It's July already. I guess we stay busy, and the time flies by. In that flying-by time, there's always something new. And everytime there's something new, something else turns old.
New: a week spent on the East Coast earlier this month - New York, and Boston. New York was again fun in the summertime, although I got to suffer along with the entire Eastern seaboard in the well-reported heat wave. I of course was traveling on business, and the business side of New York for us was suffering from stormy weather also. Certain things I thought were true were in fact not true, and certain things were said that revealed that untruth. But these are issues that arise in every business, including ours.
I proceeded to Boston, where the treading was much, much easier. We were privileged to be invited to participate in the annual "post-NeoCon" Boston party sponsored by Jim Burke's Allegheny Flooring - targeted to those professionals in the flooring trade that opted out of traveling to Chicago for the real NeoCon show. "Those professionals" are further described as about 400 architects and interior designers in the New England area, attending this Thursday afternoon and evening extravaganza. Plantation had a modest display of flooring for the troops, and happily met what seemed like all 400 of those professionals!
New things push previous new things into the now-old things category.
One old thing is the maturation of the subject I wrote about here many months ago - the making of hardwood flooring by prison labor. My thesis has been that the state and federal govenments should not be supporting manufacturing in prisons of products that compete with products produced in the private sector by tax-paying, mortgage-paying, family-supporting citizens. It is galling to think that I cannot hire additional workers, or worse, that I have to lay off my workers, while prisoners supported by the state do the same work in their prison workplaces, subsidized by you and me.
Anyway, while I was all exercised over this subject, I did what all red-blooded Americans are advised to do: I wrote to my Senators! My Senators are the California Senators, namely Barbara Boxer and Dianne Feinstein. And guess what! They answered me!
Barbara Boxer's office sent a letter that said "Dear Citizen..." and proceeded to tell me how much she appreciated my letter, went on to mention all the things she is doing to help me, the poor, put-upon citizen suffering from the policies of George Bush; and of yes, how she is fighting for the environment. Not a hint of response to my specific concern - just a form letter. Pretty much a joke, and I hate to say it - pretty much what I expected.
"DiFi," on the other hand, wrote me a real letter, signed by the Senator herself. Turns out the prison labor situation is the focus of one of her committee assignments in the Senate, and she promised in her letter to remember my concern the next time the committee met. A real response - what a concept! Thank you for listening, DiFi.
Why am I rehashing this subject now? Two things happened recently to bring my thoughts about competing against prison labor back to the forefront of my mind. One was a piece in the Wall Street Journal about prisoners being "laid off" from their "jobs," due to a retraction in demand for the products they make. The accompanying sentiment was sympathy at this unfortunate development, and likened these layoffs to those of the private sector. Of course, we all know it's not the same. Prisoner layoffs don't result in failure to pay the rent, or tightening the food budget, or telling the kids no vacation this year.
But laying off prisoners does have an affect, according to the WSJ article. Prisoners don't like to have nothing to do all day, so the level of prisoner unrest is rising. Prisoners are acting out against their "layoffs." Guards are endangered, lockdowns are more frequent.
Give me a break.
The other event that happened to focus me on this topic is a conversation I had at a recent trade show with an industry executive whose well-known flooring company supports in this prison labor scheme. After I expressed my views on this subject, this executive explained about the marvelous benefits being generated by his company by making their flooring in the prison system; about the monies being sent home to families of the incarcerated, about the funds paid in being used to offset the state costs for maintaining the prisoners, about the restitutions being made to the prisoners' victims, about the savings accounts being established in the prisoners' names for use at the time of their eventual release.
But, significantly, this executive confided the real reason they go to prisons for labor: the fact that the flooring company can find no one outside the prison system who will do the work. That is, the effort needed to make handscraped wood floors is too hard, too much work for too little pay for the good folks in the neighborhood. Prison labor, according to this executive, is their only recourse.
I said instantly, send your work to us in California, and my crews will work night and day to get your jobs done. They need and want the work. Unlike prisoners, they have rent to pay, groceries to buy. They pay taxes, they raise their families.
And they didn't steal your car.
Monday, July 26, 2010
Sunday, May 16, 2010
Where've I Been?
I checked the date of my most recent post. December?! That's a long time. You may ask, where've I been since December?
Many places, both literally, and figuratively.
Literally, I've been to Las Vegas for the International Builders Show in January. Then back to Las Vegas in February for the Surfaces trade show. Later, off to Dallas for a round of hospitality designer visits. Back and forth to jobsites and customers in San Francisco. And, during it all, the steady drumbeat of commuting between the factory and offices in Oxnard, and my home in the Bay Area.
