Global forces at Pilkington
The early 21 century continued to provide tough challenges for manufacturing organization based in developed economies. This was particularly true for manufacturing of basic materials such as steel or glass as they experienced fierce competition around the world. Pilkington based in St Helens, U.K., started glass manufacturing in 1826. But the major breakthrough for the company was the development of the float glass manufacturing process, announced in 1959. This revolutionized glass manufacturing led to major international expansion of the company- largely through acquisitions. By the 1990s the company turnover was some 3bn pounds and it had major operations in Europe, North America, South America and Australia.
Flat glass has two major uses – in the building industry for windows and doors in domestic and commercial properties, and for glazing systems in automobiles. Competition in the glass industry and their customers' industries was increasingly globalizing the operation of glass companies. Some of these global forces impacted right across the business whilst others impacted differently in the building products and automotive sectors.
Issues in this category included in general free trade, regulations about the insulation standards in houses and office buildings, and government actions to attract inward investment.
The automobile was highly globalized with major manufacturers operating in most parts of the world. Their product standardization programs led them to prefer suppliers who could source worldwide. In contrast, the building industry was very fragmented and building design, methods and requirements varied considerably from one continent to another. Climate was a crucial issue.
Glass was a fragile, heavily and relatively low-cost item. So shipping raw glass long distances was uneconomic, however, glass manufacturing was also capital...
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