Where lies the Innovator's Advantage in strategic sourcing?


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Traditional operational and supply chain operations are often driven by speed, efficiency and cost reductions for large businesses to thrive on operations leverage. Products or services provided by suppliers and contract manufacturers are frequently normalized in prices and benchmarked against commodity prices. Sourcing/ purchasing functions often strive to engage and develop meaningful relationships with tried, tested and proven suppliers to meet the matching drivers of supply chain operations. Sourcing thrives on generating competitiveness amongst suppliers that enables the strategic negotiation of price- value reductions; the larger the pool of matching suppliers, the better the bargaining power of sourcing.

However, with increasing labor and wage costs of manufacturing in domestic markets, many suppliers of traditionally manufactured products have relocated their manufacturing operations to China to keep operating margins low. A shift in the competitive architecture is recommended for sourcing operations to access new areas of innovation. Exploratory frameworks for synthesizing innovation through suppliers include (1) Core-competence and R&D networks of the outsource supplier (2) Enabling design centricity of supplier’s products to target consumer profiles (3) Suppliers with new materials/ methods wanting to break into local markets, with a potential disruptive impact.

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  • However, a hesitance to instigate change can cause some firms to ignore innovation completely, under the notion that innovation must be entirely driven from within, generating high cost outputs and resourcing pressures. Termed the “innovator’s dilemma”, this is a common phenomenon in which companies focus on the “safe”; on known quantities that don’t challenge established processes but continue to generate results in the short-to-medium term.
  • Symphony- Ability to look at the big picture, not just zoom in on the details.** Trade secrets versus patents*** The appropriabilityof the design and the networks
  • Cross-licensing of the
  • Conditions, assumptions, etc.
  • HuntingIs low cost sourcing sustainable?When is the tipping point when all local suppliers are ‘forced’ to relocate overseas?Is sourcing going to hunt endlessly in a red ocean?GatheringPlanting seeds in New Competitive ArchitectureIs there room for organic growth for both suppliers and Sourcing functions?‘Concept of abundance’Blue OceanNew capabilities may need to be nurtured outside of existing operations.
  • However, poor chemical resistance is a drawback. The other hurdle in increasing acceptance of PC, especially in the packaging industry is Bisphenol A, a raw material in PC production. It is considered an environmental estrogen that may cause human reproductive disorders.
  • Website doesn’t show product development flow from conceptualization to shipment.Non- existent presentation of how each phase is connected to the other.Bad website design reflective of structure of bad business processes?
  • SNR= Signal to noise ratio,NRR = Noise Reduction ratio
  • Points to note:Technologies are at a growth stage. - Technologies for sustaining and incremental innovation are present. - Incumbents should be aware potential disruption from below, especiallly when they strive for potential disruption.
  • Polymethylmetacrylate can serve as alternatives to Polycarbonate strength of chemicals are not
  • Where lies the Innovator's Advantage in strategic sourcing?

    1. 1. Where lies the Innovator‘s Advantage in Strategic Sourcing? An Intern‘s Perspective “Outsourcing to Asia is overhyped in the short term, but under hyped in the long term”- Daniel H Pink.
