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As manufacturers try to gain a competitive edge in today’s crowded and fast-paced global marketplace, the inevitability of product commoditization can be a litmus test for creativity, flexibility, and innovation, according to Jeroen Bloemhard of the web-enabled XIAMETER® brand from Dow Corning.

“The commoditization of a product is a fact of life cycle, whether it’s through competition catching up or a new product simply losing its ‘new-ness,’” said Bloemhard, business vice president and executive director of XIAMETER brand. “How companies deal with that reality will determine how much value they will get from a product over the course of its life and how long they will even offer it.”

While many companies narrowly define innovation in terms of product introductions or R&D spending, true innovators maintain a broader, more holistic view, which can include using e-commerce and branding strategies to drive efficiencies for buyers and sellers throughout the supply chain.

“Historically, when product life cycles were longer and competition was less fierce, a management team could expect new products to hold their value longer, and therefore innovation wasn't as important,” said Jeffrey Phillips, blogger and author of Relentless Innovation: What Works, What Doesn’t – and What That Means For Your Business. “What many firms have failed to realize is how quickly the markets are changing. Customer clock speeds are moving far more quickly, and whole platforms are shifting.”

The XIAMETER® brand has been an example of business model innovation and e-commerce best practices since it was launched in 2002 by Dow Corning to service customers who wanted and needed round-the-clock, market-based pricing for silicone products that had standardized in the marketplace. These materials are widely used as performance enhancers by multiple industries, including personal care, textiles, construction, automotive and more, where they provide qualities such as durability, stability, adhesion, and weather resistance.

“In dynamic and extremely competitive market segments such as commodity chemicals, innovative companies focus on how they can enhance their customers’ experience, which can breathe new life into older products,” Bloemhard said. “Enabling customers to be able to compare prices, place orders, check order status, and generally ‘self serve’ at any time of the day or night from anywhere in the world presents a tremendous advantage, especially to a new generation of consumers that is comfortable with purchasing online.”

The XIAMETER website directly links the order-entry system to production planning and inventory management using Dow Corning’s global SAP platform. When a customer places an order online, manufacturing is automatically notified. The XIAMETER® team can source materials from any Dow Corning plant and determine which ship site makes the most sense for the supply chain, helping to ensure reliable supply, limit inventory costs, maximize manufacturing capacity and boost profitability.

In addition, customers can control inventory costs by choosing the most appropriate price tier based on the amount of volume they want to purchase. When their inventory costs are low, they can choose to take advantage of lower prices through higher volume purchases, or vice versa when their inventory costs are higher.

“Helping customers protect cash flow, manage inventories, and capture savings through e-commerce is a great way to gain more value from products that are further along in their life cycle,” said Bloemhard. “Ultimately, a supplier that can respond to change more rapidly and manage costs with increased vigilance gains a competitive advantage in today’s fast-paced business environment.”

“Regardless of what firms choose to focus on – innovation or efficiency – the market has already decided,” Phillips said. “The market has indicated that efficiency is important, but innovation is vital – because of the increasing pace of change, the rapid acceptance and adoption of new products and services, the falling barriers to market entry. Dow Corning’s dual-brand strategy is one way to tackle innovation and efficiency at the same time.”

To view an interactive conversation about the XIAMETER brand and business model, please click here ( English and Chinese). Want to follow the XIAMETER brand online? Check us out on Facebook and Twitter.

About Dow Corning
Dow Corning (dowcorning.com) provides performance-enhancing solutions to serve the diverse needs of more than 25,000 customers worldwide. A global leader in silicones, silicon-based technology and innovation, Dow Corning offers more than 7,000 products and services via the company’s Dow Corning® and XIAMETER® brands. Dow Corning is equally owned by The Dow Chemical Company and Corning, Incorporated. More than half of Dow Corning’s annual sales are outside the United States.

About XIAMETER
The XIAMETER® brand of Dow Corning Corporation, offers market-driven prices for standard silicone products.  Introduced in 2002, the business offers more than 2,100 products including silicone fluids, sealants, silanes, emulsions and rubber.  The XIAMETER brand is a no-frills model offering cost effective products through streamlined services and a web-enabled order platform. Learn more at www.xiameter.com.