manufacturing

Kickstart Case Study

Manufacturing Case Studies

“We can design and produce the pump in Africa. We are pretty good at that side. But we have no idea about China. Without e-Bi it would have been very hard for us to make a decision to go ahead because for us, it would have meant jumping into some very deep waters with no real way of knowing where the bot-tom was or how to get out.”
——— Martin Fisher, Founder

Established in July 1991, KickStart was founded in Kenya as an interna-tional social enterprise with a mission to help millions of people out of poverty. KickStart promotes sustainable economic growth and employ-ment creation in Kenya and other countries by developing and promot-ing technologies that can be used by dynamic entrepreneurs to estab-lish and run profitable small scale enterprises.

THE SITUATION

With a mission to take millions of people out of poverty, a pump design that could take African farmers out of rain-dependent agriculture, and a marketing network established in 450 local retail shops in Kenya, Tan-zania, and Mali, KickStart Pump has sold 90,000 pumps to poor African farmers. Increasing its impact in increasing food production and de-creasing poverty requires that KickStart shave manufacturing costs and improve mass production and distribution. KickStart engaged e-Bi to help them move manufacturing to China.

With his newly-awarded Stanford University PhD in his hip pocket, Kick-Start founder Martin Fisher decided to take the summer 1985 to con-sider his options. He hoped a trek in Peru would inspire alternatives to the logical career path for someone with his background: a professor-ship, or signing on for research with an oil or military organization. The trip put him face to face with real poverty for the first time, and did in-deed inspire a new life purpose. Martin applied for a Fulbright to study the relationship between poverty and technology. The project took him to Kenya for ten months, but he wound up remaining there for 17 years. Among his projects during that time was to develop and mass produce simple farm equipment - plows, harrows, ox carts - to give away to poor farmers. He also worked on water systems and built machines for build-ing materials. After about five years of such endeavors, Martin realized that none of this work was sustainable. “You put a water system in a village and the pump works and everyone is happy. You walk away from it and two or three years later it breaks down and nobody fixes it. The tragedy that is common throughout Africa is that it is littered with broken down water systems and farm equipment.”

Long years in Kenya had helped Martin dissect the problem and narrow it to a basic truism: The answer to poverty is to find a way for individu-als to make money, which means creating millions of small businesses that can be individually managed. Martin sought a solution that would enable the very poor to start with a very small investment they could make back in three to six months. This ROI required that the invest-ment generate an immediate profit. What business could a typical poor African start that would generate such return, that he could manage on his own, that was sustainable over many seasons and many genera-tions?

In Africa, 80% of the population are poor farmers with a small plot of land and one basic skill set, which is farming. On a global scale, one third of the population are poor farmers. KickStart, originally formed as Afritek, harkening to Martin’s original training in the relationship be-tween poverty and technology, designed a practical, low-cost irrigation pump that could remove farmers’ dependency on rain-fed agriculture. The pump had to be human powered to eliminate reliance on petroleum and electricity. It had to be convincingly effective to a population with little to invest in new technology and an understandable resistance to purchase something they had never before seen.

Now, as the year 2009 draws to a close, almost 90,000 farmers have bought KickStart pumps. On average, they make almost $1,000 extra income per near, which for a family living on between $400 and $2,000 a year, represents a lift out of poverty.

Using the analytical and research talents of an intern with a Standford MBA, Martin began exploring movement of pump production to China. The intern discovered e-Bi and recommended a meeting with e-Bi man-agement after KickStart began an unsuccessful venture with a small scale Hong Kong manufacturer who proved not up to the quality and quantity KickStart required. “Because we had already done the produc-tion line and designed fixtures and methods of producing, we could have just transferred what we had already done in Africa to China,” Martin said. “But e-Bi had their own ideas and resources, providing value-added expertise to help us increase efficiencies and lower costs.” With e-Bi guidance, management and vendor relationships, KickStart started producing the Super Money Making Pump, and later introduced their second pump, a smaller implement that looks like a hand pump.

Despite the fact that Africa lacks of a tradition of mass production, Martin devoted many years to implement high quality mass production of the pump in Africa. The challenges included inferior raw materials, unskilled labor, lack of quality control. As sales increased and the company began developing new designs, hoping to offer more than one model, Martin realized that continued production in Africa was no longer feasible. A lower cost solution was likely possible in China, but KickStart was inex-perienced in the processes for evaluating offshore production, uncertain how to bridge cultural differences, and had no background in assessing margins and relative costs.

e-BI enabled KickStart to fulfill one of its objectives, which was to remain focused on developing additional pump models and marketing to get the pump into the hands of as many farmers as possible. KickStart’s confi-dence in e-BI, based on its references, client base, and meetings with e-BI senior management, assuaged his fear based “horror stories” he had heard about companies that had gone to China without appropriate mentor-ing and relationships. “We realized there would be some handholding. But if we got involved with the wrong factory that hand holding could be very costly, because you could have a compromise in quality, could not know how to negotiate cost, and not know who to trust.” e-BI, as a trusted, well-regarded, single point of con-tact for liaising with all the components in the production/supply chain, “essentially said they could guarantee finding the factories, guarantee quality control, guarantee schedules, help line up the shipping,” Fisher re-counted. “And they have their own engineers on the ground who can work with the factories over there to make sure this really happens.’” The combination of guarantees from e-BI senior management, along with local teams onsite, gave KickStart the assurance needed to select e-BI.

ENSURE SURVEILLANCE, TRACKING AND REPORTING

Noting that e-BI’s propriety supply chain software enables continuous surveillance and transparency to track account information 24 hours daily, Fisher looked to e-BI’s tech-nologies to help save time and money on a global scale by enabling remote management of every stage of every project in the e-BI process. With KickStart management and en-gineering attention refocused on pump design and marketing, having offloaded the manufacturing and supply chain management to e-BI, Fisher notes that “we have teams of engineers and a lot of ideas how we can reduce landed costs. We think we are pretty close, and are looking at ways to reduce material and process costs in shipping and pack-ing.” e-BI’s software transparency and stage by stage accountability enable the process evaluation needed to help KickStart improve margin. Given the company mission to dramatically reduce poverty on a global scale, every penny off margin has vital impact.

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