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Plastics Business 2020 Issue 2

Strategies for Today’s Plastics Processors

The Plastics Industry Reacts Emerging Technology in Medical Resins Relief Legislation Tax Implications Industry and Economic Impacts Prioritizing Training and Recruitment

Official Publication of Manufacturers Association for Plastics Processors


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Contents

2020 Issue 2

talent development

12

features

8 12

production Spring Cleaning in the Tool Room: Five Jobs to Do Now by Bryan Whitaker, technical manager, iD Additives talent development The Time to Recruit is Now by Dan Regovich, owner and operator, AJ Augur The Importance of Training for Plastics Companies by Andy Routsis, president, Routsis Training

18 22 24

development Cautious Optimism is Overwhelmed by Economic Shock and Uncertainty by Greg Alonso, principal, Plante Moran Q&A Molding the Market: The Future of Medical Resins by Brittany Willes, contributing writer, Plastics Business tax planning CARES Act Provides Relief to Plastics Processors by Michael J. Devereux II, CPA, CMP, Mueller Prost

Read the latest articles from Plastics Business or download a digital edition at plasticsbusinessmag.com.

4 | plastics business • 2020 Issue 2

Q&A

22


30 36 38

outlook The COVID-19 Effect: Preparing Your Business for a ‘New Normal’ by Laurie Harbour, president and CEO, Harbour Results benchmarking COVID-19: Business Policies and Best Practices by Ashley Turrell, membership & analytics director, MAPP economic corner What Will the Economic Aftermath Look Like? by Chris Kuehl, managing director, Armada Corporate Intelligence

tax planning

24

40

safety Surviving an OSHA Inspection Coordinated by Liz Stevens, contributing writer, Plastics Business

departments

45

booklist Not Your Typical Business Podcasts by Dianna Brodine, managing editor, Plastics Business

news.......................................... 16

viewpoint.....................................6

association................................. 35 supplier directory...................... 46

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 Tim Capps, Par 4 Plastics Inc. Treasurer Samir Patel, Midwest Molding Inc. Secretary and Counsel Alan Rothenbuecher, Benesch, Friedlander, Coplan & Aronoff LLP

MAPP Board Members Steve Bieszczat, IQMS Jim Bott, INCOE Brendan Cahill, PTG Silicones Craig Carrel, Team 1 Plastics, Inc. Rich Dorans, PTA Plastics Jim Eberle, MXL Industries Glen Fish, Revere Plastics Systems LLC Norm Forest, Dymotek Molding Technologies Chris Gedwed, Cosmetic Specialties International Jim Kepler, Intertech Plastics Tom Nagler, Natech Plastics, Inc. Derrill Rice, Plastic Components, Inc. Missy Rogers, Noble Plastics, Inc. Tom Tredway, Erie Molded Plastics, Inc. Adam Wachter, Engineered Profiles LLC Scott Walton, Harbour Results Tom Wood, E-S Plastic Products

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

Online Director Mikell Burr

www.plasticsbusinessmag.com | 5


VIEWPOINT

Recognizing All of the Heroes

I

was recently asked to participate in an interview by a publication focused on Leadership Lessons from Authorities in Business. Now, I really don’t view myself as an authority in anything, but I figured I’d go along for the ride and get out of my comfort zone. While doing the interview, I was caught off guard by the depth and intensity of the questions I was asked. One of the questions asked about my definition of a hero and further inquired if I had ever witnessed a courageous act or act of heroism during my time as a military officer in the US Army. After exhaustively thinking this question over and searching for an answer, I told the interviewer that I didn’t think my response would appeal much to the publication’s readership. I explained that my definition of a military hero was much different than is commonly depicted in the Hollywood movies – the Rambo-like characters simultaneously firing two M-60 machine guns with ammunition belts around both shoulders, running full-speed ahead, impervious to the enemy’s bullets. True acts of heroism, for me, were real-life experiences where I witnessed individuals putting the needs of others above their own. During my time of service, I never encountered the movie version of the hero, but what I did witness on a regular basis were countless acts by individuals who put the needs of others before their own. The leaders who constantly led in this fashion were heroes because of the positive impact they left on the people they touched. They embodied the concept of selfless service – they put the needs and goals of the nation, the military, the unit and the soldiers ahead of their personal needs and interests. I elected to share my viewpoint on heroes and heroic deeds because of the events that have transpired over the last several weeks. Since the onslaught of the COVID-19 crisis, I have met true-life heroes, many of whom have gone unnoticed. I have witnessed total strangers reaching out to solve problems and provide resources, even though they may have been located thousands of miles apart. I’ve witnessed compassion and empathy, and I’ve been involved with sharing between people at unbelievable levels. I’ve experienced the “good and the great” of American manufacturing, and it’s been awesome to be an eyewitness to it all!

6 | plastics business • 2020 Issue 2

Without the machine operators, the maintenance crews, the electricians, the material handlers, the set-up personnel, the process technicians, the engineers and many others, the life-saving measures, the equipment utilized and the PPE worn would not be available. Our communities and the news media have given huge and welldeserved shout-outs to first responders and frontline workers in the healthcare industry – doctors, nurses, police officers, firefighters and more. I also want to be sure we recognize and salute the professionals in our industry who are quietly doing their jobs to support those in day-to-day contact with the virus. Without the machine operators, the maintenance crews, the electricians, the material handlers, the set-up personnel, the process technicians, the engineers and many others, the lifesaving measures, the equipment utilized and the PPE worn would not be available. Just think of the lives that these people have saved. Think now about how much better our country has fared because of the professionals in the United States plastics industry who have put themselves in harm’s way to deliver the necessary products so that others could be afforded another day of life and opportunity. Our country and our citizens owe gratitude to the over one million plastics industry professional men and women who continue to show up, putting those in need above their own safety and health. They are my heroes.

Executive Director, MAPP


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PRODUCTION

Spring Cleaning in the Tool Room: Five Jobs to Do Now by Bryan Whitaker, technical manager, iD Additives

T

he tool room can be a low priority on the organizational totem pole, but a few simple steps during downtime or facility slowdowns can eliminate pain points, save time, open up new opportunities and even prevent major financial losses in the event of an emergency. Here are five jobs to do now in the tool room.

Task

1

Create a list of items of priority and rank them.

Make a list of three to five pain points – things that are an issue and need to be addressed. A lot of moldmakers and technicians are retiring, which puts stress on the supply of labor. Things start to pile up. If a shop is in that scenario, start small: What three things do you need to accomplish daily? If you’re tackling the day-to-day stuff effectively, then find your top three to five priorities this month – or this year. Once those pain points are identified, rank them. This is an elementary exercise, but I find it’s helpful because a lot of times when I go into a shop, what’s a priority for the tool room is not a priority for other areas in the operation. By going through this exercise and then ranking the issues that emerge, you can see from a management perspective what your employees think. And, you should ask for these pain points across all shifts, because what’s important to someone on third shift might not be important to first shift. Do this anonymously. There can be a fear of speaking up. To help with this, some teams allow their people to type their answers rather than writing them by hand. Some teams put 20 items on a board and have people circle their top 5. Once you’ve identified the biggest problem child – the one that makes you roll your eyes the absolute hardest – tackle this first. Knock out the kingpin – the rest will fall easily. Bonus work for your company Take this an extra step by having each department do this exercise – from operations to purchasing to quality. Once that’s done, combine all the answers and see what’s important for everyone. Is there any overlap? You can start to rank the biggest pain points in your company as a whole.

8 | plastics business • 2020 Issue 2

Jobs that can be done in a tool room during downtime include creating a prioritized list of tasks and making a list of molds in inventory. Photo courtesy of iD Additives.

Task

2

Take inventory of your molds and organize them.

I’ve been in some very clean, organized shops, but they are few and far between. A lot of custom molders have a space for tools, but no organization. While there might be one guy who runs your tool shop and knows exactly where every tool is – even if it only runs every year or two – what happens when that guy retires? What happens if a tool is shipped out to a customer during first shift and other shifts aren’t informed?


Take inventory of the tools you have in-house, and then take an extra step by finding an appropriate home on the shelf for each tool. I should be able to walk into a shop and see on a spreadsheet that the tool I want is in Row A, Spot 4. It’s simple, but it can really help a shop far beyond just the visual organization. Because there aren’t a lot of tool shop managers in the labor pool, these valuable employees are shifting from one facility to another, which means a lot of history can be lost. Setting systems in place now can save time and energy later. Bonus work for your company Check your fire extinguisher lines. I give credit to Steve Johnson at Mold Trax: He brought this to my attention. A lot of facilities treat the water that goes into their molds because it affects heat transfer and part cooling. The fire extinguisher lines do not contain quality water. If a fire extinguisher line ever goes off, you’re risking your molds. At a bare minimum, put a tarp over your molds to at least deflect a little of that water. A $100 tarp could prevent a $1 million loss.

Task

3

Create a cataloging system for spare parts and reorders.

This system allowed the tooling employee to do the task – pm’ing molds – and the purchasing department to do what it does best. It’s a simple step that allows companies to use their ERP systems without putting the burden on the tooling room personnel.

Task

4

Trial new equipment and material.

