When the engineers and the accountants put their heads together

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MOD Tom Caldwell Forum Pro • Posts: 42,133
When the engineers and the accountants put their heads together
10

Please don’t get too excited about this thread it will make heads spin.

I have to start a new thread as the thread where this debate was a sub-thread has filled.

Why do I bother? mainly because we need to dispel the idea often put forward “I want that product, why isn’t it being made?”

Basically there are two main theories about how product is made and marketed - I will restrict this to some distinct extremes as there would be all sorts of variations and combinations depending on the background and needs of a corporation and its future planning.

Some might think that making lots of product and selling them at affordable prices is an automatic way to make lots of money.

Essentially:

Make into stock and sell down the stock over a period of time.  This lends itself to known popular product of not too high a selling price. Lead times and R&D costs could be very high.

Advantages - can be made in a form of production line to keep assembly costs in check. reasonably large parts volume used would also help keep costs down. Labour would have to be trained but with a repetitive assembly process skills could be enhanced on the job. Hardly likely to run out of stock until the end of the model.

To try and keep costs under control production would start before launch and keep going until a certain level of stock was in inventory.  For a run-away success manufacture might continue and a sales disaster might result in an earlier shut down.

This is the cheapest way to make things but also the most financially risky.

Disadvantages - only suitable for high volume - stock would have to be warehoused, and sold down over an extended period of time.  The cost of manufacture - tooling, parts accumulation, staff training, cost of inventory and merchandising would have to be found up front and justified to financiers.  Slow sales and storage costs can ramp up and eat margins - the payback method of arriving at success or failure would be most appropriate.  The risk of unsold stock becoming obsolete would be huge.  It would take some time to organise the production line and train staff and once the product run was over the released factory space and operating staff would have to be found further duties.  Only large established firms need apply.

The old Olympus?

It would be hard to canvass all the details within a sensible size post.

The other type of process is only suitable for low volume production and the per item price should be high to justify the small scale activity.

This suits $7,500 lenses

Advantages - less risk, profit margins higher, every unit sold should be profitable and stocks would only be high enough to justify the relatively small demand.  Much more flexible and easier to control. Small batches of stock made on the bench by highly trained expert staff when stock levels fall to a known trigger point.  R&D easier as each design is custom built. Might not need special financing.

Easy to resist consumer attempts to get a discount - no sales then the batch production ceases pretty quickly. This is a long term product strategy and the same product might be made and sold in small quantities over a (say) ten year cycle.

Suits a small outfit with relatively low numbers of staff with access to a good machine shop who can turn there hands to assembling multiple be-spoke lens types into product.  The same space could be used for various things over any given time.  Little prospect of space redundancy.

The per item value would be quite high and therefore it would be financially difficult to carry much more than a base working level of made stock.

Disadavantages - can run out of stock.  Only suitable for very expensive items where there is a good profit margin.  A firm depending solely on this method is unlikely to sell a lot of gear.  Nor could. It make them well known - handy enough as a stocking filler if you are already a well known market identity.

The new Olympus?

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Tom Caldwell

Keit ll Veteran Member • Posts: 4,815
Re: When the engineers and the accountants put their heads together
5

I'm not sure that there is a 'new Olympus' ?  The latter sales model will not work, perhaps in the short term but long term it would be a disaster.

The majority of existing users would be alienated by such a policy which can only appeal to  Pro users who can offset costs through tax allowances & there aren't enough of them. Pros want a company with a solid base & cast-iron reliability & there are other makers with established records of success.

Raist3d Forum Pro • Posts: 43,182
Re: When the engineers and the accountants put their heads together
3

I honestly don't see the new $7,500 USD lens as a particular attempt to go higher end or such. That kind of lens was always going to be expensive. Look back years ago in 4/3rds and see how expensive the long telephoto F2.8 prime was.

You get what you pay for- in that lens.

If Olympus wants to go high-endsy they really need to delivery high quality compelling products. This means no more rear thumb rubber falloffs. The EM1X sure seems built like a tank but fails in other areas.

I still think a very well done EM5 class body (read: *not* the current EM5 MKIII)., can indeed present an interesting proposition here.

The company that most resembles what you mention on lower production stock and high end prices- and they are profitable and sell is Leica.

But Leica has worked on their brand for decades. Not easy to get there.

