Coatings World - September 2009

Business Corner

STRATEGIES & ANALYSIS BY PHIL PHILLIPS, PH.D.

CONTRIBUTING EDITOR

PHILLIPS@CHEMARKCONSULTING.NET

Reinventing the wheel

It occurred to me recently that while the paint and coatings industry is the third oldest pro- fession in the world, historically it has proven
to be the slowest industry in many key aspects.

If we were to rank industries in terms of fastest versus slowest growth rate, new product adoption, management style changes and new business model adoption speed, the paint and coatings industry would be dead last.

That’s not to say all is bad. In the past at times
things were beyond our direct control.

It wasn’t too long ago that most of the design engineering departments within the major user organizations of coatings in our industry would place dead last any consideration of coatings that would be used on the products they were designing. Coatings were merely an after-thought.

There have been cases where only weeks prior to actual product launch, the coatings to be used had not been selected and, in some situations, the coatings had to be rush-developed and rush-approved to meet the deadline of the launch.

This situation, although improving, has not gone
away and is a very expensive design flaw in prod-
uct engineering around the world.

We witness with great awe how new communication technologies are changing the world around us due to their ever-increasing speed through the various value streams of activity. Email, Facebook, texting and now Twitter are assisting some industries while tearing apart others.

The best and most visible industry example of such influence is the entertainment industry, especially the movie-making segment. In less than one years’ time, since December 2008, this segment has moved from historically making movies that would have theater staying power of from four to 10 weeks. Now, due primarily to the advent of the new social network systems such as Twitter or Facebook with instantaneous information transfer capabilities to mass audiences, the same movies could be killed as the movie-goer literally leaves the theater, sending their individual opinions to hundreds instantly as they walk to the parking lot.

This is an example of the awesome power of the collective mindset of the public. Obviously, the

Moving

forward the

paint and

coatings

industry must

become

a more

proactive

partner in the

new product

design

moviemakers will have to accommodate these new
instant information technologies and anticipate
how best to deal successfully with them as they
build new entertainment models going forward.

Maybe the next step, to avoid catastrophic episodes, could involve movie-makers providing a mechanism for the exiting movie-goer to Twitter their opinions through a controlled survey loop, the results of which could be immediately segmented into meaningful conclusions and instantly transferred to new product development for creative decisions regarding the films currently under production as well as the new ideas being considered. Well, I’ll leave that for the movie consultants to figure out!

WHAT’S THE FIT?
How does this analogy relate to the paint and
coatings industry? Some may say it doesn’t, but
at Chemark we feel there is a solid message here
that our industry must pick up on soon.

As a group of providers along the value supply chain in the paint and coatings industry we can no longer be passive and reactive, waiting for our customers to tell us when to jump into the design and redesign step of new as well as established products. This reactive and passive design and development positioning creates costly inefficiencies and, in some cases, total failure of the coated product. We must take on a proactive level of interest that leverages us into the design engineering function at the end-user application sector.

As an industry there are several reasons behind this recommendation to change the paint and coatings industry’s role in relationship to our customers and our customers’ customer. The two most critical reasons are: