Principia Consulting

Plastics:
Benchmarking Production Costs in Polymer Compounding

Challenge:
A large independent compounder with an extensive product line required a best-in-class benchmark for compounding cost, inventory management, and customer service. The results of this program would be used to set objectives for the various groups within the Client's company as part of a continuous improvement program.

Principia Partners undertook a "bottom-up" cost analysis of 20 selected competitive compounders. Principia detailed all components of conversion cost and assessed inventory practices as well as delivery lead times.

Result:
The Client rationalized portions of its manufacturing base and established clear metrics for inventory levels for both standard and made-to-order products, saving more than $15 million a year.

Plastics:
Identify Opportunities for Long Glass-Reinforced Thermoplastics

Challenge:
A leading supplier of thermoplastic compounds in North America was considering a strategic business alliance with its supplier of glass fiber to produce long glass fiber-reinforced compounds as a metal replacement alternative.

Principia investigated the value of the product features and benefits with OEMs and processors in key markets.

Principia analyzed the price/volume relationship for the products and formulated an approach to ramping-up this product line, targeting high-cost competitive products first, then moving into segments served by lower cost materials.

Result:
With the supplier providing only the technology, the Client lacked the production capabilities to process this new material, and applications development costs were too high. The effort was discontinued, a bad decision avoided.

Plastics:
Identify Key Value Drivers for Engineered Thermoplastics

Challenge:
An important producer of specialty ETP resins and compounds required insight to the key profit drivers in the ETP industry.

Principia collected sales and operating data for 30 ETP producers in five world market regions, and assessed these suppliers' product lines, approach to market, and technical resources. A multivariate regression model was developed to quantify the importance of such factors as critical mass, product line breadth, and applications development support. More than 20 factors were assessed to identify the key determinants of value creation in the ETP industry.

Result:
The company has a clear understanding of the impact that its strategic decisions will have on future profitability of its ETP business. Several longstanding strategies were modified to leverage key profit drivers in the short term. New investments in product development and technical resources are assessed using the model to determine their likely effect.

Plastics:
Redefining the Channel Strategy for Advanced Prepreg Products

Challenge:
A major producer of carbon fiber and prepregs for the sporting goods, industrial, and other non-aerospace markets needed fresh, accurate insights on the channels to market and customer requirements.

Principia mapped the entire industry structure, including all producers, processors and other intermediaries, as well as OEMs and end users, then determined the tactics required to win new and existing customers. Principia then helped quantify the sales and marketing resources to apply to each market segment. A well-defined marketing strategy was developed from internal and external assessments.

Result:
The Client implemented the new channel strategy and gained several new significant customers for its product line. The Client has also identified several new products to add to its offering to help expand share of customer at existing accounts.

Plastics:
Realigning Cost Competitiveness for a PVC Compounder

Challenge:
A large PVC compounder asked Principia to evaluate the current and projected market demand for PVC products in the United States and Canada, and its manufacturing cost position relative to 10 major competitors.

A major component of this analysis was in-depth profiles of the business activities of selected competitors. The information and analysis was used to evaluate market opportunities and better predict the market competitiveness of other producers.

The key objectives were to detail the manufacturing operations of selected producers, develop a cost model for these competitors' business(es), and provide an assessment of their market and competitive strategy in the United States and Canada. A key finding was that the Client was at a cost disadvantage for most product types relative to its competitors.

Result:
The Client restructured manufacturing operations and its approach to customer service, resulting in projected savings of $45 million a year. Principia continues to assist in development of marketing plans, and to align manufacturing operations with overall business objectives.

Plastics:
Assess Value Received by ETP Customers in Europe

Challenge:
The European marketing group of a leading ETP producer needed to benchmark its performance in satisfying customers. The group was particularly interested in understanding the perceptions of value delivered to customers.

Principia employed its proven statistical model for measuring "customer value" and fielded a survey in six languages across nine countries in Europe. Principia provided analyses for each market and served country, and pinpointed areas for improvement to increase value delivered to customers.

Result:
The group integrated the program results into its new operating plan, and reduced customer turnover, increased loyalty, and ultimately justified a price premium in the marketplace due to its superior services.

Plastics:
Evaluate Supplier Manufacturing Cost for a Critical Raw Material

Challenge:
In preparation for an annual supply contract negotiation, a Fortune 100 chemical producer sought assistance in determining the actual production cost for a critical raw material.

Principia Partners developed a research program to determine all expense items for the production of the material. The product is only manufactured by one company in North America. Principia accurately modeled the process and all costs associated with the manufacturing operations, resulting in a precise estimate of the supplier's costs.

Result:
Principia's research was instrumental in helping the Client negotiate a 12% price reduction, saving nearly $2.5 million.