Figuratively, though, I've been to even more places since December. First, we tried to create something different, and I thought pretty much fun, at Surfaces. Normally, we would have had the pleasure of paying through the nose for a booth in a dark and remote corner of the convention hall, because after all, we haven't been displaying for two lifetimes, and accordingly, we have poor space selection options. Instead, we decided to set up camp across the strip at the Mirage Resort. We took a suite on the penthouse floor, and stocked the place with food, drink, and product displays and literature. We invited suppliers, old friends, and some of the people we hoped will become new friends. Instead of standing for eight hours in an exhibit booth, we sat on couches. We snacked, sipped, and chatted - a lot - and until the wee hours. It was great! We'll do it again.
Another figurative place I've been was the experience of collaborating with the design community in Dallas. Some of our new designs are meeting enthusiastic professional acceptance. I was delighted to learn we have earned a business place at the table in the buzzing Dubai/Abu Dhabi arena, with the help of our friends immersed in the design business there. We also have been awarded a Caribbean foothold, which should lead to many more overseas resort-style projects in the coming years. Plus, we've just entered the production phase of a Dallas-designed wood floor for a nameplate hotel project.
As stimulating as these experiences have been, I'm most pleased about something else: the new and energetic expansion we have taken on for the whole company.
Strategically-speaking, Plantation is a "product-driven" enterprise. We aim to design and manufacture the best wood floor available anywhere on the planet, and sell it to whomever wants one, anywhere. Our strategy is not about certain customer groups, or certain technologies, or certain distribution channels. We're all about the Plantation product - the best wood floor we can possibly make!
And we've done pretty well at that. Our plank floor, with its high quality and fully-customizable woods, colors, and finishes, is well-received by the high-end design and contracting communities. Our handmade and prefinished parquet floor designs are popular with designers, builders, and consumers alike.
But the requirement for our company to remain relevant is tied up in innovation. Accordingly, we are engaged daily in product innovation - new colors, new finishes, new shapes, and new design ideas in wood flooring, and all under one roof. One of the joys of owning our factory is the ability to put new ideas into motion under our own strict control and timing. When we, or our customers, want to know what's going on, we simply walk around the premises, and we can see exactly what's going on.
But in additon to product innovation, we are also involved in process innovation. We are testing, upgrading, and modifying the way we produce our customized floors. We are already the specialists in making short production runs - creating for our customers the ultimate in flexibility of choice and timing for their orders.
But during our process innovation, we have discovered something more. Our acts of process innovation are leading to additional, and unexpected, product innovations. For example, one of the floor finishes we developed has led to a product innovation for commercial applications that we didn't have before. Another process innovation is reducing lead times for our customized products by half! And, a killer side-effect: a lower cost of production for these new products! When you are a product-driven company, as we are, this is truly exciting stuff!
Now, what to do about it all? Well, this is where the new and energetic expansion of the company comes in. We have developed two entire new wood floor product lines! And we have a new national sales manager, coming to us from a large and well-known national flooring company. He is busily recruiting and training our national sales force, and we're plotting thirty new markets for new products. Our first big foray into this new marketing rollout is the HD Expo in Las Vegas starting May 19. All our friends will be there, and we can't wait to show off!
So - you may ask, where have I been since December? Now you know!
Many places, both literally, and figuratively.
Literally, I've been to Las Vegas for the International Builders Show in January. Then back to Las Vegas in February for the Surfaces trade show. Later, off to Dallas for a round of hospitality designer visits. Back and forth to jobsites and customers in San Francisco. And, during it all, the steady drumbeat of commuting between the factory and offices in Oxnard, and my home in the Bay Area.
Figuratively, though, I've been to even more places since December. First, we tried to create something different, and I thought pretty much fun, at Surfaces. Normally, we would have had the pleasure of paying through the nose for a booth in a dark and remote corner of the convention hall, because after all, we haven't been displaying for two lifetimes, and accordingly, we have poor space selection options. Instead, we decided to set up camp across the strip at the Mirage Resort. We took a suite on the penthouse floor, and stocked the place with food, drink, and product displays and literature. We invited suppliers, old friends, and some of the people we hoped will become new friends. Instead of standing for eight hours in an exhibit booth, we sat on couches. We snacked, sipped, and chatted - a lot - and until the wee hours. It was great! We'll do it again.
Another figurative place I've been was the experience of collaborating with the design community in Dallas. Some of our new designs are meeting enthusiastic professional acceptance. I was delighted to learn we have earned a business place at the table in the buzzing Dubai/Abu Dhabi arena, with the help of our friends immersed in the design business there. We also have been awarded a Caribbean foothold, which should lead to many more overseas resort-style projects in the coming years. Plus, we've just entered the production phase of a Dallas-designed wood floor for a nameplate hotel project.
As stimulating as these experiences have been, I'm most pleased about something else: the new and energetic expansion we have taken on for the whole company.
Strategically-speaking, Plantation is a "product-driven" enterprise. We aim to design and manufacture the best wood floor available anywhere on the planet, and sell it to whomever wants one, anywhere. Our strategy is not about certain customer groups, or certain technologies, or certain distribution channels. We're all about the Plantation product - the best wood floor we can possibly make!
And we've done pretty well at that. Our plank floor, with its high quality and fully-customizable woods, colors, and finishes, is well-received by the high-end design and contracting communities. Our handmade and prefinished parquet floor designs are popular with designers, builders, and consumers alike.
But the requirement for our company to remain relevant is tied up in innovation. Accordingly, we are engaged daily in product innovation - new colors, new finishes, new shapes, and new design ideas in wood flooring, and all under one roof. One of the joys of owning our factory is the ability to put new ideas into motion under our own strict control and timing. When we, or our customers, want to know what's going on, we simply walk around the premises, and we can see exactly what's going on.
But in additon to product innovation, we are also involved in process innovation. We are testing, upgrading, and modifying the way we produce our customized floors. We are already the specialists in making short production runs - creating for our customers the ultimate in flexibility of choice and timing for their orders.
But during our process innovation, we have discovered something more. Our acts of process innovation are leading to additional, and unexpected, product innovations. For example, one of the floor finishes we developed has led to a product innovation for commercial applications that we didn't have before. Another process innovation is reducing lead times for our customized products by half! And, a killer side-effect: a lower cost of production for these new products! When you are a product-driven company, as we are, this is truly exciting stuff!
Now, what to do about it all? Well, this is where the new and energetic expansion of the company comes in. We have developed two entire new wood floor product lines! And we have a new national sales manager, coming to us from a large and well-known national flooring company. He is busily recruiting and training our national sales force, and we're plotting thirty new markets for new products. Our first big foray into this new marketing rollout is the HD Expo in Las Vegas starting May 19. All our friends will be there, and we can't wait to show off!
So - you may ask, where have I been since December? Now you know!
Tuesday, December 22, 2009
The Things We Do, the People We Meet
One year ago, I got a call. It was the President of an architectural firm in San Francisco saying one of the samples I had sent to their office was causing a ripple. It seems the EVP was building a new house in Marin County, and the handscraped walnut floor was perfectly in line with his vision for his home. Would I please follow up with him?
Today, a year later, that new home is finished. Along the way, we also produced a dark walnut staircase of the architect's own design, to match the dark walnut floor. The owners have moved in, the project looks fantastic, and the owners are very vocal in their delight for their new home, and their new custom-made Plantation product.
This is no ordinary home. It was designed from the ground up to be LEED certified at the platinum level - the ultimate "green" accomplishment in residential building. We just submitted our finalized list of LEED-compliant credentials relating to the hardwood floors and stairs. The home is scheduled to be the subject of a Sunset Magazine photoshoot, with other publications in the wings.
We at Plantation had the great opportunity to work with some very nice and very talented people: Erin and Robin at Erin Martin Design of St. Helena; Mike MacDonald and Mike Dwyer of MacDonald Construction and Development of Oakland, the residential LEED kings!; and Bruce Brudvig of First, Last, and Always Flooring in San Francisco, a highly competent flooring contracting firm for the installation of our floor and stairs.
And of course the owners, Scott and Tracy Lee, are not only practicing professionals in the design field, but are delightful people as well.
******
Another project is also completed: the custom-designed parquet floor for Paramount. I attended a closed set filming last week to see the floor in action. The commentary from all and sundry is that the floor is well received, beautiful, and, as solid wood, probably the only "real" item on the entire set! Everything else is styrofoam, or plastic, or some mystery material that the set constructors use. Very interesting.And of course, very entertaining. All the players were in action: the actors that everyone recognizes, the director, the cinematographer, all the assistants. I'd guess fifty people were on this large set, applying makeup, running back and forth, and, many of them, just waiting around for the next thing to happen. And the equipment! From huge cameras, to major lighting contraptions, to gizmos that I haven't a clue the use for.
When I arrived in my car, the parking lot was almost full. Mercedes and Jaguars everywhere - at the curb, in the stalls, double-parked. The parking attendant told me two shows were filming simultaneously: "Dinner with Schmucks" (my movie), and the TV series Glee.
Being inside the gates "on business" at a movie studio such as Paramount is an experience I, and most people, don't have an opportunity to do often, if ever. The surroundings are as one would imagine, right down to the guy walking around with the Viking helmet. The cooks were cooking a cafeteria-style meal in the rain, the golf carts were whizzing by, the wardrobe people were seeking shelter for the racks of clothes. The little "streets" between the huge sound studios are narrow, and filled with stars' trailers and equipment trucks. There is seemingly constant motion on all sides.
But the real action, of course, is inside the sound stages. One can't get in there without an escort, although once in, I was welcomed to stay as long as I wanted. There was plenty to see for the uninitiated like me, but everyone else was just working another workday. Too bad I was limited for time, or I would have stayed all day.
******
I was a long way from Hollywood the week before. I was happy to get a chance to pay a year-end visit with the hidden power behind our company, then spend two days presenting the products and services of Plantation to some serious hitters in the hospitality design business in Dallas. I was surprised that so much is going on in Dallas in the global hotel and restaurant arena. Most design firms I've visited in recent months resemble ghost towns, at least compared to their formal glories. Not these people. They're on the move, and pressed for time. They've got projects down the street and around the world. All very energizing, and hopeful for the survival of this genre worldwide.
