This is a microeconomic arguement versus the macroeconomic analysis which started
On the individual firm and the appropriate size to take advantage of this fast
paced industry, there seems to be a very fine line because of the high capital
investment and the changing nature of the technology. One individual cannot shell
out the $60,000 to $500,000 for major RP equipment and hope to do a volume of
business which will amortize the equipment efficiently, and quickly. So they add
a few CAD designers to the staff and a few CAM operators and increase the volume
of business. Now the RP is being amortized but salaries are eating up the profits
unless the company can guarantee a steady and high rate of labor utilization. But
as this is state of the art cutting edge stuff, the orders do not come in evenly.
So the company takes in more work than they can hope to accomplish and by running
a backlog they have high utilization of assets and labor.
Customer satisfaction declines though as work is not accomplished on time and the
decision must be made to service a few key accounts well and let the others
matriculate or give evenly mediocre service and have your entire customer base
matriculate. Maybe you add another CAD operator as the backlog gets too great.
Then you have the problem of RP bottlenecks but business is good so you buy
another RP machine. Round and around until you get too big to change with the
industry and you fail.
So this seems to be the paradox of the microeconomic aspects of this high capital
cost and fast changing technology.
But this is separate from the world crisis analysis we were talking about.
The Missing Link Jewelers
Ron Clemons wrote:
> On the other hand, this might just do in another larger and less
> efficient service bureau or two! Slow-moving bureaucracies can have
> a hard time adapting to industry changes--especially in quick fashion-
> -resulting in layoffs, cutbacks and/or filing chapter something-or-
> other bankrupcy.
> Where have the Psychic Hotline folks weighed in on the issue of the
> global and U.S. economies and the RP industry?
> Ron Clemons
> From: Joe Allison <Joe@SolidConcepts.com>
> Subject: World Economy vs US RP Market
> > This will drive some of the smaller and less efficient service providers out
> > of the business, but you will see growth in the overall industry. Unless,
> > of course, the entire world economy collapses.
> Ron Clemons
> Dir. of Marketing
> Harvest Technologies
> For more information about the rp-ml, see http://ltk.hut.fi/rp-ml/
For more information about the rp-ml, see http://ltk.hut.fi/rp-ml/
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