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Wait a minute... According to the article and his website the machine costs $2,500 each, can produce 2 napkins per minute and requires 746W of power. Each mac

Wait a minute... According to the article and his website the machine costs $2,500 each, can produce 2 napkins per minute and requires 746W of power. Each machine employs a crew of four people. A full scale industrial machine is claimed to cost $500K and, from a quick bit of google-ing can produce 350 napkins per minute and requires about 80KW of power. Each machine seems to be operable by a small team of five or so, but let's double that to ten people. In order to match the production rate of a single industrial machine you would need: Machines: 175 Cost: $437,500 Power: 131KW Workers: 700 According to this (http://mahadiscom.com/emagazine/jan06/india1%5B1%5D.pdf http://mahadiscom.com/emagazine/jan06/india1%5B1%5D.pdf) electricity cost in India runs around 1.5 rupees per KWh for residential and 3.5 rupees per KWh for industrial applications. Assuming ten hours per day (for easy math) the power costs compare as follows (converted to USD): 175 low cost machines @131KWh in household settings: USD $37 per day. Industrial machine @80KWh in industrial setting: USD $52.87 per day. The industrial machine cost a little more to run (power) but it produces 175 times more product per machine. Put a different way, around USD $0.03 of power is required per napkin with the household machine. The industrial machine --even at more than double the electricity cost-- only requires USD $0.0003 per napkin in power. In terms of labor costs --assuming $1 per hour-- the household machine would cost about $0.033 per napkin while the industrial machine runs $0.0005 per napkin. According to the linked statistic the TAM (Total Addressable Market) is around 300 million women: http://articles.timesofindia.indiatimes.com/2011-01-23/india/28363510_1_women-resort-napkins-menstruating http://articles.timesofindia.indiatimes.com/2011-01-23/india... If his dream to "make India a 100% napkin-using country" is fully realized you would need to produce a minimum of 1500 million napkins per month (assuming five pads used per period). The solutions compare as follows: Assuming that the machines are run 24 hours per day for 30 days. - Household solution Machines: 17362 Cost: $43,405,000 Power: 12MW Labor cost per 30 days: $25,001,280 - Industrial Solution: Machines: 100 Cost: $50,000,000 Power: 8MW Labor cost per 30 days: $90,000 Unless my numbers are grossly wrong (please check, I threw them together quickly) this is not as good a solution as it has been made out to be. In fact, it looks like a really bad solution to a large scale problem. The costs are staggering. Power consumption is at least 50% greater. I'll bet that product quality and consistency also suffers a great deal. And, of course, we haven't even covered maintenance costs and MTBF (Mean Time Between Failures) of 18,000 low-cost machines versus 100 industrial grade machines. Good job. Lots of work. But I'd invest in a used industrial machine out of China over making thousands of these low cost household devices.

scott_s 15y ago
His solution may be better given the infrastructure. I don't know what the infrastructure is like, but using one big machine requires being able to distribute the napkins to a much wider area. In, say, the US, that's an easy win. We have good infrastructure, and it makes sense to use one big machine and buy them in stores. That may not be true in India - I invite anyone with knowledge on the subject to comment.
Duff 15y ago
You're looking at one aspect of the problem, from the supply side. We've had industrial scale manufacturing of sanitary napkins for 100 years. Procter and Gamble can already produce these things for a fraction of the cost. But building and maintaining a distribution network, marketing the product and making a healthy profit drives costs up. This solution turns that problem on its head. Disperse the manufacturing locally, and let traditional/local social networks get the napkins distributed. In a country as large and complex as India, this is probably easier than finding 5,000 marketing campaigns to try to reach many small pockets of demand regarding a taboo subject.
- recampbell 15y ago
  Excellent point. Conversesly, the most likely is that Proctor and Gamble is perfectly positioned to enter this newly educated market and undercut this inefficient incumbent, destroying thousands of jobs in the process. But we wouldn't have it any other way.
huhtenberg 15y ago
This ain't a Google interview :) so the follow-up question is to make a list of reasons why his solution is more practical than buying a used machine out of China. The hint is the locality of production.
ajju 15y ago
-assuming $1 per hour Unskilled/semiskilled laborers in India don't make anything close to that. You are also missing the part where he is distributing production to poorer manufacturers who are willing to take a smaller profit, and thus pushing the market price down. Any commercial entity that buys the $500k machine will not want to get into a race to the bottom in pricing unless they are forced to do so. These distributed units which are run by poor women who don't want/need corporation level profits will force that race to the bottom. In the end, the big machines will likely prevail but prices will be much more reasonable.

scott_s 15y ago

His solution may be better given the infrastructure. I don't know what the infrastructure is like, but using one big machine requires being able to distribute the napkins to a much wider area. In, say, the US, that's an easy win. We have good infrastructure, and it makes sense to use one big machine and buy them in stores. That may not be true in India - I invite anyone with knowledge on the subject to comment.

Duff 15y ago

You're looking at one aspect of the problem, from the supply side. We've had industrial scale manufacturing of sanitary napkins for 100 years. Procter and Gamble can already produce these things for a fraction of the cost. But building and maintaining a distribution network, marketing the product and making a healthy profit drives costs up. This solution turns that problem on its head. Disperse the manufacturing locally, and let traditional/local social networks get the napkins distributed. In a country as large and complex as India, this is probably easier than finding 5,000 marketing campaigns to try to reach many small pockets of demand regarding a taboo subject.

recampbell 15y ago
Excellent point. Conversesly, the most likely is that Proctor and Gamble is perfectly positioned to enter this newly educated market and undercut this inefficient incumbent, destroying thousands of jobs in the process. But we wouldn't have it any other way.

huhtenberg 15y ago

This ain't a Google interview :) so the follow-up question is to make a list of reasons why his solution is more practical than buying a used machine out of China. The hint is the locality of production.

ajju 15y ago

-assuming $1 per hour Unskilled/semiskilled laborers in India don't make anything close to that. You are also missing the part where he is distributing production to poorer manufacturers who are willing to take a smaller profit, and thus pushing the market price down. Any commercial entity that buys the $500k machine will not want to get into a race to the bottom in pricing unless they are forced to do so. These distributed units which are run by poor women who don't want/need corporation level profits will force that race to the bottom. In the end, the big machines will likely prevail but prices will be much more reasonable.