The subjects today are “jobless recovery” and “productivity,” both interrelated so I will treat them as one. The financial media has seized on the former in an attempt to explain why the overall economic news is positive but the not-so-positive news on the unemployment front continues week after week. And more astute observers looking for causes have latched onto the recent productivity increases as one culprit.
There may be some truth in this as we close out the first quarter of 2010 and the time for retrospective analysis is upon us. From what I have read, heard, and experienced so far this year, the picture for manufacturing, globally, is about what was forecast in January; slow but positive growth in the manufacturing sector and caution on the part of the manufacturers in regard to company expansion and capital spending. In January I was told by a number of equipment suppliers and their customers that the first quarter would be the bellwether and that a “wait and see” attitude before committing to expansion would be the prudent thing to do. And the manufacturers could afford to do this as they were running lean and able to handle increasing business from their customers with the status-quo. All of this understandable and commendable.
But as the quarter closes we should have started to hear comments from the capital equipment suppliers that their markets were beginning to stir. And it is happening, for industrial lasers in market sectors that were identified as potential drivers back in January—medical devices, energy, and semiconductors. But the fabricated metal products sector still seems frozen, about what was expected with that industry talking about a late-first-half recovery beginning.
News of companies hiring temporary workers and others adding part-time help is often heard today. Becoming more common is the talk, and action thereof, about automation; taking us back to the jobless recovery and productivity issues. Investing in automation for manufacturing operations is expensive but not as expensive as the recurring costs of salaries and benefits. I have spoken to manufacturers who, having run lean for more than a year, are reassessing their production operations as they gear up for business growth and asking the hard questions about restaffing. Many of these companies are looking hard at what they want to be as their businesses normalize to pre-recession levels.
Back in the summer of 2009 we heard a lot about companies using the recession as a time to look to innovations. It may turn out that innovation is a cover word for automation that will lead to productivity and profit enhancement. No mention of employment here.
I’ve just returned from a trip to Europe where the same prospects and solutions are under consideration in manufacturing, both in the established industrialized West and the burgeoning states of Central Europe. Admittedly there are certain restrictive government polices that acted as a deterrent to employment reductions and consequently inhibit to a degree automated solutions to productivity increases, but the issue is a factor and automation is a well used word today.
I had the privilege of visiting two fabricated metal product producers in two regions in Belgium. One, a manufacturer of air handling equipment, has automated his turret punching systems with robot load/unload automation that not only allows for unattended and more productive operations but in the doing also improves the quality of the parts produced on the systems. As he said, “In order to compete against China (his main competitor) he must keep overhead costs down.” If he adds non-automated equipment (needing more people) it will take him 5 years to get his investment back, with automation it is 3 years.
The other, an international maker of industrial paint booths, has added a laser cutting system that uses an automated shuttle system to load/unload sheet metal and cut components, again adding the advantage of “lights-out” operation. In fact, at this company the only staffed work shift was leaving the plant at 4 p.m. and the lights were being turned off, and yet the laser cutter was still spitting out cut parts and the shuttle was feeding more sheets and shifting completed work. And yet no mention of this was made by the company owner who didn't even call this to my attention as I was exiting the now abandoned shop floor.
Both of these represent recent additions and investment made as the recovery begins, in automation, not in employment, as both company owners told me they do not have plans to add people. Just a small example of what I think may be support for the “jobless recovery” idea; and certainly examples of productivity enhancement through automation.
Tuesday, March 16, 2010
Wednesday, March 3, 2010
Death by a thousand cuts
When I last left you on the subject of the Toyota recall my sudden acceleration problem was "corrected" or so said the president of Toyota USA. Two fixes by my dealer had me driving with confidence that my quality vehicle was returned to excellent performance.
Not so fast. Another Toyota Limited Service Campaign (LSC) notice showed up in my mail this week; in the same envelope with the two Safety Recall notices about the floor mat interference and accelerator pedal problems. I had short cut the formal recalls actions on my own to effect the corrective action. This new LSC deals with a possible leaking oil supply hose that needs to be replaced.
Media reports suggested the leaking oil problem was not serious enough for a recall. But wait a minute; Toyota may have known about this for several years. I used to lease my Camrys, rolling them over every three years. Going back two leases I remember that the dealer salesman and his service manager placed emphasis on my sticking to the maintenance schedule, as it related to oil changes. It used to annoy me that they were always reminding me to have the oil checked, as if it was my problem; I faithfully took the car in every 5000 miles, as recommended, so why worry about oil problems. On my new one I can't forget the oil change as it shows up as an annoying display that gets more obnoxious the more I ignore it. Then one day in a doctor's office, scanning an old automotive magazine I ran across a letter to the editor commenting on this same concern with oil, and shortly thereafter Consumer Reports, that unbiased reviewer of automobiles, cautioned about possible undefined oil problems with certain Camrys with no details.
Here it is several years later and Toyota is now acknowledging that as far back as 2005 they had oil hose leaking problems. What's next Toyota, a recall for the entire car? And in the Wall Street Journal I read that the president and CEO of Toyota blames unnamed profit-hungry executives who put bottom line ahead of quality at the company. But, in a gesture that I have often applauded with others, he took full blame; you know, that old 'captain of the ship' analogy.
On my first trip to Japan, I was advised by my employer (at the time a multi-national conglomerate) that I had no worries while traveling there. One of the corporation's subsidiaries was a personal loan company with offices in cities throughout the world and especially in Japan where they were said to be on every street corner. "If you ever have a problem or need cash, just go to one of our branches, show your company ID, and they will take care of you." How that eases your mind when traveling in a foreign country for the first time.
The only problem, literally as I was boarding the plane for Tokyo, a massive scandal rocked Japan and the government in power at the time. It had to do with some illegal payments to certain officials involved in major purchase of an aircraft that had wings fabricated by a division of my company. The scandal was so deep that it brought down the political party in power, and the top executives for the airline and government involved actually were imprisoned.