They also have overall a pretty clear direction of where they want to be. Taking prices aside- their lenses are really good, but most interesting the simplicity of their cameras- the focus on the point, on photography.

That's something that's getting very lost in the digital world today, but they - Leica - got it right.

For the the real big question about any "New Olympus" is how much money there will be for R&D, and trying new high end things.  Doing more of the same slightly updated will not land them much higher (though may keep them walking).

It's this part that I am more concerned about whether they go high end or they can update things.

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ecovilks Regular Member • Posts: 141
Re: When the engineers and the accountants put their heads together

The Olympus camera sector lost the battle with the Ml film camera when Leica forced the change to OM1 Olympus had the best camera in the market even though it was a SLR and “real photographers” 🤩used rangefinders

Interceptor121 Senior Member • Posts: 2,455
Re: When the engineers and the accountants put their heads together

Tom Caldwell wrote:

Please don’t get too excited about this thread it will make heads spin.

I have to start a new thread as the thread where this debate was a sub-thread has filled.

Why do I bother? mainly because we need to dispel the idea often put forward “I want that product, why isn’t it being made?”

Basically there are two main theories about how product is made and marketed - I will restrict this to some distinct extremes as there would be all sorts of variations and combinations depending on the background and needs of a corporation and its future planning.

Some might think that making lots of product and selling them at affordable prices is an automatic way to make lots of money.

Essentially:

Make into stock and sell down the stock over a period of time. This lends itself to known popular product of not too high a selling price. Lead times and R&D costs could be very high.

Advantages - can be made in a form of production line to keep assembly costs in check. reasonably large parts volume used would also help keep costs down. Labour would have to be trained but with a repetitive assembly process skills could be enhanced on the job. Hardly likely to run out of stock until the end of the model.

To try and keep costs under control production would start before launch and keep going until a certain level of stock was in inventory. For a run-away success manufacture might continue and a sales disaster might result in an earlier shut down.

This is the cheapest way to make things but also the most financially risky.

Disadvantages - only suitable for high volume - stock would have to be warehoused, and sold down over an extended period of time. The cost of manufacture - tooling, parts accumulation, staff training, cost of inventory and merchandising would have to be found up front and justified to financiers. Slow sales and storage costs can ramp up and eat margins - the payback method of arriving at success or failure would be most appropriate. The risk of unsold stock becoming obsolete would be huge. It would take some time to organise the production line and train staff and once the product run was over the released factory space and operating staff would have to be found further duties. Only large established firms need apply.

The old Olympus?

It would be hard to canvass all the details within a sensible size post.

The other type of process is only suitable for low volume production and the per item price should be high to justify the small scale activity.

This suits $7,500 lenses

Advantages - less risk, profit margins higher, every unit sold should be profitable and stocks would only be high enough to justify the relatively small demand. Much more flexible and easier to control. Small batches of stock made on the bench by highly trained expert staff when stock levels fall to a known trigger point. R&D easier as each design is custom built. Might not need special financing.

Easy to resist consumer attempts to get a discount - no sales then the batch production ceases pretty quickly. This is a long term product strategy and the same product might be made and sold in small quantities over a (say) ten year cycle.

Suits a small outfit with relatively low numbers of staff with access to a good machine shop who can turn there hands to assembling multiple be-spoke lens types into product. The same space could be used for various things over any given time. Little prospect of space redundancy.

The per item value would be quite high and therefore it would be financially difficult to carry much more than a base working level of made stock.

Disadavantages - can run out of stock. Only suitable for very expensive items where there is a good profit margin. A firm depending solely on this method is unlikely to sell a lot of gear. Nor could. It make them well known - handy enough as a stocking filler if you are already a well known market identity.

The new Olympus?

The key issue of Olympus is a lack of understanding of the consumer market and the pursuit of products that drive very low volume as they were chasing a comparison with full frame and other professional segments such as wildlife.

In my opinion the new lens is a demonstration of this obsession not a new strategy based on niche products.

Despite all forum members here being more focussed on photography the combined video and photo offering is what keeps MFT afloat and the reason Panasonic is still in the game. Having the perfect device is less important than meeting consumer needs.

