Wednesday, November 10, 2010

Business is booming – and that’s a bad thing?

I can’t speak for other economic sectors but the machine vision business is doing very well. Just last week Cognex announced a sharp increase in sales, (and more importantly, profits,) and now I see that camera-manufacturer Basler has experienced a similar uptick. (“Camera Sales Increase by 85%”)

This is of course good news but I can’t help being a little concerned about the future. So far there seems to have been enough capacity to soak up the increased demand but what happens when factories are maxed out? At that point we’re going to start seeing some significant price increases – in fact we already are in some areas such as lenses – and that’s going to reduce the ROI on many automation projects.

Now as I’ve noted previously, visionware makes up only a small proportion of the total cost of a machine vision implementation, so a 20% jump in the cost of a lens isn’t going to break the project, but it still has to be reflected in the bottom line. A more serious issue might actually be the extended delivery times that also result from running at 100% of capacity. This is going to result in project delays, and that doesn’t help any of us.

So here’s my message to everyone building vision components: invest in some additional capacity. If you don’t, some entrepreneur in China will see the profit you’re making and decide that he should get a piece of the action.

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