    2. 2. Innovator‘s Dilemma, Capitalist‘s Dilemma  A creative journey through Sound…
    3. 3. Possible Solutions to the ―Innovator‘s Dilemma‖? Guillaume Tell- Overture (Gioachino RossiniWilliam Tell) Antonio Pappano & Orchestra dell' Accademia Nazionale di Santa Cecilia A journey of explorative expedition…
    4. 4. The Innovator‘s Dilemma in Strategic Sourcing  The Innovator‘s Dilemma (Christensen, 1994), applied in context of sourcing:  Competition driven by Commoditization  Preservation: Existing suppliers have access to resources and processes that allow volume production of products at low overhead costs. Tried, tested and proven suppliers are advantageous.  Specialized suppliers/ niche market suppliers can be unattractive to a company, largely because of cost constraints and higher risks. (Dyer, 1996)  Market uncertainties- Product specifications (requirements of ‗jobs-to-bedone‘), market position of supplier and technologies, scaling up of production, etc are difficult to access.  Relatively large investments of work and time to qualify and assess a new supplier.  New business procedures entailing collaborations across domains- R&D, Marketing, Sourcing, IP may be needed.  The Innovator‘s (proposed) solution in Sourcing.  Systems Innovation through Strategic Sourcing (aligned with the new Competitive Architecture.  Innovating beyond Operations and Supply Chain
    5. 5. Outline  Defining Competitive Architecture  Systems Innovation through Strategic Sourcing  Change in the Competitive Architecture  Technology: The Core of Injection Moulding of Plastics  Industry: Moulding  Markets: Cost, opportunities and technological growth.  Innovating beyond operations and supply chain (Leverage supplier’s organizational architecture)  Leverage core competence and R&D synergies to acquire competitive advantage.  Enabling Design-Centricity of supplier’s products to target customer profiles.  Benchmark of Global Personal Protective Eyewear Suppliers.  Seek agile transition to new product platforms and combinations.  Conclusion  To Hunt or To Gather? Or......  Waves of Innovation  References
    6. 6. Defining Competitive Architecture  /Competitive Architecture/- The broadest overview of a company in the context of markets, its customers, history, products, services and goals. It shows how external organizations evolve with time. patterns of  Traditional definition of competitive architecture is confronted with a generation of transformational- disruptive or radical innovations (new tech in old markets, old tech in new markets, etc)  If the company wants to remain competitive, the shiFt in drivers across economic architectures and market architectures should perpetuate and transcend to a change in organizational structures and processes that matches the DESIRES AND NEEDS of the local commune.
    7. 7. Competitive Architecture Transformational Traditional Customers Economic Architecture: Industry & Manufacturing Driven (Outsource manufacturing to low-cost economies for cost- competitiveness) Supply-driven. Mass products. Unit-price reduction achieved via commodisation. Mkting, R&D Materials & Processes Sourcing Supplier Management and Relations, Brand Driven Economics-driven Short term Profits Suppliers Knowledge Driven, Creative Conceptualization (Core-competence and open innovation, knowledge hubs, emphatic design) Market Architecture: Demand-driven. Design and customized for ‗one‘. Experience based purchase. Organizational Architecture: R&D, ―customer centered innovation‖ Market and Organizational Driven Long Term Gains
    8. 8. Optimization in Supplier Selection and Evaluation: • Achieving cost reductions through supplier management and relations. • Suppliers that are able to meet • Delivery Timelines • Manufacturability Alignment Product and equipment of Specifications 6σ values • Quality and reliability • Financial and trade solvency • Finding the right supplier in a competitive red ocean Innovating beyond Operations and Supply Chain Sustaining Operations and Supply Chain Systems innovation through Strategic Sourcing Creating leverage through strategic Supplier partnerships and Engagement • (1) Leverage Core Competence and R&D synergies to acquire competitive advantage • (2) Enabling Design-Centricity of supplier‘s products to target customer profiles • (3) Seek agile transition to new product platforms and combinations: • Suppliers wanting to break into local and regional markets * N.B. Time to Market is still an important consideration in assessment • Specialized/ integrated suppliers in home grounds Suppliers who can create a blue ocean Invention is converting cash into knowledge. Innovation is converting knowledge into cash. And Value is converting cash into knowledge, multiplied in returns of kind to the end-user. (Through development and sourcing of “customer centric” products and services.)