I foresee the complete discontinuation of Pen line and a clean up of all the old Mark II/III that are not current as step one to focus on current models and a slow down of flocking products to the market so errors like the OMD EM1MKIII will not be repeated. Yes is a great camera but it had product launch costs and the improvement is marginal it would have been more cost effective to continue to provide firmware updates and keep production and low costs down.

All MFT hopes are on Panasonic for next year

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Chris R-UK Forum Pro • Posts: 21,052
Re: When the engineers and the accountants put their heads together
2

I am not an expert on the very latest production techniques, but I think that both of your production models are rather out of date.

Current thinking is to have the shortest possible manufacturing lead time and the lowest possible investment in inventory - "Just in Time" manufacturing. An extreme example would be a modern car assembly plant that has a throughput time of, say, 6 hours for each vehicle with components and sub-assemblies coming in from suppliers for each day's production, often in kits There are no batches and each car is built for a specific customer order and gets shipped to the retailer almost immediately. There is no finished goods inventory at the manufacturer.

Whether you can do that for a $7500 lens, I don't know, but I bet that Canon, Nikon and Sony manufacture that way for most of their products. I would imagine that they manufacture is small batches for specific orders.

Of course, such a system requires a high investment in robotics, suppliers capable of daily deliveries, very good manufacturing engineering, modular design, very high quality control standards, etc., but it has a minimal investment in inventory and very short lead times.

If anybody knows more about this than I do, please correct me.

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Chris R

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cosmicnode Veteran Member • Posts: 5,798
Re: When the engineers and the accountants put their heads together

Tom Caldwell wrote:

Please don’t get too excited about this thread it will make heads spin.

I have to start a new thread as the thread where this debate was a sub-thread has filled.

Why do I bother? mainly because we need to dispel the idea often put forward “I want that product, why isn’t it being made?”

Basically there are two main theories about how product is made and marketed - I will restrict this to some distinct extremes as there would be all sorts of variations and combinations depending on the background and needs of a corporation and its future planning.

Some might think that making lots of product and selling them at affordable prices is an automatic way to make lots of money.

Essentially:

Make into stock and sell down the stock over a period of time. This lends itself to known popular product of not too high a selling price. Lead times and R&D costs could be very high.

Advantages - can be made in a form of production line to keep assembly costs in check. reasonably large parts volume used would also help keep costs down. Labour would have to be trained but with a repetitive assembly process skills could be enhanced on the job. Hardly likely to run out of stock until the end of the model.

To try and keep costs under control production would start before launch and keep going until a certain level of stock was in inventory. For a run-away success manufacture might continue and a sales disaster might result in an earlier shut down.

This is the cheapest way to make things but also the most financially risky.

Disadvantages - only suitable for high volume - stock would have to be warehoused, and sold down over an extended period of time. The cost of manufacture - tooling, parts accumulation, staff training, cost of inventory and merchandising would have to be found up front and justified to financiers. Slow sales and storage costs can ramp up and eat margins - the payback method of arriving at success or failure would be most appropriate. The risk of unsold stock becoming obsolete would be huge. It would take some time to organise the production line and train staff and once the product run was over the released factory space and operating staff would have to be found further duties. Only large established firms need apply.

This seems to be Sony's camera body manufacturing process.

The old Olympus?

It would be hard to canvass all the details within a sensible size post.

The other type of process is only suitable for low volume production and the per item price should be high to justify the small scale activity.

This suits $7,500 lenses

Advantages - less risk, profit margins higher, every unit sold should be profitable and stocks would only be high enough to justify the relatively small demand. Much more flexible and easier to control. Small batches of stock made on the bench by highly trained expert staff when stock levels fall to a known trigger point. R&D easier as each design is custom built. Might not need special financing.

Easy to resist consumer attempts to get a discount - no sales then the batch production ceases pretty quickly. This is a long term product strategy and the same product might be made and sold in small quantities over a (say) ten year cycle.

Suits a small outfit with relatively low numbers of staff with access to a good machine shop who can turn there hands to assembling multiple be-spoke lens types into product. The same space could be used for various things over any given time. Little prospect of space redundancy.

The per item value would be quite high and therefore it would be financially difficult to carry much more than a base working level of made stock.

Disadavantages - can run out of stock. Only suitable for very expensive items where there is a good profit margin. A firm depending solely on this method is unlikely to sell a lot of gear. Nor could. It make them well known - handy enough as a stocking filler if you are already a well known market identity.

