Since the introduction of the float process in glass making, improvements in product pricing, quality, safety, versatility, and service levels have been of historic proportions. Whether glass is being produced by manufacturers in mature regions like Europe or America, or newly emerging and growing countries like Hungary, India, or Thailand, the casual consumer cannot detect a difference. With the assistance of ISO 9000 standards, the days of requesting a “Belgian” mirror or “Japanese” quality have dissipated. Glass has exchanged its partisan citizenship and become a product with a worldwide passport. As a result, the past several years have brought new awareness and heightened sophistication to major purchasers of products made by the world’s glass makers.
Big manufacturers have met their match with the big buyers at many links in the glass making supply chain. Hence industry practices have trended toward looking like an auction of commodities. While this moment in time is merely part of a cycle, this sorting of the deck of players is but a true test of competitiveness.
Depending on the point of view, we are witnessing the proverbial glass that is “half full or half empty.” Will this be visualized as a problem or an opportunity? Will the industry strive to retain the comfort of turgid continuity or embrace the potential found within turbulent change? While business books and case histories are written retrospectively about how these questions are answered, we must live with our choices and decisions in real time.
For the first time, emerging markets constitute 50 percent of the world’s economy. Economic strength is shifting to the Asian region, especially China and India. These economies are in transition to a more balanced position as understood in the West with their infrastructure investments and agrarian reforms beginning to take and hold shape. At this point, capital markets are emerging and intensifying, which will enable smoother adjustments over time. At a pace of 8 percent growth per year, China’s per capita income in 2031 will be the same as the USA is currently, which makes it useful to take a closer look, especially when it comes to glass making.
In recent years much attention has been focused on the evolution of the Chinese glass industry. While the concept of return on capital has yet to be embraced by the Chinese, consolidation, elimination, obsolescence, and merger of their many independent players has already started and will continue to accelerate. Eventually we will witness the emergence of a global player from that region.
On a larger scale, the change in ownership of global glass players has not run its full course. Excluding the Chinese, the near future will see three to four well-established world-renown glassmakers departing. Simultaneously, regional players will be acquired even as new ones emerge. While these particular events are unique to our industry, this should not be surprising when we look at the fact that of the leading companies listed in the original Fortune 500, only 3 percent are in existence today. While this may be merely a transitional phase (nearly 70 percent of all mergers and acquisitions fail to create long-term shareholder value) it is one more example of the dynamic change that we are undergoing today. Those changes are global in nature. In our own backyard, North American glassmakers are in turmoil with nearly 50 percent of the industry’s float lines and nearly 6 percent of the automotive capacity having recently or about to change ownership.
For those reasons as well as the erosion of normal profit margins from Pacific Rim competition, the merger and acquisition prediction of the past remains relevant today. On a broader but smaller and less visible scale, secondary industries in developing countries will grow exponentially as pure distributors continue to fade in importance while processors will continue to emerge and flourish.
We see this more each year with our customer profiles throughout Asia and the Middle East. We also see the second-generation phenomenon in these regions where the next generation of younger, business-school trained descendants of the founders assume new responsibilities, bringing a desire for new business models, new products, systems, and offerings. In Europe and North America, these fabrication trends will shift east and south respectively. Unfortunately, many of the recent changes in our downstream industries have been caused by financially driven acquisition and consolidation strategies, especially in the window and fabrication businesses. For some, the concept was merely to amass purchasing power. Sadly, they are missing the challenge of implementing a line of attack that uses this newfound critical mass to create value-added products and services for customers.
Guardian is a diversified global manufacturing company headquartered in Auburn Hills, Michigan, with leading positions in float glass, fabricated glass products, fiberglass insulation and other building materials for commercial, residential and automotive markets. Through its Science & Technology Center, Guardian is at the forefront of innovation including development of high performance glass coatings and other advanced products. Guardian, its subsidiaries and affiliates employ 19,000 people and operate facilities throughout North America, Europe, South America, Asia, Africa and the Middle East. To see the full text of the speech visit http://www.guardian.com
Guardian is a diversified global manufacturing company headquartered in Auburn Hills, Michigan, with leading positions in float glass, fabricated glass products, fiberglass insulation and other building materials for commercial, residential and automotive markets. Through its Science & Technology Center, Guardian is at the forefront of innovation including development of high performance glass coatings and other advanced products. Guardian, its subsidiaries and affiliates employ 19,000 people and operate facilities throughout North America, Europe, South America, Asia, Africa and the Middle East. Please direct all media inquiries to Amy Hennes by phone at (248) 340-2109
Article Source: http://EzineArticles.com/?expert=Russ_Ebeid
Wednesday, July 11, 2007
Innovation, Leadership Key To Future Competitiveness Of Glass Industry
The challenge for companies in the glass making business, especially those with significant resources and financial strength, is to differentiate themselves by developing and introducing new profit opportunities for their customers, something that can be done by meeting the requirements of the industries we serve as well as anticipating future trends and demands.