    9. 9. Change in the Competitve Architecture Technology, Industries and Markets
    10. 10. Technology: The CORE of Injection Moulding FALLO ApproachFollow all opportunities -Injection of plastic melt through shaped die by means of pressure. -Closed mold and die system -High degree of technical expertise required for production excellence. Source: Plastics Engineering Handbook
    11. 11. Industry: Systemic opportunities in Moulding Emphatic Design • Fit with customers. *Ref: Frost • Customization of products to existing customers of the supplier. Tackling the Niche Market • Proximal access to regulatory bodies speeds certification • Proximal access to local users enable design changes to be quickly communicated throughout Value Chain Ref: (Quek, 2013) Globalization • Specialization and niche creation suppliers guarded against dilution • Rising labor costs, & lower margins Generalists „forced‟ to move to lost cost countries Vertically Integrated Suppliers. (Knowledge expertise) Versus Horizontally Integrated Suppliers. (Possible Network Advantages) *Ref Dyer, JH (1996). Specialized supplier networks as a source of competitive advantage: evidence from the auto industry
    12. 12. Value Chain Displacements: Wherein lies new opportunities for growth Asia Pacific Injection Molding Outlook 2 factors driving the Economics pushes from a cost-based Outsourcing plastics industry general mold makers Perspective: (Frost, 2011): that profit by volume 1. Competitive Prices to China. -Cost Savings of 40% - 70% possible, 2. Customized Solutions BUT - Process of finding the right supplier Solution: 1. Find relevant suppliers/ of mold tool and mold material is alternative who differentiate on less crowded intense and the necessary input is market spaces. Niche/ specialized suppliers high (Quek,2013) who are in tune with customer and market needs. 2. Supplier‘s whose major businessesofferings are aligned with what the company Question: Is there room for would outsource for manufacturing (and competitive ‗insourcing‘/ development). global sourcing?
    13. 13. Market: Cost Versus Profitability Concerns (2012) Solid red circles: Traditional economics driving decisions in organizations. Yellow circles: Strategic and technological planning decisions within organizational controls. Dotted yellow circles: Relatively weaker factors of market influence.
    14. 14. Performance/ value Benchmark of Technology Evolution Bioplastics $590.9 million in 2011. Estimates this to reach $1,075.8 million in 2018. (Frost) Estimated market sizeTBC Basic Polymer Processin g & Injection Moulding Composite materials Market growth (5-7%), Market value of (12%) (The plastics Industry: Economic Overview) Integrated Injection Moulding and Assembly. E.g. Dual-shot injection Moulding 3D Printing. Estimates this to reach $0.2- $0.6 trillion in 2025 (McKinsey) Effort / Time 1940s 1970s 2000s 2013
    15. 15. Innovating beyond Operations and Supply Chain Leverage/ Acquire Supplier‟s Organizational Architecture in Innovation Case Study: Suppliers of Plastics Injection Moulded Eyewear in Asia
    16. 16. (1) Leverage Core Competence and R&D synergies to acquire competitive advantage Case: Brand A
    17. 17. Core-Competence Leverage  Brand A  Mapping of Relevant Core Competencies Raw Materials Polycarbo nate High Density Poly Ethylene Core Competencies Design for Manufacturing R&D End Products Optic lenses Safety Spectacles Filters Versatile Coinjection High production turnover300 personnel 24-7 DistributionThermoplastic Poly-Urethane Products Coating Technologies 40 minutes driving from Kaohsiung International Airport (KHH) & Sea Port. Coatings Frames *Strong knowledge assets in Polycarbonate processing Laser Optic Goggles Laser Protective Eyewear
    18. 18. Knowledge-In-Sourcing: Access to R&D Networks • Electrichromism goggles • Apply voltage to change opacity of the glasses • Wide use of goggles/ safety eyewear for different environments Products • Thermoplastic PolyurethanePolycarbonate Co-injection • Concurrent/ Multilayed molding • Single molding process • Firm attachment of different materials  Relevant R & D Polymer co-injection References: http://www.google.com.br/patents/US7132167 Electrochromic goggles R&D Technologies • Multiple layered polymer injection molding • Flexible manufacturing of multilayered products • Concurrent manufacturing and assembly of goggles Research Partnerships • Laser Application Technology Center of Industrial Technology Research Institute of Taiwan • Nano Powder and Thin Film Technology Center
