Episode 48 – Noel Moore, Sustainable Photonics
Jimmy Carroll: [00:00:02] Hi everybody. My name is Jimmy Carroll. I’m the vice president of operations at Tech B2B Marketing. I’m here at SPIE Photonics West 2024 doing the Manufacturing Matters podcast. I have the pleasure of being joined today by Noel Moore of Sustainable Photonics and obviously my colleague here John Lewis. Noel, thanks so much for taking the time. Really appreciate it.
Noel Moore: [00:00:27] Great to be here. Thank you for the invite.
Jimmy Carroll: [00:00:29] Of course. So for those who don’t know, could you tell us a little bit about Sustainable Photonics and what you do there?
Noel Moore: [00:00:34] Yeah, absolutely. So Sustainable Photonics is a relatively young company, about a year old now. And what we’ve tried to do is approach the concept of sustainability within the photonics industry not only from a manufacturing point of view but from a supply chain point of view and then from a customer intimacy and relationship point of view. So engineering the relationship to be sustainable, not only looking at it in terms of traditional sustainable manufacturing.
Jimmy Carroll: [00:01:01] How did the company come to be? You started it with a partner of yours, right?
Noel Moore: [00:01:05] That’s right. Myself and my partner Ken Ferree started it. And the idea was really to try and fill in some of the gaps. For example, if you look at sustainable manufacturing techniques in other industries, they’re very well adopted. You know, electronics, semicon, automotive — these guys are world leaders. Those industries are starting to adopt products from the photonics and optics sector, and the supply chain in photonics and optics, generally speaking, is not up to those quality and manufacturing standards as much as their customers need them to be. So traditionally in photonics, it’s photonics people selling to photonics people, and everyone understands performance. But now it’s more about, for example, automotive supply chain quality control or, for example, the medical device industry quality control. And so therefore starting to think more like being a sustainable partner for your client rather than just thinking internally.
John Lewis: [00:02:00] One of the things you said made me think of when you were talking about sustainable relationships. Could you talk more about that just to clarify for me?
Noel Moore: [00:02:13] Absolutely. You know, so if you think of the traditional sales process and the sales engagement, it’s potentially adversarial. People are trying to get to a deal that makes sense. And you know, a lot of people historically, the old-fashioned way of looking at that is almost like win–lose. It’s almost a zero-sum game for some people. But the truth is that doesn’t work in volume applications. You can’t have that mindset when you’re partnering, for example, with automotive or consumer electronics, because they will mandate you to have a cost down of x percent, and it can be significant, 5–10% per year after the contract is signed. So you may have a platform and a manufacturing infrastructure that can get you the order today, but it will put you into the red in 18 months if you’re going to volume. So you have to think about: what does that sustainable relation relationship look like at the outset of the discussion. And it’s not just about getting the order; it’s about customer satisfaction. And not just your customer but their customer.
John Lewis: [00:03:18] And maintaining the relationship over time.
Noel Moore: [00:03:21] Exactly. And frankly, having the relationship be about something more than just price or performance. For example, our partner DayOptics, who we’re here with today at Photonics West, they’re probably leading the way in terms of building sustainability into their business model. They have multiple sites, they have redundancy in their production, and then they’ve deployed a lot of new technologies which are quite new to our industry, very familiar in other industries but new to photonics, with a view to having a sustainable partnership with many of their very, very large clients.
Jimmy Carroll: [00:03:56] I want to ask some questions about your partnership with DayOptics because obviously you’re here with them this week, and that suggests that this is a major partnership for you guys. But a couple other questions I wanted to ask first. So in terms of general trends in the photonics space, what are some notable ones and how do those impact some of the challenges you might encounter when it comes to sustainability?
Noel Moore: [00:04:18] Yeah. So again, it’s just to to revert back to what I said earlier. We’re moving as an industry from supplying either a component or a device to now being a manufacturing partner. And it really is a case where you’re entering into contracts where the end user consumer market dictates everything for all the supply chain partners. So it’s not something where at the outset you can say, “Look, here’s a price that we’re going to commit to for five years,” because the market dynamics, for example, in automotive a good example would be automotive lidar. You know, deployment of automotive lidar has not reached the heights that people thought it would. Yet many companies have built that capacity, and they have to hold and write that capacity and try to fill it elsewhere, if they can, until that wave comes from lidar. And that’s exactly the same if you’re talking about wearable devices, you know, or AR/VR. A lot of times the fundamental manufacturing capacity is there, and it has to be ready to scale up because when one of those big companies, the consumer electronics giants, when they deploy a new mobile phone or a new tablet or whatever, they’re not planning to sell a few hundred. They’re planning to sell a few hundred million very quickly. So you may go from prototype stage, which could only be in the thousands, to suddenly being asked to deliver 10 million a month or 50 million a month or whatever else the market will sustain.