Already we are witness to an evolution of new coatings, films, polymers, chemistry, and glass patterns. But this challenge also includes our customers, who are creating new applications to create more value and demand for glass from the ultimate consumer.
This style of competition will require a redefinition of strategy to one of making the most of an opportunity rather than one of increasing market share or size.
To reap a disproportionate share of potential profits, business must have a more diverse set of competencies. Those who say “that’s the way it is” will never have a future because what got you “here” will not get you “there.” And since people change only when they have to, their minds, like parachutes, only work when they are open.
For this reason, management’s attention must be expanded from day-to-day operations to a different course of direction. Decisive managers should not be buried in policies and procedures that hinder them from using their creative talents to address an opportunity.
While innovation can accelerate the pace, it can only partially determine the direction. Technology must be harnessed; it will never be a substitute for leadership that prefers action to rhetoric. The scarcest resource of all is time. The temptation is to reset the clock, but we cannot. Nature is the timekeeper and winning boils down to desire and effort more so than skill and experience.
Merely restructuring the current business model will not handle these consumer-driven technologies, nor can they be affected by administrative decree. Foresight must be matched with field execution. While the stakes are high, the financial health of a company depends on its role in creating tomorrow’s markets.
Since consumers lack such foresight, it will be our collective duty to lead the public to the future. Twenty years ago, few consumers would have asked for cell phones, Internet access, global positioning systems or iPods. This is magnified by the fact that the average person today has access to more information on their BlackBerry or other smart phone than existed in the entire world just 40 years ago.
If we stand back from the rigors of daily business and take a distant view, we can witness the gestation phase of a new industry being born within the traditional glass industry. Creative glass manufacturers are spearheading this rebirth by trying to differentiate themselves not only from other domestic suppliers but also to shield themselves from less expensive commodity imports.
In the past, glass products were merely a “see through” item. Now glass is becoming ever more integral to our lives. This remarkable material, with its incredible combination of function, beauty and strength, is enriching contemporary life and we are fortunate that the core essence of our business lends itself to so many innovations.
In the coming age of a myriad of new products these innovations will have both a feature as well as a functional orientation. Consequently the marketing of these products will be more focused on the demanding desires of the end consumer rather than the competitive nature of purchasing agents. This will shift the business model to one where profit margins will be proportional to the creativity, knowledge, and ambition of marketing and sales personnel rather than the traditional cost-plus structure. This, in essence, is today’s new playing field.
This situation may also provide a competitive advantage for large global glassmakers even as we see a proliferation of regional players. While size alone does not create a sustainable advantage, it does provide necessary financial resources to nurture and develop new technologies. It also provides the operating leverage, stamina, and global presence to bring them to market. At the same time, it can be a double-edged sword: large, bureaucratic organizations not in sync with the market tend to lose the correct balance between research and manufacturing capability. And while small companies may not afford the technological research, big companies must decide on the direction of technology as well as the protection of their intellectual property.
Guardian is a diversified global manufacturing company headquartered in Auburn Hills, Michigan, with leading positions in float glass, fabricated glass products, fiberglass insulation and other building materials for commercial, residential and automotive markets. Through its Science & Technology Center, Guardian is at the forefront of innovation including development of high performance glass coatings and other advanced products. Guardian, its subsidiaries and affiliates employ 19,000 people and operate facilities throughout North America, Europe, South America, Asia, Africa and the Middle East. To see the full text of the speech visit http://www.guardian.com
Guardian is a diversified global manufacturing company headquartered in Auburn Hills, Michigan, with leading positions in float glass, fabricated glass products, fiberglass insulation and other building materials for commercial, residential and automotive markets. Through its Science & Technology Center, Guardian is at the forefront of innovation including development of high performance glass coatings and other advanced products. Guardian, its subsidiaries and affiliates employ 19,000 people and operate facilities throughout North America, Europe, South America, Asia, Africa and the Middle East. Please direct all media inquiries to Amy Hennes by phone at (248) 340-2109
Article Source: http://EzineArticles.com/?expert=Russ_Ebeid
Already we are witness to an evolution of new coatings, films, polymers, chemistry, and glass patterns. But this challenge also includes our customers, who are creating new applications to create more value and demand for glass from the ultimate consumer.
