Strategically Blogging

Lasers Assisting with Cancer Surgery

Allen Nogee 09/03/2015

Finally an exciting new laser medical application that could save many lives.

The End of Non-LED Lighting is Approaching

Philip Smallwood 09/02/2015

A few weeks ago, EdisonReport reported that GE will be discontinuing some incumbent lighting technology luminaires, and will no longer be producing any new custom non-LED luminaire configurations starting in 2016. 

IKEA Lives Up to its Promise to Only Sell LED Bulbs

Stephanie Pruitt 08/18/2015

In 2012, IKEA, the world’s largest home-furnishings retailer, vowed that it would only sell LED lamps in its stores by 2016. Three years later, it looks as though the retail giant is keeping its word and getting a head start.

The End of the Smartphone Era Has Arrived. Bring in the Lasers.

Allen Nogee 08/06/2015

It’s really hard to believe that it has been just a little over 8 years since Apple introduced the iPhone, the smartphone which more or less started the smartphone revolution. In 2014, close to 1.2 billion smartphones were shipped, with Apple and Samsung leading the pack. But smartphone shipments are slowing, so manufacturers are doing what they can to get new customer by adding lasers.

Remembering Dr. Roland Haitz

Shonika Vijay 08/06/2015

We heard about the passing of Dr. Roland Haitz in late June and we wanted to take this moment and remember the pioneering figure behind the evolving world of LEDs. We give our condolences to Dr. Haitz’s family, friends and the many lives his research and work touched.

On photonics executives, complexity, and margins

By Tom Hausken
Last month's Photonics West went well again. People were in a good mood, including the executives at SPIE’s forum , where I moderated. One topic was “managing complexity.” It sounds like a buzzword, until you think about it.

Take Coherent. It has to manage different kinds of lasers (excimer, CO2, solid-state, diode), selling to different end-user sectors (semiconductors, medical, university research, etc.), in different regions and through different types of sales channels. Edmund Optics is another example. It’s catalog has 26,000 optics and is available in 10 languages. Just managing that complexity is a task. While there are advantages to scale, it also can create some inefficiencies, compared to a small company with a single product and a few customers.


There can be great advantages to complexity. Clayton Christiansen, the Harvard business guru (he coined “disruptive technologies”), says that the margin in the supply chain goes to where there is the greatest complexity . Google, Apple, and Cisco all manage a lot of the complexity that is in their supply chain. Suppliers of standardized components do not. When specifications are standardized, the customers play the suppliers against each other, and the margin gets razor thin.


Low margin complexity. Sadly, the kind of complexity that our panelists (from Coherent, Edmund Optics, Hamamatsu, IDEX, Jenoptik, Newport, and Trumpf) have to manage is not the high-margin kind. That’s because the customers don’t want to pay to manage that complexity. It’s simply what the suppliers have to do as large companies. In fact, to the extent that the larger suppliers are just federations of smaller business units, a company like Coherent competes with small companies too.


So there you go: larger photonics companies have advantages with their brands and scale efficiencies, but what seemed to be on these executives’ minds was managing the complexity of it all, when they don't get to charge margins for it.


Feb 14, 2012

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