Jimmy Carroll: [00:05:49] Okay, so going into DayOptics, a lot of times on this podcast, we’re talking to, for the most part, manufacturers or software companies, but you work with companies in a different way. So using DayOptics as a primary example, how do you work with your partners?
Noel Moore: [00:06:06] Yeah, it’s a great question. So I suppose we would try to come at it from both ends of the spectrum. If you imagine the market awareness and customer intimacy as, let’s say, the closest to the final customer, and then maybe you imagine the R&D side of your company as perhaps the closest to fundamental science. So what we try to do is we try to come at it from both directions. We try to have very, very meaningful and impactful discussions with customers, which then allow us to roadmap where the current capabilities of a company like DayOptics are, what we can do with them today, which is about building trust. It’s about building relationships. It’s about proving yourself to be a reliable and sustainable partner. But then it’s also about having that confidence of discussion with your partners at many, many touchpoints in their organization, where you can become part of not just the design win process, but in my opinion, DayOptics is is becoming a “designed to win” company. And what I mean by that is we all think about, we have a product that’s designed in and we’re safe.
Noel Moore: [00:07:17] We have that order for some period of time. What DayOptics is doing is it’s looking at the fundamentals of its business from a manufacturing point of view, from a customer relationship, supply chain and sustainable power and so forth. And it’s looking at these things with a view to having a roadmap which is expanding in terms of breadth and depth of the interaction with the customer. So in practical terms, they’re actually absorbing and removing risk from their customer by doing and adding value-add services that customers are not as competent at doing as DayOptics. A great example: many, many wonderful optics manufacturers here today. Even just from China, I think there’s 160 companies, wonderful numbers. However, what DayOptics is doing is it’s offering levels of integration to move up the value chain, which is not about taking the customer’s business away from them. It’s about de-risking their supply chain. So they’re bringing in modules that are pretested, performing at a very high level and with a very, very low variance, in the millions of products. So that’s something that people value, and they place a premium on that relationship.
John Lewis: [00:08:34] You had mentioned some of the sustainability efforts involved. AI. I know that’s a very hot topic in manufacturing these days. A lot of manufacturers talking about how they use AI. And can you talk a little bit about that.
Noel Moore: [00:08:48] Yeah, absolutely. So you know it’s probably one of the most bandied-around terms at the moment. And there’s probably millions or billions of dollars being won and lost in the stock market day by day with the hashtag AI. But put simply, what DayOptics are doing as an example is a very, very intelligent approach to it. It’s using AI in a very secure manner, not necessarily only in a generative way but in a comparative way. So to give you a specific example of what I mean, if you look at final quality control, the safest place to be is right before you dispatch to your customer, right, that final stage of quality control. But DayOptics is a little smarter than that. What they’re doing is they have an inline quality control process with a pass or no pass very, very early on in their process. So to give you an example of how this matters and how it matters to the bottom line, let’s say, for example, you create an optic and it’s not a good optic. Well then don’t waste your time cleaning it, polishing it, coating it, and packaging it only to find at the end that we have a problem.
Noel Moore: [00:09:59] So what DayOptics is doing, and it has a couple of different modalities, very simply they have done a reference lookup AI scenario, where they compare several data points. It can be something very simple like visual, but it can also be something like performance. So a metrology type thing, and they look at that and compare it in real time. So they have the feedback information to the manufacturing process. So instead of just having quality failures and rejection rates at the end of your production architecture, what it allows you to do is catch deviations early in your process, correct them, and therefore not have money going to scrap. So why is it important? Well, it allows them to be more competitive. It allows them to be more efficient. You know, in a case like DayOptics, it is not about cost down in terms of their product. It is about quality control up. And that’s in some ways counterintuitive, but they do go hand in hand.
John Lewis: [00:11:07] By not adding value to a flawed optic, for example, they’re conserving resources, not wasting.
Noel Moore: [00:11:15] Yeah exactly. You don’t cook out-of-date food. You throw it out, so you don’t waste the energy on the process, on doing it. And it’s the same thing here. So that leads DayOptics to is a very, very high pass rate in the optics and electro-optics that they make. And that is a necessary door opening. If you want to go to med tech or automotive or consumer electronics, because those guys don’t tolerate a 10% failure rate or a 1% failure. It’s not the way.
Jimmy Carroll: [00:11:48] I always appreciate a good analogy. So I like that. In terms of the general space, Noel, what advice might you offer a new or even an aspiring company in photonics? Have you seen repeat mistakes from startup companies or companies looking to get into the market that you say, “Hey, be sure not to do this or be sure to do this”?
