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Plastics Business 2019 Issue 3

Strategies for Today’s Plastics Processors

Expanding the Workforce with Home-Based Assembly Maximizing Value in M&A Building Apprenticeship Programs Shining a Spotlight on Safety

Official Publication of Manufacturers Association for Plastics Processors


asaclean.com

800.787.4348


Contents

2019 Issue 3

outlook

10

features

8 10 20 22 26 34 40

preview 2019 MAPP Benchmarking and Best Practices Conference outlook Plastics Molders Ease Hiring Strain with Apprenticeships, Internships by Nancy Cates, contributing editor, Plastics Business strategies Maximizing Value and Attracting the RIGHT Acquirer for Your Business by Jonathan Soucy, president, MBS Advisors industry EHS Summit Emphasizes Preparedness MAPP Honors Best Practices in Safety production Training Challenge Ignites Competition by Dianna Brodine, managing editor, Plastics Business view from 30 Vital Plastics’ Home-Based Assembly by Liz Stevens, contributing writer, Plastics Business focus Strategic Planning: Setting Your Business Up for Success by Laurie Harbour, president and CEO, Harbour Results, Inc.

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view from 30

34


42 44 46 49 52

benchmarking What’s in a Machine Rate? by Ashley Turrell, membership and analytics director, MAPP economic corner Election Watch: It’s the Economy, Stupid by Chris Kuehl, managing director, Armada Corporate Intelligence marketing How Marketing Impacts Talent Recruitment by Shelly Otenbaker, president, WayPoint Marketing Communications management Sales Culture Eats Strategy for Breakfast by John Waid, founder, C-3 Corporate Culture Consulting

marketing

46

booklist Excellence is a Habit by Dianna Brodine, managing editor, Plastics Business

departments viewpoint.....................................6

association................................. 32

news.......................................... 30

supplier directory...................... 54

Plastics Business

Strategies for Today’s Plastics Processors

Published by:

Manufacturers Association for Plastics Processors, Inc. (MAPP) 7321 Shadeland Station Way, Suite 285 Indianapolis, IN 46256 phone 317.913.2440 • fax 317.913.2445 www.mappinc.com MAPP Board of Directors President Norm Forest, Dymotek Molding Technologies Vice President Tim Capps, Par 4 Plastics Inc. Treasurer Ryan Richey, Precision Plastics, Inc. Secretary and Counsel Alan Rothenbuecher, Benesch, Friedlander, Coplan & Aronoff LLP

MAPP Board Members Mike Benson, Stout Steve Bieszczat, IQMS Brendan Cahill, PTG Silicones Craig Carrel, Team 1 Plastics, Inc. Jim Eberle, MXL Industries Glen Fish, Revere Plastics Systems LLC Chris Gedwed, Cosmetic Specialties International Jim Kepler, Intertech Plastics Jim Krause, Microplastics, Inc. Tom Nagler, Natech Plastics, Inc. Samir Patel, Midwest Molding Inc. Derrill Rice, Plastic Components, Inc. Missy Rogers, Noble Plastics, Inc. Stacy Shelly, AMCO Polymers Chuck Sholtis, Plastic Molding Technology, Inc. Tom Tredway, Erie Molded Plastics, Inc.

Peterson Publications, Inc. 2150 SW Westport Dr., Suite 101 Topeka, KS 66614 phone 785.271.5801 www.plasticsbusinessmag.com

Editor in Chief Jeff Peterson

Advertising/Sales Janet Dunnichay

Managing Editor Dianna Brodine

Contributing Editors Nancy Cates Lara Copeland

Art Director Becky Arensdorf Graphic Designer Kelly Adams

Circulation Manager Brenda Schell

www.plasticsbusinessmag.com | 5


VIEWPOINT

Finding Inspiration to Better My Performance

F

or the last several years, I have been taking exercise classes that are led by an instructor who coaches participants through rowing, running on the treadmill and weight exercises. Occasionally, competitions will be held in a specific area to test for improvement. On this day, part of the class was set up to test the speed at which we could run one mile. Hours before the class started, I was pumping myself up and strategizing about how I was going to attack the run, because my goal was to achieve a personal best. By the time I walked into the studio, my heart rate already was spiking and my body was full of adrenaline. As everyone knows, it’s always nice to have a plan, but when you are in the thick of things – feeling the pain from the lactic acid build up in your entire body and gasping for oxygen while your heart rate is literally maxed at 100% and your chest feels like it’s about to explode – it’s really, really easy for your mind to play tricks on you … and to convince you that it’s really not worth it. When I speak to audiences, I often stress that the easiest thing to do in life when you feel pain, when you feel the frustration of failure, when you feel you’re being cheated, when things aren’t going your way, when the door has been shut on you for the 40th time, is to simply QUIT. To me, that is the worst four-letter word in the dictionary. As I’ve grown older, I’ve come to realize that “Effort only fully releases its reward after a person refuses to quit!,” as said eloquently by Napoleon Hill, an American self-help author. My first quarter mile was at a pace about 15% faster than I’ve been training, and I was working hard to positively reinforce myself. In my head, I could hear myself saying, “You’re good, Troy. Keep going, it’s all good,” but my heart rate monitor was sending very different signals. With 0.2 of a mile left, I was done. I didn’t think I was going to make it one more step and was talking myself into taking a quick walk break “just for a second to get rid of the pain.” At that point, a fellow attendee, 24-year-old Trae, dismounted his treadmill (finishing at a 5:38 mile). You could tell he was in a great deal of pain, but he toughed it out. It was at this point that I took a gut check, furiously said to myself, “Stop being such a wimp,” found determination deep from within and pushed my speed button up on the treadmill several times. I thought to myself, “I can

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Had I not kept my eyes open to look for inspiration, I would have been unsuccessful in my endeavor. endure the pain for 90 more seconds” … and did. I achieved my personal best mile time since being a 1st lieutenant in the US Army over 30 years ago. As I told Trae afterwards, if it wasn’t for him, I would have failed. Had I not kept my eyes open to look for inspiration, I would have been unsuccessful in my endeavor. More importantly, every time I go to the gym, I now look for Trae and always take the treadmill next to him. I do this because I get motivation from him – he positively influences me and makes me better. I tell you this story because everyone reading this article has well over 600 chances to be inspired, motivated and positively impacted, just like Trae impacted me. From October 2nd through 4th in Indianapolis, more than 600 of the best professionals in the United States plastics manufacturing sector will assemble at MAPP’s 2019 Benchmarking and Best Practices Conference for the sole purpose of becoming better. It is at this location that people will openly share the innovative ideas and new concepts being used to run their operations. They will talk about their own successes, their own failures and how they have persevered. It is here that each of you will have a chance to inspire like Trae and to become inspired like me. This is your chance to look up, do a gut check and figure out how you will achieve your next personal best! See you in Indianapolis!

Executive Director, MAPP


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October 2-4 | Indianapolis Downtown Marriott | Indianapolis, IN The goal of the Benchmarking and Best Practices Conference is to help plastics companies improve their operations and tactics in order to impact bottom-line profits. This year’s Benchmarking and Best Practices conference will address leadership, operational best practices, the latest financial benchmarks, sales and marketing, the impact of employees on the bottom line and much more. With over 650 plastics professionals expected to meet in Indianapolis, on October 2-4, the conference staff has created a schedule packed with best practices, leading-edge benchmarks, expert presentations and the best networking opportunities in the industry.

Takeaways » Operational Best Practices » Leadership Strategies » Superior Networking » Financial Benchmarks YOU DON’T WANT TO MISS THIS EVENT! Don’t forget: There is a group discount to bring 4 or more! Bring your team for maximum impact!

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Thank You to Our Key Sponsors


Photo credits: Creative Technology Corp.

Speakers Keynote: Chris McChesney, Franklin Covey

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Ross Bernstein

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Chris McChesney is the co-author of the best-selling book in the world on strategy execution titled, “The 4 Disciplines of Execution.” McChesney has presented on some of the biggest stages in the world, including at the Global Leadership Summit, the World Business Forum at the Lincoln Center in New York City and in Sydney, Milan, Mexico City and Madrid. He has personally led many of the most noted implementations of the 4 Disciplines, including the State of Georgia, Marriott International, Kroger, Coca Cola, Comcast, FritoLay, Lockheed and more.

The best-selling author of nearly FIFTY sports books, Ross Bernstein is an awardwinning peak performance business speaker who’s keynoted conferences on four continents for audiences as small as 10 and as large as 10,000. He’s spent the better part of the past 20 years studying the DNA of championship teams and his program, “The Champion’s Code: Building Relationships Through Life Lessons of Integrity and Accountability from the Sports World to the Business World,” not only illustrates what it takes to become the best of the best, it also explores the fine line between cheating and gamesmanship in sports as it relates to values and integrity in the workplace.

Kirk Weisler

Kirk Weisler, president of Team Dynamics, has over 18 years of experience with executive coaching, speaking and research in building strong workplace cultures. His perspective is simple and unpretentious, and his suggestions are applicable and undiluted. Referred to as the “People Whisperer” for his exceptional way of connecting with people, Weisler is known for his ability to share personal life stories, converse with his audience and offer coaching that builds trust and inspires action. His book “The Dog Poop Initiative” has sold over 80,000 copies and is used by Boeing Aircraft in its Six Sigma Lean program and by managers in morning huddles or weekly kick-off meetings.

Tim Riesterer

Our unprecedented customer support team will go to all lengths to ensure your success, because we’re passionate about helping people through sharing our in-depth knowledge. We want you to rest assured that you’re only producing the highest quality parts while saving the environment from scrap in landfills. Improve quality. Save time. Save money. MAPP members receive exclusive training savings, including one free seat in selected courses. Ask us about it at the MAPP Benchmarking Conference at table 13.

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Tim Riesterer has dedicated his career to improving the conversations companies have with prospects and customers. He’s written three books on the subject – “Customer Message Management,” “Conversations that Win the Complex Sale,” and “The Three Value Conversations” – based on actual decision-making science research. Riesterer is a highly sought after researcher, author, speaker and consultant in the area of creating and delivering customer conversations that win!

» Supplier User Events from MBS Advisors, Paulson Training and IQMS

» Young Professionals Event

Find out more at mappinc.com/conference www.plasticsbusinessmag.com | 9


OUTLOOK

Plastics Molders Ease Hiring Strain with Apprenticeships, Internships by Nancy Cates, contributing editor, Plastics Business

Some of Sea-Lect Plastics’ crew pose for a photo to promote Manufacturing Day. From left, apprentice moldmaker Bradley Ethier, apprentice plastics process technician (PPT) Brandon Pilcher, apprentice moldmaker Nathaniel Hall, lead process and maintenance technician Ronnie Bowers, PPT Chad Neece, youth apprentice Lauren Ozbun and apprentice moldmaker Brett Muller hold up Matt Poischbeg, Sea-Lect’s vice president and general manager Photo courtesy of Sea-Lect Plastics.

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F

rom Washington to Colorado to Texas and across the country, plastics manufacturers struggle with many of the same challenges in workforce acquisition, training and management: low unemployment, baby boomer retirements and a scarcity of potential employees with the essential technical skills. To solve the problem, some have turned to apprenticeships and internships, starting to build relationships with potential employees as early as middle school. Plastics Business visited with executives from three firms to learn about their companies, their recruiting challenges, their apprenticeship programs and their advice to others who are interested in joining or starting a similar program.

