How a ceramic matrix composites company identified its supply and demand triggers and integrated them for profitable & sustainable growth?

A US-based small-scale mining venture turned its business to advanced materials and was found trapped in the perplexities of the market mechanism. The dynamic tendency of demand and supply was restricting its business growth. The company leadership sought the services of Research Nester Private Ltd to integrate efficient supply and demand equilibrium strategies through technical and marketing innovation.

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An overview:

1

A small-scale mining company in the U.S. ventured into the production of ceramic matrix composites (CMC) in 2019. With a wide range of applications in various industries, there was a high demand for CMCs. However, just analyzing historical demand patterns and supply trends of competitors was not enough to strategize growth and productivity.

2

The Company was not able to identify potential risks such as supply chain disruptions, raw material price volatility, and regulatory changes. Hence its growth was stunted.

3

By March 2021, after several failed attempts the Company’s leadership realized that it would need professional help, to devise a plan of action for estimating the future market scenario related to demand and supply. It then sought out Research Nester’s services to facilitate long and sustainable growth with profitability.

4

Research Nester analysts helped the company to incorporate a strategy that enabled it to manage market dynamics and build up sales little by little and finally reach its planned business objective.

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The Story

The Mining Company was founded in 2011. It had accomplished a strong market for its products in a short span of time. In January 2019, anticipating a lucrative market scenario of advanced materials it proceeded to take its next big step by plunging into the production of ceramic matrix composites. However, the lack of high-performing raw materials suppliers led the company to manufacture low-quality products. Moreover, the price volatility of ceramic fibers, matrix materials, etc., and their limited availability impacted the company’s ability to secure a consistent and cost-effective supply of materials. This resulted in supply constraints for finished products. Apart from that, the company being new in the business was not able to anticipate the demand for the ceramic matrix composites it produced. The preferences of the clients and the specific demands of composites used in automotive, aerospace, defense, etc. was not accurately forecasted. This led to overproduction of less needed materials and missed sales opportunities of the ones high on demand. The excess inventory of unsold materials resulted in financial losses to a huge extent. This major setback in the very 2nd year of the company’s new venture, made the authorities turn to Research Nester to act on their behalf to find out a solution for the problem.

The Solution:

The major pain point of the company was the lack of in-depth research related to the supply and demand scenario of the Ceramics Composite Matrix Market. Research Nester offered a customized Advanced Ceramics Market Analysis solution to enable the organization to understand the market logistics and focus on mitigating supply and demand risks. RNPL consultants suggested the following road map for a better future.

  • Analyzing the external business environment.
  • Determining the targeted applications and preferences of industries and accordingly prioritizing the production.
  • Having scope for scalability.
  • Assessing the strengths and weaknesses of the finished products.
  • Brainstorming the forces that affect the supply and demand patterns in the market.
  • Many Innovations that could positively impact society.

By utilizing these analytical tools, the company could optimize its inventory, manage its suppliers, and figure out the current market trends to strategize its production.

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Results

The Company was facing severe supply-demand fluctuations and very low return on investment. The Y-o-Y growth was challenged. The percentage growth of the company in the firstyear end (2019) was 30%, which went down to 15% by the end of 2020. After the end of the first quarter of 2021, Research Nester was brought into the picture to help the business stay afloat and manage sustainable growth. The analysts created a comprehensive action plan for the company’s supply and demand business model considering its offer to suppliers, the market price of its products, the margins, and the supply chain mechanism. The prevailing demand in the market, the end-use industries with high product requirements, and the current competitive landscape were also analyzed. The top sources for supplying superior quality raw materials such as composite fiber and matrix materials that could be silicon carbide or carbon were included in the analysis. Furthermore, the ratio-based requirement for each depending on the finished product was also studied for better quality purposes. The percentage growth reached 20% by the end of 2021 and it gained momentum to reach 45% by the end of 2022. With a better understanding of the market mechanisms and crucial analysis of the current and future trends, the company was able to build a better market position and subsequently, profitable growth. All of it contributed to the maximization of its revenue.

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Swara Keni

Head- Global Business Development

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