Competing Against Themselves

Jacob Harpaz, president and CEO, IMC Group (Iscar), devoted some time to sit down and answer a few questions that Today's Energy Solutions' Editorial Director Tom Grasson had regarding the technology and goals of Iscar, and what Iscar is able to deliver to customers.

You often speak of the "Magic of Iscar". What is meant by this and what do you attribute it to? The Magic of Iscar is the ongoing process of developing new products for increased productivity. Our aim is to provide our customers with the latest technology to bring down costs. The new products create magic for our customers by improving technology and lowering production costs.

How are you able to keep 10% of Iscar employees actively involved in R&D projects? My policy is to maintain high investment in research and development – one that has provided us with proven returns. Our outstanding technological breakthroughs are attributed to the fine innovative products that sprout from our design engineers. The new products bring about cost-reduction machining processes to benefit our customers.

Within the manufacturing sector, medical, aerospace, and power generation are three key areas experiencing strong growth. On a global basis, where do you see the U.S. fitting in? The U.S. has always been the backbone for major industrial processes. I am certain that the U.S. will continue to be an anchor for future business and manufacturing developments. Recent indicators suggest that the information technology revolution was real, and booming orders for computer equipment and software are setting records once again. The average rate of investment growth is on an increasing trend. In real dollars, investment in the U.S. is more than $700 billion higher per year than it was a decade ago. Investment is a sign of a booming economy, and it is driving the productivity revolution that raises U.S. living standards.

What will it take for the U.S. to compete in these markets against countries like China, India, and Russia? Eastern economies have managed to impress and frighten us with their extraordinary growth rates. But there is nothing miraculous about the successes of Asia's "tigers." Their rise was fueled by mobilizing resources – increasing inputs of machinery, infrastructure, and education – just like that of the once eroded Soviet economy. If the U.S. practices stronger manufacturing strategies and advanced manufacturing concepts, combined with a competitive advantage, it will rise again to regain world manufacturing leadership.

SUMOMILL, with tangentially clamped inserts, feature high positive cutting angles and Iscar's 3P SUMO TEC carbide grade coating.

Within these three market segments, do you think China will also become a major player as an alternative energy components supplier in the near future? We see an increased growth in China wherever manufacturing processes occur. I have no doubt that business in China will continue to expand rapidly in all segments of the metal cutting business.

I understand that Iscar's SUMO TEC grades of cutting tools feature a special post-coating that delivers an estimated 30% to 40% improvement in tool life. Will the SUMO TEC coatings provide Iscar with a distinct advantage over other cutting tool manufacturers? Iscar invests large sums of money to protect the innovative ideas it brings to the world of metal cutting. Our metallurgical processes were developed to provide increased advantages through breakthrough technologies for our customers. The combination of the right tool geometry and the new SUMO TEC coating have set a new era for machining metal. The company policy, which I have set over the years, is to compete against ourselves. Iscar employees constantly strive to improve what we do.

Today, Iscar is considered to be a fullline supplier, capable of supplying fullline solutions within the manufacturing industry. While competitive cutting tool manufacturers make the same claim, they are beginning to diversify. Will Iscar be looking at diversification as a market strategy? In what direction will you take Iscar over the next five years? We find that our business partners are more likely to reorganize or take over link alliances. We support the view that link alliances lead to greater levels of learning and capability acquisition between the partners. We are committed to constant technological improvements and cost-reduction processes for the long run. By doing so, Iscar and the IMC Group have managed to provide better full-line solutions for its end users.

Do you have any parting thoughts for our readers? ISCAR's 3P (Premium Productivity Products) campaign is another milestone in the evolution of metal cutting. Managing new product development is, to a great extent, a process of separating the winners from the losers. Iscar is committed to bringing winning solutions to its customers.