This style of competition will require a redefinition of strategy to one of making the most of an opportunity rather than one of increasing market share or size.
To reap a disproportionate share of potential profits, business must have a more diverse set of competencies. Those who say “that’s the way it is” will never have a future because what got you “here” will not get you “there.” And since people change only when they have to, their minds, like parachutes, only work when they are open.
For this reason, management’s attention must be expanded from day-to-day operations to a different course of direction. Decisive managers should not be buried in policies and procedures that hinder them from using their creative talents to address an opportunity.
While innovation can accelerate the pace, it can only partially determine the direction. Technology must be harnessed; it will never be a substitute for leadership that prefers action to rhetoric. The scarcest resource of all is time. The temptation is to reset the clock, but we cannot. Nature is the timekeeper and winning boils down to desire and effort more so than skill and experience.
Merely restructuring the current business model will not handle these consumer-driven technologies, nor can they be affected by administrative decree. Foresight must be matched with field execution. While the stakes are high, the financial health of a company depends on its role in creating tomorrow’s markets.
Since consumers lack such foresight, it will be our collective duty to lead the public to the future. Twenty years ago, few consumers would have asked for cell phones, Internet access, global positioning systems or iPods. This is magnified by the fact that the average person today has access to more information on their BlackBerry or other smart phone than existed in the entire world just 40 years ago.
If we stand back from the rigors of daily business and take a distant view, we can witness the gestation phase of a new industry being born within the traditional glass industry. Creative glass manufacturers are spearheading this rebirth by trying to differentiate themselves not only from other domestic suppliers but also to shield themselves from less expensive commodity imports.
In the past, glass products were merely a “see through” item. Now glass is becoming ever more integral to our lives. This remarkable material, with its incredible combination of function, beauty and strength, is enriching contemporary life and we are fortunate that the core essence of our business lends itself to so many innovations.
In the coming age of a myriad of new products these innovations will have both a feature as well as a functional orientation. Consequently the marketing of these products will be more focused on the demanding desires of the end consumer rather than the competitive nature of purchasing agents. This will shift the business model to one where profit margins will be proportional to the creativity, knowledge, and ambition of marketing and sales personnel rather than the traditional cost-plus structure. This, in essence, is today’s new playing field.
This situation may also provide a competitive advantage for large global glassmakers even as we see a proliferation of regional players. While size alone does not create a sustainable advantage, it does provide necessary financial resources to nurture and develop new technologies. It also provides the operating leverage, stamina, and global presence to bring them to market. At the same time, it can be a double-edged sword: large, bureaucratic organizations not in sync with the market tend to lose the correct balance between research and manufacturing capability. And while small companies may not afford the technological research, big companies must decide on the direction of technology as well as the protection of their intellectual property.
Guardian is a diversified global manufacturing company headquartered in Auburn Hills, Michigan, with leading positions in float glass, fabricated glass products, fiberglass insulation and other building materials for commercial, residential and automotive markets. Through its Science & Technology Center, Guardian is at the forefront of innovation including development of high performance glass coatings and other advanced products. Guardian, its subsidiaries and affiliates employ 19,000 people and operate facilities throughout North America, Europe, South America, Asia, Africa and the Middle East. To see the full text of the speech visit http://www.guardian.com
Guardian is a diversified global manufacturing company headquartered in Auburn Hills, Michigan, with leading positions in float glass, fabricated glass products, fiberglass insulation and other building materials for commercial, residential and automotive markets. Through its Science & Technology Center, Guardian is at the forefront of innovation including development of high performance glass coatings and other advanced products. Guardian, its subsidiaries and affiliates employ 19,000 people and operate facilities throughout North America, Europe, South America, Asia, Africa and the Middle East. Please direct all media inquiries to Amy Hennes by phone at (248) 340-2109
Article Source: http://EzineArticles.com/?expert=Russ_Ebeid
Subscribe to:
Posts (Atom)