Plastics:
Reconfiguring New Product Development in Polypropylene

Challenge:
A global leader in polypropylene saw modest growth in its core markets, and sought to rejuvenate its product portfolio. Over 250 active projects in its new product development pipeline drained resources, with few likely winners.

Principia used the Firm's proprietary FasTrak NPD assessment program to identify the value drivers in the key markets, then reviewed the Client's existing NPD process. Metrics were benchmarked against key PP competitors and against two engineering thermoplastics producers to determine improved approaches to identifying real customer needs and obtaining reliable market input. Priorities were developed along with new metrics to better measure improvement.

Result:
The Client focused on new and enhanced polymerization processes and catalysts to produce polypropylene resins with enhanced material properties. These new products have contributed over $70 million in annualized revenues since mid 2001.

Plastics:
Out-Licensing Composite Fabrication Technology

Challenge:
A small research think-tank developed a novel process for manufacturing high-performance composite structures. The Client held patents on the process and wanted to realize a return on its research investment.

Principia assessed the technology and determined a broad range of applications in which the patents would apply. Principia quantified the value that end users would realize from the use of the technology, and developed a licensing strategy. A prospectus was compiled and Principia marketed the technology, resulting in two "exclusive for field of use" licenses for the technology.

Result:
The Client receives a stream of royalties from the technology licenses for the life of the patents. Principia provides on-going policing of the licenses to ensure compliance with the terms, and assists the Client with out-licensing of future developments.

Plastics:
Developing Growth Strategies for a Plastics Compounder

Challenge:
A leading polymer compounder asked Principia to help determine the impact of market share on the profit potential in a specific business. Individual program components included market analysis, customer segmentation, manufacturing cost assessment, and financial analysis of over 15 key competitors.

This series of programs determined that attaining a market share equal to twice the second largest compounder would result in significant leverage and increased profits. Principia further assisted the company in evaluating prospective acquisition targets, and developing valuations for the attractive businesses.

Result:
As a result of this work, the company acquired a large competitor for roughly $100 million, and consolidated market share while increasing overall profitability. We continue to work with this company to identify other suitable acquisition candidates.

Plastics:
Reassessing the Market for Dielectric Films

Challenge:
A leading film producer needed a reassessment of its products and their commercial viability as a replacement to PC film capacitors.

The Client retained Principia to analyze the commercial suitability and potential of a number of products used in dielectric films including PEN, PPS, PI, and PTFE as potential replacement to PC film capacitors.

Result:
Principia’s findings and recommendations enabled the company to refine its market entry strategy for an improved PPS film in this application.

Plastics:
Seeking New Applications for Fuel Cell Membranes

Challenge:
A leading producer of film materials wanted to determine the future business potential for its specialized products in the emerging fuel cell market.

Principia was retained to determine the technical and commercial applicability of different membrane materials, including high temperature polymers such as PTFE, polyethersulfone, polybenzimidazole, and polyaryletherketone for PEM type fuel cells for the transportation and stationary fuel cell industry.

Principia examined the advantages and limitations for each potential material across the industry chain including fuel cell stack designers, assemblers, and OEMs.

Result:
The Client moved forward with strategic planning based on the clear picture created by this report that compared and contrasted materials and applications, measured against the Client's strengths and weaknesses.

Plastics:
Analyze Discrete Customer Types in the Lawn & Power Market

Challenge:
A leading ETP compounder approached the lawn and power market with a portfolio of compounds, yielding mixed results. The company required a thorough assessment of the various segments within the market to determine which customer types were suitable marketing targets.

Principia Partners designed a segmentation strategy based on OEM product design principles, and developed a model to determine which customers fit each segment. Five discrete customer types were defined, and two segments were determined to be the best targets.

Result:
The Client gained share of customer within the target segments. The company focused resources on these customers, and reduced the number of development projects that do not reach commercialization.

Plastics:
Developing a Product Introduction Strategy for Reflective Films

Challenge:
One of the world’s largest suppliers of window and industrial film products needed a clear strategy for introducing a new product line.

Principia assisted in developing this important marketing and product introduction strategy. A comprehensive plan was developed to introduce the new product line, which utilizes technology to more economically create metallized flexible polymeric films made with sputtered exotic metals such as stainless steel, titanium, copper, and silver.

Result:
The program was successful, as the company introduced a highly successful reflective film product line in the building and construction industry.

Plastics:
Assessing the Market for Hurricane-Resistant Window Glazing

Challenge:
The leading supplier of polyvinyl butyaryl (PVB) asked Principia to help position the product for hurricane-resistant glazing to meet the criteria of new coastal region legislation.

Principia interviewed many of the leading window manufacturers to determine their interest and specific programs around this market development, and how they were addressing the need. A product repositioning strategy was developed to properly introduce the Client's product as an interlayer solution to this market.

Result:
The client has furthered its leadership position in PVB film, a result based largely on following Principia recommendations.