cashflow

Is the NDA Stifling growth for industrial inkjet…or are payment terms?

Posted in response to this article:
One hesitates to criticize idealism (the world needs more of it!), but I think this plea (for more openness and fewer NDAs) is unrealistic. Inkjet is being adopted by CPG and other manufacturing companies as a part of their manufacturing processes. These companies typically view their manufacturing processes as a key source of competitive advantage, and so are understandably secretive about them. The digital advantages – of quick changeovers on short runs, personalization, shorter time-to-market and lower inventories – are SO potentially advantageous (and possibly game-changing) that adopters of new technology will want to maintain any advantage they have as long as possible. Compounding this is inkjet’s difficulty – if it were simple, everybody would be using it. But the complexities of ink/substrate interaction, printhead reliability, data rates, mechanical transport stability and so on mean that most successful inkjet implementations into a demanding production environment are the hard-won results of a lot of process knowledge. This know-how is not willingly shared with potential competitors.

This situation is not unique to inkjet – Silicon Valley thrives on NDAs and ‘dark’ start-ups, and almost every major manufacturing technology (pick & place, flow soldering, injection molding, panel stamping to name a few) started off proprietary.

I suggest that there is a bigger obstacle to widespread adoption of inkjet technology than the NDA: most of the inkjet integrators, whose knowledge fills the crucial gap between the large companies making printheads and inks on the one side and industrial manufacturers on the the other, are small and under-capitalized. Some investors are starting to appreciate this opportunity, but meanwhile many small companies have to deal with the fact that their large customers have payment terms that can extend to 90-120 days. These same companies often trumpet their desire to support innovation and new technologies, while effectively starving the innovators of cashflow. I suggest that this issue, and not the NDA, is the bigger brake on inkjet adoption.

Posted by Chris in Blog Posts, Inkjet, Strategy