3. rtp company.pdf

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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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YOUR GLOBAL COMPOUNDER OF CUSTOM ENGINEERED THERMOPLASTICS

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.

3. rtp company.pdf

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