Allan's Editorial, Run 275

Peter, I have to agree with you, Allan including his research, and experience has presented a well written  article.

Jack 

I think it presents a fair discussion of both the growing and shrinking viewpoints and what is likely the true perspective, that its shrinking slight, but due only to changes in demographics.  I've really seen no significant change one way of the other in the last 25 years.  Regardless, it will certainly be here as long as I need it, even if I'm the last model railroader alive!

Well I have yet to see the editorial, but I am sure it is worth reading. BUT will others read it and then believe it?

Many questions that frequently appear on this forum have been answered many times by the train company CEO's and managers either in the train magazines or video presentations. For example, the much beloved Jim Weaver said that it takes several sell out production runs of a newly tooled product, just to break even. Not make profit... just to recover the costs of the investment. He said this. Not me, but others like Mike Wolf have said the same. Yet there have been many here who have stated this can't be true.

Jack Lynch and Larry Harrington of WBB have explained you won't see any product from WBB that was unique to only one single railroad. I'm sure other train companies think along the same lines, and yet one always sees suggestions for products that were owned by only one single railroad.

Or the one that makes me laugh, they make this in HO so why not 3-rail. Maybe because HO is a huge market compared to the 0 gauge one.

The excellent "Visit to Sanda Kan" article in the OGR magazine some years back also answered a whole plethora of questions that still get asked all the time, many times with disbelief, that have long ago been answered.

Of course, there have been times a question gets asked on the forum, when the answer to the question is in another post on the same topic, on the very same forum page.

As the old elementary school saying goes, Reading in FUNdamental.

From reading recent posts the main issue seems to be poor communications, on delayed and projected shipping dates, cancellations notices being timely, representations versus the finished product. I don't think there are many skeptics that this is a shrinking market.

Quality control is another issue for which there is no justifiable rationale for its absence in terms of the number of issues.

A lot of what you are talking about is related to the fact that this is a small market,with relatively small sales. Basically, the 'train manufacturers' are not manufacturers, they outsourced their production, primarily to keep production costs low, and there are implications to this model. For one thing, it means they have very little control over the person doing the production, they rely on SLA's (service level agreements), that determine things like when something will be produced, and also are supposed to cover things like the quality of what is produced. The problem is the company, Lionel, MTH, whoever, has little control over this, because to be blunt the SLA means very little.....the only real threat they have is to go somewhere else, but the problem with that, to find another company, negotiate the deal, another SLA, and to move the tooling there (if the prior company will allow it, forget what the contract or law specifies), would be so costly in time and money that it isn't really an option. In theory, the companies involved could set up their own plants, but that would be expensive, and also would expose them to the many arcane rules a local manufacturer knows how to navigate and so forth.....

So with so little control,, things like you mention are going to happen, the delays, canceled production and the like. Likewise, the person producing the product is not going to invest in good quality control, because the cost of quality (ie the cost of bad quality) is such that they don't worry about it. Using inexpensive labor, if they have to throw away or rebuild stuff off their production lines, due to indifferent quality control, the cost is such that it is much less then trying to make it better. The fact that this slips marginal stuff through to let's say Lionel or MTH, doesn't matter to them, because Lionel or MTH then has the headache, they have to replace a defective unit or fix it, and no matter what the SLA is, they basically know they have no leverage. 

More importantly, with this model, they aren't exactly losing business, again it is a small market and if you want a particular engine, it isn't like there are 10 manufacturers making it, so you are stuck. Sure, some on here grumble about the quality, but how many of them go ahead and buy it anyway? 

Quality control is only a business issue when it becomes an issue of competing on quality. Put it this way, despite popular myth, the quality control on cars was dismal, the defect rate and such on cars coming off the assembly lines 40 or 50 years ago was crap, but no one cared, because the companies were so big, could afford the kind of loses from bad quality, that no one cared, the cost of quality to GM, Ford or Chrysler was a blip on the balance sheet, in large part because they all were the same (much as the QC from Lionel, MTH et al from what i can tell doesn't differ much)...it was only when they faced competition, when Japanese cars built with lean manufacturing and QC processes, that they had to change; which quite honestly Lionel, MTH et al don't face, and probably won't, because there are no alternatives. And adding to that, these are not simple units, even the basic trains have electronic control boards and complex circuitry that is rather delicate, as Mr. Scott so brilliantly said in one of the Star Trek movies, the more you complicate the plumbing, the easier it is to stop up the drain.

Some of this stuff isn't new by the way, anyone remember what MPC lionel was like? And from what little I have read of lionel's operations here and there,  as big as we might think toy trains were back then, and they were, it paled in comparison to mass market goods, it still was relatively small, if not the boutique market it is today, and from what I have read there were problems with quality back then, and that was with relatively simple units (not to mention that quality control in the 40's, 50 and into the 60's, was not a big deal in general). The big difference back then was that Lionel had a monopoly on three rail and had enough of a market that instead of semi custom building (ie the building to pre order)they were producing new stuff en masse, which covered over a lot of the issues the poster is talking about. If Lionel did stuff semi custom the way they do today, instead of mass produced stuff for the catalog,I am sure the same complaints would exist to a certain extent

I agree that Allan's editorial is an excellent view on the who issue.  Thanks for the research, Allan, and your conclusions seem like common sense to me!

Allan has always seemed very even-handed to me and this editorial is no exception.

I am also into electrically powered RC airplanes and anyone who actually believes that the popularity of RC airplanes, RC cars, and especially RC multirotors (drones) isn't experiencing rapid growth is sadly mistaken.  I look forward to the day when some of this technology, specifically brushless motors, LiPo batteries, and spread spectrum radio control, finds its way into O gauge trains.

Pete