    19. 19. (2) Enabling Design-Centricity of supplier‘s products to target customer profiles From mass manufactured designs to (possibly) customized designs Case: Brand B
    20. 20. Ethnographic StudiesLab Based Machining Workshop in NUS Venue: Control & Mechatronics Lab 1, EA 04-05/06 Department of Mechanical Engineering, National University of Singapore 9 Engineering Drive 1
    21. 21. Ethnographic StudiesLab Based Machining Workshop in NUS Venue: Control & Mechatronics Lab 1, EA 04-05/06 Department of Mechanical Engineering, National University of Singapore 9 Engineering Drive 1
    22. 22. Ethnographic studiesMaterials Lab in NUS Cabinet housing the storage of PPEs Venue: Materials Lab, E3-04-01 Department of Mechanical Engineering, National University of Singapore Engineering Drive 3 Safety Glasses chosen because of Design and Brand Name. Cleaned with alcoholic wipes (Complementary Assets) of the same company Centurion: Brand Leader in Protective Goggles
    23. 23. Match Supplier Designs with End User Desires Target consumers may pay more for (emotional) durable designs. •Synergistic with Companies strong with Brand and Market Premiums “One cannot put a price tag on safety”Mr Jeridson Ong, Safety Officer, Office of Safety, Health and Environment (OSHE), NUS Blue Ocean Effectual Design Safety glasses from Brand B Effectuation Transformational Being emphatic in selection of designs *Lead user studies are often necessary Design Form, Fit and Function Durability Standards Managers/ Department offices make decision here, based on budget and durability. •Company that competes on Market and Brand Leverage lose on Price attractiveness Compliance Traditional *Be aware of ―Standard (C.f. Art of Standard Wars) Wars‖
    24. 24. Benchmark of Global PPE Suppliers Focus on Transformational Competitive Architecture - Design, Technology and Markets
    25. 25. Benchmark of Eyewear Suppliers Brand A Brand B (HK) Brand C Brand D Brand E Brand F Industry Status OBM ODM OEM OEM VAR VAR Dominant Product Classes Eyewear Eyewear Nil Nil Nil Nil Technology Dual Shot Injection Moulding Dual Shot Injection Moulding Single Piece Injection Moulding Single Piece Injection Moulding Unclear Unclear Core Competence Polycarbonates, Dual-shot injection molding & Coatings Design, Anti-fog coating Manufacturing Manufacturing Distribution Distribution Technology Benchmark with Industry Key Pacing Base Base Base Base *Generalized assessment, based on information presented on Company‘s website
    26. 26. Evaluation of Eyewear Suppliers: R&D Leverage Design Leverage Brand A Brand B Brand C Brand E Brand D Brand F Strong Tenabl e Weak Manufacturer Safety Specialist Leading technology competence Manufacturer Safety Specialist Following technology capabilities Manufacturer ‗Me too‘ companies General retailer/ DIY and big box retailers ‗Laggards‘
    27. 27. Redesigning dimensions of sourcing competitiveness. Next wave of technologies that can disrupt the current supply chain. Do current suppliers have the capacity to innovate and remain competitive?  Does sourcing have options to move on to suppliers of the next wave of technologies? e.g. Composites in packaging, biodegradable packaging. Recall: Composites- 4-5% growth, faster than rest of plastics industry , 12% in terms of total market value (Biron, 2013) Fiber sewing of composite materials and fabrics, L-glass versus S-glass for fibre optics transmission, etc. Access to new markets and industries, e.g. defense and aerospace through new suppliers.
    28. 28. (3) Seek agile transition to new product platforms and combinations Sourcing for discontinuous innovations
    29. 29. Example: Filacon- Fiber weaving of aerofoil panel Technology was a key exhibit at JEC Composites Asia 2013. German company. Licensed fiber weaving machine to Singapore Polytechnic. Has potential to replace the manufacture of PPE equipment, such as Hardhats.