There are a lot of suppliers that want you to try their materials or test their equipment, and many trials are free. It goes back to the priority list in Step 1: What would you like to change? Your engineering team might want to lightweight a part or improve cycle time. For tool room employees, it might be trying a new insert or finding a way to save time when pm’ing a mold.

Materials suppliers are giving away free samples because they want to sell you on their product. Downtime is a great opportunity to explore new resins or make process improvements, especially if you don’t have an R&D line that’s separate from the production line. page 10 u

A lot of shops have drawers for O-rings and drawers for fittings – everything is put into a storage cabinet or tooling chest. But, there aren’t a lot of facilities that have reordering systems in place – or there isn’t one in place that makes sense in a busy tool room.

If I’m in a tool room and I’m told that a tool needs to be PM’d by the end of my shift, I’m going to work hard to make sure that tool is up and running. What I’m not going to do is spend time to catalog all of the parts I used to perform the maintenance and then log those into my ERP system. When I focus on the maintenance and ignore the data entry, the purchasing agents (rightly) get upset, and the management team isn’t happy because the tool room isn’t using the expensive ERP system. I was at a shop in Michigan that had a cataloging system that solved this issue. This facility had a two-tag system, much like the old library card system. Two tags were created for each part – one that was pulled when the part was down to re-order status (this varied from part to part) and a second for a red alert, meaning the first tag was gone and there were no parts remaining. This red alert signaled the purchasing department to look into the reorder status. When the tooling technician was done with a job, he simply placed any/all tags he pulled into the tray of whomever was responsible for re-ordering parts (his supervisor, purchaser, etc).

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PRODUCTION t page 9

Task

5

Trust the new course of action.

I visited around 60 or 70 shops last year, and some of the best ideas I’ve seen have come from someone changing things up and challenging the status quo. But, this is only effective if everyone buys in. The tool room managers need to be open to new ideas, and the members of the tooling team need to be on the same page. When that happens, I’ve seen the change in culture in those facilities.

Once everyone starts to buy in to new systems and believe in the improvements, life becomes easier for the entire team. This ties back into Step #1. If you’re responding to something in the survey, the employees can tell if you genuinely want to improve the issues that were brought up or if you’re going through the motions. This is a chance to try to find solutions for common problems.

There are a lot of facilities that have these things sitting in a corner when they haven’t been used for years. Sell it off, recycle it or get rid of it. There’s no need to have it taking up space. And, it feels good to get rid of things and clean up your tool room. n Bryan Whitaker is the technical manager for iD Additives, Inc., La Grange, Illinois. Founded in 2005, iD Additives offers full lines of foaming agents, liquid foam, purging compounds, MRO products and other additives for the plastics industry. Custom products can be designed with iD Additives’ unique compounding technology that allows the company to provide its customers with speed, versatility and accuracy. Coupling foaming agent technology with other additive and colorant needs allows the company to offer a cost-effective “One Pellet Solution.” More information: 708.588.0081 or www.idadditives.com

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| 11


TALENT DEVELOPMENT

The Time to Recruit is Now by Dan Regovich, owner and operator, AJ Augur

I

t seems as though the world has changed overnight. We went from one of the most robust economies in US history, where virtually every company was struggling to hire employees at all levels, to massive lay-offs in many sectors – all within a few weeks. I think there is a silver lining to be found in all of this: Many companies still have critical positions that need to be filled or will have critical positions to be filled later on in the year, and now is the best time to prepare to hire when the economy turns around. If you start your preparations when the economy already has turned, you’ll be late. I have one client that is an essential business producing food packaging. The company is located in a remote part of the country and always has a hard time finding employees at all levels. The business has increased production significantly over the last few weeks but is only hiring for the most critical shop floor positions by conducting interviews in a large conference room, wearing masks and taking all the proper precautions. The business currently has many more options for candidates than it typically does because many companies in the region are laying off employees. But, the food packaging company is not stopping there. Before the pandemic, a few higher-level positions were open. The company now is working to build a pipeline of candidates to fill those positions when things get back to – or closer to – normal. The company is finding it easier to have more conversations with potential candidates since many are at home (either working or laid off) and in a private place to talk.

Identify hard-to-fill positions by asking your department leaders what critical needs were open before the pandemic.

3

Take time to come up with excellent job descriptions/ job postings for those openings. This shouldn’t be a list of duties. Instead, use a job description to let people know why your company is a great place to work. Include all the perks of the job and a little bit about your environment. Give them a reason to respond to you. Your job description is a sales tool!

4

In addition to advertising those jobs on your favorite website(s), consider getting a paid subscription to LinkedIn so you can email potential candidates directly. Since many people are home, job candidates are more likely to respond via LinkedIn since they are not surrounded by co-workers and might have more time on their hands. LinkedIn also could help you identify candidates who are not looking at the job boards.