The new Olympus?

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Jan Chelminski Senior Member • Posts: 2,425
Re: When the engineers and the accountants put their heads together
3

I think you really mean ‘designers and managers’, rather than ‘engineers and accountants’, but that minor point aside, I think you are on to something, ‘big picture’-wise.

You seem to enjoy philosophical matters and are often making comments that seem to be (at least partially,) informed from your own professional (a technical background) experiences, and IMO, these are interesting comments.

It is always good to set forth from a solid base.

Managers, designers and planners are in the best position to direct their efforts, when their own assessments of their teams and all the other material items, relating to business potential and reliable production and profit in the marketplace are well and precisely grounded.

So, I agree with designers (including engineers, etc) having a respected place in the ‘upper levels’ of corporate management and planning, where their insights can have a better chance insuring an organization plays well (with a program of well supported/directed discovery, research and development, for example) within it’s strengths.

Anyway, I agree, there’s a chance a reorganization will actually better allow aspects of micro four thirds to continue with the distinction it probably requires moving forward.

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kcdogger Veteran Member • Posts: 3,171
Re: When the engineers and the accountants put their heads together
3

i would advise camera makers who tout going high end (e.g. higher priced) as a strategy to generate profits to be careful.  You will be losing lots of low to mid range buyers and potential buyers to concentrate on a much smaller group of high enders.  Are they a big enough group to give you a profit with their fewer but higher priced buys?  You may be forcing people to your nemesis - a cell phone.

For me a $7500 lens is simply a laughable oddity, and if prices of cameras and other lenses continue to climb, I will eventually be forced to give up that kind of photography and resort to using my cell phone if I want a picture of something.  The rest of my family (wife, 3 kids, and 10 grandkids) is already there.  they would no more buy a "real camera" then eat a bug.

I guess us old retired, fixed income guys will soon go the cell phone route too - when our current cameras and/or lenses wear out, but they may outlast me anyway, but replacements at much higher prices - HA!  Again, the laughable alternative.

Peace.

John

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bobn2
bobn2 Forum Pro • Posts: 67,520
Re: When the engineers and the accountants put their heads together
4

There has been a lot of work done on agile manufacturing and concepts like JIT which have been developed and promoted particularly by Japanese industry. Since the major volume manufacturers of cameras are Japanese companies, one would expect them to follow these methodologies, and all the 'inside xxx's camera factory' video that I have seen suggest that they do. The old fashioned production line method that you outline is really based on the necessity of special purpose(and expensive) jigs and tools for a product. The line allows the maximum usage of this specialised equipment.

Modern electronic based products are somewhat different. The precision jigs and tools were required because mechanically complex assemblies required them to be produced to a high reliability. In modern electronic products that mechanical complexity has given way to firmware algorithms operating in circuit boards which are assembled by sub-contractors using robotic pick and place machines. Even the remaining complex assemblies (such as shutters) are generally sourced as parts from specialist suppliers such as Copal-Nidec.

For this reason, the old, inflexible production line is likely unnecessary for camera equipment. Production is much more likely to be organised on a cellular basis, and those cells may well be adaptable to a range of different products and variations. This allows reasonable volume batch manufacture to be done at a similar cost to continuous line production, I would expect that is what the camera companies mainly do.

As for what JIP will do, I would be very surprised if, in the longer term, they maintain their own in-house manufacturing capacity. If they inherit ownership of any manufacturing facilities from Olympus (and this is far from clear) I wouldn't be surprised if at some point they spin it out as a stand-alone contract manufacturing business. I would be very surprised if they didn't opt for third-party contract manufacturing themselves, as, for instance, Apple does. For a company that will have to be agile, the last thing they want is the dead weight of the fixed costs of a large manufacturing organisation.

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OP MOD Tom Caldwell Forum Pro • Posts: 42,133
Re: When the engineers and the accountants put their heads together
2

I am not sure if the general response had quite figured out what I was on about.

I am not an engineer, nor am I aware of the precise details of current just in time repetitive bulk manufacturing processes. But I get the gist of nothing works without money oiling it.

