Monday, November 30, 2009

Getting into the spirit of the season

So we made it through the first of the holidays in reasonable fashion; celebrating with our extended family. So we made it through the first of the holidays in reasonable fashion; celebrating with our extended family. At the top of the hill where I live are three families that have seen their children grow up and move out on their own; scattering from their hometown to new locations on the East and West coasts. For the first time in many years all the kids made it home for Thanksgiving to join their families for the feast. It's easy to tell from the increased number of cars in the driveways.

A rainy Friday made it easy to work while others joined the madness of Black Friday, the biggest shopping day in the U.S. My task was to complete the Annual Economic Review that will appear in the January issue of Industrial Laser Solutions and which also will be presented at the annual Lasers & Photonics Marketplace Seminar to be held in San Francisco on January 25.

I've been collecting references on the global manufacturing scene for several months, tossing those that were superseded by updated financial news. Still the folder is several inches thick. My opinion of the overall market for industrial lasers is formed from these references, interviews with suppliers of laser products, and countless anecdotal comments that are passed to me. By necessity the timing of the report can't be finalized until the latest quarterly reports are available from the 30 publicly traded laser and system suppliers that I track. Also, because of the importance of the fabricated metal product sector, I held off until the last possible minute as I collected impressions from those attending the Fabtech show in Chicago.

I'm not going to tip readers off in this blog to what my report will conclude but most of you, if you are in manufacturing, can probably guess that 2009 will be negative. Many of those I spoke with at Fabtech had already written-off 2009 and they were planning for an improved 2010. This seems to be the attitude of others in the manufacturing sector according to my reference sources.

Most of the neighboring kids who returned for the holiday stayed around for the long weekend, taking advantage of a rather mild weekend to play some touch football. As they worked off their Thanksgiving meals with exuberant no-rules football I pondered on their immediate future as this country stumbles though a prolonged recession and slow recovery. All but two, a graduate student and doctor doing his residency, are in the nation's workforce. Each feels the recession in one way or another. The only female, an MBA consultant for a major accounting firm who sees the inside picture, can only express their concerns based on actual experiences.

One, a budding motion picture and TV producer, is concerned about investors; another, a railroad executive, is thinking about the drop in car loadings that, he says, can be a tip to the markets three months from now.

But I notice that all the kids are playing with the abandon and joy of young people when surrounded by their friends. I call them kids even though they are young men and a woman. But to me they will likely always be the kids, because I experienced their births and their childhood as they were raised here on the hill. As I enjoy their enjoyment I am encouraged by their vitality, poise, enthusiasm, and seemingly carefree attitude. They face a tough year but it doesn't seem to have them down; quite the opposite.

So as I put the final touches on my report I do so with some of their attitude; we will get through this by looking forward. Among the young people who are our future will be those tested by this, the most severe economic declines since the Great Depression, who will be starting the next economic revival. I think we are in good hands.

Thursday, November 19, 2009

FABTECH 2009 a success

FABTECH didn't disappoint; exhibitors went in with modest expectations for success and the show delivered. FABTECH didn't disappoint; exhibitors went in with modest expectations for success and the show delivered. Although the total number of exhibitors was down from the show goal, due in most part to the severe recession in the fabricated metal products industry, the show organizers were able to arrange the North and South halls at Chicago's McCormick Place so that there were no obvious gaps in the floor plan; wider aisles and discrete curtain placement worked.

We were able to meet with more than two-thirds of the 80 plus laser related exhibitors, and we shot video at a dozen or more of these. You will be able to see these videos on the ILS Website.

Among the large system suppliers (mostly laser sheet metal cutting systems) we found consensus that 2009 will go down in history as the worst year for equipment sales with average supplier company revenues decreased in excess of 35% for the latest reporting period.

However, setting aside the euphoria that trade shows engender, we found common agreement that the worst of the financial problems are over and that activity is picking up, sales are being made, and prospects for the early weeks of 2010 are looking brighter. When pressed for an estimate of how much and when it will happen--like good marketing people the world over--the proverbial six-month horizon leaves them wiggle room if they have guessed wrong.