Noel Moore: [00:12:10] Yeah. Like I think probably the number one thing, and we were talking about this at the Global Business Forum here at SPEI yesterday, our industry has gone through a few waves, even though we’re a relatively young industry, like, for example, the telecom bubble in 2001 and then the great financial crisis in 2007, 2008, 2009. And a lot of things that our industry have probably learned the hard way is about committing capacity too early and having an overcapacity in the industry. The example I would give you is in the last couple of years there have been a lot of consolidation activities in the lidar space, and a lot of very good companies with extremely good technologies have failed due to having overcapacity for a market that isn’t ready. So one of the ways to overcome that is, and DayOptics does this very, very well, it looks at fundamental architecture that can serve multiple industries. And sometimes they’re cyclical together, sometimes they’re anti-cyclical. So ideally you’d like to have a little buffer where one industry is perhaps performing very well and one maybe not so much, but that you have a surge capacity. And again, DayOptics is actively investing and expanding in new facilities. And they’re doing that partly to have additional surge capacity but also to insulate themselves from supply chain shocks.
Noel Moore: [00:13:40] You know, we’re not so far past the pandemic, and companies like DayOptics, many got wiped out by being closed down. With DayOptics, what they have is they have geographically diverse locations, and there’s a couple of reasons for that. But it does give you insulation against shocks, earthquakes, whatever. But it also gives you shocks against let’s say manmade phenomena such as energy shortages, water shortages, and so forth. So, for example, with DayOptics, they don’t choose a location based on something like labor cost. That’s foolish. In the modern photonics industry, if you choose a location based on labor cost, that just means your automation level is incorrect. So what you should be doing is looking for areas that have sustainable energy costs and low energy future costs, that have security of supply around water, that they of course a workforce and these things, they all come into it. But it’s a multi-variable, complex decision-making process. And DayOptics is actually doing this in a very aggressive way to ensure that if there’s a disaster at one location, like a COVID shutdown or something like that, they can just pivot the capacity elsewhere. So it’s a nice way to insulate against shocks.
Jimmy Carroll: [00:15:07] John, anything from your end?
John Lewis: [00:15:09] Well, I was thinking of the Global Business Forum. We were there for part of the day yesterday, and we saw the presentation on China. And, you know, one of the things that really struck me was the amount of renewable green energy that China has been investing in in the last few years.
Noel Moore: [00:15:26] Yeah. And, if you saw it in that forum yesterday, in some ways there was a reluctance to embrace the fact that China is the biggest player in photonics, and a lot of parties at that event were kind of looking at how do we protect our businesses and so forth. The truth is, you do it by collaboration, and you do it in such a way that you have sustainable partnerships with Chinese companies. The geopolitics aside, that’s fine. It is what it is. But what we have in China is we have an ecosystem which is super agile. It’s able to pivot very quickly. It’s able to invest very deeply and very heavily, and it’s able to capture applications in a very holistic way, in a way that not other places in the world can do it, not at that scale.
Jimmy Carroll: [00:16:20] Kind of a general question, because I’m curious, and you have a unique company and a unique background, but any advice you’d offer a salesperson that’s new to the photonics industry? And I ask that because some people if they come from an entirely different space might have a certain approach to sales. Whereas here, in photonics, sales and marketing have to be done a little bit differently. You’re talking to a different audience. Do you have any any general advice for that?
Noel Moore: [00:16:43] Yeah, actually, in Sustainable Photonics, and I’m sure this wasn’t a planted question, but in Sustainable Photonics we do offer a sales training course for people who are in photonics but maybe they’ve come from a scientific or engineering background. We call it the reluctant salesperson. And the level of technical knowledge you need to have in the photonics industry is a little bit deeper than in some of the other ones. It’s myriad. There’s very, very deep niches that you need to know about if you’re in that space. But what we’ve done is we’ve kind of put a process in place that suits engineers and scientists in how they follow logical processes. So to look at the sales process not necessarily as an adversarial thing but as an optimization to a converged solution, and that’s something that sits very well in the mindset of people in our industry. But in terms of the advice that I’d give them, the industry has changed a lot. So 10 or 15, 20 years ago when I started, it really was PhDs talking to PhDs, and everyone was speaking the same language. Over time, that evolved, and it was PhDs speaking to businesspeople. That’s where we were five years ago, and now we’ve moved forward.
