By Pat Hayes, CPP
Traveling unfamiliar roads via auto is less of a challenge with a GPS system. Think of the times you mapped out a travel plan only to find detours, making your trip different than originally planned. This disaster or excellent adventure accomplished its goal of getting you to your destination. The use of navigational tools most likely gave you improved options, and, in the end, made travel easier, faster and possibly more enjoyable.
The same goes for business decisions, such as investments in new equipment and technology. Using an up-to-date game plan, understanding the purpose, defining a course of action, and carrying out the plan with contingencies will allow you to define the mission and goal.
In a conversation with a friend, we discussed the relationship between economic conditions and the timing of major decisions made within our company. Fabric Images Inc. was founded in 1992, a rather down time in the economy. After finding our way through three expansions and a desire to introduce super-wide dye-sublimation print technology, we moved our company to a larger facility in March of 2001. This was the onset of another downturn in the economy, followed a few months later by 9/11.
After weathering this financial downturn, our technology strategies proved us right. Fast forward to December 2008 and another major advancement by our company with the replacement of all 2001 machinery with new grand-format dye-sub technology, again followed by the worst downturn in the economy since the great depression. The conversation ended with this friend informing me that he wanted advanced notice of our next major company investment to enable him to take all his money out of the stock market.
The moral of this story is that what is correct and prudent for one may not be so for another. Let’s take a look at what makes a good business decision in expansions through new equipment and technology.
Considering the variety of industries we all serve, it would be impossible to suggest that any one method of decision making is right for all. However, with a basic process, one should be able to make informed choices.
Fabric Images was founded on innovation. From the onset, we made equipment purchase decisions based on our business plan. Did this purchase fit in with the direction we were headed? Were we acting or reacting? In retrospect, some of our print equipment purchases might have appeared to be outdated technology, but for us at the time it was a learning process. Had it not been for understanding where the market was, we would not have been able to see for ourselves where we needed to go.
To be more specific, in 2000, after six years of producing printed textiles using electrostatic technology, we were against a wall in taking our business further. The use of this equipment was coming to an end. The manufacturers were not going to advance the technology and were eliminating service to the existing equipment. Where do we go from here?
For our industry, we knew that 10-foot-wide printing was a must. Where do we go to find the equipment? After attending trade shows, both here in the United States and in Europe, we came to the conclusion that the machinery did not exist. Conversations with the leading equipment providers were going nowhere until we happened upon a friendly ear in Europe that connected us to an interested equipment manufacturer.
Once we had the machine, we needed ink and paper. Remember, this did not exist, and who would be responsible if it didn’t work? If we were going to take textile printing to a new level, what choice did we have but to gamble and go for it? We made the decision to proceed and gained a two-year advantage on market direction.
Let’s move to 2008. Ten-foot-wide printing of uncoated textiles became the norm. We now have replaced our old technology dye sublimation printers with the latest, giving us 16-foot capacity. Wider, faster, less costly to operate, and more precise in its output.
What can we learn from these examples? First off, there was a commitment to one technology. Using this rifle vs. shotgun approach, we were focused on a specific market. Although we remain focused, we keep in mind our long range goals and verify that decisions will continue to see us through to these ends. Further, we need to analyze what these improvements really will mean to our bottom line. Are we adding production capacity? Are we improving our product? Are we able to broaden markets served? What does this mean in terms of labor savings? Have we determined a reasonable payback in terms of obsolescence? Time and again, we have proven that later generations of technology will not only show improvements in product, but savings in some cases sufficient to cover costs of expenditures.
Technology will continue to change, and markets will continue to evolve, but equipment purchases must be based on what works for you, and how well you have defined your business course of action.