So here I come, feeling that my Big Brother company has me covered and will watch over me as I navigate a strange country. Arriving in Tokyo and reading the newspaper I learn my company is so disgraced by the scandal they shut down all the loan offices, eventually pulling out of the country altogether.
It was my first experience with a culture that valued "face" to the extent that a disgraced executive has been known to make the supreme sacrifice as a demonstration of his shame. Over the next few years I was to see more of this where "the buck stops here" had major consequences.
I thought about this as the CEO of Toyota made his mea culpas before the U.S. Senate and the government in China. The consequences of the mess at Toyota are unknown because every day we are treated to new revelations. How he must feel that all is not yet revealed.
On one trip to Japan in 1979 I was mugged by some young hoodlums as I left Tokyo Main Station on a Friday evening after returning by train from Hiroshima. Several railroad workers came to my aid, helping me pick up my briefcase, suitcase, rain coat, and other packages that had been scattered in the street gutter. One of the workers, apologizing for the embarrassment this criminal act caused, said he didn't know what his county was coming to, and that youth had no respect anymore.
Recounting this to associates at dinner the next evening I said I was sad to see so much emulation of America in a country I admired for its culture, and I was sorry that they not only copied the good but also the bad from my country. And now I read that greedy executives (where have I heard this before) may have been the cause for a great company losing its moral direction. Déjà vu all over again.
Not so fast. Another Toyota Limited Service Campaign (LSC) notice showed up in my mail this week; in the same envelope with the two Safety Recall notices about the floor mat interference and accelerator pedal problems. I had short cut the formal recalls actions on my own to effect the corrective action. This new LSC deals with a possible leaking oil supply hose that needs to be replaced.
Media reports suggested the leaking oil problem was not serious enough for a recall. But wait a minute; Toyota may have known about this for several years. I used to lease my Camrys, rolling them over every three years. Going back two leases I remember that the dealer salesman and his service manager placed emphasis on my sticking to the maintenance schedule, as it related to oil changes. It used to annoy me that they were always reminding me to have the oil checked, as if it was my problem; I faithfully took the car in every 5000 miles, as recommended, so why worry about oil problems. On my new one I can't forget the oil change as it shows up as an annoying display that gets more obnoxious the more I ignore it. Then one day in a doctor's office, scanning an old automotive magazine I ran across a letter to the editor commenting on this same concern with oil, and shortly thereafter Consumer Reports, that unbiased reviewer of automobiles, cautioned about possible undefined oil problems with certain Camrys with no details.
Here it is several years later and Toyota is now acknowledging that as far back as 2005 they had oil hose leaking problems. What's next Toyota, a recall for the entire car? And in the Wall Street Journal I read that the president and CEO of Toyota blames unnamed profit-hungry executives who put bottom line ahead of quality at the company. But, in a gesture that I have often applauded with others, he took full blame; you know, that old 'captain of the ship' analogy.
On my first trip to Japan, I was advised by my employer (at the time a multi-national conglomerate) that I had no worries while traveling there. One of the corporation's subsidiaries was a personal loan company with offices in cities throughout the world and especially in Japan where they were said to be on every street corner. "If you ever have a problem or need cash, just go to one of our branches, show your company ID, and they will take care of you." How that eases your mind when traveling in a foreign country for the first time.
The only problem, literally as I was boarding the plane for Tokyo, a massive scandal rocked Japan and the government in power at the time. It had to do with some illegal payments to certain officials involved in major purchase of an aircraft that had wings fabricated by a division of my company. The scandal was so deep that it brought down the political party in power, and the top executives for the airline and government involved actually were imprisoned.
So here I come, feeling that my Big Brother company has me covered and will watch over me as I navigate a strange country. Arriving in Tokyo and reading the newspaper I learn my company is so disgraced by the scandal they shut down all the loan offices, eventually pulling out of the country altogether.
It was my first experience with a culture that valued "face" to the extent that a disgraced executive has been known to make the supreme sacrifice as a demonstration of his shame. Over the next few years I was to see more of this where "the buck stops here" had major consequences.
I thought about this as the CEO of Toyota made his mea culpas before the U.S. Senate and the government in China. The consequences of the mess at Toyota are unknown because every day we are treated to new revelations. How he must feel that all is not yet revealed.
On one trip to Japan in 1979 I was mugged by some young hoodlums as I left Tokyo Main Station on a Friday evening after returning by train from Hiroshima. Several railroad workers came to my aid, helping me pick up my briefcase, suitcase, rain coat, and other packages that had been scattered in the street gutter. One of the workers, apologizing for the embarrassment this criminal act caused, said he didn't know what his county was coming to, and that youth had no respect anymore.
Recounting this to associates at dinner the next evening I said I was sad to see so much emulation of America in a country I admired for its culture, and I was sorry that they not only copied the good but also the bad from my country. And now I read that greedy executives (where have I heard this before) may have been the cause for a great company losing its moral direction. Déjà vu all over again.
Tuesday, February 23, 2010
The factory-less future
I don't know Gregg Easterbrook; in fact, I don't believe I have read any of this journalist's work before I came across a contribution in the February 22 issue of Newsweek magazine. First a disclaimer; I have been a subscriber to this weekly news magazine for more years that I care to count. Recently this magazine--partly because of the economic upheaval in the publishing business and as defense against the inroads of the Web--reorganized itself and appointed a new editor, Jon Meacham, who, with the publisher's blessings I am sure, proceeded to rip apart what was once a nice weekly news roundup turning it into a Washington-centric collection of essays by a gaggle of columnists and contributors who churn out sometimes ponderous editorial on a broad range of subjects, much of which is of little interest to me.
I know, in order to be well read so that I can comment on current situations I should read all that is published on those subjects that require my opinion. I do occasionally find some useful information in the Newsweek pages, which I have commented on in my Blogs. But, frankly, the print version of Newsweek no longer appeals to me and I prefer their Web page, which fills in for the editorial makeup of the old Newsweek. All the more reason I will let my subscription lapse, unfortunately not until September of 2012.