Noel Moore: [00:17:58] And a great example would be DayOptics and how they’re handling this challenge. The current dynamic in the market is photonics companies talking to deep applications experts in a very narrow field. So, for example, it could be a photonics expert who’s expert in optics speaking to somebody who’s going to be deploying this in a medical device. You could be doing that on a Monday, and then on Wednesday you could be talking to somebody who’s doing an aerospace communication project. By Friday you could be talking to someone who’s doing automotive lidar. So knowing your product and knowing your company and your competitors is fantastic. But knowing the concerns of the end users and how their industries are shaping their pressures is something that I would advise people to pick up. How do you do it? Honestly, you listen to podcasts like yours, you get on and you look at what are the dynamics in those industries, what are people talking about? A lot of themes do emerge: sustainability, security of supply chain, these kinds of things. Innovation is always there. So I would encourage people to know their own company well but to know their customers even better.
Jimmy Carroll: [00:19:10] Yeah. Makes sense. Let’s see, John, anything else to add or Noel anything that we haven’t talked about today that you’re passionate about, excited about?
Noel Moore: [00:19:20] Yeah. Look, I think the future is – we really are at an inflection point in photonics at the moment. So specifically, we are about to see mass market deployment in a way we’ve never seen photonics before. You know, we all have photonics in our cell phones and our tablets and our laptops, whatever. But if you look at the new emerging world, you think of photonics as looking at things with light, but now these devices are looking back at us with the same light or with other light. So, for example, you imagine something like driver monitoring in a car. It’s monitoring you for tiredness and so forth. We’re very, very close due to things like photonic integrated circuits. We’re really, really close to having wearables and consumer products like vehicles and tablets and smartphones which will be essentially real-time wellness applications for us as well. So looking at things like your hydration levels, your oxygen saturation in your blood, your blood glucose level, other stress-related metrics that they can look at. Again, DayOptics is very, very strong in this. If you look at some of those applications, they tend to need a large bandwidth in terms of wavelengths of many, many different colors. And they maybe need many different sources or many different collection points. So there’s a broad range of modalities to look at, a lot of data to pick up. And what you end up with is a ton of data with the use of AI where you can really optimize experiences for people. And I think we’re just about to see that in the next five to 10 years really explode.
Jimmy Carroll: [00:21:06] Interesting. Yeah. Anything else, John, to add?
John Lewis: [00:21:11] I was checking out the DayOptics website the other day, and I don’t know much about them, but there were some bullet points that jumped out under their technology, like optical coating, manufacturing, and bonding technologies that seem kind of unique to me. And I don’t know if we could talk a little bit about them or not.
Noel Moore: [00:21:30] Yeah, absolutely. So I tend to look at the DayOptics portfolio in terms of utility. So they would start I would say from planar optics. These can be things like windows, and everything that has a photonics component these days has a window. But sometimes that window could be for protection, but sometimes it could be for filtering. So maybe, for example, you want a very specific wavelength or color of light, and you’re not interested in everything else. So you know the flat optics that the optics produces filters and windows. But then things like mirrors and so forth and wave plates are all part of how that light is harnessed and captured and both delivered and retrieved in terms of many, many of these products, as simple as lasers and as complicated as communication systems. But then the optics has moved up the value chain both in the complexity of the optic but also then in their level of integration. So when we talk about optics, you imagine pieces of glass or crystals, but then the next stage up is electro-optics, where we have some sort of an electrical device, for example, a piezo, which creates a sound wave across a crystal, and that’s used to control the light in some way.
Noel Moore: [00:22:49] And DayOptics are masters at this. They’re new products for them, recently developed but leading the industry in terms of performance. Shockingly fast delivery to customer needs. And that’s kind of the metric. You know, they’re delivering a lot of products at the integration level that their customers are requiring. And I think what you’ll see over time, and I think DayOptics is a little ahead of the curve here. You will see the commodity optic market, like all commodity optic businesses, is a race to the bottom in price. But by adding higher and higher levels of integration, what it does is it allows the OEM customers to move up the value chain because they’re de-risking the supply and functionality that they’re buying in, and people are very happy with that. If it’s done in a controlled manner, even where IP might be developed somewhere else, DayOptics is able to contract manufacture that in such a nice and reliable and sustainable way that it’s very much aligned to the roadmaps of these very large companies.
Jimmy Carroll: [00:23:56] Noel, if people want to learn more about Sustainable Photonics, is it just sustainablephotonics.com?
Noel Moore: [00:24:00] Sustainablephotonics.com is there. And myself and my partner Ken Ferree and myself, Noel Moore, we’re on LinkedIn. Easy enough to find and happy to reach out to anyone and just have a chat and love hearing new things. We love hearing problems and love solving problems.
Jimmy Carroll: [00:24:14] Yeah, right on. If anyone has questions too, we’re happy to take them and pass them on to Noel and his team. It’s manufacturing-matters.com. If you have any general questions, comments, want to join, or like I said have questions for Sustainable Photonics or DayOptics, please do reach out, and thanks everyone for watching or listening.