Divide and Conquer: Rohm and Haas' Response to a Changing Specialty Chemicals Market

Rohm and Haas is caught between giant raw-material suppliers and powerful retailers at opposite ends of the supply chain. In the early 1990s, several new competitors entered the emulsions market, threatening the company's largest business unit, Polymers and Resins (P and R). P and R also faced increasing price pressure from customers and calls to improve the rate of return to corporate shareholders. In 1995, P and R formed a redesign team to examine its precepts. Over a three-year period, we aligned P and R operations around well-defined business policies, segregating products into make-to-stock and make-to-order supply channels, prioritizing customers, and serving nonstrategic customers through distributors. These changes saved millions of dollars, increased productive capacity, and transformed the business into a leaner, more disciplined operating unit.