Sea-Lect Plastics

Matt Poischbeg, vice president and general manager of SeaLect Plastics, Everett, Washington, is a great believer in apprenticeships. “My mantra,” he said, “is that apprenticeships can be the backbone of the middle class. You are putting individuals into the work world at 16, and they are contributing to society earlier. I’m from Germany and went through that education system, completing two apprenticeships successfully, so I’m very familiar with how the system works.” The challenge Sea-Lect, a sister corporation to Sea-Dog, a marine hardware firm dating back to the 1920s, continues to supply parts for boating and kayaking to Sea-Dog, but the majority of Sea-Lect’s business is consumer products, along with some medical and aerospace components. Sea-Lect encountered staffing problems in 2013, Poischbeg said. “Our key tool and die maker told us he would be retiring. I searched locally, nationally, tried a headhunter – but could not find anybody, so I decided to start an apprenticeship program. I was referred to the Aerospace Joint Apprenticeship Committee (AJAC), which has a tool and die program.” AJAC, a nonprofit registered apprenticeship program, provides hands-on learning while participants earn wages. A recent expansion gives high school juniors and seniors a pathway to onthe-job-training that can lead to a journey-level card and college credits, in addition to a high-school diploma. A solution “When we established the program at Sea-Lect,” Poischbeg continued, “it became clear very quickly that it was what I had been looking for – to increase the skill level of employees as well as increasing the value of the employees to themselves. It allows us to be able to pay them at a higher level as they do more for the company. I wanted to build a pipeline, train a workforce.” A mandate of the program is having a one-to-one apprentice/ mentor relationship. “In the tool and die shop,” Poischbeg explained, “we now have three who are becoming tool and die

Mary Sholtis and PMT's mechatronics apprentice set up Baxter for hands-on student learning during Manufacturing Day 2018. Photo courtesy of Plastic Molding Technology.

makers – one each in the second, third and fourth years. Two of them came directly out of high school. I’m training people who need to learn the job-related skills anyway: I might as well start with people who are excited about learning.” The AJAC program is overseen by the US Department of Labor, which regulates topics, task requirements and classroom and training hours for each curriculum. Youth apprentices can enroll in the two-year program at age 16. The youth program offers credits toward high school graduation, an adult apprenticeship and college credits. Adult apprenticeships start at age 18 with a high school diploma or equivalent. The programs take apprentices to a journeyman level, which provides national certification to work in any state. Poischbeg partnered with three local school districts and the local skills center, which works with 15 districts. He became an AJAC committee member and asked the group to develop a process technician apprenticeship program for the plastics industry, which did not exist at any state or federal level. “Over almost 25 years at Sea-Lect,” Poischbeg said, “I always had several process technicians working. Each had learned the page 12 u

www.plasticsbusinessmag.com | 11


OUTLOOK t page 11 trade a different way, so when we were troubleshooting a mold or improving a cycle, we had several different opinions. None of them had the same base knowledge. So, I thought if we could run them all through the same program, they would have the same approach to troubleshooting. AJAC was receptive. We started the plastics process technician apprenticeship program in 2016.” How does it work? In the local program at Everett, adult apprentices go to school four hours a week on their own time and work a full-time schedule. Because the local plastics industry is not large, they are cross-trained in the machinist and maintenance technician classes. Beginning pay is driven by the journeyman rate. “For example,” Poischbeg said, “our journeyman rate is $26 an hour, so their starting wage as an apprentice is about $15. They get a raise about every six months. The apprenticeship program for plastics is four years, while tool and die is five years.” Once certified as journeymen, Poischbeg said, there is a huge demand for the skilled workers. “Hopefully our apprentices will stay with us. They might enroll in additional programs focusing on mold design or CNC (computer numerical control) programming. If they want to go to school and become an

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engineer, I support that. There are time limits, but they can take the college credits they earned in apprenticeship – roughly equivalent to an associate’s level – and potentially cut two years off that four-year degree.” A third option for journeymen is to move on to other shops. “It explains what the word ‘journeyman’ really means,” Poischbeg continued. “In the old days, after certification, journeymen would move from company to company to learn different skills. It was not seen as a negative on the resume, but a positive.” Success Poischbeg considers the program a success in more ways than one. “In looking back to 2013, we were challenged to just keep the shop open. We were not building new molds. Most of my moldmakers were old-school. They do beautiful work, but they had missed the learning curve with new technology. The apprentices learn the old-school methods as well as the new technology. “When the first apprentice started, I promised that when he needed a CNC machine, I would buy one. That’s a $70,000 investment, but that’s exactly what we did. At the end of his second year, he got into CNC setup and programming. He was the one running the machine and teaching his mentor how the machine works. It was an incredible success in my mind. It led to us starting our first in-house mold with an old-school moldmaker and an apprentice working together to build this first very simple injection mold. Now we have completed the second tier of complicated injection molds with apprentices two and three, along with mentors coaching them. We now are building molds in Everett and have mold-building jobs lined up through the end of the year. We are competitive again. Within the next two years, we might be at a 50/50 level of producing our own molds. That means hundreds of thousands of dollars that will not go to China anymore and that we can invest in our own company.”

Intertech Plastics

Rapid growth and difficulty filling technical roles were the driving forces that led Denver, Colorado-based Intertech Plastics to the CareerWise apprenticeship program. “We really struggled with filling technical roles,” said Jim Kepler, Intertech’s president. “We’ve gone from a $20 million company to a $30 million company, and we’re growing rapidly. We work with recruiting agencies and look all over the country to find moldmakers, engineers, process technicians and other technical personnel. This year, we doubled our recruiting budget.” Founded in 1980, Intertech began as a small manufacturer of custom injection-molded plastic products. Specializing in medical page 14 u


OUTLOOK t page 12 device components and industrial consumer products, Intertech has two plants, about 110 employees and more than 50 injection molding machines, ranging in size from 55 to 1,500 tons. CareerWise “The positions we’ve focused on and benefitted from with the apprentice program have been automation engineers and automation technicians,” Kepler said. “It has given us a huge advantage in keeping our costs down as well as building in process control and quality. “CareerWise was founded by Noel Ginsberg, the owner of Intertech,” Kepler explained. “The program, modeled after a Swiss apprenticeship program, partners the public and private sectors. It involves career exploration with students at the middle school level. High school students are given the opportunity to go through an apprenticeship program by joining a company and exploring advanced manufacturing, IT, healthcare services or financial services. Freshmen delve into career exploration, and in their sophomore year, apprentices spend three days a week in the classroom and two days working on-site. They go through curriculum that supports the apprenticeship program and credits toward collage – if they want to pursue that path. In their junior

and senior years, they spend three days at the workplace and two days in the classroom.” In Colorado, 125 companies participate in CareerWise. It has spread to 92 companies in New York and another 25 in Indiana. Kepler said the program was intended to be scalable to address the national skills gap in manufacturing and technical services industries. Intertech currently has eight apprentices, who are chosen through interviews, Kepler said. “It has to align with what the student/ apprentice interests are and what fits our needs. We go through the interview process just like we would with a candidate for any job. We’re looking at the soft skills that align with our company values – cultural fit, aptitude, passion and drive – things that are tough to train.” Robotics team a winner Intertech also sponsored a high school robotics team and ended up hiring a couple of student apprentices from the team. “When we interview some of these students at 16 years of age, they already

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OUTLOOK t page 14 have a skill set that we struggle to find,” Kepler said. “They know how to solve problems in a competitive environment. These robotics have vision systems, pneumatic valves, programmable logic controllers – all the electrical circuitry and programming we might use. They see the relationship between what we do and what they have already done for fun. We’re seeing the apprentices add value in the first year.” Once in the program, each apprentice has a curriculum manager, who oversees progress, and a mentor, who works with the trainee daily on Intertech projects – including dealing with customers and meeting their requirements. “They are laying out not only the design of the work center,” Kepler explained, “but creating the scope of work and specifications, while keeping in mind required standardization. They work with purchasing and maintenance departments to discuss vendor selection and return on investment. They also are involved in training. If they develop a solution, they help create instructions and train the workforce.” Kepler is enthusiastic about the difference CareerWise has made at Intertech. “The apprentices re-energized our entire company. There’s excitement and passion for implementing new ideas. We are seeing an acceleration of progress on the floor. Even our customers have noticed.” Hit the ground running Some of the change might be attributed to Kevin King, one of the first apprentices to come on board in his junior year. “He is unique in that he’s been able to come into the company and hit the ground running,” Kepler said. “He was a leader in the robotics team at the Cherry Creek School District. “Our niche has been to build and automate process control and quality control systems at the machine,” Kepler continued. “We can guarantee zero defects through process control or vision systems. Kevin has designed a robotic cell that looks for potential defects. He programmed an automation cell for a high-volume product. He designed an entire conveyance cell and added a twocamera system to ensure there are no duplicates, detect missing components and ensure everything is present and in the correct orientation. It also takes a picture of the reference quality code, assigns the file name and stores that information.

Tips to Businesses Considering Apprenticeships

• Appreciate the value of apprenticeships; a certified program is valuable. • Build your own pipeline of top-tier talent. New manufacturing jobs are growing steadily. Find a way to transfer knowledge and train new talent. • Work with the local school system to build a stronger relationship, and create partnerships with the districts’ career and technical education programs to start filling your pipeline. • Launching these programs can be challenging and time consuming: Consider hiring a training coordinator to help manage the workload of recruiting, weekly follow-up and effectiveness assessment. • Teach capability: Young people can learn to drive at 16, so they can learn to run a machine on your shop floor. • Treat apprentices right and pay them competitively so you can keep them. • Take a look at programs that exist rather than trying to build your own. Consider scalable programs such as CareerWise. Visit https://www. careerwisecolorado.org.

Tips to Communicate About Your Program

• Highlight the benefits of an apprenticeship program: higher wages than for a typical beginning worker, guaranteed pay increases with each successful step of training, potential to earn college credit without accompanying debt, national certification that enables the apprentice to go in whatever direction is chosen, options to complete college remain open. • Break through stereotypes. Educate the public, advocate for the industry and give tours to show what a modern factory does. Show parents their students can make a decent wage while gaining experience in a highpaying technical field. • Communicate clearly with youth apprentices about attendance expectations, combining school and sports with work, and general reliability. • Practice patience and be detailed in training youth who may not know how to correctly use a tape measure or identify a Phillips screwdriver. • Invest time and energy in mentor training to help skilled staff successfully download their knowledge to apprentices.

submitting it to the 2019 MAPP innovation award competition,” Kepler concluded. “We hired him on as a full-time automation technician and are paying for his engineering degree.”

Plastic Molding Technology

“We get about $35,000 to $40,000 in returns,” Kepler explained. “It’s common for end-use customers to say a part isn’t there when, in fact, it is. This system allows us to get the reference code and check the image file to see whether the piece was missing when it shipped. We can ensure that part was there when it left the building. It has helped us assure quality as well as defend return claims.

Plastic Molding Technology, El Paso, Texas, has been in business more than 45 years, and like others in the industry, is challenged to fill technical jobs. Its 110 full-time employees produce custom plastic injection-molded and insert-molded components for industries including automotive, electrical, industrial and telecommunications, according to Charles Sholtis, PMT’s second-generation owner and chief executive officer.