I had with me my usual complement of high-end wood flooring and parquet samples. All the designers were polite to me, and admired my goods. But when I got to our specialty floors, the copyrighted ones, the designers were gasping, and calling in their colleagues. I haven't had so much fun in quite a while. The planned thirty minute meetings became unplanned ninety minute meetings. If the comments are accurate, we'll be in big business in places I didn't even know about before now. Invigorating.
******
My son Michael is a graphic- and web designer, and commented to me recently that he was making some web designs without having a commission for them, because he thinks some people don't know what they want until they see it.
This idea of people not knowing is not new, but still it's very perceptive. How many times have we asked for an idea from a client - the "what are you looking for?" question. Often, there's no good answer, or it's the "I'll know it when I see it" answer.
In this spirit, we recently made a new parquet panel design in black walnut and red leather, just because we could. Somebody said, "That looks like the Wynn in Las Vegas." So I called our rep in Las Vegas, and sent the email photo. She thinks it will sell, so now we're pitching Wynn for their next remodel. A tip of the hat to son Michael for reminding the old man about some of the truisms of dealing in creative but abstract ideas with people.
I've told everyone who will listen that Plantation isn't just about making and selling flooring. Plantation is about being the "go-to" company for collaborating on great flooring ideas. We like to dream up new things, and we have the factory that can make those new ideas become real. What a concept! I want for Plantation to be that company that every creative designer wants to call when they're dreaming up something new. They will find fertile ground here.
Sunday, November 8, 2009
Opposite Ends of the World
I have a lot of fun in my job.
Most people know that the fall season in New England is beautiful. This is equally true in New York, and especially Long Island. I was there on business in October, and it was delightful in every way - the weather, the scenery, the food, the people. I'm ready to go back as soon as possible.
Now, I have just returned from another business trip, this time to Hawaii - the opposite end of the world. It is the same story - delightful in every way. Good weather, good scenery of course, great people.
Like I said, I have fun in my job.
New York was buzzing as usual. The overall national economy remains fairly rotten, but something's always going on in New York! Our group of architects and interior designers are not as busy as in years past, but they're uniformly still in the game. It's good to see existing friends, and to be introduced personally and professionally to new ones. I especially enjoyed meeting our new friends at Martha Stewart Omnimedia - a truly amazing enterprise when viewed from the inside.
Out in the Hamptons, houses were visibly being packed up for the winter. Yet at the same time, we discovered lots of planning being done for remodeling and sprucing up during the imminent unattended winter season. The concept of the Plantation customized prefinished high-end wood floor is not commonplace, and even somewhat counter-intuitive, so we have informing and educating to do about the advantages we bring.
Hawaii, at the opposite end of the world, is simply the scene of interrupted progress. Large commercial projects sit idle, from steel skeletons to "see through" buildings. There are tourists, of course. I'm convinced half of Japan was in attendance in Honolulu. But the fully-funded project under active construction in Hawaii is a rarity at the moment.
I again enjoyed seeing existing friends, and making new ones. Our exhibit at the Group 70 Sustainable Materials showroom in Honolulu was one of my first stops, since I had not actually seen it in person since it was established earlier this year. I was happy to have the opportunity to address the entire management and staff of Group 70's architects and designers - this firm Group 70 is a very prominent and progressive firm in the green building space.
In addition, I established some new venues for prospective customers to see our products on display in Honolulu. Details of the locations of these showrooms will appear on our website (www.plantationhardwood.com) in short order.
My good friend and our representative in Hawaii, Conrad Parducci (Parducci Hardwood Floors) and I took a wrong turn walking in downtown Honolulu, and ended up in the middle of the filming of a scene for the TV series "Lost." Look for us in an episode depicting a snowy street scene in, supposedly, New York City. If we survive the cutting room floor, that is. (Conrad's a good-looking guy, and we're thinking maybe he's been "discovered.")
I have a lot of fun in my job.
The neighbor islands in Hawaii have a different tempo and a different flavor than Honolulu and Oahu, and I'm more optimistic about business out there. Some of our long-suffering bids are coming to fruition now, and the area of heavy money real estate investing is starting to rumble again in Maui, Kauai, and the Big Island. I believe Hawaii will be a good market again, and sooner rather than later.
Back home in Los Angeles, we were invited to propose (successfully, it turned out) a flooring design for a movie set currently in production. Look for our intricate custom parquet floors in the interior mansion scenes of the upcoming film starring Steve Carell entitled "Dinner with Schmucks," in theaters later in 2010. My visit to the Paramount Studios lot for this project was complete with approval meetings with Oscar-level movie professionals, and of course, the attendant star-sightings.
I have a LOT of fun in my job.
Most people know that the fall season in New England is beautiful. This is equally true in New York, and especially Long Island. I was there on business in October, and it was delightful in every way - the weather, the scenery, the food, the people. I'm ready to go back as soon as possible.
