glenerrolrd Posted February 8, 2010 Share #41 Posted February 8, 2010 Advertisement (gone after registration) Hopefully the following might refocus the discussion. SAP has little to nothing to do with the challenges facing Leica. Rather the issue is the complexity and variety of products and the relatively low volume. Leica s issues are currently around managing capacity. Right now demand far exceeds capacity. Adding technicians is a long and painful process and particularly challenging when many can still remember the lean days before the M8. Overstaffing can mean layoffs in the future. Training new technicians requires that some existing capacity be devoted to training..actually lowering capacity in the short term. Similar logic exists for plant and equipment . Leica has only a few machines that can make the asph elements for example. Adding capacity means purchasing and installing a major capital improvement. What if demand drops off ? How long will we be down? Could we have quality issues? Do we have the funds ? The supplier network is what you might call a "cottage industry" ..larger suppliers don t want the small orders . This is why they run out of batteries. They have to commit to a large quantity and then forecast accurately when to reorder. The supplier reserves the right to just say its going to take longer. In this environment the plant tries to make what it can and reacts to management directives on needs . Sure they know that they will produce 900-1000 M bodies this month but not specifically if yours will be one of them . I am only sharing this so that readers might understand the why? and can determine how this affects them. If you order a new M9 thru your favorite dealer and wait for delivery ..you may not receive it before summer. If you order a new lens thats not in stock at the distributor be prepared for 6 months. This will get better overtime but not this year. And for sure the sales person doesn t have any reliable information on delivery. I should note that this isn t unique to Leica as Nikon had to commit to a years worth of glass for their pro telephoto lenses (400-600). They forecast a terrible 2009 and didn t have enough so in the fall they just told the dealers no more lenses (400-600) this year. Good news is that new products are fantastic....bad news is that you may have to be creative to put together your kit. Link to post Share on other sites More sharing options...
Advertisement Posted February 8, 2010 Posted February 8, 2010 Hi glenerrolrd, Take a look here Continuation of Leica Shipping Problems. I'm sure you'll find what you were looking for!
bill Posted February 8, 2010 Share #42 Posted February 8, 2010 Is it just a legend that there has not yet been a single satisfactorily completed SAP implementation? If you take ROI as a measure, no it's not a legend. One of the reasons why SAP will cease to exist as a separate entity in the next 12-18 months. Regards, Bill Link to post Share on other sites More sharing options...
Guest BigSplash Posted February 8, 2010 Share #43 Posted February 8, 2010 Hopefully the following might refocus the discussion. SAP has little to nothing to do with the challenges facing Leica. Rather the issue is the complexity and variety of products and the relatively low volume. Leica s issues are currently around managing capacity. Right now demand far exceeds capacity. Adding technicians is a long and painful process and particularly challenging when many can still remember the lean days before the M8. Overstaffing can mean layoffs in the future. Training new technicians requires that some existing capacity be devoted to training..actually lowering capacity in the short term. Similar logic exists for plant and equipment . Leica has only a few machines that can make the asph elements for example. Adding capacity means purchasing and installing a major capital improvement. What if demand drops off ? How long will we be down? Could we have quality issues? Do we have the funds ? The supplier network is what you might call a "cottage industry" ..larger suppliers don t want the small orders . This is why they run out of batteries. They have to commit to a large quantity and then forecast accurately when to reorder. The supplier reserves the right to just say its going to take longer. In this environment the plant tries to make what it can and reacts to management directives on needs . Sure they know that they will produce 900-1000 M bodies this month but not specifically if yours will be one of them . I am only sharing this so that readers might understand the why? and can determine how this affects them. If you order a new M9 thru your favorite dealer and wait for delivery ..you may not receive it before summer. If you order a new lens thats not in stock at the distributor be prepared for 6 months. This will get better overtime but not this year. And for sure the sales person doesn t have any reliable information on delivery. I should note that this isn t unique to Leica as Nikon had to commit to a years worth of glass for their pro telephoto lenses (400-600). They forecast a terrible 2009 and didn t have enough so in the fall they just told the dealers no more lenses (400-600) this year. Good news is that new products are fantastic....bad news is that you may have to be creative to put together your kit. Roger you make some very valid points that overall I agree with. I see the following: SAP...I cannot understand frankly why they even use this software as they are not into mass production volumes. I do believe that a major issue is that Leica is like any company very dependent on its suppliers for batteries, sensors, shutter mechanisms, integrated circuits, and glass lens elements all of which have large batch sizes, and long lead times. I accept that this means: Leica need to fund perhaps a year' supply of glass lens elements, which is costly for their P&L...however a missing glass element in inventory of say 50€uros (my guess) that causes Leica NOT to ship a 3500€uros lens is surely a big management mistake . Management has the task of balancing the risk of not having XXX in stock versus the the cost of a large reserve stock. Currently it seems that they are not doing such a great job. I recognise that some glass elements take 18 months to cool the glass so lead times are definately long, Leica will at any point in time most likely have a large WIP to fund. The time taken to actually build an M9 from parts made at Leica Portugal, shipped to Solms for final assembly, test and callibration is presumably not cheap. High attention to the production planning process and the the timely procurement of inventory seems to be key for any company and especially one that may have a lead time of several months to obtain new stock of a particular missing component. [*]Apart from supply chain management issues you are correct that capital for manufacturing equipment