Professional Documents
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Index
YOUR GLOBAL COMPOUNDER OF CUSTOM ENGINEERED THERMOPLASTICS
What do we expect from Globalization? Impact for Plastics and color industry
Regulations Challenges in everyday business opportunities Improvement suggested How to succeed and prosper
What is globalization?
YOUR GLOBAL COMPOUNDER OF CUSTOM ENGINEERED THERMOPLASTICS
Global consistency in consumption patterns Consistent expectations across boundaries Assuming product meets the same regulations as the version back home Convergence of expectations across national boundaries
Many global consumer and service company provide a consistent global experience Similar values, similar cost-benefit Provide comfort level of a familiar experience A lot of marketing and promotional support to make this happen We assume the products bought in any country pass the most rigorous regulations Considered to be safe choices Priced comparatively around the world
Industrial products
YOUR GLOBAL COMPOUNDER OF CUSTOM ENGINEERED THERMOPLASTICS
Evolution of industrial products has failed to create true global products, especially in raw materials Different regulations, levels of development and environmental laws have led to wide differences in products even from the same suppliers Difficulty in obtaining certain regulation documents make it difficult to comply with required regulations while minimizing costs and logistics Tariff barriers, protection of local manufacturers have created an imbalance for true globalization of chemicals. Difficult to find the same grade of a major resin producers in Asia, USA and Europe
Scenario #1
YOUR GLOBAL COMPOUNDER OF CUSTOM ENGINEERED THERMOPLASTICS
Develop a new product for a OEM in North America or Europe. Formulate and trial there. Use raw materials which meet regulatory requirements After a few months, call for sampling at a molder in developing country If the company has a local plant, check to see if the same pigments and resins are available locally and cost the same. Many times, the pigments and resins used in Europe and North America are not readily available and must be imported which increases cost and leadtime, and the unhappiness of the local processor and OEM
Scenario #2
YOUR GLOBAL COMPOUNDER OF CUSTOM ENGINEERED THERMOPLASTICS
Develop a new product for a OEM in North America or Europe. Formulate and trial there. Use raw materials which meet regulatory requirements After a few months, call for sampling at a molder in developing country Local color company is sent the target to match. Communication on the regulatory requirements is done by the OEM, but can be interpreted differently by local processor and local supplier. Sample is made, cost is accepted and product gets made. Some regulatory information probably missing. Product is not the same as what was sampled originally
Scenario #3
YOUR GLOBAL COMPOUNDER OF CUSTOM ENGINEERED THERMOPLASTICS
Color is developed locally by a plastics processor working on behalf of the OEM Regulatory information is passed on and may or may not be well documented from both the color company and the processor Product is made, color is accepted and product goes to market. Resulting price and leadtime are considered competitive and are accepted. They would normally be lower and shorter than those from a Western color company
Communicate openly about the issues and challenges with the OEM and molder Expand overseas and control the supply chain Open discussion with the suppliers about need to position product in important manufacturing countries Resin grade convergence Simplification of the regulation bodies. This needs support from plastics and industry associations around the world
USA
China
Same formula No rematch Comfort in knowing regulatory issues are fully understood, supported and documented on both sides No additonal product testing needed Much faster product transfers and start-ups
Lengthy rematching process Regulatory issues (FDA, USP, Lead, cadmium, diarylides etc) Different chemistries as formulas are rematched locally Additional product testing
Interpretation of regulations
YOUR GLOBAL COMPOUNDER OF CUSTOM ENGINEERED THERMOPLASTICS
Suppliers need to have a clear understanding of the regulations and and communicate then clearly to their customers (color manufacturers) Emerging suppliers from Asia, Middle East and South America need to join in the discussion and not operate outside of it Failure to understand the regulations by a supplier or a customer creates a tilted playing field
Availability
YOUR GLOBAL COMPOUNDER OF CUSTOM ENGINEERED THERMOPLASTICS
Supply chain needs to communicate better on forecasts, so that the raw materials can be there on time consistently to allow for the manufacture of the masterbatch The more restrictive the specification process, the more accurate the supply chain has to be. Too many traders/distributors have no stake in this, and the supply chain depends on them since they are the ones who supply the storage service These normally small companies need to be supported with inventory with consignment or favorable payment terms to allow for the availability of the product Even between two developed economies, such as the USA and Europe, there are plenty of cases where the same product reference is not available. This creates a grey market for raw material manufacturers
Price
YOUR GLOBAL COMPOUNDER OF CUSTOM ENGINEERED THERMOPLASTICS
Price expectations are converging Other than duties and freight, there are still too many price difference with little justification for the OEM Difficult to compete in a foreign country against local suppliers who may or not dominate all of the ramifications of the technical and regulatory requirments.
Conclusion
YOUR GLOBAL COMPOUNDER OF CUSTOM ENGINEERED THERMOPLASTICS
Global demand for consumer products has driven manufacturing to countries with better logistics, lower manufacturing costs bases and increasing manufacturing expertise in high-volume manufacturing Industrial raw materials for plastics have not followed through as efficiently as our end customers have demanded Different regulations, trade barriers favoring local manufacturers, lack of availability of the same product references, economic risk aversion from the suppliers, lack of appropriate forecasts have created a complicated and lengthy supply chain, which often result in increased leadtime and costs Our industry is complex, however by opening up communication and forcing down the number of regulations and seeing more convergence between the rules of different organizations, the plastic industry would gain in ensuring the supply of safe products which meet the OEMs specifications, while minimizing monitoring costs The global market requires the industry to think in more global terms.