My small level of production of very expensive lenses could be automated and approach the just in time theory even if it were very small scale - there is no way any company could afford to make a significant number of this type of lens into stock and then try to sell it down. I did put forward the idea that the specific parts for a design that would need such things as special injection moulding dies might be made as a cheaper bulk run into pre-stock but the more commonly sourced parts might be sourced as the small stocks were replaced. This would keep the cost of stocking down and keep the system flexible.

This would be a rigorous proposal from the engineers and the bean counters would have to decide if the financing could work.

There is already the precedent of the range of exotic lenses for the 4/3 mount that was kept available for some years after the 4/3 mount was decidedly dead. This is not a change of heart but might be a common sense way by which Olympus Inc could keep its hand dealt into lens manufacture for relatively low investment in the future. As JIP now has the future business then no doubt the same lenses would be continue to be sold via JIP-futurecorp.

Olympus Inc has had a long tilt at being a major manufacturer of retail camera gear and obviously failed. It is now been given over to JIP to see if their “agile” corporate structure can handle it.

No matter how we see the future for Olympus camera products there is no doubt that there is a change in the wind.

My argument is that any firm trying to sell very large amounts of technically complex manufactured product need to automate the procedure. In just which way is an engineering thing and I bow to those who are better versed in knowing how this can be done.

But I think that I am correct that such a high volume production facility would be very complex and expensive to set up. It would also need a continuing volume of product to feed it. This would need vibrant markets and continuing R&D. Despite all this it would have to be affordable. Venus and Mars were obviously not in conjunction with Olympus bankers to continue to make it happen. Maybe JIP has a solution, I wish them luck. Maybe they will contract much of it out to others (including Olympus?) with spare manufacturing capacity - that would seem much more sensibly do-able than trying to be a manufacturer of all things.

Where I am at is that Olympus apparently failed at the “make lots of stuff ourselves and hope we can sell it all” scenario. Even if a production line is very agile in what it can churn out - if product ain’t selling it has to go into stock. If excited buyers have to wait for stuff to be made they are not that impressed. Production lines that are in a stop-go-stop routine are not very efficient.

They work better if at turn-key they are set to make “20,000 units” (guess) give or take some thousands depending upon demand.

So there is some business sense in keeping a little earner of an exotic line of expensive lenses going in a back shed if the JIP idea keeps the affordable side rolling. I am sure that if the affordables stopped then it would only a matter of time before the exotic lenses stopped as well.

As usual nobody is forced to buy such expensive lenses (it is not a stupid idea) but surely those that do will keep the Olympus legend alive and well - if only the affordables are still there to wallow in that legend.

Making only cheap affordable stuff will surely kill Olympus off for good.

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Tom Caldwell

loafer Senior Member • Posts: 1,649
Re: When the engineers and the accountants put their heads together

What if the part of the agreement to take over imaging meant that Olympus had to put a price tag of $7500 on this lens?  JIP takes over and the price immediately drops to $5000.

But that's not all.  Olympus camera has one category leader - the TG line.   I predict that will not go away.  Further development of the mirrorless seems pretty dubious.   They may release some stuff that is in the pipeline where all the sunk costs have been accounted for.

bobn2
bobn2 Forum Pro • Posts: 67,520
Re: When the engineers and the accountants put their heads together
1

Tom Caldwell wrote:

But I think that I am correct that such a high volume production facility would be very complex and expensive to set up.

You're correct to say that, but there is no reason that OMDS needs to do so. There are plenty of contract manufacturers that already have the high volume production facilities for both lenses and cameras, and can take on manufacturing jobs at surprisingly short notice.

It would also need a continuing volume of product to feed it.

Which is one of the reasons for going the contract manufacturing route. It's also why most semiconductor companies are now 'fabless'. Semiconductor fabrication lines are now hugely expensive. If you tie up the capital in them you are committing to high volumes or you go bust servicing the loans you took out to pay for the plant. If you contract the work out, and share the facility with other companies, you can work with much smaller volumes.

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jwilliams Veteran Member • Posts: 5,842
My theory ...

My theory FWIW (probably not much) on this particular $7500 lens (for this special case).  As part of the deal with JIP Oly had to commit to finishing up the design (probably mostly already done) and setting up the environment for the limited production runs you describe.  Also build a very small number for the first production run.