So Meacham's decision to print an excerpt from Easterbrook's 2009 book, Sonic Boom: Globalization at Mach Speed (Random House) is not a surprise because it is another in a string of analyses that is better left to more weighty publications, not to what I presumed to be a news magazine.
The excerpt titled "The Boom is nigh," subheaded, "Why the coming recovery will hurt like hell," is actually worth a read and to a degree echoes what we are hearing and reading about these days; you know, a "jobless recovery" etc. What caused my temperature to rise on first reading the essay is the paragraph; "Manufacturing will be obsolete," which is quoted below.
The factory-based economy is nearly over, because of technological improvements. Fifteen years ago, Boeing took 22 days to build a 737 airliner; today, it takes 12 days. Such changes mean fewer factory jobs, even as production rises. China is losing factory jobs much faster than the United States, as efficiency improves. Soon there won't be any nation with a factory-based economy, and that would have happened regardless of whether there was trade liberalization. Higher productivity, in turn, generates the social wealth that creates more jobs for teachers, health-care providers, and other essential needs. The world is actually better off with declining factory employment, which is no consolation if you lost a job.
A day later I went back and read it again, after first Goggling Easterbrook to see who he is and what in his background qualifies him to be an expert on manufacturing, before I attacked him for knowing nothing about this sector of the economy in the U.S, or around the world. Because this is an excerpt I suppose I should read the book to see what lies behind the condensed thinking in the Newsweek excerpt. I would but, frankly, I am not interested in his observations and thinking. That is why I subscribed to Newsweek; to read what the editor thinks is worthwhile for me to be aware of. So I Goggled Meachem and found that he too has no background or credentials that would make him a manufacturing expert. And yet, Easterbrook and Meacham both thought the observations on the future state of manufacturing were important enough to appear in the condensed pages.
Easterbrook seems to be caught up with technology and productivity, two aspects of manufacturing in the U.S. that have allowed this country to survive in this period of globalization. His comments on shrinking manufacturing jobs would be appropriate if world markets never increase, as he cites efficiency as the main culprit. But the sentence on factory-based efficiency left me scratching my head. If the great surge in productivity spells the end of employment gains and a factory-based economy, where will manufacturing take place, in a field outside major cities in Africa? Productivity means producing abundantly or effectively, and in manufacturing it is a cover word for automation and labor reduction. Easterbrook sees this as good because its effect is the creation of jobs for non-manufacturing people. And he sums this up by saying the world will be better off with declining factory employment. I can just see the union bosses firing off e-mail to Meachem on this.
Then it occurred to me, Meacham has a hidden agenda; to publish controversial or debatable essays and build readership by challenging us to do some deep thinking and to care less about the Olympics. At least I think this is what he is up to with his makeover at Newsweek; if so, it's looking like a failure to me.
I know, in order to be well read so that I can comment on current situations I should read all that is published on those subjects that require my opinion. I do occasionally find some useful information in the Newsweek pages, which I have commented on in my Blogs. But, frankly, the print version of Newsweek no longer appeals to me and I prefer their Web page, which fills in for the editorial makeup of the old Newsweek. All the more reason I will let my subscription lapse, unfortunately not until September of 2012.
So Meacham's decision to print an excerpt from Easterbrook's 2009 book, Sonic Boom: Globalization at Mach Speed (Random House) is not a surprise because it is another in a string of analyses that is better left to more weighty publications, not to what I presumed to be a news magazine.
The excerpt titled "The Boom is nigh," subheaded, "Why the coming recovery will hurt like hell," is actually worth a read and to a degree echoes what we are hearing and reading about these days; you know, a "jobless recovery" etc. What caused my temperature to rise on first reading the essay is the paragraph; "Manufacturing will be obsolete," which is quoted below.
The factory-based economy is nearly over, because of technological improvements. Fifteen years ago, Boeing took 22 days to build a 737 airliner; today, it takes 12 days. Such changes mean fewer factory jobs, even as production rises. China is losing factory jobs much faster than the United States, as efficiency improves. Soon there won't be any nation with a factory-based economy, and that would have happened regardless of whether there was trade liberalization. Higher productivity, in turn, generates the social wealth that creates more jobs for teachers, health-care providers, and other essential needs. The world is actually better off with declining factory employment, which is no consolation if you lost a job.
A day later I went back and read it again, after first Goggling Easterbrook to see who he is and what in his background qualifies him to be an expert on manufacturing, before I attacked him for knowing nothing about this sector of the economy in the U.S, or around the world. Because this is an excerpt I suppose I should read the book to see what lies behind the condensed thinking in the Newsweek excerpt. I would but, frankly, I am not interested in his observations and thinking. That is why I subscribed to Newsweek; to read what the editor thinks is worthwhile for me to be aware of. So I Goggled Meachem and found that he too has no background or credentials that would make him a manufacturing expert. And yet, Easterbrook and Meacham both thought the observations on the future state of manufacturing were important enough to appear in the condensed pages.
Easterbrook seems to be caught up with technology and productivity, two aspects of manufacturing in the U.S. that have allowed this country to survive in this period of globalization. His comments on shrinking manufacturing jobs would be appropriate if world markets never increase, as he cites efficiency as the main culprit. But the sentence on factory-based efficiency left me scratching my head. If the great surge in productivity spells the end of employment gains and a factory-based economy, where will manufacturing take place, in a field outside major cities in Africa? Productivity means producing abundantly or effectively, and in manufacturing it is a cover word for automation and labor reduction. Easterbrook sees this as good because its effect is the creation of jobs for non-manufacturing people. And he sums this up by saying the world will be better off with declining factory employment. I can just see the union bosses firing off e-mail to Meachem on this.
Then it occurred to me, Meacham has a hidden agenda; to publish controversial or debatable essays and build readership by challenging us to do some deep thinking and to care less about the Olympics. At least I think this is what he is up to with his makeover at Newsweek; if so, it's looking like a failure to me.
Wednesday, February 17, 2010
Finding fault with a fault
A few weeks ago I received a notice from Toyota that there might be a floor mat interference with the accelerator pedal in my car. The notice went on to say that they, Toyota, were developing a remedy campaign and that I would be notified when it was ready. I checked my floor mats out and couldn't see any way they could interfere so I ignored the notice.
