Technical Notebook: Opportunities and threats for rubber products

Rubber technology has played a substantial role in the progressing technical development across industries and continents for over 180 years, and still today there is no substitute. Nevertheless, the rubber industry is in the maturity stage of the life cycle characterized by intense competition and low profit margins, and raising questions about the long-term sustainability of rubber industry products and jobs.

Significant technical innovations (such as thermoplastic elastomers, injection molding technology, etc.) is improving the value of rubber products and increasing profit margins. However, innovations are not always feasible, so managers must turn to improving cost competitiveness to increase margins. With the continued globalization of the economy, cost pressures, customer quality demands and environmental expenses only will increase. Where innovation is not possible, manufacturers need to find intelligent ways to reduce direct costs of rubber products.

While lowering direct costs by reducing costs of raw materials and processes is a viable approach, it should be conducted intelligently, with recognition of unique physical and chemical nature of rubber and possible negative effects on the properties of final products. We demonstrate that even materials that are termed commodities and are assumed equal in properties can have differences that affect rubber processes as well as final products. Thus, management of change (MOC) rules should be enforced to assure that service life of the final products is not affected.

We argue that quality control and improvement is a hidden powerful tool to help lower costs. However quality work is not recognized as strategic due to a mistaken classification of quality as a pure cost rather than margin enhancement tool and, as a result, frequently is viewed as a “non-value-added activity.”

Intelligent approaches to direct cost reduction contribute not only to higher profit margins, but also extend the life cycle of the rubber products and provide sustainability.