5

If you don’t have an on-boarding process, take the time to establish a process now. I once had a candidate start a new job as plant manager … and when he showed, nobody knew he was coming. He had to clean out his own office, which was being used as a storage room. That’s a horrible way to keep someone with your company, especially when there’s a war for talent. It’s my opinion that the war for talent will be back sooner than we think. The flu pandemic of 1918-1919 was followed by the Roaring 20s!

6

Set expectations for your interview process. Make sure you have a timeline for how things will happen and that you are clear in your communications. For example, you might explain that your company is unable to do face-to-face interviews right at the moment but will resume once certain safety criteria are met. Then outline the hiring steps, give candidates a timeline and stick to it.

Rather than waiting for the economy to turn and the shelter-inplace orders to be lifted, this company is starting to recruit now for future positions. Below are things you can do to be ready to hire when the economy has been kickstarted:

1

If you’ve had lay-offs and will need to re-hire those employees, do your best to stay in touch with them by email. Let those employees know that they are valuable, and you’ll need them once production picks up. Give them updates on the business. Make them still feel a small part of your company.

2

Identify hard-to-fill positions by asking your department leaders what critical needs were open before the pandemic. Clearly identify what skill sets are needed in those roles.

12 | plastics business • 2020 Issue 2


7

Time kills deals. Once you begin interviewing candidates in person, make sure the process moves quickly. A slow hiring process sends bad messages to a candidate. The worst message is the one they make up in their head as to why you are moving so slow … which leads them to talk themselves out of the job and withdraw their candidacy.

8

If you have a person you want to hire currently but can’t bring them on as a permanent, full-time employee, ask that person if he/she would consider working on a contract basis. There are several Employer of Record (EOR) services that will handle the billing, benefits and back office duties for a contract employee. In return, the EOR service charges a percentage mark-up on the hourly rate.

9

You can put your company in a very good position for getting those hard-to-fill jobs filled if you are proactive and take advantage of this downturn. Top-notch people are easier to reach right now. This is a great time to start the process to strengthen your team. History tells us that the economy always recovers. Make sure you are hiring on the front end of rebound. n Dan Regovich is the owner and operator of AJ Augur Group LLC, a search firm that specializes in the plastics industry within the US. He has been recruiting since 1997 and has filled critical positions all over the country, including sales and marketing, operations, engineering, R&D, quality and human resources positions. He uses a proven search process and has built a solid reputation within the plastics industry. More information: 440.357.7600 or dregovich@ajaugur.com

You also can consider making candidates a contingent offer or pre-offer. The letter could state the details of the offer, while also explaining the contingencies – for instance, production must pick up to reach a certain point, additional funding must be secured, a certain date should be reached, etc.

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www.plasticsbusinessmag.com | 13


TALENT DEVELOPMENT

The Importance of Training for Plastics Companies by Andy Routsis, president, Routsis Training

P

lastics are not simple. Many interactions and variables complicate the entire process. The best processors have a workforce with an in-depth understanding of many factors, including machinery, tooling, material, documentation, equipment, quality, 5S, housekeeping and processing, as well as industry best practices.

On-the-job learning, at best, provides behavioral training to help maintain the status quo. Your employees need the knowledge, skills and understanding necessary to help bring your company to the next level. To keep your entire workforce up-to-speed and up-to-date, your company needs an efficient training plan that delivers knowledge, skills development and hands-on instruction.

Structured employee development plan

The most successful plastics companies have structured, ongoing, in-house training plans in place to help develop needed talent from within. This development plan also should be used to teach new hires the varied skills needed to keep your company

14 | plastics business • 2020 Issue 2

running, as well as the critical information and skills to help it improve into the future. A structured plan involves the following elements: • effective training materials • skills-development exercises • focused hands-on mentoring • relevant testing The focus in developing a structured training plan is to first determine the knowledge, skills and capabilities needed for each job title and then locate materials that will help you meet these goals over the long term. Determine the long-term goals and objectives for each job title – not only to keep the production floor running, but also with consideration as to what is needed from everyone for your company to get to the next level.

Create a culture of continuous improvement

Continuous improvement is an ongoing process. What worked


at your company 10 or 20 years ago will not meet your current customers’ needs. The same will be true five or 10 years into the future. Your workforce must be prepared for the new machinery, equipment, materials, documentation, procedures and technology that will inevitably be introduced in the future. For example, if your employees have a real in-depth understanding of what is actually involved in making good product, then they can effectively leverage a new piece of technology in a way that someone who just knows how to run the machine cannot. The focus should be on your employees developing an evidence portfolio of their knowledge and skills capabilities that grows every year.

