What makes the glass and window industries special?
The risk of low cost imported commodity products
I live and work in a western economy and in a western market. My company and others which operate as we do have investment in R&D, tooling, skilled employees, requirements in terms of government legislation, and a similar cost structure to the glass and window companies which we supply.
Our competitors can be broken into two groups – those which operate in the same environment, and those which manufacture at lower cost offshore locations, typically Asia. Those which operate in lower cost offshore locations most often have a lower priced product to offer the market, but price is not everything. This is the same challenge for the glass and window industries. To be successful local manufactures must justify their price premium through differentiating their product.
In many of the markets in which we operate, suppliers of glass and windows from these lower cost offshore manufacturers are quite new and are seen by many of the incumbent suppliers as being a threat to the local businesses and economy. And they are. In some cases local government legislates to protect local businesses while other governments are more free market.
The reality is that there will always be countries which have a lower cost of manufacture than traditional western countries. It seems unlikely that will change in the short to medium term. This is a challenge which is here to stay and each business must work out their place and how they can be successful.
This is a challenge which is not unique to western economy glass and window companies. Most if not all western manufacturers have the same challenge.
In general, most lower cost offshore manufacturers are best at doing large runs of identical product. When it comes to standardisation they are the kings. However, short runs of highly tailored product present a challenge. This is where local manufacturers can differentiate. In many ways the architects who design difficult glass and window solutions are the best friends of the local manufacturer. In fact you could say they are essential to the ongoing viability of many local manufacturers in some markets.
How ironic that the architects who create difficult projects, and are often criticised for it, are also the life blood.
This is another aspect of our industries which challenges us, generates concern and discussion, creates decisions and change, open doors of opportunity for those who are prepared to change, and helps make glass and window an interesting industry to participate in.