“Kevin came up with the concept, designed the entire thing, built it and trained everybody on it – he implemented it. We are

PMT moved to El Paso from Bridgeport, Connecticut, in 2004. Now, its 60,000-square-foot manufacturing facility houses

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administrative, engineering, production, warehousing and support activities, including a mold repair facility and a fullservice quality laboratory. “PMT is committed to quality,” Sholtis said. “The company is a registered recipient of both ISO 9001:2015 and IATF 16949:2016 quality certifications. Typically, we mold parts with tolerances of plus or minus 0.001 inch with engineering-grade materials. The positions we find most challenging to fill are higher-skilled jobs, including process technicians, quality technicians, maintenance workers and tool makers.” Internships and apprenticeships PMT’s internship program, initiated in 2015, operates through the University of Texas at El Paso (UTEP). Two years later, PMT re-launched an in-house apprenticeship program. “Our interns work in production, quality and marketing,” said Mary Sholtis, PMT’s training and development coordinator, “often project-specific. We try to rotate them between departments. PMT hires between three and five interns each year, taking candidates from majors including engineering, supply chain management and business administration. Most

You take innovation seriously. So we take it personally.

internships include a job rotation in each production-related department, along with a department-specific project.” Interns are involved in the junior or senior year of their bachelor’s program. Apprentices at PMT enter the workforce after high school graduation. The instruction for the apprentice is a blend of hands-on, classroom and computer-aided learning. “Our apprenticeship program is registered through the Department of Labor,” Mary Sholtis explained. “We have one active registration for a mechatronics technician apprentice. Our apprentice in that role learned about PMT through a high school tour. He now is in his second year of the four-year apprenticeship. We also have an apprenticeship registration in process for a tool maker, which we hope to launch by the end of this year. Next year, we plan to a launch an additional registration for a process technician apprenticeship. “Our mechatronics apprentice works in the maintenance department,” she continued, “mentored by the head of maintenance, who was PMT’s first apprentice – way back when page 18 u

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www.plasticsbusinessmag.com | 17


OUTLOOK t page 17 we first launched an apprenticeship in Connecticut more than 30 years ago. As the mentor, he is instrumental in this program launch, providing guidance and skills transfer. “We initiated the internships and apprenticeships with a few goals in mind,” Mary Sholtis explained. “First, we want to capture local talent. We want students to experience the kinds of jobs that are available here in El Paso. Second, we want to address the skills gap by showcasing paths that lead to a fulfilling career with higher wages. Third, we want to engage the next generation in manufacturing, so they can see the industry as the modern, technology-driven career it is today.” To find the best local candidates for internships, PMT representatives attend job fairs at UTEP. “We usually are looking for someone to fill a role on an ongoing project,” Mary Sholtis said, “so we look for candidates with skills that could contribute to that project. We also require a GPA of 3.0 or above. For our apprenticeships, we visit local high schools, work with the career and technical education liaisons and invite students in for plant tours on Manufacturing Day. GPA is important, and we often look for skills in mathematics and advanced coursework.”

Benesch’s dedicated Polymer Industry Team focuses on the specialty chemicals, coatings, plastics and polymer industry. With increased pricing pressure from customers, the team understands that companies in the industry must have multiple avenues in which to increase working capital and improve cash flow.

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Across-the-board training Charles Sholtis emphasized that training has become important at PMT, “not only for our interns and apprentices, but for all employees. PMT has invested in a $55,000 dedicated training room. The space can be used for on-boarding, safety meetings, interviews, company events, class instruction and the like. In 2017, we invested $40,000 in a computer-based training platform for plastic molding injection. We offer all employees this in-house Paulson Injection Molding Training Program. It also is utilized by our apprentice and can be a good orientation and introduction to molding for any intern or new employee. “We have realized great benefits by having these students on board,” Charles Sholtis said. “They are supporting our staff while learning new skills. It is a win-win situation.” Interns typically work 20 hours a week for a three-month period. Interns and apprentices send weekly reports to human resources, reinforcing their communications abilities and ensuring that they learn new skills, remain challenged and are held accountable.

For more information, please contact Alan Rothenbuecher at arothenbuecher@beneschlaw.com or 216.363.4436.

18 | plastics business • 2019 Issue 3

“We have found so much talent in our local university system,” Charles Sholtis concluded. “One of our interns from UTEP was an exceptional contributor, and we extended his internship. His enthusiasm and willingness to support PMT convinced us to try to keep him on board. After he graduated with his engineering degree, we hired him as a quality engineer. He now is training to advance to the next level of quality engineering. The ability to find local talent to add to our staff is a great benefit.” n


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STRATEGIES

Maximizing Value and Attracting the RIGHT Acquirer for Your Business by Jonathan Soucy, president, MBS Advisors

W

hen the owner of a plastics processing company decides it is time to sell and exit the business, there generally are two overriding questions:

1. How do I maximize the value of my business? 2. How can I attract an acquirer that will preserve the company’s legacy AND take care of my employees and customers? Maximizing value and attracting good buyers often go handin-hand. The key drivers that help you achieve these goals are regular industry topics and might already be etched in your brain: profitability, sales growth, EBITDA (equal to earnings before interest, tax, depreciation and amortization) margins, customer concentration, etc. Other drivers of value and investor interest include “curb appeal” (the organization and cleanliness of the facility), the degree of specialization and the existence of a strong non-shareholder management team. But, what else can impact business valuation when an owner is looking to exit? And, just as important, what soft drivers help make the company attractive to a pool of larger, sophisticated acquirers? Here are a few of the less obvious aspects of a plastics business that are important to buyers and investors. Most of these can be addressed or incorporated into your enterprise with modest investment and a little advance planning.

Reviewed or audited financial statements

Many smaller companies and family-owned businesses do not need and/or are not required to produce audited or reviewed financial statements on an annual basis. This may be perfectly fine when “operating” the business, but when selling your company, audited or reviewed financial statements provide more comfort to buyers and signal a higher degree of sophistication in your organization. Reviewed or audited statements provide standardization and a higher degree of compliance with generally accepted accounting principles (GAAP). They also minimize accounting mistakes/irregularities that likely will be uncovered during due diligence. An acquiring entity that is more confident in the strength and validity of the financial results is more likely to make an aggressive offer for your business.

Quality certifications

ISO/TS certifications are common in the manufacturing sector today. However, there still are many smaller companies that,

20 | plastics business • 2019 Issue 3

despite having excellent quality, have not pursued an official quality certification. ISO and TS certifications are very important to larger strategic acquirers because they themselves are likely ISO/TS certified and know that post-acquisition integration will be easier and less costly if the target has the same credentials. Furthermore, if your business is focused in one particular industry, obtaining and maintaining the appropriate certification (TS-16949 for automotive, ISO-13485 for healthcare, ISO-9001 for general industrial) is a signal that your company is a serious player.

Detailed and defensible forecasts

Companies with a robust pipeline of measurable new business are universally more attractive to acquirers and investors of all shapes and sizes. Many custom injection molders “guestimate” future revenues and profits based on historical trends. This type of forecast is better than nothing, but definitely not optimal. The most credible forecasts are those in which the company has gathered monthly volume projections (ideally from the customer)


for each active part number. Program launch dates, ramp-up periods, seasonality and end-of-life data should be built into the model. Companies that can forecast on a part number (or SKU) basis and provide the supportive data will universally attract larger and more sophisticated buyers and typically command higher valuations.

the risk of past anomalies impacting the future results of the company. Being proactive and prepared to clearly explain unusual circumstances can mean the difference between a nervous and overly cautious buyer and an acquiring entity that is confident in the business and impressed with management’s understanding of past challenges or events.

Raw material pass-throughs

In conclusion, there is a lot for plastics company owners to keep in mind as they plan their exit. No company is perfect, and no merger and acquisition (M&A) transaction is perfect. But, there are a lot of small and inexpensive tweaks that can make a big difference in valuation. And, some of these tweaks could be the difference between finding and attracting an OK buyer, a good buyer or the BEST buyer. n

Acquirers always are interested in customer contracts/agreements and the ability of the molder to pass on potential resin price increases. The more a company’s profit margins are insulated from raw material price fluctuations, the more comfortable a buyer or investor will be with future earnings. This translates to a lower risk profile and higher valuations. There are various tools that injection molding companies use that can mitigate raw material pricing risk. Some of these include customer-negotiated raw material contracts, supply agreements with periodic price adjustments based on raw material price movement, financial hedging (commodity resin), customer-consigned raw material and several others. The more your company can protect itself and its profits against resin price increases – even if this means sacrificing excess profits during deflationary periods – the more buyer/investor interest it will generate, and your valuation multiple likely will increase.

MBS Advisors offers exit planning consulting for molders and other plastics processing businesses. We leverage our experience as former injection molding company owners/operators … and also use the knowledge and experience gained during our 102 (and counting) successful plastics industry M&A transactions. More information: 413.584.2899 or www.mbsadvisors.com

Owner succession/transition

Management transitions can be extremely taxing on any company, especially a company that has just undergone a change-in-control transaction. So, buyers and investors of all types strongly prefer companies that are likely to have stable management through an acquisition and long-term transition. If you are the owner and actively involved with your company’s day-to-day operations, it will be beneficial if you have a succession plan in place involving the next generation of management. This still is the case even if you plan on staying several years following a deal; acquirers understand that owner intentions/plans can change soon after a deal is completed and harbor concern over the loss of “knowhow” if/when former shareholders leave. So, to the extent buyers and investors are comfortable that the company’s key human capital will remain intact after an acquisition, the more they will be excited about the investment and the more they should be willing to pay for the business.

Crisp explanation of unusual events

All businesses have exceptions, adjustments, one-time occurrences and temporary setbacks. For example, if your business had a precipitous drop in revenue two years ago, every acquirer will want to understand the cause and the details surrounding the event. Was it a one-time occurrence or will the issue appear again in the future? Was it the loss of a customer or just a temporary gap in orders? Buyers will want to assess

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www.plasticsbusinessmag.com | 21


INDUSTRY

EHS Summit Emphasizes Preparedness the can’t-miss safety event of the year

T

he 2019 Environmental, Health and Safety (EHS) Summit was held July 17 and 18 in Columbus, Ohio. The event was the largest to date, with more than 100 attendees gathering to share leadership and safety best practices with other manufacturing professionals. With a focus on world-class safety, over 25 industry safety speakers provided implementable ideas that attendees could use to improve their own operations. Speakers stress preparation and prevention Keynote speaker Kina Hart offered a firsthand account of the importance of safety by recounting the tragic loss of her left arm in a conveyor belt accident. She described how lack of knowledge

How to Survive an OSHA Inspection Chris Whitehorne, U.S. Compliance Employee complaints are the most common source of OSHA inspections. Typically, if a former employee registers a complaint, OSHA will send a letter to your facility. When you respond in a sufficient manner to that letter, OSHA closes out the complaint without an on-site visit. However, if an active employee reports an imminent danger – such as entering into confined spaces without proper monitoring or working at heights above 12 feet without fall protection – and OSHA determines that there’s imminent danger to a current employee, that typically will trigger an on-site inspection by OSHA. Many times, these complaint inspections occur because the employee has brought up the concerns at a safety committee meeting or to a supervisor, and they’ve fallen on deaf ears. Eventually, the employee comes to a point of being so disgruntled or concerned about their own health and safety that OSHA is notified. One of the biggest things an employer can do to eliminate the potential for OSHA visits due to employee complaints is to address employee concerns. Do they have complaints? If they are voicing them, are you tracking them? Are you addressing them in a timely manner? These are critical questions.

