Planet-9 Porsche Forum banner
1 - 1 of 1 Posts

23,161 Posts
Discussion Starter · #1 ·
Consumer electronics is a seemingly inexhaustible source of innovation and revenue. And televisions are about to undergo a major breakthrough with organic light-emitting diodes (OLEDs) in thinner and lighter displays thanks to the magic of plastics. In the OLED revolution, innovative polymers will replace light-emitting diode (LED) backlights and liquid-crystal displays (LCD), making a new generation of products possible.
This is all on account of the synergistic coupling of innovation between the chemical and electronics industries. But while consumers cheer, many chemical companies devoted to older technologies may suffer.
For both industries to benefit from the development of new technologies, they will need a more holistic view of how they create and deliver products.
The problem for both the chemical and the electronics segments is that in a big world, companies often have a myopic view of business. They focus on their own value chain—from suppliers to distributors to end customers.
However, isolating the plastics and electronics supply chains from one another assumes that changes in one business have no effect on the other. It's an unrealistic view, given how many types of common products depend on operations and innovation of both areas. A phone hitting the market without a case, or a display, or a processor has no value.
Not only are the two dependent on each other, but they have the added challenge of working at different speeds.
The process from planning new chemicals capacity to actually establishing new plants can take five years or more. In electronics products, new models barely last a year and materials can become obsolete in easily less than five years.
The result is a disconnection between plastics supply and electronics demand. A consumer electronics company might decide today to shift manufacturing from outsourced Asian factories closer to customers because of increased transportation costs.
But chemical manufacturers may be incapable of making such changes as rapidly. The business calculations become even more difficult for individual companies as margins fall without guarantees of future success when the electronics industry, one of the largest application segments of plastics, is always looking for the next new thing.

For companies to succeed, managers must take a holistic view of their extended value chains. Executives should analyze which segments in the other industry are the best fits. Precisely matching market position and expertise to opportunity has become a critical decision. Leaders will need help from experts who can identify market disruptors. Only with a holistic view and specialized insight can companies stay ahead of their markets and succeed.
Don Bari is senior director and head of technology & analytics for IHS Chemical
Jagdish Rebello is senior director of cloud and computer electronics at IHS Technology
Posted December 5, 2014

1 - 1 of 1 Posts