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| Weathering the Storm and Strengthening the Team Commentary by Kevin V.G. Bevan |
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The manufacturing industry certainly has seen better days. Machine tool consumption has declined by approximately 50 percent over the last four years. Capacity utilization for durable goods has remained below the 80 percent growth level for 19 months. The net result of the downturn has forced some manufacturers and machine tool distributors to close their doors forever. Each day as we read the newspaper or tune into our favorite news channel we are confronted with "late breaking" details of yet another corporate financial scandal or global unrest. All in all, not the best of times.
But let's not get too depressed - a new day will dawn that will bring more favorable market conditions and stability to our lives. It is easy to get caught up in the negative spiral that these times can cause. Companies are tightening their belts and scaling back on production to accommodate the downturn in market conditions, but will they be prepared when the consumption demand finally picks back up?
During the current market downturn, we have adjusted our inventory levels and prudently cut back on expenses as many others have been forced to do. But we have also been diligently preparing for the brighter days to come. While other companies have significantly cutback or withdrawn from participating in our industry's largest exhibition IMTS 2002, Cincinnati Machine has maintained its premier booth location at A8101 and will be introducing 11 new products and showcasing technology that will be the mainstay of our future products.
Showcased at IMTS, the new Fixed Table Vertical (FTV) product line offers unprecedented flexibility and cutting capabilities. Our new V-CNC product line offers the best value proposition for entry-level and job shop owners who want more than a "throw away" machine tool. In addition, new control options such as the Siemens 810D and Fanuc 18i-MB will also be showcased during the exhibition. The Advanced Systems and Services Business will be introducing the V5-4000 machine as well as other new technologies include the MEGA(tm)-150 HMC. Eleven new products introduced during the worst market conditions in recent history. I think it is fair to say we have been preparing for the upturn.
In addition to new product introductions, we have been continuously evaluating our selling channels and capabilities to ensure we are offering the best value for our customers. As previously stated in earlier Winners Circle editions, best value is equated to overall satisfaction, not only at the time of purchase but over the usable life of the product. For our Value Machine products, our strong distributor partners perform the service and after sales support that is essential to your satisfaction. In the last year, Cincinnati Machine has partnered with six new distributor organizations that will raise the bar in service and after sales support. Companies such as Methods & Equipment, New West Machine Tool and Ellison are just a few. Cincinnati Machine has also instituted a 5 Star Distributor program that will rate the capabilities of each of our distributor partners with the goal of jointly improving our capabilities and services that we provide to our customers.
Finally, while many builders have seriously jeopardized the value they offer their customers by completely dismantling the existing selling and service channels, Cincinnati Machine has reorganized its internal structure to help provide more support to its distributor partners. Our new Key Account Program for Value Machine products will enable our direct selling channels to assist our distributor partners with sales to high-end customers. Within the Value Machine Business we have restructured to enable our Regional Sales Managers to spend more time in the field working directly with our distributor partners to provide the value you require.
Yes, we are in the worst market conditions any of us can remember. But keep in mind the old saying "a smooth sea never made a skilled sailor." Cincinnati Machine has not survived 118 years in this industry by focusing on the negatives or not being able to weather the storm. As skilled sailors we have built our reputation on finding better ways to serve you, our valued customer. Whether it's new products, new partnerships or new ways of doing business, we will continue to focus all our efforts on whatever it takes to provide the best value. As you read the following pages of Winner's Circle, you will see evidence of this commitment!
Vice President and General Manager
Cincinnati Machine
Value Machine Business
US Operations