22 | plastics business • 2019 Issue 3

A Safety Professional’s Guide to Prepare for, React to and Address Workplace Violence Events Scott Lowry, Three60 Response LLC In the event of an active shooter situation, pre-planning must take place between the emergency responders in your community and your company. Some of the items to be addressed include the following: Command post. Preestablish where those command posts are going to be. The fire chief is often the one to do that – to look at your facility and the surrounding area to make recommendations. Make sure the people from your organization who are assigned to the command post know where those locations will be so they can answer questions about the situation occurring and the facility. Perimeter. Emergency responders will need to establish a perimeter around the building to keep people away – loved ones, media, normal traffic flow within the community. You may need to, in preplanning, assist emergency responders in helping to plan that perimeter area. Rally points. The “run” part of “run, hide, fight” is that we want everyone to rapidly evacuate a facility. Rally points are for those people who become injured in running from the facility so medical aid can be given – and emergency services need to know where those rally points are located.


and training contributed to the day that forever changed her life. Driving home that the last line of defense is safety first, Hart encouraged active participation in safety while also discussing the effect injuries have on coworkers, family and friends. Following the emotional keynote address, attendees had the opportunity to participate in roundtable discussions to grow their peer networks and exchange ideas on the most pressing EHS topics. Breakout sessions then provided a deep dive into relevant topics, including detailed information on the requirements for Tier II reporting; mill and calender operational safety, including a drill rescue video; issues arising from the legalization of marijuana in some states; fall hazard recognition and protection procedures; and monitoring and controlling air emission sources. In-depth articles on EHS Summit topics will appear in future issues of Plastics Business. page 24 u

Lockout/Tagout and Machine Guarding Standards

Emergency Planning 101

Bill Wahoff and Nelva Smith, Steptoe-Johnson

Matthew McCrystal, Ohio Emergency Management Agency

If an OSHA compliance officer asks your employees if you have an energy control program, and all you’ve ever talked about is lockout/tagout, they might say, “no.” Keep terminology in mind. When you train your employees, if you don’t give them the right jargon, they might not recognize it in a private interview. Among the many requirements for lockout/tagout procedures, don’t forget these:

The Emergency Operations Plan (EOP) for any organization should contain all of the information necessary to appropriately respond to and recover from an emergency situation. This plan is just like a “go bag,” where all information is in one place and easily can be taken from the site of an emergency to the site where responders are gathered. Information to have on hand and ready to go includes the following:

Periodic inspection. It is required – at least annually – that a review of energy control procedures is conducted. Document the step-by-step process that someone must go through to lockout/tagout each machine on the facility floor – and then list the steps to verify that the energy has been disconnected. If the lockout/tagout is not verified, operators can be injured. Training. Training for authorized and affected employees – and all other employees whose work operations may be in an area where energy control procedures may be utilized – is vital. How often is training conducted? How many new people have joined the department? Retraining. Retraining must be done whenever an employee has a change in job assignment and whenever new machines, equipment or processes that present a new hazard are introduced into the facility.

• • • • •

Recordkeeping / Important forms Pre-scripted messages Important phone numbers Facility and area maps Employee lists

When developing an EOP, don’t start from scratch – there are plenty existing resources and tools. FEMA (www.fema. gov) provides the Comprehensive Preparedness Guide – also known as CPG 101 – to walk novice and experienced planners through plan development with information, checklists and a list of questions to consider. Ohio Emergency Management (www.ema.ohio.gov) also offers several resources.

www.plasticsbusinessmag.com | 23


INDUSTRY t page 23

MAPP honors best practices in safety

The Safety Best Practice Awards seeks to celebrate, recognize and share best practices from MAPP members in Safety. Submissions aligned with topics that included employee safety training, safety committees, safety audits/walk-throughs, emergency training, behavior-based safety, tracking/displaying safety metrics, equipment and mold change safety, safety communication and other innovative safety best practices. The submissions from MAPP members included photographs, video, copies of policies and activity checklists. The following 2019 Safety Best Practice Award winners were announced at the EHS Summit: 1st Place – Automation Plastics Corporation 2nd Place – Intertech Plastics 3rd Place (tie) Currier Plastics and PolyFlex Products Automation Plastics Corporation Description of Best Practice: Implementation of cultural change by enhancing physical appearance of the facility, while also improving and standardizing systems and procedures. Changes included upgrading older equipment on production floor, installing a new chiller system, adding new presses and lathe, installing security cameras, moving the Maintenance Department to a dedicated location, painting floors and walls throughout the building, adding new decor in offices and installing new signage outside. Realized Results: Culture change happened. Personnel on all levels are involved with sharing ideas for improvement, cleaning up spills, putting away tools and organizing equipment. People are seeing safety issues more easily and reporting them sooner to management. We also are noticing safety issues are fixed within a short time of reporting. It’s easier to work in a clean, bright environment. We are tracking a downward trend in Incidents & Accidents, with zero slips or falls at the same level this year. Pride and positive behavior have helped us to become safer. Intertech Plastics Description of Best Practice: Although we have been working on improving safety from many angles, we feel that our investments in technology to improve forklift/pedestrian safety have had the biggest impact in demonstrating Intertech’s commitment to safety for its employees. These include wirelessly monitored forklift impact sensors that detect and report forklift impacts and send out operator performance reports so managers can reinforce safe operating behavior. Intertech also uses collision avoidance devices at all blind corners in the warehouse; LED forklift warning spotlights that are projected at 10ft in front/behind forklifts; and guardrails to define all pedestrian walkways within the facility.

24 | plastics business • 2019 Issue 3

Realized Results: Since making these improvements, we’ve received lots of positive feedback from employees and they’ve been more engaged and excited about wanting to continue to improve safety. Currier Plastics Description of Best Practice: By the end of 2017, our number of recordable and lost time incidents had plateaued, and we decided it was time to reevaluate our system. Safety had become something that happened but wasn’t a primary focus. We identified focus areas, including Leadership, Conditional-Based Safety, Behavioral Observation, Communication, Training, Incident Reporting, Recognition and Continuous Improvement. Within each area, we focused on how we promote engagement, use data to make decisions and make safety a part of the conversation within the facility on a day in and day out basis. Realized Results: Currier Plastics recently broke our record for longest period of time without a recordable incident (previous record was 233 days). The safety committee is engaged and having the strongest turnout in years, and we have a high-level engagement as shown by the 550+ close call/first aid reports that have been submitted since the start of 2019. Our recordable injury rate is on pace to be the lowest in our history, and we continue to make significant improvements to our safety engagement and culture. We believe that placing the priority on safety that we have is a major part of what makes Currier Plastics a preferred employer as well as a preferred supplier to our customers. PolyFlex Products Description of Best Practice: Here at PolyFlex, we have discovered that the best way to improve and implement safety standards is to go and see the issues. We have a strong belief that you cannot solve problems behind a desk, and that you need to see where the issues are. Since we have implemented this mindset in the organization, we have more people engaging and noticing situations that could potentially lead to an accident. Once a particular situation has been identified, the department heads, the maintenance manager, possibly an HR rep and the plant manager get involved to put special attention on that situation. We work through the problem and come up with a firm plan to prevent the unsafe situation in the future. Realized Results: Improvements that have developed from our best practices in our Safety Standard include the following: fewer accidents; standard forms and processes; more accountability (more accurate/precise safety plan); better predicting of safety issues; quicker response in implementing safety standards; tracking/updating of SDS sheets; more training videos, pictures and tests; and a more formal lockout/tagout process. n


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PRODUCTION

Training Challenge Ignites Competition by Dianna Brodine, managing editor, Plastics Business

I

n the late 1970s, a televised sports program began with announcer Jim McKay’s voice saying, “The thrill of victory, and the agony of defeat.” The competitive spirit drives many to push a little harder, learn a little more and give additional effort. That’s the idea behind the monthly injection molding challenges issued by Paulson Training Programs.

The challenge

The 2019 SimTech™ Injection Molding Challenge launched in February as a series of free monthly challenges to test participants’ knowledge of injection molding. There are more than 400 active challengers, and the Top 30 are shown on the leaderboard on the Paulson Training website, providing added incentive to perform well. At the end of the year, a grand prize winner will receive $3,000 worth of training from Paulson Training Programs. Each month, participants are given a challenge related to making a defect-free part, within specifications, with the fastest cycle time. The molding simulation uses defined parts to control the scenario, so all participants are solving the same problem.

The science

Michelle Paulson, director of marketing communications for Paulson Training Programs, explained the history behind the program. “Simtech was developed years ago when Chuck Paulson, an artificial intelligence programmer, took the research and knowledge that Don Paulson had accumulated over his plastics processing career and built a software engine to house all that information,” she said. The simulation program has the ability to process more than 26 million calculations, and it helps plastics engineers develop a deeper understanding of the molding process. Karen Paulson, president of the company, added, “It is based on physics and formulas. Plastic responds to only four variables: heat, flow, pressure and cooling, and it doesn’t know what kind of machine it’s in. Based on these physical laws, we can calculate what will happen to a plastic part. SimTech mimics a fully functioning molding machine so people can change controls and parameters to see what the outputs will be.” SimTech is not a virtual prototyping tool – instead, it functions as a learning tool. “In any company, when people are learning, the most expensive way to learn is on a molding machine,” said Karen Paulson. “Simtech removes the cost of on-press learning.”

26 | plastics business • 2019 Issue 3

The reward

According to Michelle Paulson, the goal of the challenge is to teach processors, engineers and technicians the mindset with which to approach a problem. “We’re trying to educate people on the best way to approach making their parts. The challenge hits that concept home in a fun and engaging way,” she said. “When molding a part, the conditions and variables can change often. One set of rules won’t solve every problem.” Karen Paulson added, “What worked last week on a machine is not necessarily going to work this week. We’re trying to teach them to think – what’s behind the problem? Then it doesn’t matter what machine they’re on, they have the tools to adjust machine controls to fix the problem.” Peter Fongemie, lead process technician for Dymotek (Ellington, Connecticut), said the challenge reinforces the concepts he shares with his technicians. “What I try to teach is that it’s important to think about the process move – make one process move and see where that takes you, instead of changing eight or nine things.” At least six Dymotek employees have participated in the monthly challenges, using the simulation sessions as a training exercise and a team building event. “I have some newer technicians and a supervisor in the quality department going through it,” Fongemie said. “It’s a good team building exercise, because even the guys with experience who know how to make adjustments approach the challenge slightly differently.” Fongemie and the technicians went through the first challenge to see who had the highest score, and then a gift card was awarded to that individual. “I wanted it to be fun,” he said, “and it also gave bragging rights to the person with the highest score.” “The more we can get these guys thinking about the process move, the better off everyone is,” he concluded. n


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NEWS Polyplastics Announces PolySource as TOPAS® COC Distribution Partner

ASACLEAN™ Manufacturer Sun Plastech Hires New Vice President

Polyplastics USA, Inc., has named Independence, Missouri-based PolySource, an applications development and materials supply company, as an official TOPAS® COC distribution partner. A cyclic olefin copolymer, TOPAS COC is a glass-clear and pure plastic for healthcare, packaging and electronics applications. TOPAS® COC provides purity, chemical resistance and precision molding performance. It is deployed in a wide range of healthcare, diagnostics and pharmaceutical applications where quality standards are rigorous. In Polyplastics’ effort to expand and grow the product line, the partnership will leverage PolySource’s ability to develop new business as an application-focused source with the expertise to support existing and new injection molding programs. PolySource specializes in expert technical support with the resources to stock and inventory for faster turnarounds and shorter lead times. For more information, visit www.polysource.net.

Parsippany, New Jersey-based Sun Plastech, Inc., the subsidiary of Asahi Kasei Corporation that manufactures and distributes ASACLEAN™ Purging Compounds, announced that Phani Nagaraj has been hired as its new vice president. In this capacity, Nagaraj will lead all aspects of SPI’s business in the Americas. Nagaraj holds a bachelor of engineering degree in polymer science and technology from the University of Mysore, an MS degree in polymer engineering from the University of Akron, and an MBA degree from the University of Connecticut. Nagaraj joins SPI from Dynatect Manufacturing, where he served as general manager for the past five years. Before Dynatect, Phani worked for 11 years at LANXESS/Chemtura, where he held positions of increasing responsibility in engineering, marketing, sales and general management. For more information, visit www.asaclean.com.

