Yet another marketing genius weighs in...

gunrunnerjohn posted:

palallin posted:

IF GM could do it then selling millions of trucks, why can't Lionel do it now selling hundreds of engines?

I think you answered your own question!  The difference between producing millions of even tens of thousands of a specific model and trim is quite different than selling less than a thousand model locomotives and having multiple options in the mix.  Having a bunch of different options for a production run of a thousand is sure to run the cost up for every article.

I don't buy that:  it's all (or almost all) done by hand, anyway.

Manufacturing Step 22:  Select form this bin or that bin or no bin at all.

Being in the train business on the consulting side, I can say that building motor vehicles in large volume is worlds away from building hundreds of locomotives.  Vehicles are mostly built my machines now and they don't make mistakes.  Humans always make mistakes, especially when the workforce (regardless of country of origin) has no idea what the real locomotive, car, or accessory is supposed to look like outside of a few photographs and drawings.   

In a typical 3rd Rail project we have anywhere from 25-75 variations across the run of a diesel.  Costs go up for every single variation, sometimes by a lot.  What makes this successful is teamwork:  oversight by Scott himself, a project manager that has been with the company in Asia for something like 30 years, a dedicated staff of builders at the factory, and the several extremely knowledgeable individuals who have a vested interest in seeing successful projects.  Even then things slip through the cracks at times.

The one item that has been left out of this discussion is the human side - relationships.  Most successful train manufacturers have long standing relationships with individuals who know how to navigate the system (again regardless of country of origin) that you know you can trust.  There is more than a few instances of some overseas managers providing the same research to multiple manufacturers and getting a fee each time.  It has happened here in the US and all the lawsuits of the last decade don't need to be re-hashed to understand that.  While it is easy to denigrate a worker in a foreign plant, keeping skilled employees isn't any different anywhere in the world.  A skilled employee is an asset and it is necessary to keep the best workers paid so they stay.  These factories are not large operations.  Think in the 10's of employees not the 100's or the 1000's.  

Parts don't just come from a bin, they are typically sourced from all over the world.  Someone needs to manage that process and make sure they are getting ordered on time and within the budget.     

This is not a huge industry even factoring in G, HO, and N.  Being in small business in my full time job, I would be nowhere without the relationships I have formed over the years.  I have clients and colleagues in other sectors I have worked with for half my life.  If you don't know the right people, you will never get a model train project built in Asia, Europe, the US, Mars or wherever.  However, if anyone want's their project built nearly all the manufacturers will do it if you take on all the risk.   

GG1 4877 posted:

 In a typical 3rd Rail project we have anywhere from 25-75 variations across the run of a diesel.  Costs go up for every single variation, sometimes by a lot.  

I rest my case.   People have to understand there's no such thing as a free lunch!

gunrunnerjohn posted:

GG1 4877 posted:

 In a typical 3rd Rail project we have anywhere from 25-75 variations across the run of a diesel.  Costs go up for every single variation, sometimes by a lot.  

I rest my case.   People have to understand there's no such thing as a free lunch!

No there aren't any free lunches but think about all the things that you can purchase for the price of  Legacy Engine. A Garden Tractor, 3 generators, 4 chainsaws, a snowblower, 5 widescreen TV's or 3 dishwashers  for that money.....and they are all digitally controlled.  This illustrates the extremely poor value of a full featured O gauge engine.    If you like them buy them but I maintain they are not a very good deal.

"think about all the things that you can purchase for the price of  Legacy Engine"

How about 500-2000 packages of dental floss?

Dennis LaGrua posted:

gunrunnerjohn posted:

GG1 4877 posted:

 In a typical 3rd Rail project we have anywhere from 25-75 variations across the run of a diesel.  Costs go up for every single variation, sometimes by a lot.  

I rest my case.   People have to understand there's no such thing as a free lunch!

No there aren't any free lunches but think about all the things that you can purchase for the price of  Legacy Engine. A Garden Tractor, 3 generators, 4 chainsaws, a snowblower, 5 widescreen TV's or 3 dishwashers  for that money.....and they are all digitally controlled.  This illustrates the extremely poor value of a full featured O gauge engine.    If you like them buy them but I maintain they are not a very good deal.

I disagree (not because I buy legacy engines and the like, I don't), and I think the perspective is wrong. Items like a garden tractor, a generator, a chainsaw, a snowblower, a tv, etc have their value in what they do, they are utilitarian and are made that way, and are made on a mass scale, they are made to do something, and none of those has much in the way of an emotional component to them (yeah, you yell at the tv, but that is because you are a dimwit like myself that roots for a team run by idiots and poltroons and coached by a buffoon [ny jets fan here]), not because you are angry at the tv set.