    30. 30. Filacon- Fiber Weaving Panel Economic benchmarks for plastics and composites in terms of raw materials and processing- Biron (2013), pp. 42-46
    31. 31. Benchmark of costings for Carbon-fiber Woven Hardhats Beware of “The Innovator‟s Dilemma” Cost: US$19.95 Red Carbon Fiber Hard Hat Cost: US$69.95 Skullgard hard hats meet or surpass all requirements for type 1 hard hats, Excellent safety, comfort, and superb design. Standards: Four point ratchet suspension - fully SEI certified, and meet ANSI Z89.1 adjustable, 2003, Class G and ANSI/ISEA z89.1High-density polyethylene shell is 2009 standard requirements. finished with a high-gloss Carbon Can costs be minimized through fiber look. innovative measures such as Standards:ANSI Z89.1-2003 Type 1, technological outsourcing? Source: Class C and G. http://www.hatsrcool.com/
    32. 32. Cost-benchmarks for glassfibre reinforced composites *Plastic additives and filler material costs are not reflected on chart. Source: Biron(2013), pp. 43 Source: Biron(2013), pp. 47 Raw material costs may not see a drastic increase as compared to traditional plastics. Higher price of composite products may be attributed to other manufacturing and supply chain factors.
    33. 33. ―Insanity is doing the same things over expecting different results‖ - Albert Einstein Innovation Ecosystems RIs Students Knowledge Hubs Uni. TTO
    34. 34. Performance (Unit cost reductions) New Dimensions of Innovation Opportunities for Disruption ―Good enough‖ Performance, (Unknown Deep Insights, market) New Markets, New Customers EffortTime
    35. 35. References:  Bengtsson, L., Von Haartman, R., & Dabhilkar, M. (2009). Low-Cost versus Innovation: Contrasting Outsourcing and Integration Strategies in Manufacturing. Creativity and Innovation Management, 18(1), 35–47. doi:10.1111/j.1467-8691.2009.00510.x  Biron, M. (2012). Thermoplastics and thermoplastic composites. In The Plastics Industry: An economic Overview (pp. 32- 133) William Andrew.  Carpay, F, Hang, CC, Dan, Y. Management of Outsourcing R&D in the era of open innovation. The 5th International Symposium of Management of Technology (ISMOT‘07), pp. 252-256.  Christensen, C. (1997). The innovator's dilemma: when new technologies cause great firms to fail. Harvard Business Press.  Christensen, C. M., & Raynor, M. E. (2003). The innovators solution: Creating and sustaining successful growth. Harvard Business Press.  Dyer, JH (1996). Specialized supplier networks as a source of competitive advantage: evidence from the auto industry. Strategic Management Journal (17), pp. 271 – 291
    36. 36. References:  Howells, J., James, A., & Malik, K. (2003). The sourcing of technological knowledge: distributed innovation processes and dynamic change. R&D Management, 33(4), 395–409. doi:10.1111/14679310.00306  Mahajan, S, et al (2012). Strategic Analysis of Engineering Plastics Market in Southeast Asia, Growth in Automotive Industry will drive demand. Frost and Sullivan, Market Engineering.  Manyika, J, Chui, M. et al (2013). Disruptive technologies: Advances that will transform life, business and the global economy. McKinsey Global Institute.  Nonaka, I. (1995). The Knowledge-Creating Company: How Japanese Companies Create the Dynamics of Innovation: How Japanese Companies Create the Dynamics of Innovation. Oxford university press.  Pink, DH (2008). A Whole New Mind. Marshall Cavendish Education.  Quek, A (2013). Asia Pacific Metalworking Equipment News. In The Mold and Die Industry to change with the times. Pp. 54-56  Shapiro, C., & Varian, H. R. (1999). The art of standards wars.  Teece, D. J. (1986). Profiting from technological innovation: Implications for integration, collaboration, licensing and public policy. Research policy, 15(6), 285-305  Yu, H (2011). Rethinking strategy to escape commoditization. A lesson from Mickey Mouse.
    37. 37. Stefan Choo | Creative Analysis | Passion | | Making a Difference| Email: Stefan.JQ@gmail.com https://www.facebook.com/StefanChoo http://www.linkedin.com/in/stefanchoo The End Or is it really?