Now, I have just returned from another business trip, this time to Hawaii - the opposite end of the world. It is the same story - delightful in every way. Good weather, good scenery of course, great people.
Like I said, I have fun in my job.
New York was buzzing as usual. The overall national economy remains fairly rotten, but something's always going on in New York! Our group of architects and interior designers are not as busy as in years past, but they're uniformly still in the game. It's good to see existing friends, and to be introduced personally and professionally to new ones. I especially enjoyed meeting our new friends at Martha Stewart Omnimedia - a truly amazing enterprise when viewed from the inside.
Out in the Hamptons, houses were visibly being packed up for the winter. Yet at the same time, we discovered lots of planning being done for remodeling and sprucing up during the imminent unattended winter season. The concept of the Plantation customized prefinished high-end wood floor is not commonplace, and even somewhat counter-intuitive, so we have informing and educating to do about the advantages we bring.
Hawaii, at the opposite end of the world, is simply the scene of interrupted progress. Large commercial projects sit idle, from steel skeletons to "see through" buildings. There are tourists, of course. I'm convinced half of Japan was in attendance in Honolulu. But the fully-funded project under active construction in Hawaii is a rarity at the moment.
I again enjoyed seeing existing friends, and making new ones. Our exhibit at the Group 70 Sustainable Materials showroom in Honolulu was one of my first stops, since I had not actually seen it in person since it was established earlier this year. I was happy to have the opportunity to address the entire management and staff of Group 70's architects and designers - this firm Group 70 is a very prominent and progressive firm in the green building space.
In addition, I established some new venues for prospective customers to see our products on display in Honolulu. Details of the locations of these showrooms will appear on our website (www.plantationhardwood.com) in short order.
My good friend and our representative in Hawaii, Conrad Parducci (Parducci Hardwood Floors) and I took a wrong turn walking in downtown Honolulu, and ended up in the middle of the filming of a scene for the TV series "Lost." Look for us in an episode depicting a snowy street scene in, supposedly, New York City. If we survive the cutting room floor, that is. (Conrad's a good-looking guy, and we're thinking maybe he's been "discovered.")
I have a lot of fun in my job.
The neighbor islands in Hawaii have a different tempo and a different flavor than Honolulu and Oahu, and I'm more optimistic about business out there. Some of our long-suffering bids are coming to fruition now, and the area of heavy money real estate investing is starting to rumble again in Maui, Kauai, and the Big Island. I believe Hawaii will be a good market again, and sooner rather than later.
Back home in Los Angeles, we were invited to propose (successfully, it turned out) a flooring design for a movie set currently in production. Look for our intricate custom parquet floors in the interior mansion scenes of the upcoming film starring Steve Carell entitled "Dinner with Schmucks," in theaters later in 2010. My visit to the Paramount Studios lot for this project was complete with approval meetings with Oscar-level movie professionals, and of course, the attendant star-sightings.
I have a LOT of fun in my job.
Sunday, September 20, 2009
Getting Out and About
I had a chance to get out and about last week.
The nominal reason was attendance at the annual Hospitality Design Boutique Show in Miami, as a walker, rather than our more normal role as an exhibitor. Trade show participation is expensive, and I'm sure I have plenty of company these days in evaluating where to spend the promotional bucks.
So what did I think of HD Boutique? I was able to have some meetings at the small show, so that means some key people were there. I also missed some meetings (for "nobody's fault" reasons), and couldn't reschedule due to travel plans. So that means some key people were there, but not for long - maybe one day, or even just a few hours. The show is small, and can be navigated in one day or less.
Not one wood flooring company was exhibiting. Our major competitors apparently stayed away in droves. Perhaps that tells a story in itself.
I spent another couple of days in South Florida, looking for signs of commercial life. I didn't find much, at least not at the high-end, where we live. Some large projects are under construction up the coast, but are rumored to be high-priced housing with low-priced components, such as cheapie commodity wood flooring or low-end tile. What consumer would knowing buy into that?
I visited a project using our Plantation custom teak plank and parquet floors, and I got some photos of the installation under way. They're posted on our website in the Gallery.
Even though Florida seems dull (unless we're missing it), other geographies around the nation are more productive. Indeed, our Oxnard factory is now running full blast again - to the point where we needed more skilled folks making our custom floors, and weekly overtime, just to meet our promised lead times!
Imagine that... carefully calculating lead times! And overtime! And hiring! Must say I'm pleasantly surprised, and of course very excited.
I have long predicted that any recovery in flooring orders will exchange one set of problems for another set. My projection has been that raw materials will suddenly get scarce in any recovery scenario, particularly if the pent-up demand we have been expecting manifests itself in orders requiring immediate delivery!
And that is exactly what is happening... many of our new orders are actually old projects now getting funded and transacted. The demand frequently now is that we make custom floors fast! We ourselves can do that, because we own and operate the California factory, rather than outsource our production to China, Europe, or even down the street.
