Invar Product(~7MB)

2. What are typical order magnitudes?
We probably have current work for 25 to 50 customers at any one time. Some of these customer s have one large contract with us, up to $20 million over a two year delivery period, some cu stomers have 50 orders with us with relatively constant re-order periods of four times per ye ar or annually.

Therefore there are maybe, 1000 orders on the books for 40 customers to a total value of $40 million in the form of a backlog of work. The average order is, therefore, $40M/1,000 orders or $40,000, - but the largest order can be $20M and the smallest can be $1,000, so the stati stics can be misleading.

3. How are new product introductions and changes handled at Invar?
By the above definition all new contracts are new products, so the question is really irrelev ant, but the purpose of the question is as I see it to ascertain trends in the product design s.

If there has been one major trend in the past 5 years in our markets, it has been the increas e in accuracy requirements, quality assurance documentation and general lack of leniency for deviations of products from specifications.

This is obviously the result of seminars on Japanese quality assurance programs, with the Nor th American attempt at instant emulation. It may sound commendable but this requires a depth of knowledge to implement a sound Total Quality Management program. The arbitrary reduction of dimensional tolerances and rigid demands for stringent material specifications has had a little more effect than the spawning of a class of semi-qualified inspectors with the authori ty to reject components and systems on the basis of obscure requirements that do not necessar ily support form, fit or function. This has caused an increase of costs and loss of work.

4. What is a major concern that Invar will have to face in the near future?
The major concern in the near future is the tendency for Canadian customers to view the mergi ng opportunities in Eastern Europe, Mexico, and the Pacific Far East to have manufacturing pe rformed at low labor rates and with local Government export assistance offered to their advan tage. Low labor rates, reflecting the local low living standards, poor working conditions, m inimal social benefits, create an uneven playing field for the Canadian Industry - an industr y which has to accommodate a myriad labor laws and social restrictions to stay in business an d if the Company is located in Ontario, to suffer regional preferential treatment arranged ag ainst it.

There is no intention to degrade the Canadian work standards, but exploitation of deplorable conditions in other countries for immediate profits is going to ultimately have the affect of degrading Canadian manufacturing technology, and once lost, the cost of catch-up or re-intro duction will be difficult.