RJG Releases New 250 lb 6 mm Cavity Pressure Sensor RJG, a provider of injection molding training, technology and resources based in Traverse City, Michigan, has released a new 250 lb. 6 mm cavity pressure sensor. The 6 mm sensor is ideal for high cavitation molds with small, tightly packed ejector pins. It allows customers to measure cavity pressure to improve quality and reduce costs. Two models are available: one rated to 50 pounds for use with ejector pins up to 1/8 inch (3 mm) diameter, and the newest one rated to 250 pounds for pins up to ¼ inch (6 mm) diameter. The 6 mm sensor is a robust, indirect (under the pin) pressure sensor that works in conjunction with the eDART® System for diagnosing processes and automatically sorting suspect parts. For more information, visit www.rjginc.com.

iDAdditives Offers iD Eco-Pro 360 Cart LaGrange, Illinois-based iDAdditives, a maker of purging compounds, foaming agents and liquid systems, now offers the iD Eco-Pro 360 cart, a pump and filter combination unit for flushing cooling passages in injection molds and heat exchangers. It removes, protects and helps prevent rust within cooling passages, heat exchangers and water lines. The built-in filter function allows the Eco-Pro 360 solution to remain at peak performance for optimal reusability. The cart is designed to be used with 5 to 55 gallons of material, and runs off compressed air. For more information, visit www.idadditives.com.

30 | plastics business • 2019 Issue 3


New Conair D Series Simplifies Large Dryer Line The Conair Group, an international supplier of auxiliary equipment for plastics processors, has launched the new D Series large desiccant dryers, with nominal throughputs from 600 to 5000 lb/hr (272 to 2268 kg/hr). Every model is built around proven desiccant-wheel drying technology, a common touchscreen control, an expanded set of standard features and a focus on value. The D Series features the DC-C programmable electronic control, software and interface developed specifically by Conair for drying applications. The standard DC-C Premium control system offers a 7-inch color touchscreen user interface and a set of features that includes temperature setback, dew-point monitoring and control, real-time trending, 7-day auto-start/stop, library of customizable resin-drying recipes, energy usage metering, audible and visual alarms, and is Industry 4.0 enabled with remote control capability. For more information, visit www.conairgroup.com.

Progressive Components Releases Insulator Block for High Temperature Tools Progressive Components of Wauconda, Illinois, a developer and distributor of componentry and software for the injection mold industry, announced the release of its new Insulator Block. The block installs on the outside of the mold and protects Progressive’s CounterView and CVe Monitor from temperatures found when molding hightemperature resins. The maximum temperature for a CounterView is 120°C/250°F, and a CVe Monitor is 90°C/190°F. When utilizing an Insulator Block, both units will perform with mold temperatures up to 180°C/360°F. The block can be installed on either half of the tool, but for the CVe Monitor, the stationary side is recommended for optimal cable routing. It is available in both inch and metric versions, complete with ¼-20 or M6 screws. For more information, visit www.procomps.com.

Frigel Group Introduces 3FR Modular Air-Cooled Chillers Frigel Group, Scandicci, Italy, an intelligent process cooling system manufacturer, has announced the launch of its 3FR modular air-cooled chillers for plastics processors in North America. Supporting needs from 38 to 130 tons, these modular chillers offer better control, flexibility and an industryleading energy efficiency ratio (EER) for users in need of a smarter option for a wide range of processes, including injection and blow molding, blown film and cast sheet/film extrusion applications. The line of super-compact 3FR chillers combine high cooling capacities with high energy efficiency to decrease cooling times, increase quality and repeatability of product production, and decrease overall costs. The split-system chillers feature an indoor chiller module and outdoor remote condenser, ultimately reducing the system footprint inside the plant. For more information, visit www.frigel.com.

Chem-Trend Develops Products Meeting Food Safety Compliance Requirements Chem-Trend, an international provider of high-performance release agents, purging compounds and other process chemical specialties, announced Lusin® LU1201F, a new lubricant specifically created for the thermoplastics packaging industry. Lusin® LU1201F completes a larger portfolio of chemical specialty products developed in support of customers trying to achieve SQF Certification. Chem-Trend’s portfolio of targeted products for those working to achieve food safety compliance includes: Lusin® Release Agents, Ultra Purge™ and Lusin® Purging Compounds, Lusin® Cleaners and Lusin® Lubricants. Chem-Trend understands that every product is different and every machine unique, and that manufacturing conditions vary greatly. Chem-Trend works with each customer, often on-site, to further refine solutions for each situation. For more information, visit ChemTrend.com. n

www.plasticsbusinessmag.com | 31


association

• Percent markups for SGA, scrap rate, assembly, components, packaging and automated cells • Discount or markup rates for high- and low-volume parts and overall complexity • Specific benchmarking for cleanroom manufacturing Where Plastics Professionals Excel: The 2019 Benchmarking and Best Practices Conference Oct. 2-4, 2019 Indianapolis, Indiana Now in its 17th year, the annual Benchmarking and Best Practices Conference is returning to Indianapolis for two-and-a-half days of networking, inspiration, sharing, benchmarking and learning. This year’s conference includes keynote presentations from expert Chris McChesney, author of 4 Disciplines of Execution; sales guru Tim Riesterer of Corporate Vision; culture specialist Kirk Weisler; and team building leader Ross Bernstein. Additionally, the more than 650 plastics manufacturing attendees will have access to dozens of breakout sessions, peer networking roundtables and learning tracks. These tracks allow attendees to customize their conference experience based on their functional area, operational goals or future planning. Pre-conference sessions this year allow attendees to kickstart their conference experience by deep diving into specific topic or focus areas. This year’s pre-conference sessions begin early on Oct. 2 and include the following: • Young Professional Pre-Conference Session • IQMS Users Group • MBS Pre-Conference Event • Paulson Training Session • Makuta Plant Tour

As the industry leader in providing meaningful and relevant industry data, MAPP continues to produce and publish benchmarking reports for industry executives. All benchmarking opportunities are driven by MAPP member organizations and new benchmarking studies are added throughout the year. Benchmarking reports are available for purchase on the MAPP website at www.mappinc.com/resources. Sharing Best in Class Initiatives: 2019 MAPP Best Practices Awards MAPP established its Best Practices Award Series in 2015 and each year submissions, involvement and impact see significant increases from MAPP-member organizations. Not only do these awards recognize member organizations going above and beyond, they also give plastics companies the opportunity to learn and get inspiration from others in the industry. The 2019 Awards include Safety Best Practice, Innovations in Workstation Layout and Best Practices in Educational Outreach. See the submissions for all Best Practices Awards at www.mappinc.com/resoures/bestpracticesawards.

Registration for the 2019 Benchmarking and Best Practices Conference is open. Visit www.mappinc.com/conference for more information.

• 2019 Safety Best Practices Awards ƒƒ This year’s award recipients were recognized at the annual Environmental, Health & Safety (EHS) Summit this July in Columbus, Ohio. This award seeks to celebrate, recognize and share best practices from MAPP members in safety. ƒƒ This year’s Safety Best Practices winners are Automation Plastics Corporation, Intertech Plastics, Currier Plastics and PolyFlex.

Plastics Industry Machine Rate Report: New for MAPP Members Every two years, MAPP publishes the Plastics Industry Machine Rate Report. This July, MAPP published the 2019 report – and this year’s report received a major overhaul. The previously 8-page report now includes more than 58 pages of data analysis, breakdowns and new information. The 2019 report, generated by input from more than 250 injection molding leaders, now includes the following: • Breakdowns by region, industry and business activity • New, narrower machine tonnage ranges

• 2019 Innovation Award ƒƒ Voting continues for the 2019 Innovation Award. The 2019 Innovation Award is focused on Workstation Layout. MAPP members submitted photos and videos to illustrate how their companies have implemented an effective workstation layout to reduce motion and waste, optimize ergonomics, create standardization, eliminate confusion, increase workplace safety, reduce takt time, maximize space or otherwise increase overall employee and/or workplace efficiency. ƒƒ Winners are selected by MAPP members and will

32 | plastics business • 2019 Issue 3


be recognized at the 2019 Benchmarking and Best Practices Conference. • 2019 Educational Outreach Award ƒƒ The annual Educational Outreach Award opened this August for submissions. This award was established to showcase companies that are going above and beyond to get their community and local youth and students interested and involved in manufacturing. ƒƒ MAPP Members may enter their submissions, which should include a description, photo and/or video, through the MAPP website until Sept. 13, 2019. MAPP Welcomes New Members MAPP is proud to welcome the following plastics organizations into the MAPP network: • A&M Plastics, Inc. – South Houston, Texas • FMT, Inc. – Findlay, Ohio • Honeywell International Inc. – Oak Creek, Wisconsin • Kimball Electronics – Indianapolis, Indiana • RL Hudson – Broken Arrow, Oklahoma • SMI Molding – Clearfield, Utah • Vision Plastics, Inc. – Wilsonville, Oregon • WaDal Plastics, Inc. – Medford, Wisconsin Bringing Together Plastics Industry Peers to Excel In 2019, MAPP hosted two new events geared toward unique groups of MAPP members and plastics industry professionals. Both events were driven by the needs voiced from MAPP members, and the content was developed specifically to improve skills and network with others in their same functional area or demographic. • Young Professionals Leadership Training ƒƒ This spring, MAPP offered the first annual Leadership Experience for industry young professionals. The

Leadership Experience curriculum was developed with the understanding that leadership is a hard skill, does not happen in a vacuum and needs to be practiced. ƒƒ This event explored the importance of understanding what drives you, your strengths, weaknesses, and how to build mental and emotional muscles to be an effective leader. The YP Leadership Experience was the kickoff to a nine-month journey, which will follow up with breakouts and event takeaways, three virtual coaching sessions from Ryan Krupa and peer networking, as well as continued outreach to facilitate accountability and further develop peer-to-peer relationships. ƒƒ Interested in the 2020 event? Join MAPP’s Young Professionals Network at www.mappinc.com. • 2019 Sales Forum ƒƒ “There is no space for salespeople in the plastics industry to truly learn and share from one another.” It was those words from a MAPP member that led MAPP to hold the 2019 Sales Process Forum. It is no secret that one of the biggest challenges reported by manufacturing companies is strategically managing their sales processes. To that end, MAPP created an event laser-focused on helping manufacturers understand best practices in managing sales. ƒƒ The forum focused specifically on how to best manage components critical to business development. This full-day event featured seven sales professionals from member companies, four roundtable exchanges and culminated in final event takeaways and action plans. ƒƒ Find the recap and summary of this event on the MAPP website. n

www.plasticsbusinessmag.com | 33


VIEW FROM 30

The View from 30 Feet Business gurus often talk about the view from 30,000 feet – the big picture that provides a look at overall operations. Perhaps, however, the focus should be on the view from 30 feet – a close-up of specific processes and procedures that make an impact now.

Home-Based Assembly at Vital Plastics by Liz Stevens, contributing writer, Plastics Business

A

regular flow of vehicles approaches the roll-up door at Vital Plastics throughout the course of every work week. The volume varies – some weeks, there may be 125 vehicles, and other weeks may bring as many as 200. Each vehicle disappears inside, and 15 minutes later, it emerges and drives away. This volume of traffic is not typical for a plastics injection molding operation, but then Vital Plastics is not typical. That stream of vehicles entering and leaving? Those are home-based employees arriving to drop off finished work and pick up parts to assemble. In 2019, 70% of Vital Plastics’ assembly work has been done off-site by home-based assemblers.

The company

Photo courtesy of Vital Plastics.

Vital Plastics, located just east of Minneapolis in Baldwin, Wisconsin, produces parts for the automotive/transportation, industrial, agriculture, appliance, consumer goods and electronics/telecommunications markets. It has operated with home-based assemblers for 25 years. The company has mastered the art of matching production needs to workers’ capacities, scheduling individual weekly visits for a large crew and streamlining the drop-off/pick-up routine. And, it has fine-tuned the science of adjusting the entire operation to meet the shifting needs of customers and to accommodate the changing availability of workers. According to George Hauser, president of Vital Plastics, the original founder of the company, Joe Ahlm, began a small assembly business in a garage in 1994. After soon expanding to a larger building, he had an idea, believing that “There are people who can do this in their living room.” A business model was born.