for items such as lens grinding and polishing machines is an issue. However surely this is an investment with a 3 to 5 year capital ammortisation. This should be seen against huge profits for a Leica ASPH lens, which hopefully can drive capital payback within months rather than years.. If this is not the case then frankly Leica's problems are really tough. [*]Dr Kaufmann made the point in 2009 that revenues had to increase significantly at Leica to balance the continued R&D, plus I guess capital, inventory costs, and the new Wetlar factory. Obviously if they are late in shipping M9's, ASPH lenses, accessories and X1 plus S2 the this will not be good news for the revenue increases he requires. I actually believe that Leica management have real challenges and it is ridiculous to try to second guess ways forward as an external armchair CEO. That said I think it is obvious that they need to get product out of the door much quicker than is happening currently. Finally I do not agree that a particular M9 cannot be assigned a serial number at conception through to birth and this unit be destined for a particular dealer. Car manufactureres do this routinely and even customise the vehicle as defined by the client. Bosch run 25 different versions of their fuel injection system down one computer controlled production line ...so Leica could certainly do the same. Link to post Share on other sites More sharing options...
SJP Posted February 8, 2010 Share #44 Posted February 8, 2010 (1)it is obvious that they need to get product out of the door much quicker than is happening currently.......(2) Bosch run 25 different versions of their fuel injection system down one computer controlled production line ...so Leica could certainly do the same.. (1)No, (2) they could but they won't. Leica thrive on small volume, balancing at the edge, being exclusive and different, it is their raison d'etre. Surely this is not quantum physics to figure out? Link to post Share on other sites More sharing options...
ho_co Posted February 9, 2010 Share #45 Posted February 9, 2010 ... (which is SAP for Germany).... Roger, just curious--how do you know that? What is your source? Yours is the first mention I think I've seen of whose software Solms uses. Link to post Share on other sites More sharing options...
mby Posted February 9, 2010 Share #46 Posted February 9, 2010 Roger, just curious--how do you know that? What is your source? Yours is the first mention I think I've seen of whose software Solms uses. ITS System Information Best regards, Michael Link to post Share on other sites More sharing options...
andybarton Posted February 9, 2010 Share #47 Posted February 9, 2010 Advertisement (gone after registration) Returns an invalid link Link to post Share on other sites More sharing options...
LUF Admin Posted February 9, 2010 Share #48 Posted February 9, 2010 Roger, just curious--how do you know that? What is your source? Yours is the first mention I think I've seen of whose software Solms uses. I can acknowledge that - they run SAP. A few years ago we tried to create a web interface for repair tracking. No fun... Andreas Link to post Share on other sites More sharing options...
Guest BigSplash Posted February 9, 2010 Share #49 Posted February 9, 2010 (1)No, (2) they could but they won't.Leica thrive on small volume, balancing at the edge, being exclusive and different, it is their raison d'etre. Surely this is not quantum physics to figure out? I agree about "Balancing on the edge" ....Leica has tottered near bankruptcy over many years and finally was saved by Dr Kaufmann, who not only bought the company but later needed to inject signigicant extra capital to put the company on a more solid footing. He stated that revenues had to increase significantly..and that means: "getting more product out of the door" unless you see an alternative. So I do not relate to you saying "No". Are you saying that Dr Kaufmann is wrong and revenues / volumes should not be increased? If you are saying that Leica cannot move overnight from say 15000 M9's per year to 100,000 per year I agree. However I see no reason why they cannot progressively increase production to say 30,000 or 40,000 for the camera body, without destroying quality and retaining their flexibility to match market demand. Ramping up lens production seems to be more difficult I agree. It involves placing large orders for glass with very long lead times. It also suggests significant capital investment for lens grinding and polishing machines. However presumably this has been planned for and is no surprise...I guess the Noctilux problems when they started production is understandable, but now it seems that many other new ASPH lenses are not getting out of the factory door quickly enough. Surely by now all of these items should be sitting on dealers shelves? You say Leica "thrive on small volume" ..and being exclusive and different. I guess this is partially true..... Certainly the M9 with a six month backlog means it is EXCLUSIVE, and likewise the huge delinquent backlog for the new lenses, and even a growing level of pain to obtain batteries and simple accessories such as a lenshood or filter suggest exclusivity. It has even been suggested here that Leica should restrict production to build exclusivity. .....If that is the Leica strategy I suppose that would be positioned by appropriate marketing messages, and dealers would not be frustrated awaiting confirmed deliveries that do not materialise. I am less sure about seeing this as evidence of a THRIVING company that seems unable to ship a product that took years to develop, and is a huge success currently in the market. Can you explain this one to me as I clearly am unable (despite a Physics degree) to work it out! Various threads have suggested that potential clients have become disillusioned waiting for the M9 and/or a new lens to go with it. The lack of information from dealers about what is going on and when clients will receive their orders is not healthy I believe. Finally I guess Leica management have by now created an environment where clients have placed double or multiple orders and that too is potentially a problem for a small company that sees a huge backlog that maybe actually smaller than the books suggest. IMHO the quicker they clean the delinquent backlog the better for the P&L, client satisfaction and forward visibility...or is that wrong? IMHO the quicker they communicate accurate shipping details to their dealers the better ...... In my case I have ordered a lenshood and filter since last October and neither my dealer, nor Milton Keynes can confirm when it will arrive, and even where in the Solms system this order is despite monthly follow ups. It is something I can live with but it suggests to me that this is not an example of a company in control of its operations. Link to post Share on other sites More sharing options...
