Sunday, October 03, 1999
GREATER CINCINNATI 100
Notable locals investing in R&D and technology
BY JOHN ECKBERG
The Cincinnati Enquirer
A visitor to offices of Cincinnati 100 companies need only look to the nearest computer or fiber-optic line to get a glimpse of how leading executives plan to drive productivity in the years to come.
Research and development and taking advantage of sales opportunities offered through the Internet emerged in 1999 as two critical elements of strategies that executives plan to embrace to seed continued revenue growth.
About 70 percent of the companies on the roster compiled by Arthur Andersen plan to spend up to 5 percent of annual revenues this year on technology, with 55 percent planning to spend 5 percent of revenues on research and development.
Nobody knows the impact of this trend better than Robert V. Glutting, chairman and chief executive officer at Fairfield-based Floturn Inc.
When North American companies make a significant commitment to new technology, usually the first new equipment to arrive is a state-of-the art printer. Floturn Inc., a firm with $42 million in revenues in 1998 and 95th on the list, benefits because it makes photoreceptors for the laser printer market.
The company is the world's largest producer of photoreceptors and employs 230 at its Fairfield headquarters. That is a 24 percent increase from the 185 who worked at the firm in 1997.
A photoreceptor is an aluminum tube that is diamond-turned to a bright mirror finish to extremely close specifications, and which in turn is coated with materials to allow photo-reproduction to occur.
“Typically, there are two reasons why a company upgrades,” Mr. Glutting said. “Keep in mind that back in the 1970s, everybody had a copy machine. It cost $10,000 to $50,000. You put a print down, and it copied it.
“Now, for a couple of hundred dollars, you can have a laser printer on your desk. It gives you better print quality at a faster speed. the idea that by spending a couple of hundred dollars for that kind of capability, well, it's petty cash.”
Floturn's market is the remanufacturing of laser toner cartridges. It produces a cartridge that is like new but at half the cost of a new cartridge. The company, which produced 200,000 dry paper receptors in 1989, produced 25 million laser photoreceptors in 1998.
Even a manufacturer of high-technology equipment has to upgrade, he said. Research and development efforts can refine production, and Floturn sees internal processing, anodizing and diamond-turning processes, or centerless grinding, as critical developments.
“The processes themselves are not that highly technical, but it is extremely important in a competitive business to constantly refine to increase productivity,” he said.
Scott Q. Nesbitt, chief executive officer of Blue Ash-based Data Processing Sciences, thinks that the Internet will be the driving technological force for the foreseeable future. The company, which employs 230 throughout the Midwest and is 79th on the list, designs, implements and supports integrated communications networks. It had $42.1 million in revenues in 1998.
“The Internet is doing for the written word what the telephone did for the spoken word 80 or 100 years,” he said.
“But what we have found in the last several years is that fewer and fewer companies are building private networks.”
He said the integration of voice and Internet communications will drive revenues for many companies.
If, for instance, a customer is looking at an apparel company's Web page through a cable modem, the technology allows a consumer contact center operator to “push” the customer's browser to the proper Web page where his question gets answered or another sale is possible.
“I'm an Internet fan and probably overstate the case. But from my perspective and corner of world, it is absolutely the most revolutionary thing that has occurred in my lifetime,” he said. “On an economic basis, it is the equivalent to the linking of the coasts by railroad. It will profoundly change the way everybody does business in this country.”
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