MMR: FAQ – Specialty Manufacturing Arrangement with Stern Pinball Inc.

ANNOUNCEMENT FAQ: Planetary Pinball, Chicago Gaming and Stern Pinball announce Specialty Manufacturing Arrangement (5/14/14) 

Q: What is the announcement?
A: The announcement is that Chicago Gaming Co (CGC) and Planetary Pinball Supply, Inc.(PPS) will be using the Stern Pinball, Inc (SPI) factory to assemble the Playfield and Cabinet assemblies for Medieval Madness Remake, using both original spec WEG (Williams Electronic Games, Inc.) Medieval Madness parts and newly-designed CGC parts (electronics and lighting systems).  SPI will make its manufacturing facility and factory labor available to PPS and CGC.

Q: Why would you do this as I thought CGC was making the game?
A: CGC is ‘making the game’ for PPS and, as such, they have designed, prototyped and tested the game.  CGC retains responsibility for the BOM (bill of materials), overall QA responsibility for the game, as well as packaging and shipping. What is happening is that rather than build a pinball production line, we will be using SPI’s. SPI has a high capacity line and manufacturing operation. 

Q:  If you were picking a pinball manufacturer – why not pick JJP since you already have a relationship with them?
A: A number of reasons go into this – first we have a relationship with SPI as well and SPI has been doing contract manufacturing for many years, and is geared up for it whereas JJP is very focused on producing its own games (WOZ, etc). Additionally, the logistics between CGC and SPI already exist – trucks move back and forth between the companies daily, as well as the finishing up at CGC would not be able to happen if the game were assembled in New Jersey. There is a lot of sub-assembly that is being done both at CGC as well as with suppliers in the Chicago area, so this is another consideration. 

Q; Why would Stern Pinball do this – helping out a ‘competitor’?
A: MMR is going to be built one way or another and SPI believes MMR fits into their contract manufacturing line of business, which helps keep its factory busy during breaks  between Stern-branded games.  Additionally, there is a reduction in market uncertainty by insuring the game comes out sooner than later, which helps everyone. 

Q: What does this do to the schedule?
A: The great news is it firms up the schedule as SPI can build upwards of 200 games/week on its line and this will allow MMR’s to be scheduled to be assembled in one or more builds, which will help ensure that we will finish the LE’s before the end of the year – so it basically allows us to get a lot more games out in a much shorter period of time with a different ramp up.  The initial games will slip a few weeks to get everything setup to run. Everything assumes of course the timely delivery of all quality parts needed to assemble the game from CGC.

Q: Does this change the plan for Pre-Production games?
A: The pre-production games will now be assembled at the SPI factory, to give the production line a warmup for starting the overall assembly of the first run. The pre-production gets pushed out a few weeks. 

Q: What about the quality – are you sacrificing quality by going with Stern Pinball?
A: The quality of a game is a function of many factors including parts selection, design, as well as build quality. For the MMR, the assembly is using OUR set of parts and OUR design. As for build quality, the objective is to have the same build quality as the original Medieval Madness. Additionally, we will incorporate CGC Quality Control people into the SPI line to address and escalate any build issues. Finally, SPI itself has major initiatives focused on improving build quality, which will benefit us.  

Conversely, there is a learning curve and a ramp up of building a new manufacturing line – there are people to hire, train, etc, and lots of design and working to get ‘things right’. Additionally, from all of our cumulative manufacturing experience, we all know that a new assembly facility would have ‘bumps in the road’. We chose this path to help avoid those bumps which would translate to delays that we could not predict and thus more uncertainty and delay in customers getting their games at the level of quality that they expect. Also, if you do not keep an assembly line running then you have issues with people not having work in-between, retraining … and potentially quality issues popping up from time to time. SPI’s assembly line does not have these issues and they can handle the capacity of the MMR games.

 Q: When did this decision get made – have you been keeping us in the dark?
A: The decision was brought up in earnest in March, and we had initial discussions, including a list of concerns that we wanted addressed (many of the concerns that are being answered in this FAQ). We had some additional discussion between CGC/PPS/SPI management and PPS/CGC came to a decision in early May that this would be the best path for the customer. 

Q: Does this mean Stern Pinball will be building all of the PPS/CGC games?
A: This decision is for MMR, that is the focus. There have been no discussions with SPI about building any more games. We will deliver MMR first, and then consider what the market tells us and proceed based on that.  

Q: Why wouldn’t Stern Pinball just sabotage the game or the dates, etc?
A: SPI has a strong reputation and the industry is very small. Additionally, this supports SPI’s business in terms of contract manufacturing (assembly), and our customers are in many cases SPI’s customers and visa-versa – the pinball community is a very tight space, and any negatives like this would not serve SPI. CGC has an ongoing business relationship with SPI, providing Cabinets and Playfields for SPI games, so there is a strong business and industry relationship there. PPS has always been on respectful terms with SPI (and we are the exclusive provider of Gary Stern’s personal Jelly Belly stash!). In the end, the market players are embracing the ‘coompetition model’ – where players can both ‘compete’ but also ‘cooperate’ at the same time – a refreshing option in this case which we believe will benefit all of our customers