It has been some time since my last post, too long in fact but there have been major developments at the factory and whilst there is some awareness of these developments in the public domain the situation in China has changed almost on a weekly (and sometime daily) basis so it has been difficult to state definitively at any point in time what is the current position. However, understandably there are a lot of inaccurate rumours going around so this post will attempt to clarify what is the current position regarding Eureka Models in the turmoil which is currently engulfing the factory.
The signs had been there for sometime but in June this year we were summoned to our manufacturer's head office to discuss what turned out to be a major re-structuring of the company's activities. Our manufacturer, Sanda Kan is now owned by Kader the large toy manufacturer who also owns Backmann.
At the meeting company management opened procedings by stating that they were having problems maintaining deliveries (which we already knew) and that they intended to downsize the Sanda Kan operation to a more manageable size. This would be done by completing existing projects for customers but for the majority of customers no new projects would be commenced.
Now, whilst the suddeness of these decisions came as a surprise, as mentioned above, the signs that something was happening had been there for sometime and so Eureka had already started to make arrangements with an alternative supplier.
When Eureka first started with Sanda Kan Ivan was our project engineer. Ivan delivered the first four of our projects, all were excellent in terms of quality, accuracy and operation. Just over two years ago Ivan left Sanda Kan and in partnership with an existing manufacturer went into business for himself. Eureka kept in touch with him and early this year after seeing the quality of projects that he was delivering for other customers commissioned him to do a project for Eureka. This is the VR E wagon project outlined elsewhere.
The E wagon project is progressing well and so when the problems at Sanda Kan surfaced the decision was taken to switch all new projects to Ivan.
This is working well. Sanda Kan have been very supportive and have assisted the move of projects to Ivan. This is taking the pressure off them which I suspect they appreciate. In a recent discussion with a US based supplier the word that they used most in discussing their dealings with Sanda Kan was "chaos".
The current arrangement then is that Sanda Kan will complete the AD60 re-run, the 38 class re-run, the CPH/CTH sound units and the 40 class. Ivan has taken over the R class, HUB sets, NSWGR oil tankers, 59 class, 620/720 re-run and LCH/CCH re-run.
As stated above things are very fluid at Sanda Kan but I expect the above arrangements to hold. The move to Ivan will have very positive outcomes with the E wagon project already demonstrating the ability of Ivan to deliver quality items in a more timely manner.
There will be more problems in the short-term but once things settle down with Ivan I think that we will see a much improved delivery result which would be a pleasant change.