    38. 38. How to purchase? Visit the website at http://www.slingprint.com/innovato rsdna Or Scan the QR Code:
    39. 39. Supplementary Slides/ Working Slides
    40. 40. Outsourcing: Why outsource? A creative conundrum Slower time to market, ↓ Costs Lower costs (but really so in the long term?) Operate Improving Innovation Capability Innovate Present/ Past • Cost • Economy of Scale • Lower Wages Capacity Better Products • Redistribute resources from non-core to innovation activities • Access to new, noncore Competencies • Loss of Knowledge Architecture • Loss of Process Architecture Faster Time To Market • Acquisition of Product and Process Architecture • Development of Knowledge Architecture Source: Bengstsson, L (2009)
    41. 41. Ref: Wanamaker, B (2013). When will plug and play medical devices and data be a reality? Extracted from the World Wide Web. Clayton Christensen Institutehttp://www.christenseninstitute.org/when-will-plug-and-play-medical-devices-and-datafinally-be-here/#sthash.FHyIxJiH.dpuf on 20 Aug 2013.
    42. 42. Ethnographic StudiesLab Based Machining Workshop in NUS Venue: Control & Mechatronics Lab 1, EA 04-05/06 Department of Mechanical Engineering, National University of Singapore 9 Engineering Drive 1
    43. 43. Ethnographic StudiesLab Based Machining Workshop in NUS Venue: Control & Mechatronics Lab 1, EA 04-05/06 Department of Mechanical Engineering, National University of Singapore 9 Engineering Drive 1
    44. 44. Ethnographic studiesMaterials Lab in NUS Cabinet housing the storage of PPEs Venue: Materials Lab, E3-04-01 Department of Mechanical Engineering, National University of Singapore Engineering Drive 3 Cleaned with alcoholic wipes (Complementary Assets) of the same company Safety Glasses chosen because of Design and Brand Name. Centurion: Brand Leader in Protective Goggles
    45. 45. Guidelines to assess the technological competitive strength of a company
    46. 46. Frost and Sullivan‘s classification of suppliers of PPEs
    47. 47. Brand A  Quick Summary  Established in 1981. Started off with Polycarbonate optic lenses,      Poly-carbonate Infrared Lenses, welding filters, safety spectacles and laser goggles. OEM/ODM to OBM. (Tier 1) SO9001 Certified, TUV Certified. Claims to have passed global ANSI, CSA, CE, JIS and AS safety standards (Likely to have passed, but bad website representation) Customers: Medical, Research, and recently Military Personnel **Comments: Display resolution on ISO Certificate is too small
    48. 48. Brand A Sourcing Interests: Eyewear  Laser Protective Goggles  Core: Injection molded Laser filtered lenses  Complementary: Customizable range of coatings for anti fog, anti-scratch, etc  Safety Goggles  Core: Injection molded eyewear  UV/IR protection  Complementary: Customizable range of coatings for anti fog, anti-scratch, etc Images obtained from: http://www.tarokoint.com.tw/products.html
    49. 49. Brand A SWOT Analysis Strong Technology Competence Polycarbonate‘s durability, optical clarity, and ability to be blended with other polymers contribute to the strong performance. Distribution Tier 1 Distributor Close access to distribution channels: 40 minutes driving from Kaohsiung International Airport (KHH) & Sea Port. S W O T
    50. 50. Brand B Industrial Company Pte Ltd  Safety/ Assurance  ISO 9001:2000 Certification in 2003  Core Technologies (Lens)  Fog free (Hydrophobic surface) machine  Hard coating  High vacuum deposition machines on lens
    51. 51. Brand B  Geographical Advantages - Located 5 mins away from the Mission Hill Golf club in Guan Lan, mainland China. Easy transportation ensures prompt services.  Source of supplies/ raw materials Materials are imported from the US, Germany and Japan.  Machinery / Production Process From injection molding to packing- Stringent QC. 4 groups different groups from engineering and QC departments monitors the entire production procedure.