Not too long afterwards the media floodgates opened. Accelerator sticking and possibly computer problems on certain models made by Toyota became the lead news item on local and network TV. Blogs and Websites were cluttered with critics belaboring Toyota, and almost every day came new revelations from the U.S government and industry specialists. Now accidents with fatalities were being uncovered, causing me to rethink my lack of concern.
After some unintentional stonewalling, while Toyota experts attempted to define and understand the depths of the problem, headquarters in Japan advised that a fix would be available, to be installed by the dealers. Before that fix was described, another possible cause was identified and another round of tests, followed by the announcement of another fix.
The largest automotive recall in history was announced and media advertisements apologizing for the problem were distributed. The latest culprit, a sticking accelerator pedal, could be fixed by the insertion of a metal plate, which miraculously was available at all U.S. dealers.
Curious as to why I hadn't received a formal recall notice for the floor mat or the accelerator pedal fixes, I called Toyota and was informed that, indeed, my car was one of those possibly affected and that I could simply call my dealer for an appointment for corrective action.
So Monday was the day, and I checked in at my dealer where I joined a significant number of others who waited for about an hour for two fixes, a floor mat modification and the accelerator plate retrofit. The service department at my dealer is top rated and they have always been a pleasure to visit. Even in the face of extended service department hours to accommodate the affected vehicle owners, the service staff managed to look unflustered and in-control. Of course, our complaint was not with the dealer it was with Toyota, but just like the poor airline ticket clerk who gets involved with travelers in a sometimes vehement confrontation, the service people are the front line for owner complaints.
I think that had we been driving any other make of automobile we might not have been so concerened with the maker's response; but this was Toyota, the paragon of quality and reliability, the brand that we willingly pay more for because of these two factors. I've been driving these for almost 35 years and in that time Toyota has consistently delivered the right products for my needs.
But now I, like others, am concerned. The revelations about more problems makes the company look bad, warranted or not. My associate, who has her recall fix scheduled for today, has heard the news that her model may also have a steering problem. And she drives the latest of Toyota's most reliable models. Her son is training for his license and she has concerns that he is practicing in a potentially unsafe vehicle. She is looking to Toyota for reassurance and so far they have let her down.
In my technology world, quality, reliability, and safety are hard-earned attributes that product makers strive for. Even I, just a reporter of products, always wince when I see a rare Web reference to a fire involving a laser, usually traced to either an electric fault or a buildup of byproduct materials in the exhaust system. It's almost as if these infrequent occurrences are an affront to my sensibilities.
Years ago, when I was in the electron beam business, we learned that a faulty electron beam weldment had been identified as the cause of jet fighter canopy deployment leading to a fatality. Even though the maker of the electron beam welder used by the jobshop responsible for the weld failure was our bitterest rival we were all pulling for them to be cleared of fault so that our products would not be looked upon with disfavor. Frankly, we were pleased that the tumult over the finding of the problem quickly disappeared from the media and, to my knowledge, no long-term effects were felt within the industry.
I don't have any idea how Toyota will come out of this. Every day brings more bad news and the company seems handcuffed when it comes to clearing the air. I am not acting as an apologist for Toyota or the auto industry, but it never ceases to amaze me that a package made of thousands of parts, from hundreds of vendors, operated by skilled and unskilled drivers under the most onerous of conditions manages to perform to specification.
Sunday I was watching the end of the Daytona 500 as one of the announcers made a comment that a driver was trying for the win with an engine turning 8000 rpm on his tachometer. I thought, 8000 revolutions per minute for minute on minute, what a test for that engine and, since it made it through the race, what a tribute to the engine makers who assembled such a beautifully performing product. So I guess a once–in-awhile glitch precipitating a recall is forgivable.
Not too long afterwards the media floodgates opened. Accelerator sticking and possibly computer problems on certain models made by Toyota became the lead news item on local and network TV. Blogs and Websites were cluttered with critics belaboring Toyota, and almost every day came new revelations from the U.S government and industry specialists. Now accidents with fatalities were being uncovered, causing me to rethink my lack of concern.
After some unintentional stonewalling, while Toyota experts attempted to define and understand the depths of the problem, headquarters in Japan advised that a fix would be available, to be installed by the dealers. Before that fix was described, another possible cause was identified and another round of tests, followed by the announcement of another fix.
The largest automotive recall in history was announced and media advertisements apologizing for the problem were distributed. The latest culprit, a sticking accelerator pedal, could be fixed by the insertion of a metal plate, which miraculously was available at all U.S. dealers.
Curious as to why I hadn't received a formal recall notice for the floor mat or the accelerator pedal fixes, I called Toyota and was informed that, indeed, my car was one of those possibly affected and that I could simply call my dealer for an appointment for corrective action.
So Monday was the day, and I checked in at my dealer where I joined a significant number of others who waited for about an hour for two fixes, a floor mat modification and the accelerator plate retrofit. The service department at my dealer is top rated and they have always been a pleasure to visit. Even in the face of extended service department hours to accommodate the affected vehicle owners, the service staff managed to look unflustered and in-control. Of course, our complaint was not with the dealer it was with Toyota, but just like the poor airline ticket clerk who gets involved with travelers in a sometimes vehement confrontation, the service people are the front line for owner complaints.
I think that had we been driving any other make of automobile we might not have been so concerened with the maker's response; but this was Toyota, the paragon of quality and reliability, the brand that we willingly pay more for because of these two factors. I've been driving these for almost 35 years and in that time Toyota has consistently delivered the right products for my needs.
But now I, like others, am concerned. The revelations about more problems makes the company look bad, warranted or not. My associate, who has her recall fix scheduled for today, has heard the news that her model may also have a steering problem. And she drives the latest of Toyota's most reliable models. Her son is training for his license and she has concerns that he is practicing in a potentially unsafe vehicle. She is looking to Toyota for reassurance and so far they have let her down.