Keep the focus on quality assurance

Hundreds of free troubleshooting charts and guides are available online, yet bad product still gets to the customer. The truth is, most plastics processors put too much training emphasis on traditional troubleshooting because they do not actually know what makes good product. Technicians usually spend a large percentage of their time moving from one unreliable process to another, while the quality team tries to stop any bad product from getting to the customer. This is known as quality control. A key aspect of getting better is constantly striving to provide better quality assurance for your customers every day on every production run. If the processor truly understands and properly documents what makes good product, then the goal of production is to repeat those conditions every time. Scientific troubleshooting is just the process of creating a standard – or returning the process back to the standard – by determining what is preventing you from making good product and then fixing the issues.

Monitoring and maintaining your training

A successful in-house training program should develop and increase the knowledge, skills and capabilities of your workforce. This increased capability will improve their ability to perform their job functions and better prepare them to handle future improvements in procedures, documentation, part handling and technology.

…processors put too much training emphasis on traditional troubleshooting because they do not actually know what makes good product. Track improvements using metrics, including the following: • scrap rate and/or customer returns • unscheduled downtime • die setting and color change times • mold and machinery damage • troubleshooting time • efficiency and productivity The key in choosing metrics is to select data that show at least six months of history so the impact of the training initiative can be measured effectively. n Andy Routsis is president of Routsis Training and is a master trainer for Routsis Training. Over the last 30 years, Routsis Training has developed the largest, most up-to-date online plastics training library in the world on scientific molding. The training materials in this library range from beginner to advanced and explain in detail the plastics industry’s best practices. His company specializes in ongoing training systems and on-site training. More information and a free Gap Analysis Test: info@traininteractive.com or www.traininteractive.com/gap/

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ADVISORS www.plasticsbusinessmag.com | 15


NEWS M. Holland’s 3D Printing Group Launches Online Platform In response to COVID-19, M. Holland Company, Northbrook, Illinois, a distributor of thermoplastic resins, has launched an online solutions platform to allow for remote access to 3D printing education and resources. The Additive Manufacturing Educational Portal allows participants to access training programs, educational courses, certifications, materials, printed parts and technical information. Members can enroll in courses and access other resources. The site offers à la carte training options covering a wide range of topics, including essentials for fused deposition modeling (FDM), selective laser sintering (SLS) and photopolymerization (stereolithography [SLA] and digital light processing [DLP]); design for additive manufacturing; operation guidance on 3D printer selection; material properties and more. To learn more about educational opportunities tailored to specific applications or business goals, please contact 3Dinfo@mholland.com. For more information, visit www.mholland.com.

Conair Offers Hybrid Vacuum Pump for Long-Distance Conveying The multi-stage regenerative impeller design of the new HRG Series vacuum pumps from auxiliary equipment supplier Conair, Cranberry Township, Pennsylvania, develops deep vacuum power for conveying plastic pellets over long distances. An optional variable-frequency drive saves energy and makes the new pump ideal for use in Conair Wave Conveying™ systems. The three-stage pump design, with regenerative impellers, allows HRG Series pumps to convey material up to 1,000 linear feet. Vacuum levels below 12 inches of mercury are possible, and the pumps operate at 60 Hz, with average sound level ranges between 74 and 77 dBA. The HRG-10 has an 11.5-hp motor and is intended for 2.5-inch conveying lines; the HRG-15 (16.9 hp) and the HRG- 30 (42.9 hp) service up to 3-inch line sizes. For more information, visit www.conairgroup.com.

Cognex Introduces Industrial Smart Camera for Inspection

Paulson Offers Virtual ProMolder Classes

Cognex Corporation, Natick, Massachusetts, a manufacturer of industrial machine vision, has introduced the In-Sight® D900 embedded vision system. A first-of-its-kind solution, the In-Sight D900 features Cognex’s ViDiTM deep learning software inside an In-Sight industrial-grade smart camera. The self-contained system is designed to solve a broad range of complex in-line inspection applications including optical character recognition (OCR), assembly verification and defect detection. With the self-learning ability of a human inspector and the robustness and consistency of a vision system, it can be set up using a small number of image samples, leveraging Cognex’s familiar and easy-to-use spreadsheet platform and without the need for a PC or deep learning expertise to deploy. For more information, visit www.cognex.com/In-Sight-ViDi.

Paulson Training Programs, Inc., Chester, Connecticut, has announced that it is transitioning Paulson Plastics Academy in-person seminars to a virtual live-streaming format using Zoom videoconferencing. The company will incorporate its injection molding machine simulator SimTech™ into the live-streaming ProMolder classes, offering training on the fundamentals and advanced learning from the safety of one’s own particular environment. ProMolder 1 will be offered May 18-21, 2020. All that is needed is a computer with internet access, but those with no camera or no audio can call in via phone and use a computer to share the instructor’s screen. For more information, call 800.826.1901 or visit www.PaulsonPlasticsAcademy.com.