    52. 52. Brand B  Profile Total area of : 2000 square meters (21528 square feet)  Staff Details Production Staff: 200 to 280 QC Staff: 20 to 29 R&D Staff: 5 to 9
    53. 53. Brand B Production Quality Control Image sourced from http://www.chaplin.com.hk/factory.php Appears to be 2nd or 3rd Generation R&D Dominant
    54. 54. Brand B Range of Products: Safety Eyewear & Goggles- New Designs Favorable Designs! New Safety Eyewear: Model 919B • Soft rubber nose pads for superior comfort and fit High performance • Stylized frames feature a cutting edge design that's ideal for work and play • Polycarbonate lens provides 99.9% UV protection • Dual lenses, wrap-around protection • Anti-scratch or anti-fog coating • Exceeds the "High Impact" level of the ANSI Z87.1+ safety standards New Safety Goggles: Model 981 • Unique 3-way adjustable temples give a customized fit • Ratch-it-fit adjusts lens angle • P.V.C nose bridge for comfort and secure fit • High performance polycarbonate lens provides 99.9% UV protection Lightweight sport-frame styling • Lens options include anti-scratch or anti-fog coating • Integrated wrap-aroung side shields • Exceeds the "High Impact" level of the ANSI Z87.1+ safety standards
    55. 55. Brand B Range of Products: Safety Eyewear & Goggles- New Designs Faceshields & Safety Visors Eyewear Accessories (Complementary Assets to Safety Spectacles/ Goggles Hearing Protection / Folding Earmuffs 23NRR Welding Goggles Earmuffs Meets ANSI S3.19 requirements 23NRR
    56. 56. Brand B Complementary Assets- Customizable range of packaging Blister Card Jumbo Box for Multiple Pdts Packaging PVC Box
    57. 57. Brand C  Tier 2 Supplier (OEM/ ODM)  Manufacturing- Eyewear Manufacturing in Tainan, Taiwan. Rest of facilities for PPE Manufacturing and Respiratory Manufacturing Facilities in Xiamen, China and Donguan, China  Core competencies: "dual-coat" lenses with different types of coating on the outside and inside of the lens, for example, hard coat on the outside & AF on the inside.  Safety Selection of Safety Goggles   ANSI, AS, ASTM, CE, CSA, NIOSH standards compliant ISO 9001 & ISO 14001 Certified  ISO14001 entails  Reduced cost of waste management  Savings in consumption of energy and materials  Lower distribution costs  Improved corporate image among regulators, customers and the public Selection of Safety Glasses and Eyewear
    58. 58. Research/ Design Planning Analysis Prototyping Information Gathering CAD Desig n ?? Style Research Color Selection ? ? QA/ Materials testing Vertical injection machine P r o d u C c y t c l D e e v e l o p m e n t Horizonta l Injection Molding L i f e Brand C Optical Analysis System for CE standard ? High Impact Testing Inspection ? Assembly Packaging ? ?
    59. 59. Brand D  Claimed core competencies --- Lack of understanding of core competencies  Research & Development  Production Process  Safety & Standards Quality Assurance  Lack of Understanding of Core Competencies Our test procedures are Certifications And based on Accreditations USA-ANSI Z87.1 ISO 9001-.OCTOBER 1998 AUSTRALIAN EUROPE-CE EN166 AUSTRALIA-AS/NZS1337 JAPAN-JIS T 8147 CANADA-CSA Z94. STANDARDS…since 1995 CE
    60. 60. Brand D  Production Value Chain- Vague and Confusing Design Information and Process Flow Machining??? Packaging Safety Certifications End of Line Testing Production Finishing Operations
    61. 61. Brand D Relevant Products Offered By Brand D Goggles Over spectacles
    62. 62. Brand E  ISO 9001: 2000 certified in 2002  Claimed to be an OEM. More likely a VAR.  One of capabilities listed in OEM is Reverse Engineering  Many (NOT ALL) products meet European CE and U.S. ANSI/NIOSH standards.  Appears to be a mere distributor of products (middleman).  Seems to be a distributor associated with manufacturers across China.  Although mufflers were procured, the company offers a reasonable range of safety goggles and spectacles.  Source of suppliers unknown.