A typical response to our queries was a nominal 10-12% growth over the worst quarter of the fiscal or calendar year. In the words of my colleague Tom Hausken of Strategies Unlimited, "There will be growth."

Most company managers project a bumpy six months with no major blips that will push sales up because the inventory of "new" used equipment has to be worked off and credit availability has to ease.

Daniel Gross, a writer I respect, in his latest column in Slate predicts a faster-than-expected recovery in employment could happen, and if he is right then that bump may already be out here waiting to explode.

The market prospects for small laser system suppliers, mainly laser markers, looked brighter at this year's FABTECH, as their market sectors have not felt the depth of the recession because they are not tied exclusively to heavy manufacturing; they are serving the medical, scientific, and military markets, in addition to industrial. Recovery seems to be happening faster with them as their more diverse manufacturing markets have not felt the pain that the industrial has. Many of the companies serving these markets are having a good year, in one or two cases an excellent year.

The suppliers of related products and consumables expressed positive feelings for the show and the visitors they met. Many of those surveyed serve more than the industrial market and this has helped them weather the storm that has hit their OEM customers in other market sectors.

There were lots of potential buyers attending the show (visitor total at 25,000, Monday and Tuesday both halls experienced heavy traffic), which gave exhibitors the impression that the worst was behind them and that 2010 will be brighter. We were told by many exhibitors that leads generated were plentiful and of high quality. Several of these mentioned sales made at the show.

Our judgment; FABTECH exhibitor goals were met and a willing and potentially growing selling market has developed. On the whole this year's show will be judged a success.

Thursday, November 12, 2009

Do you remember when...?

So here's the idea, suggested to me by the editor of Laser Community, the laser magazine from TRUMPF, for whom I occasionally contribute editorial. I'll pick the Top Ten industrial laser applications developed in the first 50 years of laser technology, which will appear in their 50 year Highlight issue. So here's the idea, suggested to me by the editor of Laser Community, the laser magazine from TRUMPF, for whom I occasionally contribute editorial. I'll pick the Top Ten industrial laser applications developed in the first 50 years of laser technology, which will appear in their 50 year Highlight issue. Interesting idea. I'm not sure if I was chosen because of my long career in industrial laser technology (meaning I have outlasted all the other pioneers) or because of my 25 years of editing Industrial Laser Solutions, but this is an offer that is hard to resist albeit one fraught with potential controversy.

If I pick ten will my choices be accepted by others as a definitive list or will they nit pick me to death for my choices? My solution, set guidelines for how the choices are made. This seems a reasonable way to resolve future correspondence on why I passed on certain applications.

With that as my modus operandi, agreed to by the editor, I set out to revisit 50 years of laser technology and specifically 40 years of industrial laser activity, as I consider 1970 as the start of the industrial laser business.

The task was made easier for me by the criteria that I set; the application had to be innovative and a breakthrough in terms of it's utilization, it had to fill a need in industry as exemplified by its eventual widespread acceptance globally, it had to advance laser and system technology and in so doing create spin-off technology that continues the growth of industrial laser materials processing, it had to have longevity as determined by its continued use today, and finally the markets that used the application had to be measurable in terms of units sold and revenues produced. These criteria, if met, would cull out all those great applications we still talk about which are now forgotten, even though they were media news in their day.

I tapped all my resources, files of information in my possession, personal reminiscences of those who were the applications developers, and the pages of ILS. The result was a list of great applications that so intrigued me that I asked the Laser Community editor for permission to expand on his requirements for a full-blown review in ILS (it will appear only as a timeline reference in the winter issue of Laser Community). This longer piece will appear in the January issue of ILS, and until then my choices are known only to some of those who I tapped for background information.

This blog is first notice to those who are widely versed in industrial laser processing, meaning those who have been around for years and are qualified to comment on what transpired over 50 years. I will be committing the Top Ten list to perpetuity at the end of this month when the January article is in pre-production.

I have to say that a lot of great applications were recalled and their exclusion from my list was only because they did not fully meet the criteria I set. When the list is published you will note that it does not include any of the new crop of applications that may over time qualify, therefore most of those chosen date back to the early days of this technology. I think I will treat these and others that missed the cut in a general closing paragraph that at least gives them mention, sort of an honorable mentions list.