34 | plastics business • 2019 Issue 3

Vital Plastics now uses a mix of automated and hand assembly. “You cannot automate everything,” explained Hauser. “There are just things that do not lend themselves to automation. Either the automation process is too expensive or automation may be affordable, but the low parts volume doesn’t warrant it.” The parts that don’t fit for automation are assembled by hand.

The assemblers

Back in the day, the company recruited home-based assembly employees with ads in the newspaper. These days, the injection molder uses a database to gather and track ongoing online job applications and uses email broadcasting to put out the call for immediate hiring. Working as a home-based employee for Vital Plastics is so popular in this community that the last time the company put out a call to hire, 30 employee slots were filled in five minutes.


Employees include retirees, stay-at-home moms and members of the Amish community, among others. Employment begins with a four-hour orientation on policies, quality standards and assembly expectations. The workers have a lot of flexibility in their time commitment, with the ability to choose to work from 15 to 29 hours per week. The company accommodates employees when special needs arise. “If, for example, they have a vacation coming up, and they aren’t able to produce any parts that week, we can accommodate them,” said Hauser. In return for the flexibility, assemblers accommodate the company as workloads wax and wane, and when production priorities suddenly shift. “Our current customers’ demand will literally change within the day,” said Hauser. “So, employees don’t always get the exact same parts to assemble.”

The work

The company uses two criteria to choose the parts slated for home-based assembly. Volume is the first factor; parts lacking the volume to warrant automation fall into the hand assembly bucket. The second factor is the size of the parts. “Most of the

parts that we farm out are all small parts so that when employees pick up boxes of them, they will fit in the back of their vehicles,” explained Hauser. The business model works for Vital Plastics, and it works for employees and contractors. “You can do the work in your sweatpants, or in your flannel pajamas. You can assemble parts at midnight, or you can do it at six in the morning,” said Hauser. Vital Plastics pays its assembly workers by the piece, but they are company employees rather than contract workers. As such, if employees are slower than the standard, the company adjusts the pay to make sure they receive minimum wage. To aid in efficient production, the training for new employees includes examples of how to set up an assembly station at home.

Big challenge, big reward

There are moving parts to this operation, and lots of them. Managing the physical moving parts, along with adjusting scheduling to satisfy customers and coordinate up to 200 homebased employees are the biggest challenges for Vital Plastics. Hauser pointed to two important factors that help keep the page 37 u

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www.plasticsbusinessmag.com | 35


49TH ANNUAL

PLASTICS –> Advancing Mobility NOVEMBER 6 2019

CALL FOR NOMINATIONS

–> MOST INNOVATIVE USE OF PLASTICS AWARDS

The Automotive Division of the Society of Plastics Engineers (SPE®) is announcing a “Call for Nominations” for its 49th-annual Automotive Innovation Awards Gala, the oldest and largest recognition event in the automotive and plastics industries. This year’s Awards Gala will be held Wednesday, November 6, 2019 at the Burton Manor in Livonia, Mich. Winning part nominations (due by September, 6, 2019) in 10 different categories, and the teams that developed them, will be honored with a Most Innovative Use of Plastics award. A Grand Award will be presented to the winning team from all category award winners.

SPONSORSHIP OPPORTUNITIES

This annual event currently draws over 800 OEM engineers, automotive and plastics industry executives, and media. A variety of sponsorship packages - including tables at the banquet, networking receptions, advertising in the program book, signage at the event and more are available. Contact Teri Chouinard of Intuit Group at teri@intuitgroup.com. For more info and to submit nominations, go to: www.speautomotive.com/innovation-awards-gala.

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VIEW FROM 30 t page 35 operation running smoothly: a well-planned schedule for prepping parts for pick-up and an efficient routine for the parts handoffs. Since each home-based employee has a standing weekly appointment to visit the facility, an enormous amount of work goes into planning, scheduling and staging the parts for them to pick up. To make the pick-up/drop-off routine work – and fit into the short window of time for each of the up to 200 visiting employees – the company has created clear, concise documentation and has spent time training each of the assemblers. “We put together good work instructions on what we call a travel ticket,” explained Hauser. The travel ticket contains information on what part is being assembled, how many are in the box being picked up and how many hours it should take the employee to complete the work. Also included for the employee are any fixtures or jigs that they may need in order to assemble the parts.

Typically, home-based assembly employees can be in and out of the facility in about 15 minutes. When the assembled parts are returned to the facility, four auditing stations are utilized to verify all parts are assembled correctly. With a 99.6% on-time delivery performance, Vital Plastics has created a home-based assembly system that fills a niche for the company, its customers and its employees. Hauser said that the compliments he receives are the big reward that accompany the big challenge of making it all work smoothly. “We have people who’ve been putting parts together in their homes for more than 20 years,” he said. “And, we get so many compliments from employees who are thankful that we offer this. They’re very appreciative. I think they feel valued – and we do value them.” That kind of feedback counterbalances the hard work the company has invested to make its home-based assembly program flourish. n

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FOCUS

Strategic Planning: Setting Your Business Up for Success by Laurie Harbour, president and CEO, Harbour Results, Inc.

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ike everyone, shop owners have a more-than-full plate to deal with at work. As a result, they often spend their time addressing day-to-day business challenges and neglecting the critical activity of developing long-term strategies to drive their companies’ future success. However, the mistake many leaders make is assuming that once the plan is done and in place, the task is complete. Now more than ever – with changes in tariffs and trade negotiations, the skilled trade gap and economic instability – a company must adjust its plan to address the current industry landscape. If company leadership doesn’t react, they are executing a plan that may not get them through current economic or geopolitical situations. To avoid this, leaders need to think of their plan as a living, evolving document that is reviewed and updated every quarter. For example, during the past several months, there have been ongoing discussions about trade agreements and tariffs. Companies already should be taking action – by reviewing their long-term plan – to protect themselves and better plan for the future. This should include the identification of someone who can be the company expert on the trade negotiations and current and future tariffs. That individual then can provide insight into what needs to be done to sustain the company – and the company’s customers. Make no mistake, this does not mean that when things are or appear to be stable, a company can skip reviewing its plan. During these “good times,” it’s advisable that companies “stress test” their businesses. If X happens, how will it impact the business? If a company loses 20% of its business, will it survive? As a business owner, it’s critical to be prepared for what may be lurking around the corner – expect the unexpected.

Building a foundation – the strategic plan

Before a strategic plan can be adjusted, company leadership must recognize the need for it. A strategic plan is a company’s

40 | plastics business • 2019 Issue 3

foundation, and it equips leaders to drive efficiency and performance across the business. It’s driven by the company’s vision and mission, which describe the desired future position of the company and defines the business. Without a strategic plan, companies lose competitiveness and suffer from these four common challenges: • Lack of direction: No vision of what the company wants to be or where it’s going; there’s an abundance of inefficiencies because everyone does what they believe is best • Competing goals: No common, agreed-upon vision and strategy communicated throughout the company • Disconnected leadership: Leaders keep the vision and strategy to themselves • The wrong goal: The organization is united, but focused on the wrong goals and objectives To identify a sound strategy, leadership must look at all aspects of the business and determine what the company does best and how to leverage those things. Key categories to consider in the strategy development process include the following: • Purpose: Why do we do business? • Arenas: Where will we be active? • Vehicles: How will we get there? • Staging: How fast and in what order will we implement activities?


• Economic logic: How do we obtain our returns? • Differentiators: Why should customers do business with us? How will we win? Once a strategy is in place, the business plan can be developed. Although it is not an easy task and will take time and discipline, completing the business planning process will deliver a clear roadmap for the enterprise to follow. In a recent study conducted by Harbour Results, plastics processors, die casters and stampers were asked if they had strategic plans in place. Of those who responded, 97% claimed to have overall business plans and 73% stated they have sales process plans. However, only 40% have technology improvement plans and 33% have labor and hiring plans, which are critical to the future success of the business. It is important that companies look at the full business in developing a business plan, including the following components: • Investment: capital, software, training • Workforce development and succession planning • Target industry trends • Technology and automation • Legislation/regulation • Customer forecast

Communicate, communicate, communicate

Once a plan is in place, the next critical step is communicating it to the rest of the company. Research indicates that an engaged workforce is a more productive workforce, so it is important that employees not only understand business goals and the strategic plan, but their role in helping the company be successful. This is especially important with younger members of the workforce: Approximately 40% of Gen Z and Millennials want to be engaged with and have input at their companies. So, any plans made need to take them – and their expectations – into

consideration. The more they are involved, the more engaged and efficient they will be in the business. When making communication plans, companies should remember their audience and adjust messages accordingly. Some team members may not have a business background, so a more high-level overview may be appropriate for them. Companies should consider hosting separate meetings with different levels of employees and sharing the appropriate level of detail with them. And, leadership should avoid the common mistake of communicating these key business points once. Instead, these should be integrated into other activities, such as onboarding and training, so they become engrained in employees’ minds. And finally, as the year progresses and the plan is reviewed, company leadership should communicate with the team. This provides an opportunity to connect with them to better understand what is working and identify opportunities for improvement. Employees should be asked about which aspects of the plan should change or be improved to meet company goals. Strategic planning is not a quick or easy task. It’s like a long voyage: A desired destination lies ahead, but the right path needs to be identified. Bumps along the road, expected or unexpected, will alter the route, but with foresight and keen driving skills, each company can reach its destination. n Laurie Harbour is president and CEO of Harbour Results, Inc., a business and operational consulting firm for the manufacturing industry, offering operational and strategic advisory expertise, as well as proprietary assessment programs, to help optimize business performance. More information: www.harbourresults.com

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BENCHMARKING

What’s in a Machine Rate? by Ashley Turrell, membership and analytics director, MAPP

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hen developing and evaluating machine rates for injection molders, there is hardly a one-size-fitsall option. Instead, a myriad of factors come into play, and those variables are unique to each company. Instead of looking at machine rates as a snapshot of data, molders should dive deeper into what variables need to be taken into consideration. Machine rates across the industry are just part of a whole and need to be reviewed regularly for quoting and budgeting purposes. The 2019 Plastics Industry Machine Rate Report, recently published by the Manufacturers Association for Plastics Processors (MAPP), takes a comprehensive look into multiple factors that impact an organization’s machine rate. With inputs from more than 250 plastics companies, across 18 different industries and from all areas of the United States, the report is able to analyze and present data that affect companies’ machine rates. Reported machine rates for injection molders range from $20.00 per hour to $328.90 per hour. The most easily defined factor at play is machine tonnage. Reported machine rates for machines under 75 tons average around $31.00 per hour without labor or selling, general and administrative expenses (SG&A), while larger presses approach closer to $200.00 per hour. Beyond the obvious variable of machine size, manufacturing environment, industry served, labor costs and a variety of markups have an impact on the hourly rates manufacturers put on their machines. To start, the MAPP report examines labor/burden rates. In essence, this rate is the average machine operator labor rate divided by the number of press operators per machine. For example, if two operators are needed at a machine at an average of $8 per hour, the labor/burden rate is $16.00. However, if only one operator is working on two machines at an average of $8 per hour, the labor/burden rate is $4.00. Labor/burden rates reported range from $2.00 to $42.00, and these vary greatly based on company size, region and industry served. The median labor/ burden rate overall reported was $16.00. The large variance can be attributed to numerous variables, including but not limited to wage requirements, machine and cell efficiency, operator knowledge/necessary skill level and part complexity. A major factor plastics companies must examine is markups. In the 2019 report, the following markups are analyzed: SG&A, scrap rate, assembly, components, packaging, automated molding cells, difficult parts or materials, two-shot and insert