In my technology world, quality, reliability, and safety are hard-earned attributes that product makers strive for. Even I, just a reporter of products, always wince when I see a rare Web reference to a fire involving a laser, usually traced to either an electric fault or a buildup of byproduct materials in the exhaust system. It's almost as if these infrequent occurrences are an affront to my sensibilities.
Years ago, when I was in the electron beam business, we learned that a faulty electron beam weldment had been identified as the cause of jet fighter canopy deployment leading to a fatality. Even though the maker of the electron beam welder used by the jobshop responsible for the weld failure was our bitterest rival we were all pulling for them to be cleared of fault so that our products would not be looked upon with disfavor. Frankly, we were pleased that the tumult over the finding of the problem quickly disappeared from the media and, to my knowledge, no long-term effects were felt within the industry.
I don't have any idea how Toyota will come out of this. Every day brings more bad news and the company seems handcuffed when it comes to clearing the air. I am not acting as an apologist for Toyota or the auto industry, but it never ceases to amaze me that a package made of thousands of parts, from hundreds of vendors, operated by skilled and unskilled drivers under the most onerous of conditions manages to perform to specification.
Sunday I was watching the end of the Daytona 500 as one of the announcers made a comment that a driver was trying for the win with an engine turning 8000 rpm on his tachometer. I thought, 8000 revolutions per minute for minute on minute, what a test for that engine and, since it made it through the race, what a tribute to the engine makers who assembled such a beautifully performing product. So I guess a once–in-awhile glitch precipitating a recall is forgivable.
Thursday, February 11, 2010
That was then, this is now
This year we celebrate the 50th Anniversary of Ted Maiman's successful demonstration of a working laser. As one who has been around since that time, and is still active in the technology, I am being bombarded with requests for quotes, observations, retrospectives, feature articles, and speaking requests. I don't know if these requests are recognition of my fund of knowledge or just because I have outlived many of the pioneers in this technology. I chose to think the former.
As I was reconstructing activities in the early days for some of these requests, it occurred to me that the 1960s were a period of frenetic research and development, with technology breakthroughs happening weekly. I was a member of a solid-state research team at the time, providing equipment support assistance to another group who were working on optical masers (eventually lasers.) One of our tasks was to build a crystal growing apparatus for that group, which eventually produced single crystal ruby boules that were ground into laser rods.
At the weekly research division staff technology meeting, each group was asked to summarize pertinent progress in their specialty. It seemed that for a time every meeting was dominated by reviews on internal progress with "lasers" and reports from scientists who had attended international conferences where "laser" technology was the prime subject in and out of formal sessions.
It was an exhilarating time participating in the birth of a technology which then was being likened to the invention of the transistor. Interestingly, none in our laboratory had any thoughts about making history. Rather conversations typically centered around speculation on possible uses for this powerful energy source, but rarely on how the technology could be, as we say today, monetized.
My interests shifted away from laser technology into another high energy process, electron beam, and I didn't return to laser technology until 1970. A that time the commercial prospects for laser materials processing were just beginning to jell around the overlap pulsed laser spot welding of hermetically sealed microelectronic packages and realization that CO2 lasers could cut sheet metal. For this reason I arbitrarily date the beginnings of the commercial market for industrial lasers to 1970. As the first person to attempt to quantify the market for these lasers I estimated total 1970 revenues for industrial lasers at $2 million. Since then the market has grown at a CAGR of 18% up to the great economic recession of 2009.
About 15 years after the first industrial laser systems were installed I had the temerity, or brashness, to write two published articles that were an attempt to send a message to the laser suppliers: "Why Doesn't Industry Use More Lasers?" (Lasers And Applications, February 1983) and "Key Issues for Industry Acceptance of Lasers" (Laser Focus/Electro-Optics, November 1983). The first identified: organizational, competitive, and industrial factors that played a role in answering the question posed by the title. In the latter, suggestions on: pricing, system design and integration, processing databases, and equipment standardization were added to the mix.
I'd like to say that industry responded to these articles and as a result that 18% CAGR resulted. Unfortunately my astute analysis has never been credited as raison d'être for this good performance. These did however serve to bring me together, as a consultant, with many of the companies supplying the lasers and systems where I could, functioning on the inside, see the seed of my thinking take root.
Most of the issues I identified eventually were addressed either due to more astute company management or more likely in response to developing competitive pressures. The one that I believed was perhaps a most important factor necessary to raise laser processing to even higher levels of acceptance was standardization, a dirty word to some manufacturers, but one that I have heard over and over as necessary when talking with industries in the markets that industrial lasers serve.
My colleague, Dr. Tom Hausken of Strategies Unlimited (a sister company in PennWell), uttered this word in his presentation at the annual Lasers and Photonics Marketplace seminar (San Francisco, January 25, 2010). After which I asked him if he expected to receive negative response to this idea from an industry that has openly been opposed to standards, except for laser safety and grudgingly to a relatively weak European equipment standard. His answer was a smile and typical Hausken's shoulder shrug, suggesting that he too saw this issue as a battle not to be fought without a lot of bloodletting.
I still believe that the development of some form of industry standards that future potential users of industrial laser systems could use as a first cut in qualifying suppliers of systems for sheet metal cutting, marking, turbine blade drilling, and medical device welding and cutting would go a long way toward opening new market opportunities as potential purchasers would have base standards to refer to when judging and selecting vendors.
It's a painfully onerous and lengthy process but other manufacturers of industrial machines and systems have gone though it and their industry is the better for it. As we enter the second decade of this new century we should be asking ourselves where will the markets be that will ensure a continuing growth of the laser processes now and about to be used? After recovery from the recession we will be looking for the next big application, such as photovoltaic manufacturing in the past year, that will boost annual sales into the double-digit area.
One can argue that making the buying process easier using standards for certain applications should facilitate the lengthy process that buyers now experience. I have talked with sheet metal cutting customers who have had to develop a matrix analysis to understand what their vendors were offering, when in reality the process was the object and the accomplishment of it clearly described in industry standards. Only the options offered by suppliers, their reputations, and the selling price differentiate one from another.