But no manufacturer, including us, controls the stream of manufacturing inputs such as lumber, finish, and add-on machinery. That pipeline of materials is predictably drier than most people expected. Fortunately, we have some defensive wood inventory, and several of our selected suppliers are well-stocked as well. The likely outcome of this situation is that orders will get made from existing raw materials inventories, then will get delayed as the raw materials disappear.
This scenario of depleted raw material pipelines suggests the wisdom of buying now rather than later. Again, I say...
Imagine that!
The nominal reason was attendance at the annual Hospitality Design Boutique Show in Miami, as a walker, rather than our more normal role as an exhibitor. Trade show participation is expensive, and I'm sure I have plenty of company these days in evaluating where to spend the promotional bucks.
So what did I think of HD Boutique? I was able to have some meetings at the small show, so that means some key people were there. I also missed some meetings (for "nobody's fault" reasons), and couldn't reschedule due to travel plans. So that means some key people were there, but not for long - maybe one day, or even just a few hours. The show is small, and can be navigated in one day or less.
Not one wood flooring company was exhibiting. Our major competitors apparently stayed away in droves. Perhaps that tells a story in itself.
I spent another couple of days in South Florida, looking for signs of commercial life. I didn't find much, at least not at the high-end, where we live. Some large projects are under construction up the coast, but are rumored to be high-priced housing with low-priced components, such as cheapie commodity wood flooring or low-end tile. What consumer would knowing buy into that?
I visited a project using our Plantation custom teak plank and parquet floors, and I got some photos of the installation under way. They're posted on our website in the Gallery.
Even though Florida seems dull (unless we're missing it), other geographies around the nation are more productive. Indeed, our Oxnard factory is now running full blast again - to the point where we needed more skilled folks making our custom floors, and weekly overtime, just to meet our promised lead times!
Imagine that... carefully calculating lead times! And overtime! And hiring! Must say I'm pleasantly surprised, and of course very excited.
I have long predicted that any recovery in flooring orders will exchange one set of problems for another set. My projection has been that raw materials will suddenly get scarce in any recovery scenario, particularly if the pent-up demand we have been expecting manifests itself in orders requiring immediate delivery!
And that is exactly what is happening... many of our new orders are actually old projects now getting funded and transacted. The demand frequently now is that we make custom floors fast! We ourselves can do that, because we own and operate the California factory, rather than outsource our production to China, Europe, or even down the street.
But no manufacturer, including us, controls the stream of manufacturing inputs such as lumber, finish, and add-on machinery. That pipeline of materials is predictably drier than most people expected. Fortunately, we have some defensive wood inventory, and several of our selected suppliers are well-stocked as well. The likely outcome of this situation is that orders will get made from existing raw materials inventories, then will get delayed as the raw materials disappear.
This scenario of depleted raw material pipelines suggests the wisdom of buying now rather than later. Again, I say...
Imagine that!
Friday, August 14, 2009
On a More Personal Note...
I have two things on my mind today. Two things that are personal, not business.
First, I opened the mail one day last week at home in San Francisco, and found a bill. Not just a bill, but a traffic ticket. A traffic ticket fine worth $125, for failure to stop at a stop sign in a municipal park in Los Angeles.
It unnerved me. I was totally blanked out on being stopped by a policeman and being given a citation. I simply could not in my mind conjure up this scene. Had I spent some "blackout" time? Do I have a mental thing going on? Are all the synapses not firing?
Actually, turns out I'm fine. There was no policeman, there was no traffic stop. Just a ticket in the mail for $125. And a link to a video.
I ran to my computer, accessed the link, and watched a short video of a car with my license plate fail to make a dead stop at a corner stop sign, then turn right. A short video taken by a fixed-in-place video camera, mounted somewhere near an intersection in a municipal park in Los Angeles, that I happened to drive through on my way to somewhere else.
The mailed citation was signed by a park ranger (a park ranger!), attesting to the fact that he had viewed the video, and deemed it an accurate portrayal of me committing a moving violation. And thus the citation, totally impersonal, in the mail.
Am I guilty? Apparently I am! It's on video!
But this bothers me - a lot. It's way too sneaky. Way too "Big Brother is watching." If I am to be arrested, I want to be arrested in person, by a real law enforcement officer. An officer who is charged with public safety, and who has observed me recklessly endangering public safety, and who is justified in arresting me. Not by a park ranger sitting in a darkened, windowless room watching videos of cars going around a corner and cranking out $125 demand letters.
Creepy.
What's even more creepy is that this citation is not an infraction of Santa Monica statute, or California law, but rather is just between me and the Mountains Recreation and Conservation Authority. No record will be sent to the California DMV, or my insurance company. Seemingly, my fine derives from my infraction of a private traffic law.
Should I pay this? Looks official. But the fine print makes it seem off-the-books. Hmmm...
