Balancing Cost & Quality: Developing High Performance Materials
by AJ Jesiolowski, Director of Product, Eva-Last Americas
Balancing the seemingly contradictory goals of cost vs quality while developing high performance materials may seem counterintuitive to some, but with current technology, it is possible to offer handsome returns in future.
Of course, the cost of Research & Development (R&D) is often high and can be amortised over time as new products gain market share and economies of scale are achieved. But the old expectation that the higher the quality, the higher the cost – both in terms of input costs and even product pricing – can no longer be accepted as a rule of thumb. Thanks to advancements in production processes and materials management, astute manufacturers such as Eva-Last are redefining the concepts of new product development and profitability.
Profitability + Progress (Product/Process) = Sustainability
Cost and quality control in materials manufacturing has far-reaching implications beyond gross margins and supply chain management to strategic marketing, brand loyalty and accountability. We’re talking safety, sustainability and reputation management, not just profit and loss.
Profitability and progress are intrinsically linked to the sustainability of any company, not only from a financial perspective but also to establish and maintain a competitive advantage. Continuous improvement – both in terms of products and processes – through prudent cost control and leveraging core competencies for new product development are critical factors for longevity.
Achieving economies of scale on production lines, however, plus prohibitive R&D costs can act as significant barriers to entry. Many manufacturing giants lack the agility to capitalise on market development opportunities, through techniques such as product customisation per region. Many prefer the cut-and-paste approach to cut costs, offering the same product to different markets without adapting to differing regional requirements or aesthetics, such as colour, material and finish preferences, or worse, sometimes even compromising safety standards.
Growth Through Innovation
Innovation and Customer Excellence are two core values that govern all activities at Eva-Last from manufacturing to marketing. With significant investment into the latest materials engineering, coupled with sophisticated ERP (Enterprise Resource Planning) software and a decentralised distribution model, the company has optimised capacity and streamlined its operations to develop advanced bamboo composite construction materials that can be customised for different regions. And we’re constantly striving to do better.
By incorporating the latest technology in our portfolio of products, we service different market segments, and importantly, different budgets. As new technologies become available, we upgrade and improve our ranges, or produce new ones, effectively expanding our portfolio of products and delivering the best, up-to-date developments available in the market.
For example, ranges that followed from our original Eva-tech bamboo composite technology, such as Infinity, build on the same proven core materials but feature an advanced polymer capping for enhanced resistance to scratches, UV, and weathering. Then ranges such as Apex Plus and Pioneer, have gone to a new-and-improved GFR (glass-fibre reinforced) core providing extra tensile strength and stability for specifications needing extended span and less expansion and contraction for changing climatic conditions.
We used our core competencies, and production capacity, in one range to expand into others. This not only improves margins through enhanced economies of scale, but also helps us grow organically into new markets and segments with a diversified product offering.
Cost Analysis
Naturally, we also constantly review our production processes. Initially, a detailed Cost Analysis of our fixed and variable costs in the production of our alternative wood products identified opportunities to achieve significant savings. We reduce our input costs (and earn valuable carbon credits!) by incorporating recycled waste plastic and bamboo fibre as a raw material instead of reclaimed timber, effectively changing our entire product offering from wood-plastic composites (WPC) to bamboo-plastic composites (BPC). Shortly thereafter, we installed solar-powered to reduce our energy consumption during the manufacturing process. Not only is Sustainability a key value in the business, it is the cornerstone that enables us to protect our environment (the forests and oceans), it also gives us a unique market positioning to create, and maintain a competitive advantage.
Process Efficiency
As mentioned before, we’ve taken proven products lines and utilised the pioneering technology, and production capacity – to expand our market offerings and develop new products into other related categories like composite fencing. The technology’s proven performance in the market, backed by world-class warranties, accelerates market penetration for the new product right from the outset. This enables us to improve our Process Efficiency by utilising our existing production capacity from one line to expand into another, without massive expense. We’ve capitalised on a core competency, reputation and resource and expanded seamlessly into another category of building products.
In addition, we’re able to pass on attractive profit margins to customers through incentive programmes and rebates, and try avoid price increases by negotiating freight rates, anticipating tariff increases and rising raw materials costs based on volumes and anticipated demand.
Customer Feedback and Accountability
Finally, we don’t cut corners to cut costs. Our products are engineered to outperform wood with superior weather-, wear and performance characteristics, thanks to the inherent properties of composites made from recycled plastic and renewable raw materials such as bamboo. We constantly adapt our offerings to comply with critical quality or safety standards, offering new and improved finishes, fittings or fastenings based on valued feedback or suggestions from our customers or contractors. For example, our Lifespan architectural beams were developed with a lightweight, hollow aluminium core, and Eva-tech composite coating. This makes them stronger, lighter and easier to work with when installed at height, yet still incorporates the proven performance and durability of the Eva-tech composite.
Our matrix-style management and cross-functional collaboration between departments enables us to capitalise on successes and learn from our mistakes, ensuring constant improvement in our company. Each idea is scrutinised and developed through a Stage Gate Evaluation which includes production cost and capacity, quality and safety standards, price parity, market analysis, demand forecasting, and break-even point determination. Thanks to this model, we can deliver on our promise of Customer Excellence and Accountability, building our international brand reputation and loyalty, and ultimately deliver a sustainable business.
Conclusion
In conclusion, effective quality management and cost control is critical in the development of high-performance materials and plays a pivotal role in the continued profitability and sustainability of progressive companies like Eva-Last.