As I was reconstructing activities in the early days for some of these requests, it occurred to me that the 1960s were a period of frenetic research and development, with technology breakthroughs happening weekly. I was a member of a solid-state research team at the time, providing equipment support assistance to another group who were working on optical masers (eventually lasers.) One of our tasks was to build a crystal growing apparatus for that group, which eventually produced single crystal ruby boules that were ground into laser rods.
At the weekly research division staff technology meeting, each group was asked to summarize pertinent progress in their specialty. It seemed that for a time every meeting was dominated by reviews on internal progress with "lasers" and reports from scientists who had attended international conferences where "laser" technology was the prime subject in and out of formal sessions.
It was an exhilarating time participating in the birth of a technology which then was being likened to the invention of the transistor. Interestingly, none in our laboratory had any thoughts about making history. Rather conversations typically centered around speculation on possible uses for this powerful energy source, but rarely on how the technology could be, as we say today, monetized.
My interests shifted away from laser technology into another high energy process, electron beam, and I didn't return to laser technology until 1970. A that time the commercial prospects for laser materials processing were just beginning to jell around the overlap pulsed laser spot welding of hermetically sealed microelectronic packages and realization that CO2 lasers could cut sheet metal. For this reason I arbitrarily date the beginnings of the commercial market for industrial lasers to 1970. As the first person to attempt to quantify the market for these lasers I estimated total 1970 revenues for industrial lasers at $2 million. Since then the market has grown at a CAGR of 18% up to the great economic recession of 2009.
About 15 years after the first industrial laser systems were installed I had the temerity, or brashness, to write two published articles that were an attempt to send a message to the laser suppliers: "Why Doesn't Industry Use More Lasers?" (Lasers And Applications, February 1983) and "Key Issues for Industry Acceptance of Lasers" (Laser Focus/Electro-Optics, November 1983). The first identified: organizational, competitive, and industrial factors that played a role in answering the question posed by the title. In the latter, suggestions on: pricing, system design and integration, processing databases, and equipment standardization were added to the mix.
I'd like to say that industry responded to these articles and as a result that 18% CAGR resulted. Unfortunately my astute analysis has never been credited as raison d'être for this good performance. These did however serve to bring me together, as a consultant, with many of the companies supplying the lasers and systems where I could, functioning on the inside, see the seed of my thinking take root.
Most of the issues I identified eventually were addressed either due to more astute company management or more likely in response to developing competitive pressures. The one that I believed was perhaps a most important factor necessary to raise laser processing to even higher levels of acceptance was standardization, a dirty word to some manufacturers, but one that I have heard over and over as necessary when talking with industries in the markets that industrial lasers serve.
My colleague, Dr. Tom Hausken of Strategies Unlimited (a sister company in PennWell), uttered this word in his presentation at the annual Lasers and Photonics Marketplace seminar (San Francisco, January 25, 2010). After which I asked him if he expected to receive negative response to this idea from an industry that has openly been opposed to standards, except for laser safety and grudgingly to a relatively weak European equipment standard. His answer was a smile and typical Hausken's shoulder shrug, suggesting that he too saw this issue as a battle not to be fought without a lot of bloodletting.
I still believe that the development of some form of industry standards that future potential users of industrial laser systems could use as a first cut in qualifying suppliers of systems for sheet metal cutting, marking, turbine blade drilling, and medical device welding and cutting would go a long way toward opening new market opportunities as potential purchasers would have base standards to refer to when judging and selecting vendors.
It's a painfully onerous and lengthy process but other manufacturers of industrial machines and systems have gone though it and their industry is the better for it. As we enter the second decade of this new century we should be asking ourselves where will the markets be that will ensure a continuing growth of the laser processes now and about to be used? After recovery from the recession we will be looking for the next big application, such as photovoltaic manufacturing in the past year, that will boost annual sales into the double-digit area.
One can argue that making the buying process easier using standards for certain applications should facilitate the lengthy process that buyers now experience. I have talked with sheet metal cutting customers who have had to develop a matrix analysis to understand what their vendors were offering, when in reality the process was the object and the accomplishment of it clearly described in industry standards. Only the options offered by suppliers, their reputations, and the selling price differentiate one from another.
Thursday, February 4, 2010
Good times in the city by the bay
I like San Francisco. Haven't left my heart there, but this great city fills a place in my heart for all the wonderful visits I have made there over the years. Yes, it has problems, like all major cities in the USA, one of which is an abundance of "street people." Call them vagrants, homeless, panhandlers, or what you will, they are all over the center of the city, seemingly congregating where tourists locate, like the hotels.
For the most part they are easy to ignore, but occasionally you run into a persistent one who manages to irritate you by not leaving you alone. I suppose this is a ploy to get a handout; whatever, it is really aggravating.
One night last week I was standing in front of my hotel talking with two business acquaintances when one of these pests sidled up to us, occupying my space, and refusing to take "no" for an answer hung around listening to our discussion, which we continued in hopes he would leave. Big mistake. This guy was more than a pest, he was a pain, and he had attitude, expressing his unasked opinion of the Presidency, Congress, the state of the nation and war in Afghanistan. The problem was the guy was right, and if he hadn't been panhandling we might have invited him to express his opinion as these were the very subjects we were discussing.
You can't escape these people as they are everywhere, even in front of the Moscone Center where we were convening the Photonics West show. However, the second day of the show Apple and Steve Jobs showed up to introduce the new iPad and the city police cleared a four-block area around the halls so that the multitude of news media covering the Apple announcement would not see these vagrants as a metaphor for unemployment problems in our country. I was glad that the unwanted and uninvited eavesdropper from the previous night wasn't in the area; otherwise he might have made the six o'clock news.
Inside Moscone in two large halls were about 1200 exhibitors showing products for the photonics industry. Among these were a few, perhaps a couple dozen, who have laser products that are used in industrial applications and therefore targets for yours truly.