bill Posted February 9, 2010 Share #50 Posted February 9, 2010 please can we have an armchair ceo sub-forum. Link to post Share on other sites More sharing options...
tdtaylor Posted February 9, 2010 Share #51 Posted February 9, 2010 I'm with Bill on this one. Of course, I have employees that second guess my decisions all day, so why would anywhere else be different Link to post Share on other sites More sharing options...
mby Posted February 9, 2010 Share #52 Posted February 9, 2010 Returns an invalid link Sure, but look at the top right corner... Link to post Share on other sites More sharing options...
glenerrolrd Posted February 9, 2010 Share #53 Posted February 9, 2010 I can acknowledge that - they run SAP.A few years ago we tried to create a web interface for repair tracking. No fun... Andreas Thank you Andreas. Exactly my recommendation 2 years ago in the first digital M service crisis. Roger Link to post Share on other sites More sharing options...
glenerrolrd Posted February 9, 2010 Share #54 Posted February 9, 2010 It should be obvious that making recommendations on how to "fix the Leica problem" do not result in anything other than an intellectual debate. Maybe you are snowed in today and this keeps things lively? The point that does amaze me however is the number of times we hear about "no information on delivery". Why anyone would order a small item from a local dealer (after backorder has been confirmed ) is beyond me? The dealer doesn t know, the sales rep for the dealer doesn t know, customer service at the distributor doesn t know and in many cases the factory doesn t know. Why? because they would order something like a lens hood from a small plastics manufacturer with injection molding equipment. He would demand an order size of a few hundred and give price breaks on volume..so that Leica would want to buy in quantity. Leica is also probably almost a waste of time for the supplier . Now add to this that leica isn t on top of the supply chain for lens hoods ..when do you think you might get one? My process is (1) I don t bother my dealer for small items that take his time and have small margin unless I think he might stock the item(like a battery) (2) I order from B&H if they have it ...if they don t good sign its in short supply ...I check other web sources (3) no luck I email the specialty retailers and start checking ebay. If I am stuck ..like on DMR batteries..I call the spare parts manager in NJ...he told me where to find my DMR batteries I needed before a trip. I have never waited more than 2 weeks for anything except my M9 . Your expectations for a orderly communication process will not be fulfilled..so I have been suggesting that a better course of action is to assume ...its never going to come if its backordered. Link to post Share on other sites More sharing options...
Guest BigSplash Posted February 9, 2010 Share #55 Posted February 9, 2010 Bill I suspect that your wish for a CEO forum will defacto happen as soon as the Leica annual results are announced for the year up to end of March 2010. I sincerely hope that the results are brilliant and in line with what Dr Kaufmann told us last year when he articulated what he needed to keep Leica healthy (ie increased revenues) . I hope that any concerns I may have expressed over the last year are blown to pieces. ..that would be great news. If that happens: I shall get my lenshood, and filters within the next few weeks so that Leica can show it in their revenues for this year, This is not a mission critical thing for me by the way. Batteries for M9 and M8 will be available again off dealer shelves. Again I can buy none OEM batteries if I need to. Many people will hopefully get their M9's that are now seriously delinquent The new expensive lenses. will be shipping like crazy. I am thinking of buying an 18mm or WATE. R&D at Leica will be on track to deliver firmware upgrades for M9 and M8 before end of March. Maybe that means I have to pay for some new M8 firmware upgraded functionality...again more revenue for Leica. S2 will be actually shipping and making lots of inroads into Hasselblad and Phase One . I guess that we shall see better the success of the strategic initiative of S2 X1 will be shown to be a market success at £1300 each (without view finder) and shipping in volumes. M9+ or M10 will be nearer and new lenses will be on the horizon. Bill I really care about the long term health of Leica in a very uncertain world. I want Leica to remain healthy as selfishly that gives me a security that spare parts and after sales will be available long term for my Leica kit. I also want to buy a digital FF (M10?) that has addressed some or all of the issues that M9 users have identified already. ...and in some cases are issues not resolved from M8. If the CEO forum that you clearly want can yield visibility of the above I fully support you. If you are suggesting that we are not allowed to raise doubts about Leica roadmap, and viability as a company if they cannot fix supply issues I have a different view. The Leica management team have the data (not me) I see the results as a client, hopefully their CEO at some point can explain to us what is going on at Solms ...directly or via the dealers. Is that wrong to expect that as a minimum? Link to post Share on other sites More sharing options...
