It takes a little time. But the economics and the outcomes are in our favor. And I’m very bullish on that. Orthopedics, I think it’s transforming orthopedics, frankly. And there’s ripple effects, less inventory in the supply chain, better patient matching of solutions, all of that you get. The example I gave, I’m just over the moon about with the skill repair. It brings all the benefits of additive manufacturing together in one example, and it’s fabulous. And this is a change in this patient’s life. So it’s great. On the industrial side, again, broad acceptance. I mean when you look at everything from rocketry and satellites to new ground transportation with electric vehicles and even old line manufacturing. Now we’re not going after a lot of high-volume standard components made out of steel and other lower-cost materials.
We generally are in the higher-value markets of titanium and nickel and some of the other high-value materials and applications because that’s the first adopters, if you will, of additive. But especially these younger — I would tell you, these younger companies, where there are fewer design paradigms they love additive. And if you look at the percentage of additive parts in some of these really progressive industries that are moving fast, it’s really high. I mean you’re talking 70%, 75% of components in some modern vehicles that are not ground-based vehicles yet, but the modern flight vehicles for air and space that are made with additive manufacturing and either directly or indirectly through castings. And it is remarkable. So I think your — all of the tides are going in the right direction for adoption.
And the only thing that could really slow it down is a drop in capital spending by companies if they are worried about cash. But our customers generally are in good shape on cash. So they’re willing to make investments to reduce supply chain risk and improve the turn time. So it’s — right now, it’s greenfields ahead. There’s enough to be nervous about in the papers. But unless things get worse, I’m pretty confident in those numbers we put out there.
Danny Eggerichs: Yes. That’s all good stuff. Maybe just sneak in one more quick one on your inventory levels. I mean, a pretty big jump again both year-over-year and sequentially. Just update on your comfort levels there and how we should think about that going forward?
Jeffrey Graves: We’re very comfortable. We’re going to have enough inventory to make product. Yes. it’s — no. When you look at comfort is how much cash do we take on inventory, it is right now outrageous. I mean we in-source manufacturing, we had to take on to our books, and I think it hit us in Q3 and probably a little overlap in Q4. Our inventory levels jumped up a lot because the supplier we were using to make product had just an absurd amount of inventory. So we took on the good inventory. We’ve got it on the shelf now. We’ll be working our way through that. It’s certainly a source of cash in 2023 and it’s an important one to us. So we’re going to be working inventory levels down to a much more respectable level throughout the year.
What I am really pleased about is by taking over that manufacturing, we immediately improve the quality and delivery metrics for our products. And it was critical to our customers and their growth. So we immediately did that. Now we’ll work down inventories. And I just think our type of business is much better suited for many platforms for internal manufacturing. And that’s a trend we’ll probably continue not 100%. But in — for our high €“ our low volume, high mix, complex products. We have a great manufacturing base here in South Carolina. And we’re developing the same in Europe, and you’ll see more of that to come.
