Making the best products is a pretty good recipe for success… for today. But if you want to succeed long term, you need to think broadly about your capabilities so you can capture tomorrow’s opportunities.
When reporters or academics write about Corning, they often note the company’s track record of evolution. No question, Corning’s ability to adapt to changing markets has allowed the company to thrive for more than 165 years. But why are we able to evolve? While there is no single explanation, Corning’s ability to capture synergies among its core capabilities is probably the biggest factor.
If you follow Corning, you are probably familiar with some of our best-in-the-world capabilities. They include three core technologies (glass science, ceramic science, and optical physics), four manufacturing and engineering platforms (vapor deposition, fusion, precision forming, and extrusion), and five market-access platforms (optical communications, display, mobile consumer electronics, automotive, and life sciences vessels). We are constantly re-applying our knowledge and re-purposing our assets across product sets and markets. These synergies increase our likelihood of success, reduce the cost of innovation, create higher barriers to entry for our competitors, and allow us to produce tailored solutions with a strong value proposition for our customers. They also make it possible for us to capture opportunities in new or adjacent markets.
One of the best examples is Gorilla® Glass. By repurposing our fusion knowledge and assets from our Display Technologies business, we saved about $800 million in capital spending to bring Gorilla Glass to market, and we built a $1 billion business in just six years. We’re now leveraging those same assets to build a new business in automotive glass for vehicle interiors and exteriors, which we believe could reach $500 million in sales within a few years.
Our other capabilities are just as synergistic. For example, we recently leveraged our vapor deposition process, which allows us to make the ultrapure glass at the heart of low-loss optical fiber, to enhance the strength and machinability of our new pharmaceutical glass – Valor® Glass – which we believe has the potential to power the company’s growth in the next decade and beyond.
The synergistic nature of our manufacturing and engineering platforms has led not only to Corning’s long-term success, but also to the longevity of our facilities. For example, our flat-glass plant in Harrodsburg, Kentucky, has operated for more than 65 years; our Life Sciences plants in Big Flats, New York, and Kennebunk Maine, are both more than 50 years young; and our Environmental Technologies plant in Erwin, New York, recently celebrated its 45th anniversary. All these plants have undergone evolutions of their own, and are all currently making products introduced in the last five years. The sustainability of our facilities is not just advantageous for Corning, but also the people we are able to provide with good jobs and the communities that we help to thrive.
So, what needs to happen from a manufacturing perspective to fuel evolution?
- Focus on manufacturing excellence rather than individual products
The Kennebunk plant began as a manufacturer of cassette tapes. When we repurposed the forming capabilities to make life sciences products, we were able to adapt a lot of the equipment and retain our people. Meanwhile, there was a CD manufacturer down the road that closed after our plant’s transition, as new audio formats disrupted the technology. Why did that plant fold while Corning’s plant continued to thrive? I believe one explanation is that the other plant was in the product business, while our plant is in the manufacturing business.
You will always need to learn specialized skills for particular products. But that’s the smallest part of manufacturing excellence. Mastering the fundamentals makes you more agile.
- Engage manufacturing early in new product development
No matter how great an innovation is, if you can’t manufacture it at scale, with the necessary quality, at reasonable economics, you will never build a viable business. When pursuing a new innovation, Corning creates cross functional teams that include manufacturing and engineering experts in addition to scientists and commercial leaders. Their participation during the early stages of a project helps the innovation teams understand what is viable from a production standpoint so a team doesn’t waste valuable time and resources going down a wrong path.
Their institutional knowledge is often as valuable as their mechanical knowledge. For example, one of our veteran engineering leaders drew on his experience in optical fiber to design reliability tests that not only increased Corning’s understanding of how to manufacture Valor Glass, but also how to design it in the first place.
- Avoid outsourcing work that you do best
A lot of companies outsource manufacturing to reduce costs. This can be practical if the products are commodities. But for most of Corning’s products, the manufacturing and engineering platforms are key competitive differentiators. We continually innovate our processes as well as our products to increase efficiencies, lower costs, and introduce new capabilities. That requires ownership and control.
There have been times that we tried to outsource a step or acquire an existing production line to supplement our existing assets and bring a capability to market sooner. We ended up doing so much troubleshooting and retrofitting that we concluded we would have been better off building from the ground up. We might make a few mistakes and need to undergo a few iterations when we build our own processes, but those experiences deepen our knowledge to the point where, when we get it right, our capabilities far surpass anything that anyone could have brought our way.
- Don’t neglect the in-betweens
There are three basic tiers to a manufacturing ramp, but many companies try to get away with two. The first is pilot production, where you develop platforms to produce a relatively small quantity of samples so customers can see, handle, and test the product. If the customer is happy – and particularly if they’re eager to go to market – it’s tempting to try and go straight to the third tier, which is manufacturing at scale. But going from one extreme to the other almost never works. There is a critical in-between step where you supply your customer with actual product, while continuing to develop the platform to ensure that it is sustainable and that you can be competitive. Only when you are able to manufacture the product reliably, consistently, and at cost targets, are you ready to advance to the ultimate step of high-volume manufacturing. That intermediate step requires an investment of time and resources that many companies would like to avoid. But if you’re serious about building successful new businesses, you can’t take shortcuts.
All these steps require commitment from leadership, a long-term perspective of what’s best for your company and its stakeholders, and the willingness to take some risks. After all, evolution is about being in it for the ultimate long haul, which requires you to pursue future opportunities even when the path forward is uncertain. The writer and futurist H.G. Wells famously noted that “Adapt or perish” is the law of nature. It’s the law of business, too.
Note: If you are interested in reading more about how Corning leverages its core capabilities to create competitive advantage, I encourage you to check out a recent article by my colleague Jeff Evenson, which provides a more colorful (or should I say flavorful?) take on the topic: When ‘Mother Sauce’ Meets ‘Secret Sauce,” You Have a Recipe for Success