bill Posted February 9, 2010 Share #56 Posted February 9, 2010 ...................................................tumbleweed..................................................... your ''agenda is pellucidly clear... Link to post Share on other sites More sharing options...
aesop Posted February 9, 2010 Share #57 Posted February 9, 2010 ...Frank, you are overdoing it. Buy your Leica equipment, take/make images and be happy with it. Better still, share your photographs and/or photographic knowledge with the clan. You and I have opinions on what Leica should or should not be doing, and I admire your passion for "the long term health of Leica", but I think you will find you are not alone. Work with your dealer - if you are not happy with him/her, find another one. Some advice - if you really insist on blessing us with your unique insights on Leica strategy, keep it short. We may come to appreciate your nous, but not if it is incessant and quite frankly, tiresome. Some of us use the forum as an oasis - the last thing we want when we do arrive here is a bone dry well. Please take this in the spirit in which it is intended. Link to post Share on other sites More sharing options...
jaapv Posted February 9, 2010 Share #58 Posted February 9, 2010 I would take an Aston Martin over a Porsche any day - Porsches are too expensive in insurance, as they are generally driven by pimps over here -that is actually what I was told by my insurance before anybody shoots me.... Link to post Share on other sites More sharing options...
marknorton Posted February 10, 2010 Share #59 Posted February 10, 2010 Porsches are too expensive in insurance, as they are generally driven by pimps I must have changed career without realising... my 911 costs €600 to insure, less than my photographic kit. Porsche certainly do have their manufacturing act together; my car was built on the day they said it would be, 3 weeks after the model first went on sale in Europe and was at my dealer just 6 business days later. I hope Bill will appreciate my restraint in not posting a picture of it... Link to post Share on other sites More sharing options...
Guest BigSplash Posted February 10, 2010 Share #60 Posted February 10, 2010 It should be obvious that making recommendations on how to "fix the Leica problem" do not result in anything other than an intellectual debate. Maybe you are snowed in today and this keeps things lively? The point that does amaze me however is the number of times we hear about "no information on delivery". Why anyone would order a small item from a local dealer (after backorder has been confirmed ) is beyond me? The dealer doesn t know, the sales rep for the dealer doesn t know, customer service at the distributor doesn t know and in many cases the factory doesn t know. Why? because they would order something like a lens hood from a small plastics manufacturer with injection molding equipment. He would demand an order size of a few hundred and give price breaks on volume..so that Leica would want to buy in quantity. Leica is also probably almost a waste of time for the supplier . Now add to this that leica isn t on top of the supply chain for lens hoods ..when do you think you might get one? My process is (1) I don t bother my dealer for small items that take his time and have small margin unless I think he might stock the item(like a battery) (2) I order from B&H if they have it ...if they don t good sign its in short supply ...I check other web sources (3) no luck I email the specialty retailers and start checking ebay. If I am stuck ..like on DMR batteries..I call the spare parts manager in NJ...he told me where to find my DMR batteries I needed before a trip. I have never waited more than 2 weeks for anything except my M9 . Your expectations for a orderly communication process will not be fulfilled..so I have been suggesting that a better course of action is to assume ...its never going to come if its backordered. The point that plastic injection moulders want to make large batches is clear, and Leica has to handle this as part of their business approach. They buy a few thousand at a price of 2$ each and sell the thing (lenshood) for 165$ ...the difference is profit plus the cost of keeping inventory. I tried BH and they had to order the lenshood from Solms (via NJ). In UK small parts go via a special channel at Miltin Keynes and is not part of the order process for cameras and lenses I have discovered. I personally find it unacceptable that confirmed orders into the Leica system, get lost, are unable to be found etc etc. Thanks for the advice that I need to phone the Leica main agent for a battery you are probably correct but then that is what I thought dealers do. I am amased how many people feel that one needs to work the system and be forgiving of Leica's performance. Anyhow the camera and lenses are great so I am off to take some photos as the sun is shining and spring is almost here.... Link to post Share on other sites More sharing options...
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