As an aside, at the recent successful gathering of advanced laser materials processing developers at ICALEO, Paul Denney of CCAT put forth an idea for future ICALEO meetings--a session devoted to the wildest, craziest, zaniest industrial laser applications. Among the candidates, cutting cheese, changing the sex of shrimp, and trimming cut asparagus spears. Several old-timers, myself included, could in a short time identify some of these misfits that never would have made my Top Ten list. As I dug through my reference for the list many of these occurred to me as examples of misguided efforts that an emerging technology engendered as it struggled to find its markets.

I look forward to the comments that my Top Ten list will produce and I promise, in one way or another, to share these better ones with you. If you want to have a little fun, make up your own list and send it along to me after December 1st. I'll compare these to mine and I'll acknowledge anyone who guesses right on my choices the week after the January issue of ILS appears.

Wednesday, November 4, 2009

Everything old is new again

It's October 1800 and they've called a special meeting of the Town Council. The subject--what happened to the Town Crier?

It's October 1800 and they've called a special meeting of the Town Council. The subject--what happened to the Town Crier? Because the Council comprises merchants, a banker, and a farmer, the concern for the missing Crier is mostly expressed by the general store proprietor. "Who is going to be spreading the noon news that I used to sponsor," he asked. "I just got a shipment of China tea from that latest clipper ship arrival and it's going to be clogging up my stockroom if I don't let the housewives know it is here."

The practical farmer answered, "Why not use young Ben who has the newfangled broadside sheet press in his print shop?"

"Takes too long to get quantities of those sheets printed and on a humid day the ink runs so you can't make out my selling prices."

The cooper whose barrels were only made to order asked, "How much were you paying the Crier and why did you stop?"

"Not much, but I was his best customer. It's the economy, what with the recent collapse of the state banking system, new taxes on imported goods, and two years of drought that impacted the harvest reducing bartering options, my business is off by 40%," said the store owner.

"Well don't blame me," said the farmer. "I don't control the weather. Besides the drought is over and this year's crop looks better. So you should see the wives back in your store soon."

"I hear you but I'm just not ready to start up with the Crier again until I have more confidence in the economy."

"You mean you want guarantees that buyers will come back to you before you spend money telling them what you have to sell? Who ever heard of such a thing?" said the miller. "Besides, if you don't get the word out about your new shipment my wife will keep serving me that chamomile tea she makes, which I can’t stand."

The Council Chairman interrupted, "Look, forget the tea; the issue before us is how can we get the Crier back on the road. There's an election coming up and I need to get my message to the voters."

"Don't look at me as the bad guy," said the store owner. "I can't fund him by myself, maybe others need to pitch in."

The cooper said, "Right, and we need to do it now. By the time Ben gets his machine running right it may be too late and you'll be forced to cut your hours and the assortment of merchandise you stock."

The banker, whose contacts were widespread cautioned, "I’ve heard the Crier was seen across the river, trying out for the flatlander's council. Ben can't print enough broad sheets to get news over there. Maybe if we they hire him we can give him a megaphone and he can shout the news over the river to us."

"How about we find a new Crier," opined the farmer. "What's so special about the old one?"

"He knows us, our needs, our wants, and our way of life; he's one of us," answered the miller. "When he spreads the news it's done with integrity."

"What's with the integrity, all we want is the news headlines, you think content matters?" the Council Chairman added, knowing full well that he really didn't want the Crier telling everything he knew.

"I've got a suggestion--why don't you guys kick in? I shouldn't be the only one sponsoring the Crier. How about sharing the burden?" pleaded the store owner.

At this blasphemy a motion was made to adjourn the Council and the members fled the room, clutching their purses.

A few days later passing the General Store one could see, through an open door, the proprietor standing in front of a sign reading--Inventory Reduction Sale--surrounded by unopened boxes of China tea, striving to listen through an ear trumpet to the faint voice of the Town Crier delivering the noon news across the river.

And so it goes.