By the way, the monitored address is 15601 Sunset Blvd., in Temescal Canyon Park. Watch out, all you citizen suspects. There's a park ranger's video camera watching you drive by, every day, hoping to collect another $125 by demonstrating that you eased around that corner!
Just creepy.
First, I opened the mail one day last week at home in San Francisco, and found a bill. Not just a bill, but a traffic ticket. A traffic ticket fine worth $125, for failure to stop at a stop sign in a municipal park in Los Angeles.
It unnerved me. I was totally blanked out on being stopped by a policeman and being given a citation. I simply could not in my mind conjure up this scene. Had I spent some "blackout" time? Do I have a mental thing going on? Are all the synapses not firing?
Actually, turns out I'm fine. There was no policeman, there was no traffic stop. Just a ticket in the mail for $125. And a link to a video.
I ran to my computer, accessed the link, and watched a short video of a car with my license plate fail to make a dead stop at a corner stop sign, then turn right. A short video taken by a fixed-in-place video camera, mounted somewhere near an intersection in a municipal park in Los Angeles, that I happened to drive through on my way to somewhere else.
The mailed citation was signed by a park ranger (a park ranger!), attesting to the fact that he had viewed the video, and deemed it an accurate portrayal of me committing a moving violation. And thus the citation, totally impersonal, in the mail.
Am I guilty? Apparently I am! It's on video!
But this bothers me - a lot. It's way too sneaky. Way too "Big Brother is watching." If I am to be arrested, I want to be arrested in person, by a real law enforcement officer. An officer who is charged with public safety, and who has observed me recklessly endangering public safety, and who is justified in arresting me. Not by a park ranger sitting in a darkened, windowless room watching videos of cars going around a corner and cranking out $125 demand letters.
Creepy.
What's even more creepy is that this citation is not an infraction of Santa Monica statute, or California law, but rather is just between me and the Mountains Recreation and Conservation Authority. No record will be sent to the California DMV, or my insurance company. Seemingly, my fine derives from my infraction of a private traffic law.
Should I pay this? Looks official. But the fine print makes it seem off-the-books. Hmmm...
By the way, the monitored address is 15601 Sunset Blvd., in Temescal Canyon Park. Watch out, all you citizen suspects. There's a park ranger's video camera watching you drive by, every day, hoping to collect another $125 by demonstrating that you eased around that corner!
Just creepy.
........
Item Two:
Our son Colby, 25, was recently accepted into the graduate Master of Fine Arts program at the American Film Institute Conservatory in Los Angeles, in the discipline of cinematography. The Conservatory accepts each year 28 new fellows worldwide in each of a handful of disciplines(producing, directing, set design, etc.). The Institute sponsors the well-known AFI annual achievement awards in filmmaking, and boasts all the Hollywood names you ever heard of.
Colby's Conservatory program is the filmmaker's equivalent of, in my world, Harvard Business School on steroids. We have many friends in and around the movie business, and they say this acceptance is HUGE! Congratulations to Colby, who did this without insider connections, or committing to building a new wing; he did it on raw and unadulterated talent, coupled with his fierce determination to succeed.
I and his mother are simply falling-down proud of our son.
Monday, August 3, 2009
What the Heck is Going On Over There?
My prime business associate in Malaysia recently asked me the pertinent business questions to which everyone in the world wants to know the answers: What the Heck is Going On Over There?
Here's what I told him:
Hello Chew,
The questions you ask about the US economy are difficult to answer clearly. The missing buyer demand is not returning quickly, so business cannot grow until the demand increases.
The companies that make consumable products, or that make the goods that carry and package the consumable products, have been liquidating their raw stock inventory for many months whenever any buyer appears. The liquidated raw inventories are not being replaced with new raw inventory, so the demand for industrial goods has been missing also.
This cycle of liquidation is nearly ended, as manufacturers' inventories are very low now, and any new demand cannot be met from inventory - but will require new investment.
Will substantial new demand reappear? This is the major question of 2009 and 2010.
There are two types of US demand - private consumers, and government ("public") demand. Examples of public demand are military orders (guns), public works orders (highways), and public construction orders (courthouse buildings). Private consumer demand covers every conceivable product used by people, and is potentially much larger than government demand. Statistically, consumer demand makes up about 70% of US economic activity.
Government demand would seem to be more secure and predictable, but in fact is the opposite. Regardless of published intent to spend, government contracting is slow, and often payments for goods and services is even slower. Even now, last year's highly publicized government emergency economic support for "shovel-ready" contracts are mostly still tangled up in government bureaucracy.
Consumer demand is different, and better. We have a well-founded belief that the US consumers have lots of pent-up demand, because we see the singular success of the new US government program for trading old cars for new ones with a sizeable government rebate (the program called "cash for clunkers" - funny name, eh?). For the first time since the recession began, the US government has put significant sums of money directly available to consumer buyers - and the consumers have spent the money immediately. The car industry is suddenly very busy, and very happy.
