Dow Corning's New Strategies Help Electronics Companies to Grow
05 Maggio 2004 - 3:30PM
PR Newswire (US)
Dow Corning's New Strategies Help Electronics Companies to Grow
MIDLAND, Mich., May 5 /PRNewswire-FirstCall/ -- 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 (http://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
(NYSE:DOW) and Corning, Incorporated (NYSE:GLW). More than half of
Dow Corning's annual sales are outside the United States.
DATASOURCE: Dow Corning Corporation CONTACT: Amy Rosborough (U.S.),
+1-989-496-8288, Karen Heenan-Davies (Europe), + 44-1446-723-498,
or Liliana Ng (Asia), + 852-2835-0387, all of Dow Corning
Corporation Web site: http://www.dowcorning.com/
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