ZT-Automations, with the goal of shutting down OpenBeam's Amazon listings by end of February.  

One of those enlightenment moments in running a business, is learning one's strengths and weaknesses, and for the things you are bad at, hopefully figuring out whether it can be made someone's problem with a reasonable amount of money.  In my case, although I am a pretty decent design engineer, my organization skills leaves a bit to be desired and it's became apparent that the business had grown beyond what I can reasonably manage while holding down a day job and being a good father to my son.  I am very fortunate that I have someone whom I trust (Mike and I have been friends for almost 2 decades) whose skills complement mine well, and I'm 100% confident that Mike will be able to handle our businesses's growing organizational needs.  For me, the most immediate gain is the ability to focus my energy on what I do best -  design engineering.  We already have a collection of new products that are on its way to our Amazon web store, and we'll be updating the blogs with new product announcements soon.

Thank you for your support,

-=- Terence, Rachel, Zachary & the furry monster puppy