SAN FRANCISCO - The exponential growth of the photonics market has caused that industry to do a "lousy" job of managing its supply chain, the chief executive officer of Corning Inc. said here Monday.
Responding to a question about inventories, John Loose told an audience at the Bank of America Securities Technology Conference that "We've been dealing with an industry in photonics which has been doubling in each of the last five years.
"In our case, five years ago we had a $50 million or $100 million business, and last year it was a billion dollars," Loose said. "You've got poor guys like Frank over here running the business, and there's only one thing he worries about and that's missing deliveries," he said, referring to Frank Little, vice president and general manager of Corning's Optical Transport Products, who also was at the conference.
"Consequently, I think for all of us in the industry, we've not paid close enough attention to the supply chain," Loose continued. "I think if you look at the inventories and turns of ourselves, the systems houses, and our competitors, you're going to see they're sort of lousy."
The current economic slowdown, however is creating "a lot of attention on supply chain, getting inventories under control across the entire value chain," Loose added.
Late last month, Corning warned of "some softness" in the first half of 2001. The Corning, N.Y.-based company slightly adjusted its earnings per share expectation for the first quarter of 2001 to between 28 cents and 31 cents compared with a prior estimate of 29 cents to 30 cents to reflect concerns about slower sales into the telecommunications market.
"Several customers in our optical fiber and photonic technologies businesses have recently indicated that their order rate may be lower and more uneven than previously expected in the first-half of the year," the company explained then. "Also, with the weak retail environment, we expect our customers to adjust their inventory levels of finished LCD monitors in the first quarter."