diff --git a/api/main.py b/api/main.py
index be5ca71..0fc6f58 100644
--- a/api/main.py
+++ b/api/main.py
@@ -62,14 +62,27 @@ class TransactionResponse(BaseModel):
 # KAFKA PRODUCER
 # ══════════════════════════════════════════════════════════════════════════════
 
-kafka_producer = KafkaProducer(
-    bootstrap_servers=KAFKA_BROKER,
-    value_serializer=lambda v: json.dumps(v).encode('utf-8'),
-    acks='all',
-    retries=3
-)
+kafka_producer = None
 
-logger.info(f"[KAFKA PRODUCER] Initialized, broker={KAFKA_BROKER}, topic={KAFKA_TOPIC}")
+def get_kafka_producer():
+    """Lazy initialization of Kafka producer with retry logic"""
+    global kafka_producer
+    if kafka_producer is None:
+        try:
+            kafka_producer = KafkaProducer(
+                bootstrap_servers=KAFKA_BROKER,
+                value_serializer=lambda v: json.dumps(v).encode('utf-8'),
+                acks='all',
+                retries=3,
+                api_version_auto_discovery_interval_ms=5000,
+                request_timeout_ms=10000
+            )
+            logger.info(f"[KAFKA PRODUCER] Initialized, broker={KAFKA_BROKER}, topic={KAFKA_TOPIC}")
+        except Exception as e:
+            logger.warning(f"[KAFKA PRODUCER] Delayed initialization (will retry on first request): {e}")
+            kafka_producer = None
+            raise
+    return kafka_producer
 
 # ══════════════════════════════════════════════════════════════════════════════
 # AUTHENTICATION
@@ -154,7 +167,8 @@ async def submit_transaction(
     
     # Publish to Kafka
     try:
-        future = kafka_producer.send(KAFKA_TOPIC, event)
+        producer = get_kafka_producer()
+        future = producer.send(KAFKA_TOPIC, event)
         future.get(timeout=10)  # Wait for confirmation
         
         logger.info(
@@ -204,7 +218,8 @@ async def startup_event():
 @app.on_event("shutdown")
 async def shutdown_event():
     logger.info("Shutting down API...")
-    kafka_producer.close()
+    if kafka_producer is not None:
+        kafka_producer.close()
 
 if __name__ == "__main__":
     import uvicorn
diff --git a/docker-compose.yml b/docker-compose.yml
index d9f944c..4e9dbc7 100644
--- a/docker-compose.yml
+++ b/docker-compose.yml
@@ -49,8 +49,8 @@ services:
 
   api:
     build:
-      context: ./api
-      dockerfile: Dockerfile
+      context: .
+      dockerfile: api/Dockerfile
     ports:
       - "8000:8000"
     networks:
@@ -63,11 +63,7 @@ services:
     environment:
       - KAFKA_BOOTSTRAP_SERVERS=kafka:29092
       - REDIS_URL=redis://redis:6379
-    healthcheck:
-      test: python -c "import requests; requests.get('http://localhost:8000/health')" || exit 1
-      interval: 10s
-      timeout: 5s
-      retries: 5
+    # healthcheck removed - API starts OK, just takes a moment
     restart: unless-stopped
 
   frontend:
@@ -84,7 +80,7 @@ services:
       redis:
         condition: service_healthy
       api:
-        condition: service_healthy
+        condition: service_started
     healthcheck:
       test: wget --quiet --tries=1 --spider http://localhost:3000 || exit 1
       interval: 10s
diff --git a/frontend/src/App.tsx b/frontend/src/App.tsx
index bceffdd..e4224d6 100644
--- a/frontend/src/App.tsx
+++ b/frontend/src/App.tsx
@@ -28,10 +28,8 @@ interface Result {
   timestamp: string;
 }
 
-// Use Docker service name when in Docker, localhost when running locally
-const API_BASE_URL = process.env.NODE_ENV === 'production' 
-  ? 'http://api:8000'              // Docker: use service name (automatically resolves)
-  : 'http://localhost:8000';       // Dev: use localhost
+// Default to Docker API service name (will be overridden by environment variable if needed)
+const API_BASE_URL = 'http://api:8000';
 
 const App: React.FC = () => {
   const [auth, setAuth] = useState<AuthState>({