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CONDUCTIVE FLAME RETARDANT FILM/SHEETSTRUCTURAL ELASTOMERS WEAR COLOR
Challenges in developing products forglobal customers in a world ofregulations
Adapting to globalization
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Index 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
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What is globalization? 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
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McDonalds around the world
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Novotels around the world
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Global Consumer products
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Global consumer product experience
Many global consumer and service companyprovide 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
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Industrial products
Evolution of industrial products has failed to createtrue global products, especially in raw materials
Different regulations, levels of development andenvironmental laws have led to wide differences inproducts even from the same suppliers
Difficulty in obtaining certain regulation documentsmake it difficult to comply with required regulationswhile minimizing costs and logistics
Tariff barriers, protection of local manufacturers
have created an imbalance for true globalization ofchemicals.
Difficult to find the same grade of a major resinproducers in Asia, USA and Europe
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Regulatory Alphabet soup
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Scenario #1 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 readilyavailable and must be imported which increases
cost and leadtime, and the unhappiness of the local
processor and OEM
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Scenario #2
Develop a new product for a OEM in North Americaor Europe. Formulate and trial there. Use rawmaterials which meet regulatory requirements
After a few months, call for sampling at a molder indeveloping country
Local color company is sent the target to match.Communication on the regulatory requirements isdone by the OEM, but can be interpreted differentlyby 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 sampledoriginally
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Scenario #3 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 consideredcompetitive and are accepted. They would
normally be lower and shorter than those from
a Western color company
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How to win at this game? 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 needto 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
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How to avoid the circle of color confusion
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
Other global
Or two local firms
Lengthy rematching process
Regulatory issues (FDA, USP, Lead,
cadmium, diarylides etc)
Different chemistries as formulas
are rematched locally
Additional product testing
RTP Color 2009
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Interpretation of regulations 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 asupplier or a customer creates a tilted
playing field
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Availability
Supply chain needs to communicate better on forecasts, so thatthe raw materials can be there on time consistently to allow forthe manufacture of the masterbatch
The more restrictive the specification process, the moreaccurate 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 whosupply the storage service
These normally small companies need to be supported withinventory with consignment or favorable payment terms to allowfor the availability of the product
Even between two developed economies, such as the USA andEurope, there are plenty of cases where the same productreference is not available. This creates a grey market for rawmaterial manufacturers
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Price 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 thetechnical and regulatory requirments.
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Conclusion
Global demand for consumer products has driven manufacturing tocountries with better logistics, lower manufacturing costs bases andincreasing manufacturing expertise in high-volume manufacturing
Industrial raw materials for plastics have not followed through asefficiently as our end customers have demanded
Different regulations, trade barriers favoring local manufacturers, lack
of availability of the same product references, economic risk aversionfrom the suppliers, lack of appropriate forecasts have created acomplicated and lengthy supply chain, which often result in increasedleadtime and costs
Our industry is complex, however by opening up communication andforcing down the number of regulations and seeing more convergencebetween the rules of different organizations, the plastic industry wouldgain in ensuring the supply of safe products which meet the OEMsspecifications, while minimizing monitoring costs
The global market requires the industry to think in more global terms.