Photonics West is by its timing the first important show of the year, and as such it's populated, for the most part, by sales and marketing people who see the new year as a fresh page in their sales books and therefore most news generated is good news. I always temper my comments on the upbeat nature of this show by this observation; it's hard to be negative when you have 11 months more to make good things happen.
For the most part exhibitors I interviewed were optimistic that the recession had bottomed and that business was starting a long climb back to prosperity. Many of those I spoke with were already feeling the effects of a surge in spending by the global semiconductor industry, resurgence in the solar power sector, and a reversal of decline in the medical devices market.
Some laser suppliers are scratching to ramp up their lean manufacturing operations to meet stringent demands from certain Asian market sectors for expedited product deliveries. What took a year to complete a sale was now overwhelmed by demands for expedited deliveries. Problem is that many of the laser companies are so lean that they have no inventory and only a skeleton crew to assemble products. Their suppliers are also leaned down and several spoke about their purchasing agents scrambling to get material and sub-components, common occurrence. It's a problem we had discussed last year as a nice problem to have. Now that it is happening it's not as nice as we dreamed back then.
But the suppliers are coping and many are adding back employees let go last year and some are advertising for and adding new hires. Those who used overtime to compensate find that it is now uneconomic to do and new hires turn out to be more economically effective.
The most common comment we received when asking aobut the year to come was that the companies are waiting until the end of the first quarter to gain assurance that the market recovery is real and has legs. "Talk to me in March" was a frequent answer I got to my question about the rebound. However, it is clear that underlying this answer was the feeling that we are recovering, even a little faster than planned. As I told my audience at last Monday's Marketplace Seminar, my 9% increase for 2010 might be a little conservative and that with not much more impetus we might see this climb to double digits. Of course, we are moving from a -30% last year so it doesn't take many new orders to get to +10%.
We left San Francisco in a good mood, buoyed by the new business that is raising backlogs. Now if we can get the high-power laser market to rebound faster, 2010 might end up with surprisingly good numbers.
For the most part they are easy to ignore, but occasionally you run into a persistent one who manages to irritate you by not leaving you alone. I suppose this is a ploy to get a handout; whatever, it is really aggravating.
One night last week I was standing in front of my hotel talking with two business acquaintances when one of these pests sidled up to us, occupying my space, and refusing to take "no" for an answer hung around listening to our discussion, which we continued in hopes he would leave. Big mistake. This guy was more than a pest, he was a pain, and he had attitude, expressing his unasked opinion of the Presidency, Congress, the state of the nation and war in Afghanistan. The problem was the guy was right, and if he hadn't been panhandling we might have invited him to express his opinion as these were the very subjects we were discussing.
You can't escape these people as they are everywhere, even in front of the Moscone Center where we were convening the Photonics West show. However, the second day of the show Apple and Steve Jobs showed up to introduce the new iPad and the city police cleared a four-block area around the halls so that the multitude of news media covering the Apple announcement would not see these vagrants as a metaphor for unemployment problems in our country. I was glad that the unwanted and uninvited eavesdropper from the previous night wasn't in the area; otherwise he might have made the six o'clock news.
Inside Moscone in two large halls were about 1200 exhibitors showing products for the photonics industry. Among these were a few, perhaps a couple dozen, who have laser products that are used in industrial applications and therefore targets for yours truly.
Photonics West is by its timing the first important show of the year, and as such it's populated, for the most part, by sales and marketing people who see the new year as a fresh page in their sales books and therefore most news generated is good news. I always temper my comments on the upbeat nature of this show by this observation; it's hard to be negative when you have 11 months more to make good things happen.
For the most part exhibitors I interviewed were optimistic that the recession had bottomed and that business was starting a long climb back to prosperity. Many of those I spoke with were already feeling the effects of a surge in spending by the global semiconductor industry, resurgence in the solar power sector, and a reversal of decline in the medical devices market.
Some laser suppliers are scratching to ramp up their lean manufacturing operations to meet stringent demands from certain Asian market sectors for expedited product deliveries. What took a year to complete a sale was now overwhelmed by demands for expedited deliveries. Problem is that many of the laser companies are so lean that they have no inventory and only a skeleton crew to assemble products. Their suppliers are also leaned down and several spoke about their purchasing agents scrambling to get material and sub-components, common occurrence. It's a problem we had discussed last year as a nice problem to have. Now that it is happening it's not as nice as we dreamed back then.
But the suppliers are coping and many are adding back employees let go last year and some are advertising for and adding new hires. Those who used overtime to compensate find that it is now uneconomic to do and new hires turn out to be more economically effective.
The most common comment we received when asking aobut the year to come was that the companies are waiting until the end of the first quarter to gain assurance that the market recovery is real and has legs. "Talk to me in March" was a frequent answer I got to my question about the rebound. However, it is clear that underlying this answer was the feeling that we are recovering, even a little faster than planned. As I told my audience at last Monday's Marketplace Seminar, my 9% increase for 2010 might be a little conservative and that with not much more impetus we might see this climb to double digits. Of course, we are moving from a -30% last year so it doesn't take many new orders to get to +10%.
We left San Francisco in a good mood, buoyed by the new business that is raising backlogs. Now if we can get the high-power laser market to rebound faster, 2010 might end up with surprisingly good numbers.
Monday, January 25, 2010
What goes around comes around
I attended a book signing a few nights ago, where a local author, a full-time bartender, talked about the creative process of writing a mystery novel that features a "hard-boiled" but gentle private investigator. Ironic that this event coincided with the notice of the death of the king of modern detective mysteries, Robert Parker, whose Spenser novels have been best sellers for decades.
Anyway, this new author entertained a receptive crowd with anecdotes about his experiences in writing his first novel. In so doing he got so carried away with thanking his many supporters that he neglected to tell us how he overcame the lethargy that writers experience when they have exhausted all they can say about a specific thought and end up staring at a blank computer monitor screen.
