Recent Blog Posts
I had a meeting of my CEO Peer Group on Monday. As a treat to ourselves at the end of our 2012/2013 meetings, we met on the sailboat of one of our members, a 38 foot Catalina. Moored at an ideal spot in Portsmouth, NH harbor, we boarded quickly and were soon in the Gulf of Maine sailing out to the Isle of Shoals, about ten miles off the New Hampshire coast. The weather was spectacular – a light breeze, calm seas, and sunny, with a few puffy clouds. The forecast was for the possibility of scattered thunderstorms later in the afternoon. No problem. It took about two hours to get out to the islands, and looking back we could see some darkening, but nothing too concerning. We spent the next hour conducting our meeting, enjoying the cool breezes and the slight rock to the boat. Getting ready to go back, we noticed a significant change toward shore. Scattered thunderstorms was not quite correct. A dark mass with some ugly clouds, indicative of a front rather than isolated thermal storms, was covering the shore. Now we were concerned that the weather was going to be much worse than forecast. We decided to head back, stowing the sails and motoring at full speed. The seas and winds picked up. We headed in toward the coast, then turned to run with the storm a little to give us more maneuvering room. By the time we turned toward the coast again, the storm was upon us and we headed through it. The seas rose to six to eight foot waves and the winds exceeded 70 knots. It was more like being in a hurricane than a scattered thunderstorm. Even without the sails, the boat heeled in the swirling wind. Waves crashed over the bow. Our helmsman kept his eye on the seas and the weather, applied his knowledge of sailing and his boat, and got us through in good shape. When we re-entered Portsmouth harbor the water was calm, and the sun was out. Damage on shore was significant, including parts of a nearby dock which had fallen into the harbor. Our experienced captain said it was the worst weather he had ever sailed.
The business metaphor of this trip is too hard to avoid. Know you business. Know your markets. Look at the forecasts. Enjoy the propitious weather and the profits of a good run. Be prepared for changes. Use your skills to navigate the worst economic storms, surviving with your business and bringing it to calmer times to prepare for another profitable journey. This sounds a lot like the last five years. There couldn’t have been a better lesson for a boat full of business owners.
We run a sales forecasting model every month to try to predict how we’ll do for bookings one and two months out. Our model is a neural network model based on company performance, econometric data, and market trends. This type of model uses years of historical information to try to develop predictive trends. We run the model multiple times to get a range of predictions. Sometimes they are tightly grouped, and other times, they can bounce around. This happens even though the same data are used. When things bounce around, there are usually conflicting data. Data that usually move together begin to come apart. That’s what happened in December. Good econometric information was clashing with negative emotional measures and the predictions bounced back and forth between dismal and pretty good. The real, numerical data was showing growth, but people were still negative on the economy.
We were expecting that the emotions would begin to turn to mirror the numbers, and that began to happen in January. Prior to January, most of of our bookings had been from recently added customers, seemingly unaffected by the slow economy, while our legacy customers, more affected by the economy, were not ordering. That changed in January. We began to see orders from companies who had been dormant for the past few years. Additionally, the newer customers started ordering larger quantities of parts. This is beginning to feel more “normal”, if such a term can describe our post recession economy. In any event, we’re enjoying the change. Hopefully, it will continue. Maybe the forecasting model will start showing more stable numbers and operate as if the world has returned to a more predictive mode.
Being a manufacturer and the owner of a company, I should be in the perfect demographic category for being a Republican. The Republicans lost me a decade ago. The Republicans went from being pragmatic problem solvers, with a Main Street business mentality and little concern about what you did in your personal relationships, to fiscally reckless moralists who want to control your personal life. They say they want smaller, less intrusive government, but want to legislatively impose a morality at odds with most of the country. Increasingly, they cannot put forth a message that resonates with the country in national elections, are having trouble in statewide elections, and are only able to capture voters in isolated congressional districts. Hence, they lost the Presidential election, lost Senate seats, and lost some congressional seats, only able to keep control of the House through gerrymandered congressional districts. It’s not that I am a through and through Democrat, I just find the current day Democrats more realistic problem solvers than the current day Republicans.
I have a suggestion for the Republicans – split the party and come back to your roots. Let the radical wing nuts form their own party. They can call it the Tea Party, the Arrogant Know it All Party, or whatever suits them. They will be happier and the moderate Republicans won’t agonize over trying to coddle the vocal minority. The new Republican party will actually recognize problems, not ignore them, and offer prudent, moderate, rational, pragmatic solutions to problems. Many independents will join them. Many moderate Democrats will join them. Many lapsed Republicans will join them. They will offer real alternatives to our nation’s issues. They will stay out of our bedrooms and doctor’s offices. They will start to win elections and begin to rebuild themselves as a respected voice in the national dialogue.
Without some change to the tone and substance of their message, I think the Republicans will become increasingly irrelevant. I, for one, do not want a one party monopoly. Please come back.
Jaffrey, New Hampshire is a small town in the southwest corner of the state. It’s an old mill town that still supports a number of manufacturing and industrial companies. I came across an interesting company yesterday, one that does “urban mining”. Urban mining is the process of extracting and recycling valuable components from discarded items. The big push is on electronic waste, which has become an immense disposal problem. The company, E-Waste Recyclers, brings in all types of electronic and electrical devices for recycling and value extraction, much like conventional mining. They have about 30,000 square feet of warehouse space filled with piles and bales of segregated components such as printed circuit boards, plastic cabinets, sheet metal frames, wiring, and other hardware. Their activity, and the value of the recycled components, is very much affected by the global economy.
Right now, there is a big market for components containing rare earth minerals. These minerals find their way into dozens of high tech products. The main source of rare earths is China, which is tightly controlling the export market, putting pressure on other sources of these minerals. Besides reopening closed mines elsewhere in the world, extracting rare earths from other sources, such as recycled magnets and electronics is a growing market.
At one time, almost all e-recycling was done in China. It’s a labor intensive process, and with few environmental and safety standards in place, and low wages for their workers, the Chinese dominated the market. With the exposure of the Chinese labor and environmental abuses, increased transportation costs, and the growing value and improved methods for extracting value from components, environmentally safe facilities providing decent wages have sprung up closer to the sources of the e-waste. This is good news and a hidden factor in the broader subject of re-shoring manufacturing, and recycling, back to the US.
A Video Interview with Kirk Barrett on the Economic and Design Value of Graphite Permanent Mold Castings
Our sales manager, Kirk Barrett, was interviewed at the Design 2 Part Show in Marlborough, MA. Kirk speaks on the benefits of graphite permanent mold castings. Interview with Kirk Barrett.