In contrast, the US government program for putting monies into banks to give them lendable funds has been almost totally unsuccessful, because the banks are simply keeping the money in the vaults, and not lending it to the consumers who will buy the goods that run the factories, truckers, packagers, and retailers. One could argue that the banks are the wrong parties to recapitalize the economy because the banks are now overly risk-averse, when the economy needs some element of risk-taking to return to overall health.
So, the current state of the US economy seems to be
- slowing or stopped inventory liquidation
- cautious but still interested consumers
- widespread pent-up demand by consumers
- lack of urgency to buy (prices aren't going up, and might still go down)
- lack of confidence by buyers to make large financial commitments
- unwillingness of the prime sources of consumer liquidity, the banks, to participate in recovery
The return of consumer demand will be influenced heavily by the length of time that goes by while no new economic shocks hit the fragile consumer. Barring any such new economic shocks, we think consumers will come out of their bunkers with purses and wallets open within a matter of three-six months.
When the consumers return, they will discover an inventory outage, with resulting longer wait times than expected. This outage won't last long, as the capacity to fill the inventory pipeline is waiting in the wings to swing into action. One interesting side effect is likely to be the resurgence of domestic US production, rather than overseas production, due to the need for very fast turnaround of orders.
The requirement for producers and their suppliers, then, is to hang on for another six months while demand builds. The requirements for economic facilitators, like banks and government entities, is to keep a steady hand on the wheel - no changing the rules in the middle of the game - in order to inspire a growing confidence in all parties.
The bottom line is that the future must be a foreseeable future, and not simply a throw of the dice. We're getting there, slowly. This is what the stock market tells us by bouncing nicely from the lows of this year to today's much improved values.
Regards/Jim
Here's what I told him:
Hello Chew,
The questions you ask about the US economy are difficult to answer clearly. The missing buyer demand is not returning quickly, so business cannot grow until the demand increases.
The companies that make consumable products, or that make the goods that carry and package the consumable products, have been liquidating their raw stock inventory for many months whenever any buyer appears. The liquidated raw inventories are not being replaced with new raw inventory, so the demand for industrial goods has been missing also.
This cycle of liquidation is nearly ended, as manufacturers' inventories are very low now, and any new demand cannot be met from inventory - but will require new investment.
Will substantial new demand reappear? This is the major question of 2009 and 2010.
There are two types of US demand - private consumers, and government ("public") demand. Examples of public demand are military orders (guns), public works orders (highways), and public construction orders (courthouse buildings). Private consumer demand covers every conceivable product used by people, and is potentially much larger than government demand. Statistically, consumer demand makes up about 70% of US economic activity.
Government demand would seem to be more secure and predictable, but in fact is the opposite. Regardless of published intent to spend, government contracting is slow, and often payments for goods and services is even slower. Even now, last year's highly publicized government emergency economic support for "shovel-ready" contracts are mostly still tangled up in government bureaucracy.
Consumer demand is different, and better. We have a well-founded belief that the US consumers have lots of pent-up demand, because we see the singular success of the new US government program for trading old cars for new ones with a sizeable government rebate (the program called "cash for clunkers" - funny name, eh?). For the first time since the recession began, the US government has put significant sums of money directly available to consumer buyers - and the consumers have spent the money immediately. The car industry is suddenly very busy, and very happy.
In contrast, the US government program for putting monies into banks to give them lendable funds has been almost totally unsuccessful, because the banks are simply keeping the money in the vaults, and not lending it to the consumers who will buy the goods that run the factories, truckers, packagers, and retailers. One could argue that the banks are the wrong parties to recapitalize the economy because the banks are now overly risk-averse, when the economy needs some element of risk-taking to return to overall health.
So, the current state of the US economy seems to be
- slowing or stopped inventory liquidation
- cautious but still interested consumers
- widespread pent-up demand by consumers
- lack of urgency to buy (prices aren't going up, and might still go down)
- lack of confidence by buyers to make large financial commitments
- unwillingness of the prime sources of consumer liquidity, the banks, to participate in recovery
The return of consumer demand will be influenced heavily by the length of time that goes by while no new economic shocks hit the fragile consumer. Barring any such new economic shocks, we think consumers will come out of their bunkers with purses and wallets open within a matter of three-six months.
When the consumers return, they will discover an inventory outage, with resulting longer wait times than expected. This outage won't last long, as the capacity to fill the inventory pipeline is waiting in the wings to swing into action. One interesting side effect is likely to be the resurgence of domestic US production, rather than overseas production, due to the need for very fast turnaround of orders.
The requirement for producers and their suppliers, then, is to hang on for another six months while demand builds. The requirements for economic facilitators, like banks and government entities, is to keep a steady hand on the wheel - no changing the rules in the middle of the game - in order to inspire a growing confidence in all parties.
The bottom line is that the future must be a foreseeable future, and not simply a throw of the dice. We're getting there, slowly. This is what the stock market tells us by bouncing nicely from the lows of this year to today's much improved values.
Regards/Jim
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