JIP then only has to commit a small amount of resources when additional copies are sold.   Good deal for JIP.  Oly probably had no choice in the matter if they wanted to offload the camera division.  All hypothesis but makes sense to me at least.

What production model does JIP pursue in the long run?

I think that they are most likely to purse large scale production of a more limited portfolio of products.  I see choices shrinking not expanding despite the recent addition of a very limited production item.  That lens is a special case and unlikely to have anything similar following it.  The upfront costs of designing small scale production items is probably not going to interest JIP much going forward.  In the case of this particular lens Oly bore all the upfront costs so JIP got a good deal.

So many unknowns.  I've yet to see anything giving any detailed info of the deal for the sale.  The info may never reach the public domain.  I don't know the disclosure laws in Japan.

BTW, good tutorial on large/small scale manufacturing.

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Jonathan

MEDISN
MEDISN Senior Member • Posts: 1,373
Re: When the engineers and the accountants put their heads together
2

Interceptor121 wrote:

and the pursuit of products that drive very low volume as they were chasing a comparison with full frame and other professional segments such as wildlife.

Why not offer tools I can use casually and professionally on the same mount? Seems a win-win.

In my opinion the new lens is a demonstration of this obsession not a new strategy based on niche products.

Sure, but somebody's going to sell me a super-tele zoom for sports and wildlife. Why not Olympus?

Despite all forum members here being more focussed on photography the combined video and photo offering is what keeps MFT afloat and the reason Panasonic is still in the game. Having the perfect device is less important than meeting consumer needs.

Winner! Yes the video ecosystem in MFT is phenomenal. Meeting the customers needs is paramount and MFT does this successfully.

I foresee the complete discontinuation of Pen line and a clean up of all the old Mark II/III that are not current as step one to focus on current models and a slow down of flocking products to the market so errors like the OMD EM1MKIII will not be repeated. Yes is a great camera but it had product launch costs and the improvement is marginal it would have been more cost effective to continue to provide firmware updates and keep production and low costs down.

I doubt in-camera charging, USB-C power delivery, 802.11ac WiFi tethering, "always-on" Bluetooth, dedicated ISO button, 8-way joystick, C4 additional mode, mech shutter with 2x life rating could have been implemented over firmware

Then there's the additional features: HHHR, Starry Sky AF, new face detection, LIveND, 96kHz/24bit audio and 120fps in movie mode, firmware update/setting backup via iOS - not sure if Truepic VIII could handle these.

Ultimately I'm glad the mkIII is very much like the mkII as the mkII was near perfect to use.

kcdogger Veteran Member • Posts: 3,171
Re: When the engineers and the accountants put their heads together
3

The constant demand for higher and higher technology in cameras and the camera companies attempt to provide it causes R&D cost to skyrocket and the resultant prices for cameras and lenses to go up.  In hindsight the old film cameras had little technology compared to today's cameras, and were popular with a large group of people.

Today's (and tomorrows) stuff relies upon more and more technology.  Our own demands and the camera companies efforts to provide it has pretty much "killed the golden goose."  The answer - automate and play to where the most buyers are, not to a small group of elites - and it ain't for $7500 cameras and lenses.  Sure, provide a few technology wonders, but that isn't going to give enough profits to make a profit.

Somebody come up with a Henry Ford (assembley lines or robots, or ..... etc.) or equivalent for the camera industry.  Make a good product, sensibly priced and collect good profits.  Stop with the "hand work" and with always trying to introduce the latest whiz-bang, high tech thingy - unless you want to go broke.

Peace.

John

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Sergey Borachev Veteran Member • Posts: 5,298
Re: When the engineers and the accountants put their heads together
1

kcdogger wrote:

" The answer - automate and play to where the most buyers are, not to a small group of elites - and it ain't for $7500 cameras and lenses. Sure, provide a few technology wonders, but that isn't going to give enough profits to make a profit.

Somebody come up with a Henry Ford (assembley lines or robots, or ..... etc.) or equivalent for the camera industry. Make a good product, sensibly priced and collect good profits. Stop with the "hand work" and with always trying to introduce the latest whiz-bang, high tech thingy - unless you want to go broke.

Agree.  Olympus should already know this after the 43 failure.

