Radical Innovation at Italian Manufacturer - IndustryWeek Article
Posted by Machines Italia | 01 Jun 2012
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Devoting 11-12% of sales to R&D has proven to be a successful strategy for SAES Getters, a producer of scientific and industrial applications where stringent vacuum conditions or ultra high pure gases are required.
SAES' product applications span from the display industry, in all its forms from conventional CRTs to the new generations of flat displays, to the manufacturing of components used in several and diversified electronic devices ranging from x-ray tubes to wafer-level MEMS, from applications in particle accelerators and in large vacuum systems for physical experiments to solutions supporting the lamp, semiconductor, optoelectronic and automotive industries.
I recently toured the company's research and development lab in Milan arranged by Machines Italia, as part of the Italian Trade Commission. During a presentation Giulio Canale, deputy group CEO and group financial officer, explained that the company moved from a closed innovation model to an open one. "Working with customers, major labs and universities we are able to innovate at a faster pace than we could achieve by only focusing internally," Canale explained.
The company now refers to its method of discovery as radical innovation. And radical is a good term to describe how the company had to overcome an adverse economic situation in one of its products lines. In 2007 the company enjoyed a high percentage of its sales from one particular product line and earned a nice margin as well. Sales were at €90 million (US$112 million). By 2011 sales were less than €1 million and Canale predicts that the product line will not see any sales in 2013.
Luckily the company has a track record of innovation, filing patent applications every year for eight to ten new inventions, and was able to innovate its way out of the financial crisis.
In fact last year the company won the 49th Annual R&D 100 Awards for the NEXTorr D 100-5 pump which is a non evaporaive geter pump integraing geter and ion pumping technologies into a single high performance, light and compact device. It was created at the Milan lab.
One particular area of success is the shape memory alloy. "We are creating the market," said Canale. The company saw an opportunity to take its 70 years of experience in the vacuum metallurgy arena and go after emerging markets such as medical devices and innovative compact actuators. So in 2004 they expanded into knowledge-intensive materials, in particular the market of NiTiNOL whose super elastic properties are applied in the biomedical sector and whose shape memory properties are applied in industrial fields. The company developed a Nitinol material and a thin-diameter Nitinol wire for automotive applications.
Nitinol is a trade name taken from the alloys composing it -- nickel (Ni) and titanium (Ti) -- and the scientific group that discovered it -- the Naval Ordnance Laboratory (NOL). A team from the NOL discovered the alloy while searching for materials that could be used in tools for dismantling magnetic mines.
In 2006 the SAES Getters Group acquired 50% of Memory Metalle GmbH located in Germany, in order to establish an entry point into the European medical device market. Two years later the company is one of the largest worldwide Nitinol suppliers through the acquisition of Nitinol production assets in New Hartford, New York. That acquisition gave the company a complete product line which includes mill products, semi-finished products (wires, tubes, strips, sheets) and highly engineered components manufactured.
(During my visit the company demonstrated how the shape memory alloy works. See video.)
The revenue from this sector reflects the growing business opportunity. For the first quarter of 2012, sales were €12 million, up 15.8% compared to last year. Gross profit was €4.4 million in the first, an increase of 36.4%. The growth was based in the medical field and a direct result of "research and development made by the group in the last few years," the company said in its earnings report.
Looking towards the next breakthrough in advanced materials, the company is developing products in the area of organic electronics. On a tour through their research center my guide described this area as disruptive technology.
Organic Light Emitting Diodes (OLEDs) are the new frontier for the manufacturing of thin, low power-consuming and low cost displays. This new technology is based on the coupling of layers of different "active" organic materials (either of the so-called "small molecules" type or the "polymer" type), deposited by chemical or physical methods, together with a cathode, usually made of reactive metal such as Ba, Ca or Li. Organics, and especially the cathode material, are sensitive to moisture and, in some cases, to oxygen. Therefore, protection of such materials from the external environment is one of the most challenging tasks for the emerging OLED display industry. This technology is the platform for the next display and lighting applications which will make it possible the production of extremely thin displays with excellent contrast as well as flat lamps.
As these organic molecules showing semiconductor properties will bring "bring breakthrough developments in the consumer electronic as well as in domestic and industrial lighting industries," according to the company, SAES offers a variety of dispensable innovative Dryers able to ensure a long life of OLED devices. For many years the company has been involved in the development of special dryer configurations for both "small molecules" and "polymer" OLED displays.
These new technologies along with many others servicing a variety of markets are what SAES Getters is banking on its future. "The speed of the technological evolution that has characterized the last century and that is going to accompany our lives in the new millennium requires a total commitment to innovation," the company said in explaining how it will position itself for the future. And given its seventy year corporate culture of R&D, it seems to be able to meet that commitment.