42 | plastics business • 2019 Issue 3


molding, discount for high-volume parts and markups for lowvolume parts. Overall, the median markup for most adjustments sits at 10%. On average, low-volume parts receive the highest average markup of 16%, while discounts for high-volume parts received the lowest average adjustment of 4%. Additionally, the environment in which parts are being manufactured factors into machine and labor rates as well – specifically, open production environments vs. cleanroom manufacturing environments. On average, manufacturers apply a 15% markup when manufacturing in a cleanroom environment is required. In terms of specific product lines, internal medical devices and food and beverage containers see the highest markups for cleanroom manufacturing costs, while pharmaceutical products experience the lowest average markup. Perhaps some of the most revealing data are showcased when manufacturers dive deeper into the data based on the primary industry served. Of all industries reporting data into this study, automotive, medical, consumer goods and industrial were the most common. Each of these industries has a dedicated appendix within the report. Between the four industries, medical tends to have the highest average markup rate across the board, while

On average, manufacturers apply a 15% markup when manufacturing in a cleanroom environment is required. the consumer goods sector tends to be lowest. These trends are especially pronounced when looking at SG&A markups (10% on average overall, but 20% markup in the medical industry) and assembly markups (medical is nearly double all other industries, while consumer goods is half of the plastics industry average). In short, it is imperative that manufacturers regularly review their machine rates, associated labor rates, and markup and adjustment opportunities. These are only a small percentage of the factors at play, and to stay both competitive and profitable, plastics companies need to benchmark and understand exactly what is impacting their machine rates. n More information: www.mappinc.com

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ECONOMIC CORNER

Election Watch: It’s the Economy, Stupid by Chris Kuehl, managing director, Armada Corporate Intelligence

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s far as elections are concerned, “It’s the economy, stupid” has been the refrain for a while now. It essentially asserts that, when it comes right down to it, the only thing voters really care about is the economy. That may not be as true for the election in 2020 as it has been in past years, but the topic still will command a lot of interest as the focus shifts from attracting the hard-core primary voter to influencing the vast middle of the voting population. At this point in the campaign. it is a little hard to pinpoint exactly what the field of Democrats have in mind as far as economic policy, but some themes are emerging. In fact, there appears to be a substantial difference between the two wings of the Democratic party – progressives and moderates (or traditionalists). Thus far, little attention has been paid to the issue of economic growth or any of the currently pressing issues affecting the economy: No focus on the labor shortage that has hampered many businesses as they try to expand, no attention to the trade war or tariff issue, no mention of what to do with US trade partners, no discussion of how to address the nation’s infrastructure needs, no comment on R&D needs ... and so on. It is likely that some or all of these issues will start to emerge as the election grows closer, but it has been hard to argue that the economy under Trump has been faltering. The key issue now is whether the economic weaknesses that have started to appear will merit more concern a year from now. The four most discussed economic issues among Democrats involve health care, education, minimum wage and equal pay. A related issue is taxation, as there will have to be additional revenue to support the programs that have been suggested. There also has been some attention paid to regulation as a means by which to address other issues, and these will have an impact on business and the economy as well.

1

Health care

At the top of the list is health care, and the mantra from some in the Democratic field is “Medicare for all.” There are a range of suggestions that vary from a totally governmentfunded medical system to some hybrid between public and private, but the focus of the entire conversation is how to pay for medical care. There are essentially three players in the system – the patient, the health care provider and the entity that pays for the care. Ultimately, the patient pays, but the question is how. Currently, a complex system exists that revolves around private insurance – which each person is responsible for acquiring. Once a person reaches retirement age, the Medicare option

44 | plastics business • 2019 Issue 3

appears, and the government pays the health care provider while the patient pays through their role as taxpayer. Most Medicare recipients also carry private insurance as a supplement. Medicaid is offered to those who have no means to acquire their own insurance. To expand Medicare/Medicaid to all means that private insurance either vanishes or is drastically curtailed, and the government pays all the bills – meaning, the taxpayer pays all the bills. The obvious economic issue is where the additional funds will come from, and there are only two options: Raise revenue with new or expanded taxes or cut funding from other programs to finance health care. Neither of these options will be popular, and it is very doubtful that either option would pass through both Houses of Congress, although some hybrid plan might have a shot.

The offer of free education would overwhelm the current education system and would demand very swift expansion.

2

Education

The second issue that has attracted early attention has been education. One issue is access, and the other is student loan debt. The origins of the problems are similar. Over the last couple of decades, education has become very expensive, as state legislatures have steadily reduced their financial support, and the schools have been developing bigger budgets. Tuition has skyrocketed, and now there are many people who have been priced out of higher education and millions more who are dealing with paying off the debt they incurred. The solutions offered by Democratic candidates have varied from offering free university education to everyone to forgiving all student debt. There are economic implications involved with either plan. The offer of free education would overwhelm the current education system and would demand very swift expansion, a challenge that would be hard to meet, given the limitations on qualified instruction. More salient is the issue of devaluation. Should the college degree become as ubiquitous as the high school diploma, it loses most of its influence and provides no advantage to the holder of that degree. The issue of student debt has been affecting the economy negatively for years. Those who have taken out a significant amount of debt have been limited later, finding themselves unable to buy homes as easily or engage in other economic


activity. They have been slow to start families and often find their employment options limited. Granted, the majority of those who finished their college education and chose a major with economic upside have had little problem paying on their loans, but there are thousands who have been struggling. The potential of a government offer to pay off these loans would be an expensive proposition and – once again – the issue becomes the source of the revenue. The other issue is fairness. Those who have been paying their loans or have already paid them are not getting any break at all – only those who are not meeting their obligations. It seems to be sending a rather awkward signal that one is better off refusing to honor one’s obligations while demanding that somebody else pay for it.

3

Minimum wage

The third major issue has been the minimum wage. The current federal minimum is $7.25 an hour and, if one assumes a 40-hour work week, that adds up to $290. If one works all 52 weeks of the year, that equals an income of around $15,000. The poverty rate for a family of four is $25,750, and the median household income is $65,372. It is obvious that $15,000 a year is insufficient for a family. If the rate was moved to $15 an hour, the annual income would be around $31,000 – but that assumes a 40-hour work week for all 52 weeks.

The ideas that are being discussed by the Democratic candidates thus far are painted in the broadest of strokes and clearly are aimed at galvanizing the base. At this point, the contest is between the two wings of the Democratic Party, and economic issues largely have taken second place behind more emotional issues, such as racism and immigration. The one constant thus far is that these policy suggestions will cost a great deal of money, and this burden falls on a country that already has a record level of national debt and a record deficit that constantly require the raising of the debt ceiling. n Chris Kuehl is managing director of Armada Corporate Intelligence. Founded by Keith Prather and Chris Kuehl in January 2001, Armada began as a competitive intelligence firm, grounded in the discipline of gathering, analyzing and disseminating intelligence. Today, Armada executives function as trusted strategic advisers to business executives, merging fundamental roots in corporate intelligence gathering, economic forecasting and strategy development. Armada focuses on the market forces bearing down on organizations. More information: www.armada-intel.com

The questions are complex. It starts with who the minimum wage is for – is this designed for the teen just starting to gain job experience or the casual part-time worker? That was the original intent, but today there are thousands of people who are raising families with these low-paying jobs. The bigger question is how the business community will react to the higher wages. They face the reality that all of their employees will be demanding a raise. The guy that was making $15 an hour will demand more if a new and inexperienced worker now is getting $15. The business knows that its labor costs will approximately double, and that will require a response. The vast majority will reduce the size of the labor force through the addition of machines and technology, and that will mean less opportunity for the lowskilled or inexperienced worker.

4

Equal pay

The last of these issues is equal pay. The average pay for women still lags that of men doing the same job. It is estimated that women working full time make 80% of what men make. There are many factors in play – everything from the jobs that are being performed to longevity – but even the most optimistic estimates have women paid around 90% of what men make for the same jobs. Addressing the pay gap is hard to do legislatively, and that means more reliance on the regulatory system. It is unlikely to have a major impact on taxpayers but could add to labor costs for businesses that would need to address the gap.

When the first shot matters.

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www.plasticsbusinessmag.com | 45


MARKETING

How Marketing Impacts Talent Recruitment by Shelly Otenbaker, president, WayPoint Marketing Communications

P

eople are always on the move, and that’s especially true in their careers. One often-cited study1 from the Bureau of Labor Statistics found that, on average, a person will change jobs 12 times during his or her career. And in 2018, the Bureau of Labor Statistics reported that the median employee tenure2 was 4.3 years for men and four years for women.

The data tell a clear story – at any given point, there’s a substantial population of people looking for their next job opportunity. Think it’s different in this industry? Think again. In this year’s Manufacturers Association for Plastics Processors (MAPP) benchmarking study, 100% of those who responded indicated recruiting and retaining talent as a top challenge for 2019. So, obviously talent management is a challenge for plastic processors – but, what are companies doing in response? Do they have a talent strategy in place? Are they preparing for the future workforce? Are they leveraging marketing for talent attraction?

46 | plastics business • 2019 Issue 3

Marketing is more than business development

It is a common myth throughout the industry that marketing is exclusively for business development. In reality, a company’s marketing activities are one of the most effective tools in talent acquisition. And, websites often are the front-line marketing presence that is most visible to those seeking to learn more about a potential employer. During the search process, job seekers will most certainly visit your company’s website to learn about the culture, leadership and

During the search process, job seekers will most certainly visit your company’s website ... Because of this, your website should serve as the foundation of recruiting activities.


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major initiatives or projects. Because of this, your website should serve as the foundation of recruiting activities. Why? Because if the job seeker’s experience doesn’t align with your desired brand identity, you’ve potentially lost a qualified candidate – or, worse yet, you’ve contributed to a negative perception of your company that could be shared with others. What does this mean in terms of employee recruitment? At the most basic level, it means you can’t afford not to have a website or to just “get by” with a generic website that is not built with your target audience in mind. More specifically, it has become imperative for a company website to have a careers section that is easily discoverable, informative and built with the user’s experience in mind. To do this, you need enough information to convey your company’s story (e.g. define your company’s culture, differentiators that set your company apart from competitors, anecdotes from employees). Keep in mind, this will be difficult to do without well-defined key messages about your company, which will help you effectively attract the “right” people for your organization.

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Put yourself in the job seeker’s shoes

When looking for a job, people typically search for a specific job title, type of company or industry and experience level. Thus, each of your job openings must include this information in the title tags. An example would be: • Assembly Operator (Title) – Entry-Level Jobs (Experience Level) | ABC Mold (Name of Company) – Plastics Industry (Industry Type) Each posting also needs to be organized with a job seeker’s intentions in mind. If you were looking for a job, what would you hope to see in a job description? This commonly includes the purpose of the position, day-to-day and overarching responsibilities, necessary skills and experience, and applicable company information. But, their attention doesn’t stop at your website. That’s just the beginning. In 2020, 50% of the US workforce will be made up of millennials, and studies indicate that 73% of millennials use social media to find a job. This means your shop should not just utilize social media but have a social media strategy that leverages the outlets that best match your desired talent pool. Your social media activity should be utilized to communicate your company culture, key news items related to your business, community initiatives and any other information that would page 48 u

www.plasticsbusinessmag.com | 47


MARKETING t page 47 help job seekers determine if they would like to work for your company. Because everyone – including all of your competitors – is looking to hire talent, help your company stand out from the rest by allocating budget to promote job postings on social media. Job boards, such as Indeed and Glassdoor, are another tool the next-generation workforce uses to identify job opportunities and research the companies posting them. Consider having a presence on these and other job boards: The good news is that a Glassdoor profile is free. Now, let’s talk about tradeshows. These often are a missed opportunity for recruiting. If your company is participating in an industry event, such as NPE, don’t pass up this prime opportunity to reach potential talent at all levels – from apprentices to experienced professionals. But, as with most things, you can’t just roll in and think the candidates will flock to your exhibit. You need to develop and implement a strategy that focuses on pre-, post- and on-site show activities that will drive potential, qualified candidates to you.

marketing and communications are pushed aside and not considered an important part of business development and talent acquisition. Companies that don’t change this mindset are at risk of falling behind. If not already there, invite human resources to the leadership table and ensure a talent acquisition and management strategy that includes marketing be put into place. n 1. US Bureau of Labor Statistics’ National Longitudinal Survey of Youth 1979, https://www.bls.gov/news.release/pdf/nlsoy. pdf 2. US Bureau of Labor Statistics’ Employee Tenure Summary, https://www.bls.gov/news.release/tenure.nr0.htm Shelly Otenbaker is the president of WayPoint Marketing Communications, a Metro Detroit-based agency that partners with small- to -medium-sized businesses to help them reach their goals through smart, well thought-out marketing strategies. More information: 248.506.6696 or www.waypointmc.com.

