Friends,
Seeing that there have recently been some inquiries regarding our status, I thought it important to fill everybody in on what’s been going on here at SP Tech. I’m certain that the following is more detail than many are interested to know, but I am also just as certain that there are a handful that do want to know. For those that are interested, the following has been provided.
As I’m sure most of you are aware from my last update, through the end of last year we had received some added funding which was to be used to complete our backlog of orders and also to reorganize our enclosure production department and processes. The largest portion of that investment was to enable us to secure the assistance and involvement of Tim Shelton, who was responsible for most of that effort. I must say it has been quite a “blessing” to have Tim here as he has made a tremendous difference and I cannot even begin to estimate the level of education I have received from working with him. Not that enclosure building was (or should be) my main area of responsibility, but I have helped in the process along the way and am well aware of how things were done in the past. Thankfully those days are now long gone such that with Tim in charge, we now have the human resources needed to really transform not only our production capacity, but also our image in the market.
I feel it is also important to share with you all the fact that the funding we received last fall had a secondary and even greater purpose. You see, it was also intended to finance what amounts to a “feasibility study,” the outcome of which would determine whether or not much greater funding would be made available at the end thereof. Several pairs of speakers in that “batch” were to be used as examples of our market potential and for the purpose of demonstration to new potential investors in Denmark.
Well… the results of that effort did not quite turn out as we had planned or hoped. As a part thereof, my responsibility was to make projections as to how much we could accomplish and how long it would take, along with the needed financial resources. Even though I had performed a detailed time study/estimate and then multiplied the time needed by 2.5, we still missed the mark by a considerable margin.
The detailed reasons for this failure were manifold, but the fundamental reason falls back one last time to the “former employee” mentioned in my previous update. At the earliest stage of the project, we had one of the investors from Denmark visit us for a month to help in whatever ways he could and also to act as a “scout” to see just what all was involved in building speakers. While he was here he naturally wanted to see “progress” being made, and this was at a time that the former enclosure builder was still involved. Therefore, in order to “impress” the investor, the former employee foolishly took it upon himself to run all of the hardwood we had in stock that was slated for this batch of enclosures... on our CNC. Unfortunately, unbeknownst to either Tim or I, the part programs written by this employee for our CNC had numerous defects. As a result, over 60% of these parts had one form of defect or another, and some had to be completely replaced.
As it turned out, it would have been easier to write new programs and order replacement wood enabling us to make new parts, rather than to repair all of those defects. Unfortunately, Tim was not up to speed on programming our CNC and we didn’t have the finances or time to replace the wood. Had we been able to do so, our job would have been easier, but doing so would have taken even more time. Therefore, Tim had no choice but to repair the defective parts by removing and then reattaching new wood, build hand fixtures and then re-machine them by hand. Needless to say, this all took an enormous amount of time and completely destroyed any time estimates that I had made.
Only after Tim began his attempts at assembling these enclosures was this discovery made. As I said, neither he nor I had any idea these parts were in such a state before we made our time estimates. We have since come to realize that the former enclosure builder had been using these defective parts all along, and then “fixing” them during the finishing process. I suppose, knowing the tendencies of the former enclosure builder, I might have “guessed” that such may have been the case, but prior to Tim’s involvement I had little to do with the enclosure fabrication. I had always wondered what took so long to build them, but not doing the “hands on” work myself, I honestly had no idea. I would often ask, “What the holdup was,” but was given a multitude of excuses. As many and varied as these “reasons” were, it was never made known to me that the root cause was the CNC programs. Had I known such, THAT would have exposed where the real responsibility lied and implied additional work for the enclosure builder to correct those programs.
In the end, the previous enclosure builder was able to do the repairs such that for the most part, the enclosures looked fine, but now we know WHY it took him so long to build them. Tim told me that while it is possible to do these repairs at the “end of the line,” the difficulty level and time involved to do so is far greater after the enclosures are assembled than to do so ahead of time on each individual part. Nevertheless, regardless of where the repairs take place in the process, to do so takes far more time than if such repairs were not needed in the first place. Had our former enclosure builder been committed enough to take the time to write corrected programs, he would have saved himself much work over the last several years and everyone else involved a lot of unnecessary wasted time and wait. What a difference one person can make! It seems that before he left, our former enclosure builder’s poor decisions severely derailed things one last time.
In any case, despite the above Tim and I found ourselves in a situation where we were forced to concentrate on the Danish orders above all else. You see… the new investment that they alone have the potential to generate is vital for our continued operations. This is not only true with regards to expansion of our business, but also for the expedient delivery of the orders we already have. Unfortunately I must advise everyone that if this new investment does not transpire, SP Technology will be forced to “downsize” our operations significantly. Even though we are severely behind on orders as it is, such a downsizing will delay delivery far more than were things to remain essentially as they are now.
But… we have great hope that such will not be necessary. In contrary, we have every expectation that new investment will be forthcoming in the relatively near future. As it stands, we have what amounts to the most important pair of speakers destined for Denmark on a pallet – ready for pick-up. That pair is going to a very “high profile” individual that is key to the whole process and who has great influence in securing the new investment. He has been informed that his speakers are ready to ship and has now expressed renewed enthusiasm for our future business objectives. I have it by his word directly that as soon as the speakers arrive, negotiations with all parties will commence with determined sincerity and high expectations.
In the mean time, we feel the need to announce to everybody that our ongoing efforts here will be focused solely on completing our existing orders while we await what the future holds on the larger front. As such we have decided to announce that we will not be accepting any new orders for the next 2 or 3 weeks. Should the new investment be forthcoming, we feel the need to “clean up” as much of the older orders as we can without concerning ourselves with processing new orders. In the remote chance that the anticipated investment does not transpire, we feel that the prudent and honorable thing to do is not to expose any new customers to what would become an even more unreasonable wait to have their orders completed.
Please excuse the length of this message, but we felt the need to inform everyone interested, as you all have been such good and loyal friends throughout the years. We also felt the need to inform any potential new customers regarding our decision to suspend new sales. We should know the outcome of our situation within just a few weeks, so stay tuned. I will inform everyone as soon as we get word as to our future direction. Thanks in advance for your understanding and patience. Rest assured that no matter what the outcome, SP Tech is not “going away.” For all of our customers still waiting for their speakers: You can rest assured that no matter how long it takes, as long as there is still breath in me I will continue to work until every last individual has received their speakers. In a “worst case” scenario, all of us may have a few more gray hairs on our heads before you get them… but “get them” - you will. Only then would I even consider “giving up,” as every other issue pales in comparison to me. There are a number of other things I can do to earn a living… but to be effective at any of them I first need to be able to sleep at night.
Finally, for those of similar “persuasion”… if you believe in the power of prayer… we’d greatly appreciate it. For the handful of you that know me a bit more intimately... there's more at stake than "just" a speaker company.
Take care,
-Bob