16 | plastics business • 2020 Issue 2


Dri-Air Introduces SmartTouch Control Dri-Air Industries, Inc., East Windsor, Connecticut, a provider of compressed air and desiccant drying technology, has introduced an Industry 4.0-compliant SmartTouch Control. The new control gathers data from the dryer and shares it with other equipment, such as the injection molding machine. It is compatible with all Dri-Air dryers. The controls come standard on Dri-Air’s HP series dryers and dual hopper dryers, and it is optional on its 2-bed, Arid-X dryers. The SmartTouch controller features a 7” color touchscreen. Other features include -49° F dewpoint monitor, seven-day timer for automatic start and stops, diagnostic functions with trending for temperatures and dewpoint, resin library, OPC-UA open platform for maximum connectivity, available Wi-Fi connectivity and available Ethernet connectivity hub. For more information, visit www.dri-air.com.

Maguire Introduces New 1200 Series Blenders

RJG’s CoPilot™ Now with Cavity Pressure Monitoring

Gravimetric blender, liquid color pump and vacuum dryer supplier Maguire Products, Inc., Aston, Pennsylvania, is introducing a new series of gravimetric blenders. The new blenders for larger-throughput applications precisely dispense up to 12 materials of diverse types and can be configured to dose up to six major ingredients, including virgin polymer, regrind and post-consumer resin. The Maguire® Weigh Scale Blender (WSB) 1200 Series has a throughput range of 900 to 2,040 kg/hr (2,000 to 4,500 lb/hr) and is suitable for extrusion, high-volume injection and blow molding, and central blending applications. For more information, visit www.maguire.com.

CoPilot™, from Traverse City, Missouri-based injection molding training, technology and resources company RJG, now has an advanced software option. CoPilot+ offers new options, including cavity pressure monitoring, the ability to run DECOUPLED MOLDING® III processes, cavity balance view for hot runner molds and part containment. CoPilot is injection molding process monitoring and control software that allows users to view and record data from the machine and mold. CoPilot+ cavity pressure monitoring allows users to see what’s happening from the plastic’s point of view through the use of sensors in the mold. This allows users to see if a process is running properly to ensure part consistency. This also allows for automatic part sorting if a process strays. For more information, visit www.rjginc.com.

ARI Focuses on Ease of Use with New Automation Features Absolute Robot (ARI), Worcester, Massachusetts, is launching two new features to simplify and enhance its servo robots and automation. Beginning in February 2020, customers who own A/AW, BW or CW servo robots from ARI will benefit from Virtual Assist, a remote monitoring system that simplifies troubleshooting by allowing an ARI service engineer to remotely access a customer’s robot controller. For robots purchased by customers from June 2019 forward, ARI will offer Safe Torque Off (STO) drives as standard on all servo robot models. The STO drives provide a supervisory sensor to the robot that allows the operator to pause the robot (in a safe pause position) prior to entering the guarded area. For more information, visit www.absoluterobot.com. n

www.plasticsbusinessmag.com | 17


DEVELOPMENT

Cautious Optimism is Overwhelmed by Economic Shock and Uncertainty by Greg Alonso, principal, Plante Moran

T

he 2020 calendar year began with a solid, consumerdriven US economy, historically low unemployment and rising wages. The prevailing sentiment regarding nearterm economic prospects was cautious optimism as the longest running recovery on record seemed likely to continue. Other significant events with economic implications included a ratified United States-Mexico-Canada Agreement (USMCA) and an oil war between OPEC and Russia. These pale in comparison to COVID-19, which has seized communities and caused unprecedented economic shocks, affecting market sectors and plastic processors in very different ways – bringing some to a virtual standstill (e.g., automotive) and driving demand spikes in others (e.g., consumer products, food and beverage, household cleaners, etc.). Chart 1

The performance results of plastics processors in Plante Moran’s 2020 North American Plastics Industry Study (NAPIS) report precedes COVID-19 but continues recent trends of lower profit levels and slowing sales growth for plastic processors. We expect 2020 to exacerbate these trends, creating greater challenges for underperformers and potential opportunities for strong performers.