    63. 63. Brand E  Range of Eyewear Offered Chemical Splash Goggle SE1112: Indirect ventilation, Polycarbonate Lens, Fits over personal spectacles • CE EN166, ANSI Z87.1 Impact Goggle PC direct ventilation, Tough Polycarbonate Lens, Fits over personal spectacles, • ANSI Z87.1 Protective spectacles Foldable sideshields with direct ventilation, Polycarbonate lens, • ANSI Z87.1 Protective spectacles Stylishly wraparound design frame with curve lens for a snug, secure fit. • ANSI Z87.1 Wide Range of eyewear, however inconsistent in terms of compliance.
    64. 64. Brand E  Range of Mufflers Offered SE1310: Lightweight, snug fitted, adjustable headband • CE EN352-1, ANSI S3.19 • SNR:27dB; NRR:20dB SE1331: Lightweight, padded headband • No certifications SE1340 Cushioned earcups, compact and portable • CE EN352-1, ANSI S3.19 • SNR 30dB; NRR: 25dB SE1348 Dual colored with double shell, compact and portable • Pending CE and ANSI clearance Wide range of mufflers, however inconsistent in terms of critical certifications.
    65. 65. What influences Organizing Decisions in PPE.  Search and analysis of products available in market is time consuming (1000 pdts on market) Rebuys are the most convenient and adopted method  Clean slate is recommended by Health & Safety Orgns. Buyer develops new choice criteria for product selection.
    66. 66. PPE Market Product SegmentsUser prefer e-Commerce  End users less choosy in selecting above the neck PPE products.
    67. 67. Differentiating factors for PPE Supliers
    68. 68. End-user information for PPEs- Global 2012 ` Unless of major Industrial users account for >70% of PPE demand
    69. 69. Overview of the PPE Industry ―One cannot put a price tag on safety‖Mr Adison Tan, OSHE
    70. 70. Structure of Distribution of PPE Gap
    71. 71. Trends and Market forecasts of plastics and injection molding
    72. 72. Drivers- Technical Improvement  Heat and moisture resistant polymers- such as PBT are being increasingly used in industrial plastics  Creep resistant polymers.  Ultra-high molecular weight polyethylene being used as hip-socket joint replacements for prostheses.  Opacity- Poly (methyl methacrylate) (PMMA compounds can scatter light more efficiently ↑ efficiency in lighting up surface and optical displays  Polycarbonates- Tough and flexible
    73. 73. Drivers- Substitute to traditional materials  Elimination of secondary manufacturing steps Plastics superior choice to metals.  Many structural plastics match job requirements in resistance against cracks, deformation, breakage and corrosion  Weight considerations in transport & automotive applications.  50% Volume for 20% weight.  Cheaper for supply chain shipping and distribution  PMMA and PC replace glass for outdoor and indoor applications. They are safer and give flexibility in design.
    74. 74. Restraints to Engineering Plastics Growth and Developments- Price Sensitivity of Consumer  Raw material prices are steadily and substantially increasing for Engineering plastics since 2010.  Cost is passed on to consumers  A carry forward trend will push customers away from engineering plastics.  Income divide in Middle of Pyramid (MOP) countries is vast; purchases in finished products dampened due to raw material prices.
    75. 75. Restraints to Engineering Plastics Growth and Developments- Substitute Materials  Price/ Performance Tradeoff –  Performance must meet costs, or buyers will source for alternatives  Improved performance of substitutes hinder technological advancement for plastics in Southeast Asia.  Nylon (Polyamide, PA) often substituted with Polyethylene/ Polypropylene
    76. 76. Geographical Case Study: China
    77. 77. Plastics Processing Machinery- Global Strategic Business Report  Global     Global recession pushed plastics processing machinery manufacturing services from West to East. Brazil, China, India and Russia emerge in sales volume and manufacturer revenues. China replaced Germany as leading producer of plastics processing machinery in 2009 with lower labor costs. Industry  Shift towards complete production systems and highly automated systems  Construction products, automotive parts and packaging products form bulk     of plastics applications in developing countries. Local market drives demand. Machining Technology Lifespan in short. Competition is based on speed, efficiency, low maintenance and intricate decorating capabilties (Innovation 1).—  Which companies can do a ‗Blue Ocean Strategy‘? Taiwan is ranked as Top 5 amongst manufactures and exporters of plastic and rubber processing machinery.