To manage the changing workforce and to close the talent gap, it is critical for leadership to take action. All too frequently,

48 | plastics business • 2019 Issue 3


MANAGEMENT

Sales Culture Eats Strategy for Breakfast by John Waid, founder, C-3 Corporate Culture Consulting

C

hick-fil-A produces twice as much revenue as any other fast food chain, and its restaurants are closed on Sundays.

When the founder of Chick-fil-A was asked why the company was so successful, he mentioned that the company’s success comes from its people, saying, “Putting people before profits is how we've tried to operate from the beginning.” When sales managers are asked what makes for a great salesforce, they’ll often cite characteristics like great products and services, excellent strategies, sound processes and systems, and being in the right place at the right time. Although these elements are important, there is one secret that the really successful sales leaders have: Regardless of their particular industry, once the mindset is established that salespeople are in the “People Business,” then it almost does not matter what they sell. Great sales managers begin by focusing on their salespeople.

Salespeople first. Customers second. Money third.

Let’s face it: We are driven to push the salesforce for results – financial results. This focus on “money first” leads us to then look to the customers (where the money comes from) and – as a distant third, fourth or fifth – we then spend some resources on the salespeople. This order leads to lower profits, upset customers and high employee turnover. What would happen if we changed the order to focus on employees first, customers second and money third? Richard Anderson, the former CEO of Delta Airlines, realized that if his company was to survive (he helped bring two airlines, Delta and Northwest, out of bankruptcy) it was going to be because of the people. During his tenure at Delta, he focused his time and communication on the employees (who he thought of as salespeople for the Delta brand), making sure they followed the company founder’s values and behaviors. To do this, Anderson found an employee manual from the 1940s and rewrote it into what became the driving principles at Delta. This led to a rebirth as a sales and service culture … which led to record profits. If you want to be truly successful, change your mindset to focus on salespeople/employees first. This drives customer satisfaction and, as a result, more profits.

Sales culture first. Structure second. Strategy third.

In recent business history, there has been a strong focus on

developing a sales strategy, creating a structure to support it and (as an afterthought) creating a generic company culture that may or may not fit with the sales team. What has this led to? As companies focused on getting things done, too many tasks were completed that did not fulfill the key element of sales strategy – which is to create a sustainable competitive advantage. While sales managers pushed to check off a daily To Do list, they created structures to support this frantic activity. After the strategy and structure were created (with little employee involvement), sales managers wondered why employees did not want to buy in or execute the strategy. Make the sales culture the focus of your efforts and then build the structures and strategies to support that culture. A good culture to start out with is one based on the C.A.P. values of Curiosity, Accountability and People Skills. page 51 u

www.plasticsbusinessmag.com | 49


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• Full day of technical papers and workshops • Networking opportunities • Tabletop exhibits from leading suppliers Topics covered will include: UV LED Curing Insights Regarding Surface Hard Coats Choosing the Best Surface Treatment Option for Your Plastics Application Advantages/Disadvantages of Arc, Microwave and UV LED Curing

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MANAGEMENT t page 49 Curiosity: Why do people buy? How can a salesperson add value? Accountability: Has the salesperson done the work needed to support the customer and the potential sale? People Skills: Does the salesperson genuinely enjoy helping customers solve problems?

Sales leaders first. Coaching second. Managing third.

A leader focuses on salespeople and sales culture. A coach focuses on sales processes. A manager focuses on sales strategies and results. It is important as a sales leader to focus on all three of these areas, in the order mentioned. People first need to be inspired and have a culture to live within; then they can flourish in a structure that grows and holds them accountable for producing great results. There are currently too many sales managers, a few sales coaches and hardly any sales leaders. This heavy emphasis on managing the salesforce with quotas and “Beatings will continue until morale improves” attitude is creating salespeople who sell because they have to, customers who buy because they have to and profits that come in below expectations – because everyone is being forced to do something against their will.

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When you lead first, coach second and manage third, you will have a salesforce that likes and is successful at selling, treats customers well and produces great results. Another secret to having a great salesforce is to hire and promote well. As always, this is done with an emphasis on hiring people that fit your culture, growing their skills through with coaching and training, and then holding them accountable to reach the high levels they are capable of within your organization. Remember: Sales culture eats sales strategy for breakfast. Adopt a culture-driven selling mindset. n John Waid is the founder of C-3 Corporate Culture Consulting, a keynote speaker and author of the book, Reinventing Ralph. With a specialty and passion for corporate culture, sales and global business, Waid believes culture is the engine that drives companies to better results, higher morale and increased profitability. More information: www.CorporateCultureConsulting.com

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www.plasticsbusinessmag.com | 51


BOOKLIST

Excellence is a Habit by Dianna Brodine, managing editor, Plastics Business

W

hen I came across Atomic Habits at my local library, I was struck by these two sentences in the book description: “You do not rise to the level of your goals. You fall to the level of your systems.” It seems obvious, right? Setting goals is only half the battle – achieving them requires precise steps that lead from the starting point to goal achievement … steps that overcome the embedded systems that are holding us back. Those steps are built on healthy habits. And so, this issue’s Booklist was easy: It starts with Atomic Habits to provide a new system of habit formation, proceeds to a book that helps us understand how human nature influences our habits and ends with a look at the habits of 100 successful people.

Atomic Habits: An Easy & Proven Way to Build Good Habits & Break Bad Ones Authors: James Clear Released: October 16, 2018

One of the world’s leading experts on habit formation reveals practical strategies that will teach you exactly how to form good habits, break bad ones and master the tiny behaviors that lead to remarkable results. If you’re having trouble changing your habits, the problem isn’t you. The problem is your system. Bad habits repeat themselves again and again not because you don’t want to change, but because you have the wrong system for change. You do not rise to the level of your goals. You fall to the level of your systems. Here, the author draws on the most proven ideas from biology, psychology and neuroscience to create an easy-tounderstand guide for making good habits inevitable and bad habits impossible. Along the way, readers will be inspired and entertained with true stories from Olympic gold medalists, award-winning artists, business leaders, life-saving physicians and star comedians who have used the science of small habits to master their craft and vault to the top of their field. Atomic Habits will reshape the way you think about progress and success, and give you the tools and strategies you need to transform your habits.

The Power of Habit: Why We Do What We Do in Life and Business Author: Charles Duhigg Released: January 7, 2014

In The Power of Habit, award-winning business reporter Charles Duhigg takes us to the thrilling edge of scientific discoveries that explain why habits exist and how they can

52 | plastics business • 2019 Issue 3

be changed. Distilling vast amounts of information into engrossing narratives that take us from the boardrooms of Procter & Gamble to the sidelines of the NFL to the front lines of the civil rights movement, Duhigg presents a whole new understanding of human nature and its potential. At its core, The Power of Habit contains an exhilarating argument: The key to exercising regularly, losing weight, being more productive and achieving success is understanding how habits work. As Duhigg shows, by harnessing this new science, we can transform our businesses, our communities and our lives.

1 Habit: 100 Habits from the World’s Happiest Achievers Author: Steven Samblis Released: July 10, 2019

We set out to gather habits from the most successful people we could find. We learned not just the habit, but the “Why” as well. Of the wealth of knowledge each person held, they could each offer only 1 Habit™. So, why was their 1 Habit™ so important to them? We took the answers and put them into one incredible book, which will allow you to tap into and make these habits your own. What’s the most surprising thing about the people we interviewed for the book and their habits? They’re not at all about wealth, fame, or ego – they were about happiness. Even more surprising is each person in 1 Habit™ is super successful in business and life. They are not just High Achievers in business only. They are successful across all planes of existence. 1 Habit is filled with the simple but powerful habits from “Happy Achievers™” that have led these titans of industry, entrepreneurs, artists and visionaries to the holy grail of success: happiness. n


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SUPPLIER DIRECTORY Energy Strategy

Hot Runners

Constellation www.constellation.com Page 35

INCOE Corporation www.incoe.com Page 19

Equipment/ Auxiliary Suppliers

Synventive Molding Solutions www.synventive.com Page 45

Conair www.conairgroup.com/simple Back cover

Insurance

Frigel www.frigel.com Page 47 Novatec www.novatec.com Pages 28, 29 Progressive Components www.procomps.com/CVe Page 15

Federated Insurance www.federatedinsurance.com Page 53

Legal Benesch www.beneschlaw.com Page 18

M&A Activity

Ivanhoe Tool & Die Company, Inc. www.ivanhoetool.com Page 39

Operations Consulting Harbour Results, Inc. www.harbourresults.com Page 14

Process Monitoring IQMS www.iqms.com Page 3 RJG, Inc. www.rjginc.com/tzero Page 7

MBS Advisors www.mbsadvisors.com Page 41

Yushin America, Inc. www.yushinamerica.com Page 27

Stout www.stout.com Page 25

Events/Organizations

MRO Supplies

Manufacturers Association for Plastics Processors (MAPP) www.mappinc.com/conference Page 53

Grainger www.grainger.com Inside back cover

Resins

Molds/Tooling

Amco Polymers www.amcopolymers.com Page 51

The Surface Summit www.plasticsdecorating.com/ surface-summit-2019 Page 50

A-1 Tool Corporation www.a1toolcorp.com Page 39 B A Die Mold www.badiemold.com Page 38

Foaming Agents

Carson Tool & Mold www.carsonmold.com Page 39

iD Additives www.idadditives.com Page 13

Concept Molds www.conceptmolds.com Page 38

54 | plastics business • 2019 Issue 3

Chem-Pak, Inc. www.chem-pak.com Page 12

Tax & Advisory Mueller Prost www.muellerprost.com Page 27

Training Paulson Training Programs, Inc. www.paulsontraining.com Page 37

SIGMASOFT Virtual Molding www.virtualmolding.us Page 48

Wittmann Battenfeld www.wittmann-group.com Page 33

SPE Automotive Innovation Awards www.speautomotive.com/ innovation-awards-gala Page 36

Specialty Coatings

Purging Compounds ASACLEAN/Sun Plastech Inc. www.asaclean.com Inside front cover Chem-Trend www.chemtrend.com www.ultrapurge.com Pages 18, 47

Chase Plastics www.chaseplastics.com Page 21 M. Holland www.mholland.com Page 17 PolySource www.polysource.net Page 43

A guide to this issue’s Plastics Business advertisers.


What people

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Plastics Business 2019 Issue 3  

Strategies for Today's Plastics Processors Official Publication of Manufacturers Association for Plastics Processors (MAPP)

Plastics Business 2019 Issue 3  

Strategies for Today's Plastics Processors Official Publication of Manufacturers Association for Plastics Processors (MAPP)