Unfavorable industry trends thin the ranks of ‘Successful Companies’

For 25 years, Plante Moran has been tracking performance and core competencies of Successful Companies. We define Successful Companies as those processors that achieve 10% earnings before interest and taxes (EBIT) margin, 15% return on assets and 5% sales growth. Successful Companies typically comprise approximately 10% of the total survey population. In the current survey data, 7% of the companies met the Successful definition. For comparison purposes, we have provided the mean values of quartiles for income statement line items and median values of selected benchmark metrics vs. Successful Companies. (See Chart 1.) Successful companies distinguish themselves from the rest of the industry through their ability to efficiently manage their labor costs as well as differentiated engineering and manufacturing capabilities that facilitate substantially higher profit margins and sales growth than the rest of the industry.

Chart 2

Charts 2, 3 and 4 show 10-year trend of key performance indicators for the overall health of the plastic processing page 20 u

18 | plastics business • 2020 Issue 2

Chart 3


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DEVELOPMENT t page 18 industry: gross profit margin, value-add per employee and press utilization. Profit margins have declined by four percentage points over the last 10 years. The rate of decline did slow in 2019. We are concerned, in light of the COVID-19 crisis, that profit margin declines will accelerate if processors lose pricing discipline to keep their facilities busy. Processors should closely manage labor costs, as this tends to be more correlated with profit margins than other cost components. Processors have increased productivity by 12.7% over the last 10 years. Although it declined two years ago, it bounced back in 2019. The industry’s ability to offset the inefficiencies of employee turnover – which has risen consistently over the last five years – is notable. COVID-19 should limit turnover and flip labor markets from a “sellers” market to a “buyers” market for skilled and unskilled positions. Utilization has declined slightly in recent years. Capital expenditures over the last five years have been at “maintenance levels” (capex = depreciation). Remaining useful life of capital assets has declined slightly over the last five years and is about 5.5 years. Plastic processors with a solid financial position and operations capabilities should see opportunities to consolidate

Chart 4

business from low-performing companies as customers look to de-risk their supply chains. These opportunities to consolidate share should not require significant capex given capacity utilization levels.

Final thoughts and key considerations

Make the mark.

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20 | plastics business • 2020 Issue 2

The plastics industry will change substantially during 2020. We expect a shakeout in segments such as automotive – 50% of the companies in the survey are experiencing low-single-digit operating profits and earnings decline over the last two years. In addition to declining profits, processors’ revenue is highly concentrated: the median company requires six customers to achieve 80% of their revenue, and concentration subjects the typical processor to greater risk should one of its customers reduce orders or change suppliers. The recent government stimulus will help some processors through the current crisis, but processors also should closely manage their liquidity, assess their readiness for a second COVID-19 shock and strategically assess markets to diversify revenue. n Greg Alonso is a principal in Plante Moran’s strategy and plastics industry consulting practices. He has nearly 30 years of industry and consulting experience. Alonso manages the North American Plastics Industry Survey (NAPIS) and also advises senior management teams on strategic initiatives, including acquisition strategy, commercial due diligence, new market entry, product portfolio analysis and strategic planning. More information: www.plantemoran.com


Q&A

Molding the Market: The Future of Medical Resins by Brittany Willes, contributing writer, Plastics Business

H

ealthcare in all its various forms is a hot topic in today’s uncertain climate. While many are focusing on finished products, plastics manufacturers, molders and suppliers are on the front line making sure the highest quality materials are being used to meet ever-growing demand for medical supplies and parts. Plastics Business sat down with PolySource’s Director of Sales and Marketing Bob Findlen and Director of Applications Development Dr. Cliff Watkins to discuss the growing opportunities for medical resins as well as what challenges they present.

What are the emerging technologies for medical resins?

One area that we have been looking at, and that is quite pertinent to today, is that of high throughput screening – a process that allows automated testing of large numbers of chemical and/or biological compounds for a specific biological target and therefore of particular importance in the medical industry. With this process, micro chemical reactors evaluate different chemicals for different reactions. What’s unique about high throughput screening is that these very detailed surfaces are molded onto plastic parts that will have a lot of surface area and a lot of channels for the reactants to flow across. Picture a small microscope slide. Viewed under a microscope, it would appear almost like a corn maze where liquids are forced to flow back and forth across one another. The reactor plates might then be exposed to heat or UV light to induce energy for a chemical reaction. When it comes to medical testing, it is vital that plastics used in various test equipment – such as those used in high throughput screening – do not contaminate whatever liquid the plastic container is holding. For example, there have been instances with plastics such as acrylic, polycarbonate or polystyrene, which are cost-efficient commodity type resins but have been shown to leave behind trace amounts of unreacted monomer. Those trace amounts can interfere with the reactions meant to take place.

22 | plastics business • 2020 Issue 2

Do medical resins present any unique challenges?

