Manufacturing inflatables Case Study
Here in Canada and the United States, decorating your house for the holiday season is a leading indicator for the holiday season. Neighbors enter into an arms race to determine who has the best display. Local news agencies release city wide maps of the best shows. Parents drive around with their kids to see the lights neighborhood by neighborhood.
As is expected, trends develop every year, and often the trends grow year over year. As of late, the leading decoration trend has been inflatables. Once only small novelties, now most yards are littered with these blow ups. All sizes and characters are represented from Star Wars to full nativity scenes. The 20ft penguin has been to Christmas what the 12ft skeleton was to Halloween. Since these are such fascinating developments, we are going to do a case study on the manufacturing process of these decorations!
Why do people love inflatables:
The inflatables offer three main advantages: low cost, ease of storage, and a wide variety of characters/scenes. At current pricing, a 20ft tall inflatable penguin costs a mere $99 USD with free shipping. That same penguin weighs only 19lbs and can pack into a small tote for the off-season hibernation. Then the variety, every year new characters are chosen and fill our home improvement stores. Some homes have dozens of inflatables without any duplicates.
We know why people love these inflatables, but how are they manufactured to make this possible? What advances in high volume motors allows for these to stay inflated reliably all night? What miracles of modern manufacturing have made it possible to get so much holiday décor for such a small cost?
How are they made:
Step 1: Ideation and design – Characters are likely chosen by sentiment analysis, focus groups and trending search keywords. For instance, Star Wars is always popular, so every year new Star Wars inflatables are requested. This year Bluey also seems to be a hot ticket. From there a design team generates 3D models in their CAD package of choice, which can then be dissected into flat shapes.
Assuming industry standard design time for such a project, this is likely a 40-80hr endeavor, the cost of which would be spread across the whole production run.
Step 2: Die cutting fabric – The flat shapes generated by the CAD package can now be cut from sheets of nylon fabric. The fabric used is similar to parachute fabric, but is not certified, meaning much lower cost. This material has a controlled air permeability, meaning it is easy for engineering into an inflatable structure without fear of popping. Fabric dies are cheap to fabricate, especially for limited runs as is common in the holiday décor market. The cheap fabric and cheap cutting automation make for easy production of the raw materials to make our inflatable.
Assuming our 20ft penguin is a cylinder 20ft tall and 8ft in diameter, we get a surface area of 603 sq.ft. Based on a hobby source, the material cost would be $311.55 USD. We can assume the manufacturer’s supply brings that down by a facto of 10, meaning only $31.15 USD worth of fabric.
Step 3: Sewing – This is the most expensive part of the inflatable, and the step that is most closely protected by the manufacturers. Generally speaking, for each foot tall of the inflatable, there are 4X as many seams to sew. That means that for our 20ft penguin, we have roughly 80ft of seams that need to be near air tight, properly aligned and adequately strong. The more features on the inflatable, the more seams. An 8ft tall by 8ft wide nativity scene, for instance, might have over 200ft of hand sewn seams. Any seam out of place might leave to a disfigured sheep or unrecognizable star. Due to the low run and materials used, automated sewing is not cost effective to implement. This means that each inflatable must be largely hand made.
A standard sewing machine operator can sew about 1-2ft/hour in the garment industry. Assuming a faster speed here of 3ft/hr that is still 26.5hrs of direct sewing labor per 20ft penguin. We’ll neglect the cost of the thread, as it is likely considered a consumable and counted to overhead.
Step 4: Motor manufacture and install – The motor is the final piece of the puzzle. These motors are fascinating in their own right, able to run for days at a time, outdoors, in all weather while still costing under $10 USD. This is an example of supply chain integration and excellent economy of scale. Since all of the inflatables use the same motors, all the manufacturers win by setting a standard. By joining together and using the standard motor, each manufacturer gets a better product made at a lower cost, as their vendor can specialize on this one product.
Step 5: Shipping and warehousing - These inflatables are likely made throughout the year and stock piled until October/November at the start of the décor shopping season. Shipped via low priority ocean freight in large containers, we could expect costs of around $2600 USD to move 2000 units. Add another $10USD for warehousing and local movement and it costs about $11 USD to move these from the manufacturer to your lawn.
Overall Cost - Out of our $99USD sale price, the fabric, the motor and shipping have taken up roughly $52 USD. That leaves us with $48 USD to account for engineering, facility overhead and production hourly rate. If we ignore all of that (and any profit margin!), allocating the $48 USD to direct sewing labor, we get an hourly rate of $1.81/hr. I was unable to find an actual location listed for where these are made, but $1.81/hr is one of the lowest hourly rates I have ever seen in the modern manufacturing world.
Other thoughts:
There is a small hobbyist community who actually make their own inflatables or modify existing ones. As with most things, easy access to materials and industrial grade tools has allowed hobbyists and cottage industries to pop up catering to unique demands.
The design process and technologies used here are the very same ones used in bounce houses, inflatable obstacle courses, pool floats and inflatable paint booths. The material chosen are typically vinyl or tarpaulin in place of the delicate nylon. The thread used for sewing these is also much thicker and the stitch more substantial. With a more powerful motor, they can remain inflated through all manner of torture, showing the resilience of this construction method. In the case of pool floats, the seams are heat sealed and of course, you are the inflating motor!
Conclusion:
Over the past two months, as more and more of the homes around me have been decorating, I’ve been scratching my head about how these funny things are made. Most people are asking “when should I take down my lights” or “how many hours a day should my decorations be powered” but I wanted to know how these new decorations took over the market. I am concerned and curious to see where these are made that offers such a low hourly rate. I’m sure I’m not the only one, and I hope you found this interesting. If there are any other topics you’d like to see covered, drop me a line.
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