Competition Affecting Powder Metallurgy Part Manufacturing Powder Metallurgy Parts Association 2009 Spring Management Meeting June 29–30, 2009 The Mirage Hotel, Las Vegas Rose M. Baker & David L. Passmore Penn State Workforce Education & Development Initiative

Penn State Workforce Education & Development Initiative Rose Baker Assistant Professor & Director Center for Regional Economic & Workforce Analysis Professor & Director Penn State Institute for Research in Training & Development David Passmore

Clicker practice Is it raining now in Las Vegas? Yes No

Yes

No

Today… Interactive discussion of five of the many competitive pressures on PM manufacturers affecting how they serve their customers & make a profit

Factors affecting whether PM manufacturers serve their customers & make a profit

Factors affecting whether PM manufacturers serve their customers & make a profit

Factors affecting whether PM manufacturers serve their customers & make a profit

Factors affecting whether PM manufacturers serve their customers & make a profit

Entry of new competitors Non-U.S. entrants to PM manufacturing have captured a significant portion of U.S. orders Agree Disagree

Agree

Disagree

Entry of new competitors What portion of U.S. orders captured by non-U.S. entrants has returned to U.S. manufacturers. > one–half ≤ one–half

> one–half

≤ one–half

Factors affecting whether PM manufacturers serve their customers & make a profit

Factors affecting whether PM manufacturers serve their customers & make a profit

Bargaining power of customers Proportion of multi–year contracts that require price reduction over time > one–half ≤ one–half

> one–half

≤ one–half

Bargaining power of customers After engineering & design bugs are worked out, business goes to rivals accepting lower prices Agree Disagree

Agree

Disagree

Factors affecting whether PM manufacturers serve their customers & make a profit

Factors affecting whether PM manufacturers serve their customers & make a profit

Bargaining power of suppliers The most beneficial support provided by metal powder suppliers to PM manufacturers: Financial Technical R & D Early market warning New product insight

Financial

Technical

R & D

Early market warning

New product insight

Factors affecting whether PM manufacturers serve their customers & make a profit

Factors affecting whether PM manufacturers serve their customers & make a profit

Threat (& opportunity) of substitutes Greatest opportunities exist to substitute PM processes & products for: Plastics Machining Forging Die casting Metal stamping

Plastics

Machining

Forging

Die casting

Metal stamping

Factors affecting whether PM manufacturers serve their customers & make a profit

Factors affecting whether PM manufacturers serve their customers & make a profit

Competitive rivalry within industry PM manufacturers compete with each other on price, but not with other processes Agree Disagree

Agree

Disagree

Factors affecting whether PM manufacturers serve their customers & make a profit

Factors affecting whether PM manufacturers serve their customers & make a profit

North central Pennsylvania report released by Penn State Geographic/economic region PM manufacturing materials & processes Structure of PM in north central Pennsylvania Evidence of competitive forces affecting the industry

Geographic/economic region

PM manufacturing materials & processes

Structure of PM in north central Pennsylvania

Evidence of competitive forces affecting the industry

http://PSU-MetalPowder.notlong.com Penn State web site containing slides & links to report

Competition Affecting Powder Metallurgy Part Manufacturing Powder Metallurgy Parts Association 2009 Spring Management Meeting June 29–30, 2009 The Mirage Hotel, Las Vegas Rose M. Baker & David L. Passmore Penn State Workforce Education & Development Initiative