The value of a legacy engine is not really in it being utilitarian, it is a pure discretionary purchase that you buy to have fun with, to enjoy the way it looks, to use it, it gives you a thrill, unlike let's say a chainsaw (well, okay, there are certain people in this world who might get a thrill out of them, but I am not going there). I was watching a show on the Velocity channel where this guy had a 1959 Cadillac the place did for him, and it was like 50,000 dollars in parts put it into, and if I heard right, like 2300 hours of labor, which means likely you are talking somewhere well above 200k for that car work....that a)would sell for a fraction of that, even in mint shape and b)that 200k could buy a lot of really nice collector cars, muscle cars or a number of really hot modern muscle cars or even some exotics......but it was worth it to him because he loved the car, had been his dad's, always dreamed of driving it again, etc.....in other words, not a rational decision. 

As far as all the items you mention being digitally controlled, I am not sure how that is relevant, my phone camera uses the basic technology a high end DSLR uses these days, but they aren't the same. The digital controls on those items are relatively simple compared to a legacy engine, and a digital tv set is not that complex,it is not customized, it is one of many millions using the same LCD screens, same chip sets, etc, whereas the reality of a legacy engine is it is almost approaching the level of a semi custom build, given how few they make, how much they do, and the level of engineering (almost all custom) they have to do, plus they are pretty much hand built.  

gunrunnerjohn posted:

GG1 4877 posted:

 In a typical 3rd Rail project we have anywhere from 25-75 variations across the run of a diesel.  Costs go up for every single variation, sometimes by a lot.  

I rest my case.   People have to understand there's no such thing as a free lunch!

You haven't made a case:  the analogy is flawed.  We're not talking about variations, choosing among many options with varied inventory of pats to sort through and procure.  We're talking about simply not installing all the parts on an engine being made.  This is really very simple:  build an engine with all the bells-and-whistles and build another without them.  No added costs, not added steps, no added people.

"No added costs, not added steps, no added people."

I think you have underestimated the costs of inventorying a greater variety of products, for manufacturer, distributor and dealer.  And the increased likelihood of error in assembly, for example.  And difficulties and complexity of QA/QC.  Much more of a gamble to figure out what the product mix should be with more than one product configuration.  Those are a few key reasons for the lack of different levels of features in these locomotive runs.  I think you are bound for disappointment if your desires vary from what the majority of the market wants in this sort of tiny industry with long supply lines, and long planning timelines.

palallin posted:

gunrunnerjohn posted:

GG1 4877 posted:

 In a typical 3rd Rail project we have anywhere from 25-75 variations across the run of a diesel.  Costs go up for every single variation, sometimes by a lot.  

I rest my case.   People have to understand there's no such thing as a free lunch!

You haven't made a case:  the analogy is flawed.  We're not talking about variations, choosing among many options with varied inventory of pats to sort through and procure.  We're talking about simply not installing all the parts on an engine being made.  This is really very simple:  build an engine with all the bells-and-whistles and build another without them.  No added costs, not added steps, no added people.

I see LANDSTEINER beat me to it.  You really need to take a look at how manufacturing flows before you make such pronouncements!  The bottom line is, and you've been told that by a person that actually manufacturers model trains, it's not simple!  My signature line is obviously not working, maybe this will.

Nothing is so easy as the job you imagine someone else doing.

In another thread, Palallin, you also rejected the arguments of two manufacturers — Rapido and Con-Cor — when the owners explained why train manufacturing could not suddenly be reinstated in this country and why China could not be readily extracted from the mix. Both explained how total U.S. production would be extraordinarily costly and completely impractical in the market. Worse yet, you took a snippet of Jim Conway’s letter on his website and managed to misrepresent his statement that he was at least better off than some manufacturers in that he had some production facilities in the U.S. (as does Lionel).

In this current thread, you reject other expert information and then tell others they are flat out wrong in their thinking.

Frankly, your opinions are wearing thin. So unless you have some empirical data — that’s information confirmed in a peer review and published in professional journals — showing how your business ideas have been proven successful, please refrain from dismissing other people’s opinions (as in John’s post above) above your own. Feel free to state your opinion, then move on.

https://goo.gl/images/6v2LEk

Sounds like a great opportunity for you to launch your own super efficient manufacturing facility making model trains.