As seen in Irrigation Business and Technology,
September/October 2001

Conservation Series:
Don Olson and Kathy Baldwin
by Steve Smith

IBT: What's your company's core market niche?
Don Olson: In an average year, we are 60 percent ag and 40 percent in turf, but it really depends on the year. In the ag market our niche is tree crops, in the turf market it's drip, pre-manifolded valves and specialty drip products.

IBT: On the economic front, what do you think the next few years will be like for the irrigation industry?
D.O.: I think the next few years will be similar to the last two years.

IBT: Your company has been known as a real innovator in the irrigation market. How have you been able to identify new product needs and designs?
D.O.: You have to find niche areas, niche markets. With every product line, you find out that there are some weak spots. They become obvious after awhile. There are areas where you have customer requirements and products that are not available. Those products need to be designed for that specific kind of problem.
Kathy Baldwin: If one grower has that need, usually many others have similar requirements. Many of our products were developed because Don was talking with someone who had a problem. When he spends time in the field, we get new products.

IBT: What technological breakthroughs do you anticipate for the irrigation industry in the coming years?
D.O.: Short term, I don't know of any. The long-term future is biotechnology and the development of crops that require less water or no water.

IBT: What are some of the challenges you've faced in recent years as an irrigation manufacturer?
D.O.: The biggest challenge we have is foreign competition from companies who are manufacturing in areas where labor is cheap or in countries whose governments support foreign trade. They enjoy development programs, export credits, tax incentives, variable labor rates. The list goes on and on.

IBT: It's cheaper to produce a product abroad and sell it in the U.S., than it is for a U.S. manufacturer to produce and sell the product in America?
D.O.: Right. And there's not a lot you can do. If they decide they want to undercut a market and go for it, they do it. You can't match them if you don't have the same economic base. When a company can support R&D, without any individual expense, it's a big factor. California is tough for manufacturing. Our power bill went up by 2.5 times in the last six months. It went from $4000 to $10,000 in one particular month. Sales taxes, income taxes, property taxes all have an effect.
K.B.: I think some sort of government subsidy to help protect domestic manufacturers and cultivate foreign trade would be helpful in this country. One of the fortunate parts about our location is that, occasionally, we can send some of our assembly work to Mexico and get some economy on the labor rates.

IBT: Your company is celebrating its 25th anniversary. What do you think has been the key for surviving this long?
D.O.: I'll tell you, it has taken some tenacity, some luck and a lot of dedicated hard work.
K.B.: OIS is small, tightly knit and our staff has been with us for a long time. We're able to respond to market conditions and opportunities rather rapidly. We devote a lot of our effort to product development, and we're able to design the equipment necessary to manufacture the product.
D.O.: This gives us the ability to handle special projects that are over and above our normal sales. On several occasions, we have had the opportunity to sell technology and the special manufacturing equipment necessary to produce some of our patented products.

IBT: What are your current priorities for the company? What do you think is the future of Olson Irrigation Systems?
D.O.: We're working on several new products, improvements on several existing products, and we are working with other companies in the industry on special OEM products which we will manufacture and private label for them.
K.B.: Don's talents will probably always keep us heavily involved in new product development.

IBT: Take us through the process involved from taking a need in the field and turning it into a new product.
D.O.: Normally, you identify, "What's not working?" This often comes through conversation with field people. You give some thought to what might "make it work."

Sometimes the first concept might be on the back of a napkin at lunch with the customer. Back at the drawing board, now it's the computer, you design a product. A prototype is built in the R&D shop and it's taken to the customer for his evaluation and tryout.

There are usually adjustments before the next phase, which is fabrication of a new prototype mold. We then run a few hundred parts and put them out for field testing. Final adjustments to the design are made and production tooling is built. The product is then market ready.
K.B.: Production tooling requires major investment. It is critical that an evaluation be done to make sure the market is great enough to justify that investment in tooling and assembly equipment. Some great ideas never get to the market for that reason.

The author is managing editor of IBT magazine. He can be reached at 800/456-0707 or email at ssmith@gie.net.