Robert Parker, throughout his entire career reputedly always wrote five pages of a novel everyday, seven days a week. Five pages, that's 2500 to 3000 words, every day, quite a feat. When I talked with the local author as he signed a copy of his book for me, I asked how much time he devoted to his first attempt. His response was interrupted by his publicist who needed his attention and when he continued with me the talk shifted to other subjects, so I never learned his regimen, except that he told us that it had taken him two years to finish a 285-page book. In Parker time that's about two months. I guess the local guy has to ratchet up his work ethic.
Leaving the book signing, I was asked about my book, which has morphed into a screenplay. I've been working on it for about 18 months, off and on and I've only got 40,000 words done, maybe enough for a "treatment" as they say in Hollywood, but only half of a thin novel.
Another friend asked why I didn't compile and publish a selection of the editorials I have written for ILS over the first 25 years of the magazine. This prompted me to start looking through the bound copies of the 24 volumes of the magazine; an exercise which changed direction as I forgot the original idea of trying to determine if there was enough material for a compilation and turned my attention to what I have been writing all these years.
No, I'm not going to bore you with nostalgia, but I did think you might be interested in a column I wrote in April of 1992, in the depths of the other recession that disrupted growth in the industrial laser business. Setting aside the dated references to a "white paper" I thought the message to the then President George Bush (the elder) has meaning today.
Who's in charge here, anyhow? The Congress? The Bureaucracy? The political candidates? Heaven help us if the latter, with all their posturing and finger pointing.
No, it's quite simple. The President is in charge. Mr. Bush, an old navy man, should remember that the captain of the ship assumes full responsibility, no matter what happens.
So, Mr. President, set aside politics for the moment and heed the words of one of the Democratic candidates for nomination. In his well-written and presented white paper, "A Call to Economic Arms – Forging a New American Mandate," Paul Tsongas (since deceased) hits us where it hurts; "A nation without a manufacturing base is a nation heading toward Third World status."
He doesn't enamor himself to fellow Democrats with such statements as, "America's standard of living is totally dependent upon their capacity to compete and be profitable." And scientists and engineers should applaud this: "The economic war that we are loosing is centered on process technologies. The taking of new ideas, indeed even old ideas, and converting them to manufacturing goods is the great trade battleground."
President Bush would do well to read Mr. Tsongas' white paper, set partisan political rhetoric aside, and take the high ground with a statesmanlike position on rebuilding the U.S. as a world-class manufacturing power.
We know how to do it Mr. President--we just need the man in charge to identify the issue as one of his greatest national concerns. No government handouts. No new commissions. No wasteful regulations. Just a call to arms, if you will. We can do it, Mr. President, but we need your sincere and unflinching support.
You can substitute Obama for Bush and it still resonates.
This is not a new position for me, as I have always espoused the American "can do" spirit. Historians may say that it was a significant contributor to recovery from the 1990-92 recession. With some support from the top it might be a contributor to speeding up the moribund rebound we seem to be experiencing.
Anyway, this new author entertained a receptive crowd with anecdotes about his experiences in writing his first novel. In so doing he got so carried away with thanking his many supporters that he neglected to tell us how he overcame the lethargy that writers experience when they have exhausted all they can say about a specific thought and end up staring at a blank computer monitor screen.
Robert Parker, throughout his entire career reputedly always wrote five pages of a novel everyday, seven days a week. Five pages, that's 2500 to 3000 words, every day, quite a feat. When I talked with the local author as he signed a copy of his book for me, I asked how much time he devoted to his first attempt. His response was interrupted by his publicist who needed his attention and when he continued with me the talk shifted to other subjects, so I never learned his regimen, except that he told us that it had taken him two years to finish a 285-page book. In Parker time that's about two months. I guess the local guy has to ratchet up his work ethic.
Leaving the book signing, I was asked about my book, which has morphed into a screenplay. I've been working on it for about 18 months, off and on and I've only got 40,000 words done, maybe enough for a "treatment" as they say in Hollywood, but only half of a thin novel.
Another friend asked why I didn't compile and publish a selection of the editorials I have written for ILS over the first 25 years of the magazine. This prompted me to start looking through the bound copies of the 24 volumes of the magazine; an exercise which changed direction as I forgot the original idea of trying to determine if there was enough material for a compilation and turned my attention to what I have been writing all these years.
No, I'm not going to bore you with nostalgia, but I did think you might be interested in a column I wrote in April of 1992, in the depths of the other recession that disrupted growth in the industrial laser business. Setting aside the dated references to a "white paper" I thought the message to the then President George Bush (the elder) has meaning today.
Who's in charge here, anyhow? The Congress? The Bureaucracy? The political candidates? Heaven help us if the latter, with all their posturing and finger pointing.
No, it's quite simple. The President is in charge. Mr. Bush, an old navy man, should remember that the captain of the ship assumes full responsibility, no matter what happens.
So, Mr. President, set aside politics for the moment and heed the words of one of the Democratic candidates for nomination. In his well-written and presented white paper, "A Call to Economic Arms – Forging a New American Mandate," Paul Tsongas (since deceased) hits us where it hurts; "A nation without a manufacturing base is a nation heading toward Third World status."
He doesn't enamor himself to fellow Democrats with such statements as, "America's standard of living is totally dependent upon their capacity to compete and be profitable." And scientists and engineers should applaud this: "The economic war that we are loosing is centered on process technologies. The taking of new ideas, indeed even old ideas, and converting them to manufacturing goods is the great trade battleground."
President Bush would do well to read Mr. Tsongas' white paper, set partisan political rhetoric aside, and take the high ground with a statesmanlike position on rebuilding the U.S. as a world-class manufacturing power.
We know how to do it Mr. President--we just need the man in charge to identify the issue as one of his greatest national concerns. No government handouts. No new commissions. No wasteful regulations. Just a call to arms, if you will. We can do it, Mr. President, but we need your sincere and unflinching support.
You can substitute Obama for Bush and it still resonates.
This is not a new position for me, as I have always espoused the American "can do" spirit. Historians may say that it was a significant contributor to recovery from the 1990-92 recession. With some support from the top it might be a contributor to speeding up the moribund rebound we seem to be experiencing.
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