It's important to know ones place and do what sustainable and achievable to survive.  Olympus seemed to be trying the upmarket strategy with the $2000 E-M1 II back in 2016, not realising that both its place as a camera maker and consumer confidence in it have eroded a lot over the years.  Then they doubled down with the other f/1.20PRO lenses and even a new E-M1X, apparently catering only to the tiny percentage of its users (a tiny user base compared to others).  They rest is history.

bobn2
bobn2 Forum Pro • Posts: 67,520
Re: My theory ...

jwilliams wrote:

I think that they are most likely to purse large scale production of a more limited portfolio of products. I see choices shrinking not expanding despite the recent addition of a very limited production item. That lens is a special case and unlikely to have anything similar following it. The upfront costs of designing small scale production items is probably not going to interest JIP much going forward. In the case of this particular lens Oly bore all the upfront costs so JIP got a good deal.

I suspect there will be a two stage process. I think at the beginning there will be a ruthless pruning of the product line, which eliminating all products that are loss-making. I think that will mostly be at the lower, volume end, where margins are small and big distribution operations are necessary to move the volume necessary to make money. These products will continue to be sub-contracted to Olympus for manufacture, or to the contract manufacturers that Olympus was already using (e.g. Sigma for lenses). Things like the EMIX ind the new lens make big margins, even if they don't sell a lot. I can see them continuing. Their problem is, that they weren't the type of product which would grow the market and bring sustainability.

Then there is the stage after that, where OMDS starts to develop new products. JIP has already indicated that it will explore new market areas, and if it does that using the mFT mount and lens system, it will be a very interesting possibility indeed. I would expect all those products to be tailored variants of the same technology base (probably the existing one) which can be manufactured easily at the same plants. What I'm saying is don't necessarily expect a new E-M5 model. Don't be surprised to see a drone cam which is essentially an E-M5 III repackaged for drone usage.

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Confusedabit Senior Member • Posts: 1,539
Re: When the engineers and the accountants put their heads together

I wonder if the problem is the engineers are doing the accounting and the accountants doing the engineering.

The camera world does seem an antiverse of any business I have ever encountered.

The smaller the profits the grander the plans, the smaller the sales the larger the product range and of course with the replacement of mechanical items by electronics the higher the cost.

 Confusedabit's gear list:Confusedabit's gear list
Canon PowerShot G5 X Canon PowerShot SX620 HS Nikon Coolpix A1000 Olympus OM-D E-M10 II Olympus E-PL8 +6 more
gary0319
gary0319 Veteran Member • Posts: 8,296
Re: My theory ...

bobn2 wrote:

jwilliams wrote:

I think that they are most likely to purse large scale production of a more limited portfolio of products. I see choices shrinking not expanding despite the recent addition of a very limited production item. That lens is a special case and unlikely to have anything similar following it. The upfront costs of designing small scale production items is probably not going to interest JIP much going forward. In the case of this particular lens Oly bore all the upfront costs so JIP got a good deal.

I suspect there will be a two stage process. I think at the beginning there will be a ruthless pruning of the product line, which eliminating all products that are loss-making. I think that will mostly be at the lower, volume end, where margins are small and big distribution operations are necessary to move the volume necessary to make money. These products will continue to be sub-contracted to Olympus for manufacture, or to the contract manufacturers that Olympus was already using (e.g. Sigma for lenses). Things like the EMIX ind the new lens make big margins, even if they don't sell a lot. I can see them continuing. Their problem is, that they weren't the type of product which would grow the market and bring sustainability.

Then there is the stage after that, where OMDS starts to develop new products. JIP has already indicated that it will explore new market areas, and if it does that using the mFT mount and lens system, it will be a very interesting possibility indeed. I would expect all those products to be tailored variants of the same technology base (probably the existing one) which can be manufactured easily at the same plants. What I'm saying is don't necessarily expect a new E-M5 model. Don't be surprised to see a drone cam which is essentially an E-M5 III repackaged for drone usage.

I recall a recent notice of an interview where supposedly a JIP knowledgeable person reiterated that JIP would concentrate on high end and video going forward. I presume your drone camera idea would fit within  the “video” of arena.

 gary0319's gear list:gary0319's gear list
Olympus PEN-F Olympus OM-D E-M10 III Olympus E-M5 III Olympus E-M1 III Olympus M.Zuiko Digital ED 40-150mm F4-5.6 R +9 more
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