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March-April 2014 : The "Glorious Thirty" and new times

Written by Dubosc
Wednesday, 05 March 2014 08:28

Those who lived through the “Glorious Thirty”(*), a time of ever-expanding economy from 1945 to 1975, are now in their sixties, or more.

They were witnesses of an extraordinary period, which unfortunately has gone forever.

Will the next generations know a similar occurrence?

You bet “no”!

As many of our readers were not yet born then, they only heard of it. Guess how it was?

Authors of this paper…are in a good position to let you know something about this time.

Penetrant and Magnetic Particle Testing manufacturers were mostly from the USA at the end of World War II.

In Europe some governments, as UK’s, urged their chemicals’ manufacturers to enter this market by designing and manufacturing such products in their countries. Some of these chemicals’ producers were far from being enthusiastic as these products were a “niche” market (though the word “niche” was not used at these times). However, ever visionary, some civil servants pushed in this strategic way: how to maintain military aircraft if an embargo was issued by the American Administration, for instance?

More and more, new manufacturers came to this market. The market being in full throttle, these manufacturers experienced a time of high margins; every manufacturer had customers, hence:

-    Selling prices and margins were high, allowing companies to commission new plants, to pay for Research and Development costs, which were, then, in a “ask for money-get it immediately” situation,

-    Customers were loyal, did not contact competitors: everyone was happy about the not-so-complex situation, everyone having huge financial returns.

Everything went wrong with the first oil crisis (October 17, 1973) and, nowadays, we see that:
-    PT and MT materials prices have dramatically dwindled, as new entrants on these markets cut prices, as this happened in the market of X-rays films. Never will we be back to the price range in constant money that was seen then,

-    Competition in the industrial world is very tough; customers are no longer so loyal; they play the competition off of each supplier, as mandatory after the Purchase Department requirements…with some drawbacks sometimes!

-    Many PT and MT materials manufacturers simply vanished due to:

o    Mismanagement: prices and margins diving in a desperate move to keep or increase market shares while overhead’s costs exploded,

o    No rationalization of the range of products, no bettering off of the products’ costs,

o    ‘‘Fossilization” of companies which were renowned back in time…but became short of responsiveness.

-    Some of these vanished companies have been bought by others for two purposes:

o    Buying renowned companies, but above all buying their qualified products allowing for a quick increase of the market share and of revenues,

o    Wipe out a competitor, a trademark, though this is not that cost-effective.

So, what is the situation today?

The main “adjustment”, by far, is the supplier/customer relationship, more precisely the service the supplier may deliver to its customer. The customer’s loyalty is no longer a given, but on the other hand, suppliers thoroughly look after the cost-effectiveness of every customer!
In fact:

-    Paying a visit to customers may be expensive: refer to the number of pharmaceutical salespeople, which dropped due, among other reasons, to the increasing market share of the generic drugs replacing the original products from the very large drugs companies,

-    Increasing relationship to a customer is five times cheaper than getting a new customer.

Have you noticed that some suppliers no longer pay a visit to your plant/office? Every contact comes through phone calls, emails or fax messages. However, some problems cannot be solved this way. Nothing can be better than the true service-to-the-customer action: the supplier’s guy who is near the PT process line performing the tests with the user’s guy and giving the right advice - hopefully!

But there are also some users who do not play after the rules:

-    The technical sales representative spent a long afternoon with the would-be customer,

-    The supplier has sent a technical report and a quotation,

-    None of the other would-be suppliers have paid a visit. Nevertheless, the customer asked them to send a technical offer along a quotation. The customer even gives some ideas suggested by the technical sales representative who took a long time to give explanations,

-    The lowest quotation wins the battle.

This may make even serious suppliers wonder whether a visit to the customer is useful: the supplier who does not have to pay for car expenses, tolls, gas, hotels/restaurants’ receipts may quote a lower price!

Personal relationship is still a valid and important factor. Phone calls, the Internet, cannot help every time. Just an example: quite easy to buy any equipment from the USA through the Internet: a computer, an Internet connection, a credit card, that all is needed. Now buy a UV-A source, a hand-held yoke (electromagnet) for MT, or whatever, that you want to use in Europe. You get it quite fast, you unpack, you plug the equipment to the mains, and...flash!! You burn it! The U.S. standard voltage/frequency is 117 V/60 Hz; in Europe, it is 230 V/50 Hz. Do you think that the standard technical sales representative in the USA (if you are lucky, you have someone on the phone; most likely, your order is processed only through a computer…and the computer does not even “know” that other voltages are used elsewhere in the world) will ask you about this “small thing”? Right, you get your equipment about half the price you would have paid to the distributor in your country. However, your “half-the-price” money is definitely lost!

So, be careful to emphasize personal relationship with competent suppliers’ sales-or technical persons.

(*) “Les Trente Glorieuses ("The Glorious Thirty") refers to the thirty years from 1945-1975 following the end of the Second World War in 1945 in France. The name was first used by the French demographer Jean FOURASTIÉ. It is derived from Les Trois Glorieuses (Three Glorious Days), the three days of revolution on 27–29 July 1830 in France.

During the thirty years, France's population and a state-driven economy grew rapidly. The French standard of living, which had been ruined by both World Wars, had become one of the world's highest. Since the 1973 oil crisis, France's economy, while still faring well under Mitterrand and Chirac, slowed down its explosive growth, thus the mid-1970s mark the end of the period.’’
(From Wikipedia, the free encyclopedia)

Last Updated ( Friday, 07 March 2014 08:53 )