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Stanley Bentley,
President of dsi
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During
my travels over the past several months, I have been asked many times
what I think is happening in our industry and what will occur in the fourth
quarter. On an intellectual level, I think everyone knows that if I (or
anyone) had such insight, we wouldn’t be out calling on customers.
However, it is certainly nice to be asked!
What
I have discovered in my travels is that overall business levels are OK,
margins stink, and very few people are willing to make major capital investments
or take any risks. We have gone from the Dot Com euphoria to an almost
Depression Era mindset.
Most
certainly, to err on the side of caution is prudent. However, if you take
no risk, you can’t expect to reap much reward. You will simply mark
time. Our economy is driven by investment and risk, so marking time also
stalls our economy. I wouldn’t presume to tell anyone how to run
their business since they alone must live with the consequences of their
decisions. (Consultants, however, are seldom burdened with conscience.)
I can tell people what dsi is doing and what
strategy we are employing.
We
have the fortunate circumstance of being profitable and having a positive
cash flow. (Before Enron, profitability implied positive cash flow.) Investment
accounts aren’t paying even enough to keep up with inflation, so
cash accumulation beyond that needed for working capital represents a
lost opportunity. Everything is on sale right now, from stocks to capital
equipment. Consequently, dsi is using cash to
make strategic investments that will improve our technology, our efficiency,
and our speed. We may get a corollary increase in capacity, but that isn’t
a primary objective of our investments. We are taking this opportunity
to upgrade our processes, our equipment, our systems, and our training.
We
have funded a revamped website with a secure customer log-in feature for
access to information about the status of orders. Our secure website also
provides design tools to help our customers’ engineers with technology
decisions by allowing them to cost out various design options. We are
implementing new front-end software for change management, material sourcing,
planning/scheduling, and enterprise resource planning (ERP).
We
also have upgraded our testing capabilities and are now offering flying
probe testing for rapid-turn assemblies. We have added an automated alternative
finishes line for gold, silver and tin. Manufacturing has been charged
(and funded) with the responsibility of accelerating our technology roadmap.
Project management has been tasked with enhancing our ability to absorb
new high-mix customers. Quality has reviewed all of our certifications
for compliance with the new standards, and has even submitted for Ford Q1.
Although
we haven’t added debt, we have used our resources to position dsi
to rapidly respond should there be a significant up-turn in the economy
or to profitably deliver the services needed by our customers should the
economy continue to run in “low gear.” We don’t believe
that the need for technology will decrease in either case. New product
development and introduction is the engine that drives consumption. Even
though I’m an engineer rather than an economist by training, even
I know that consumption drives investment. Although I can’t predict
the timing or the shape of the recovery, I do know that those who have
the infrastructure in place to rapidly respond will benefit the most.
So, don’t just hunker in the bunker; get out and kick some butt!
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