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Midland, Michigan - A new business approach is helping electronics
companies break into new markets and bring down barriers to innovation and
growth. In today’s tough business environment of rising costs, increased
regulation and stiff competition, firms in the electronics sector are under
mounting pressure to find new ways to grow. Complicating this has been a
growing list of regulatory requirements in countries around the world that
further add to their cost burden and slow speed-to-market.
In response, Dow Corning, a global leader in silicon-based technology and
innovation, has developed a business approach with solutions aimed directly at
helping the electronics companies expand into new geographies or markets,
manage capacity bottlenecks, and innovate.
In addition to providing materials, technologies and services, Dow Corning now
offers assistance ranging from access to a distribution network, contracted
R&D services, an equipment alliance and process trouble shooting.
It’s an approach that has already helped companies around the world. As a
result, one company was able to build an airbag sensor manufacturing plant in
Mexico; another reduced distribution costs by 50%; and a third secured the
funding needed to expand into North America.
In the past, Dow Corning focused on developing and marketing silicon-based
materials. Its staff now supports customers in multiple ways, offering
expertise and building on more than 60 years of technology leadership and
business experience.
Speeding Capacity Expansion
One global electronics company that produces airbag sensors needed to expand
capacity to keep up with soaring demand. The decision was made to build a
manufacturing operation in Mexico. Company executives recognized they could
speed the process and ensure a top-quality new facility by replicating their
own processes and best practices at their existing U.S. plant.
The company produces airbag sensors that measure the weight of front-seat
passengers and adjust the velocity, or de-activate, airbags accordingly to
protect children. The U.S. government has mandated that a certain percentage
of new vehicles sold next year be equipped with "smart" passenger-side airbags.
In order to save time and maintain its focus on meeting fast-growing demand
for its products, the company sought external support from a company with
extensive experience managing manufacturing expansion projects.
Dow Corning was selected to manage key elements of the project, including
designing and implementing an unloading station, a bulk storage unit, and a
centralized silicone delivery system. Its work extended throughout the life
of the project, from the purchase and design of the site to the implementation
and integration of the facility. Through broad-based engineering know-how
and contractor management, both costs and time were reduced.
Using proven delivery systems reduced challenges – technical, financial and
regulatory – associated with the expansion project. Dow Corning’s experience
stems from the design, construction and operation of its own manufacturing
operations and systems, as well as expertise in operational efficiency, HVAC,
certification and maintenance.
This approach allowed the electronics manufacturer to focus on its top
priority – creating products and technologies for its own customers.
"I believe what set our approach apart is that we live with these types of
business challenges every day, unlike consultants who provide advice and then
depart,” explained Tom Cook, Global Industry Executive Director for Dow
Corning’s electronics business. “The results were so good, the company asked
us to retrofit the original plant in the U.S. as well.”
The Right Distribution Strategy Opens Markets Quickly
One of the challenges companies face after market entry is identifying and
contracting effective, well-connected distributors to help them build their
businesses. To speed this process, Dow Corning has created a proprietary
Distributor Effectiveness Model and ‘Best Partner’ criteria that allow
equipment companies to systematically compare distributor options.
For electronics companies that need equipment, the Equipment Alliance aligns
proven, effective distributors with companies entering a new geography. The
company achieves market expertise and contacts, and the distributor broadens
its portfolio of offerings.
“We are working with a fast-growing German electronics company that plans to
enter the U.S. market,” explained Cook. “While it sometimes takes 3 to 5
years to find, establish and implement an effective distribution network, we
have been able to supply an existing distribution network with an instant
sales force of professionals familiar with their equipment, technology and
local market opportunities. This reduced implementation time to reach full
productivity to 12 to 18 months and reduced distribution costs by half.”
The distributor also benefited by receiving a distinctive product with unique
capabilities for the U.S. market. In addition to the solution, Dow Corning
provides the materials used in the company’s equipment and contributes
macro-electronics expertise based on its acquisition of Raychem Power
Materials.
Offering Global Expertise and Expansion Support
Expansion solutions can be narrow or broad-based. When a small, innovative
electronics company decided to expand into North America but was unable to
secure financing for the move, it needed to consider other options. Investment
banks would not provide funding because of the company’s size and relatively
short time in business.
“Our solution involved Dow Corning partnering with the company, which provided
the immediate credibility, global expertise, and resources the financial
institutions needed to agree to fund the enterprise,” Cook continued.
“We also helped them by arranging a distribution network, providing
repackaging services, and giving the company entree to our own North American
customers. This has become a model for the entry of other European companies
into American markets.”
Partnering with a major global company gives small and medium-sized companies
large-company advantages.
“Small companies indicate what they need most is expertise, resources and
connections of established players in a new geography,” explained Cook. “We
have been able to fill in any gaps, expand their reach and capabilities, and
accelerate speed to market which is extremely important in a competitive
marketplace.”
Innovation Can Be Affordable
Some companies require innovation services but haven’t the time or financial
resources for research and development. For them, there is a new opportunity
to contract R&D services from an established, innovation-focused company like
Dow Corning. R&D solutions reduce the company’s time and minimize risk.
As an option to paying for R&D outright, Dow Corning often works within a
revenue-sharing arrangement by which it is paid a percentage of the revenue
generated from the innovation. For many companies, this increases
opportunities and allows them to create new markets by partnering with Dow
Corning, a leader in silicon science.
A Different Way of Supporting Customers
These solutions reflect a new way of doing business. Where previously, Dow
Corning focused on developing and marketing silicon-based materials, the
company now supports customers in multiple ways, offering expertise and
technology leadership and to help companies achieve their business goals.
“Where we once had limited points of contact with customers, typically between
our sales person and the company’s procurement department, we now interface
with companies on multiple levels,” said Cook. “Our engineers work with
customers’ engineers to troubleshoot process problems on their manufacturing
lines, our scientists support customers’ scientists in creating new
formulations, R&D teams help customers’ brand managers create new markets and
our business development leaders work with our customers’ business owners to
outline and develop proposals to meet their significant business challenges.
“We have transformed Dow Corning from a materials supplier into a solutions
provider that helps electronics customers increase their profitability, boost
productivity, solve problems, and achieve their business goals.”
Dow Corning (www.dowcorning.com ) provides performance-enhancing solutions to
serve the diverse needs of more than 25,000 customers worldwide. A global
leader in silicon-based technology and innovation, offering more than 7,000
products and services. Dow Corning is equally owned by The Dow Chemical
Company and Corning, Incorporated. More than half of Dow Corning’s annual
sales are outside the United States.
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