SBs (long)

From: Brock Hinzmann (bhinzmann@sric.sri.com)
Date: Thu Nov 26 1998 - 01:17:09 EET


It seems I'm catching it from both sides:

Those that feel I'm being too pessimistic because I have raised a few
questions about the assumptions of overly optimistic forecasts.

Those that say I'm not telling it like it is, that Plynetics Express (and
Compression) are, in fact, in worse shape than even the rumors have it.

Let me start by writing that I would not have written on The Personal
Factory and Internet-Mediated Remote Manufacturing if I did not think the
potential exists for RP to evolve and change the very way we will live and
work, let alone change the nature of manufacturing. On the other hand, while
I believe that optimism and promotion are good and necessary things for
those people in the business, my work obligates me to be a little more
circumspect and to question the conventional wisdom, on both the optimistic
and pessimistic sides of things. After doing this for the past 25 years,
most of it living in the center of high-tech optimism, I have had to analyze
what happened to many a self-assured optimist impaled on spikes of their
own hype.

As for Plynetics Express, at the time of my original message last week,
Karl is absolutely correct. A restructuring had already begun and Dave
Flynn and Tom Mueller were already gone, but at least two offices were still
open. Since then, negotiations between certain investors and creditors
evidently broke down and the remaining offices were closed. Unless a new
infusion of cash is forthcoming, Plynetics Express may be gone. In spite of
several interviews and updtes, however, it is not clear to me that anything
is certain and I still do not want to sound the death knell until I see an
official press release from the company.

As far as all of that goes, Karl is again, at least mostly, correct in
pointing out that the problems of Plynetics Express represent a business
failure, not necessarily a technology failure. I will not even go so far as
to say that the company got too big, but that certain business decisions
and methods did not work out as planned and the revenues were not able to
keep up with the costs. I have listened to logical arguments pro and con on
certain cost structures that were in place.

Rather, it appears that service bureaus, both internal and external to
the OEMs, that can be viewed as having an understanding of the clients
needs, adding value, achieving rapid time to market, extending life cycle,
adding intellectual property portfolio value, and so forth, rather than being
seen as a commodity that is bid down to the lowest cost, are thriving,
growing, with pipelines full of work, and hiring new staff. As someone else
pointed out, we have seen plenty of evidence of that on this RPML.

The hype has come from various sources:

Market forecasts based on a regression analysis that triple digit growth
can continue forever. As the most conservative from the start, even my
projections from ten years ago proved too optimistic.

Handwaving of technical barriers in solving such engineering problems as
speed, accuracy, and materials performance. These things take time and
money and cannot be solved overnight on the budgets available to most
developers. I have heard plenty of complaints that rapid tooling has not lived up
to the expectations established in the minds of customers by vendors,
backtracking notwithstanding. I am not a user, so you may choose to disregard
my comments, but people in the inudstry have said it has been a couple of
years since any real breakthroughs. Many of us hope that the critical
mass of university and other research going on around the world will soon
result in some new breakthroughs. As breakthroughs occur, we will see another
round of work to solve standards and technology integration issues. More
time and money.

Lack of understanding of consumer acceptance of technology. No matter how
good we think the technology is, the customer must be ready to accept it
for it to take off in the marketplace. I can't believe there is anyone
left in product design and development who is not now at least aware of RP. I
still see a big role for RP service bureaus in allowing a lot of
newcomers to see how it works and either fit it into their current process, ask
you to change it so that it does fit into their current process, or make
some investments to change their process so that it does fit in.

My temptation was to avoid responding at all, since I'm busy preparing
for a trip that will take me out of the office until December 10, and a
couple of people advised me to let it go, but Karl's message, bless his soul,
convinced me that my original message was completely misunderstood and
that my silence between now and the 10th would have been misunderstood as
well. I don't feel like I'm being a pessimist. Just realistic. I look forward
to reading the flames upon my return.

Brock Hinzmann

Denton, Karl R. KD1588 wrote:
>
>Hello all...
>
>This is in response to Brock Hinzmanns response on the topic...
>
>1st, I believe that the restructuring actually began several months ago
 
>when several key (founding) members of the company were let go!
>
>2nd, Brock I don't see a decline in the business or industry either via
  
>SB or OEM wise. We went through the gloom and doom predictions earlier
 
>this year and it seems to me that when we hear about an SB that closes
it
>starts all over again. Why don't we hear the opposite when a new SB
>opens or when one of the lesser knowns purchase a 2nd or 3rd or 4th
>technology?. We do not know what the business operations were like
>Plynetics Express, could it be that they just expanded to quickly?,
could
>it be that they were just not that could at the business side of
things?,
>isn't possible that we could muster up a whole set of new question
>regarding this topic without once saying "the industry is in trouble"?
>
>
>Karl Denton
>
>For more information about the rp-ml, see http://ltk.hut.fi/rp-ml/
>
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