A level of high quality is required for medical parts. The challenge is providing resin grades with low to no extractables or leachable chemicals, such as residual monomers. A good example is the polymer ABS. It is a ubiquitous, highvolume, multifaceted polymer; however, it contains the monomer acrylonitrile. The national sanitation foundation (NSF) has been reducing the acceptable extraction levels for acrylonitrile down to fractions of a part per billion (ppb). As a result, resin manufacturers are striving to develop simpler, niche polymers made with benign monomers. One such resin, Topas COC, is an amorphous, highly certified medical plastic. Testing that has been done with Topas has shown essentially no extractables. This makes Topas and resins like it ideally suited for molding complex surfaces needed in high throughput screening devices. Another challenge is sanitization using highly aggressive cleaners, solvents and chemicals. With these high-purity amorphous materials, and any amorphous materials for that matter, it is necessary to be careful about the kinds of sanitizing wipes, cleaners, solvents and chemicals the plastic is being exposed to. This is because amorphous polymers – while offering very good visual clarity, UV transparency and other advantages – by definition are not as chemically resistant as semi-crystalline resins. It is critical to be mindful of how the plastic is going to be used.


Are there any new issues facing medical resins/plastics?

A good example of this goes back to cleaning solutions and solvents that attack polycarbonate and now are being used in field hospitals and medical rooms. Materials that have been used for years without issue suddenly are cracking and breaking down. The materials of the past no longer will stand up to today’s more aggressive environment. This means molders have to look at other resins with improved chemical resistance.

How should molders select new resins to suit their parts?

We call it the triangle – the triangle between the OEM (in this case, the medical OEM), the processor and the material supplier. When OEMs are developing an application, they need to work closely with the resin supplier to make sure it follows all regulatory guidelines and also work with the processor to make sure the design of the part – the functionality that is built into the part – can be molded. In most cases, the molder will rely on the OEM to select the resin. Of course, there may be times where the material is not working or there may be physical performance issues or molding issues. At that point, it may become necessary to look at alternative materials. This is when it is important to have a good relationship between the molder, the OEM and the resin supplier in order to immediately address and eliminate any issues encountered at the start of processing or later on in the molding of the product. From a resin supplier standpoint, it is critical to be part of those conversations to complete the triangle. Often, not just in the medical industry but in all industries, there is a prevailing desire when designing something new to say, “We’ve always used this plastic or that plastic, so we’ll just use it again for this new part.” There have been situations where, because of the requirements with sterilization, etc., what has been used in the past is no longer appropriate. If the process has gotten so far down the road where molders actually have made an injection mold, there is high potential for crisis as it can be quite a challenge to now fit – literally and figuratively – the best resin into that mold if it

was designed for something quite different. Again, that triangle up front is so critical to head off what can be an incredibly costly decision to just do things the way they’ve always been done.

What questions should be asked to make sure the best material is utilized?

When working with the OEM or the processor, with the medical industry especially, it is crucial that the field team ask all the right questions regarding regulatory concerns and specifications the application must meet. Then there are more traditional concerns, regardless of the market: Are there chemical resistance requirements? Is there a heat source? What are the impact needs? Ask all the plastic questions to make sure you know the answers. The material that resin suppliers provide for their customers is only as good as the questions they ask and the answers they get. In the case of medical resins, it’s possible to find something that meets all the regulatory requirements and looks good, but then the molded part is too brittle. Then the supplier realizes, “Well yeah, the material that we chose is brittle. We didn’t consider this application based on its design or realize it had to have more durability to it.” They should have known that up front. As much as a customer may want to do things a certain way, it is the resin supplier’s job to be the referee and make sure all decisions are based on facts and data. n Bob Findlen is director of sales and marketing for PolySource with 39 years of experience in the plastics industry. PolySource Director of Applications Development Cliff Watkins has a Ph.D. in Chemistry and is the former owner of TP Composites with 39 years of industry experience. PolySource is a leader in engineered plastic resin solutions. Its technically trained professionals know the disciplines of plastic design, tooling design, troubleshooting and material selection. More information: www.polysource.net

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www.plasticsbusinessmag.com | 23


TAX PLANNING

CARES Act Provides Relief to Plastics Processors by Michael J. Devereux II, CPA, CMP, Mueller Prost

O

n March 27, 2020, President Trump signed the Coronavirus Aid, Relief and Economic Security (CARES) Act – the largest relief package ever passed by Congress almost three times over – into law, thereby ushering a host of new lending and tax provisions available to plastics processors. The CARES Act made several taxpayer-favorable changes to the tax code that impact plastics processors, some of which should provide much needed cash during the COVID-19 pandemic. The following provides a brief overview of the business tax provisions of the CARES Act.

Employee retention credit

The CARES Act provides for a refundable payroll tax credit for 50% of the wages paid by eligible processors to certain employees during the COVID-19 pandemic. The credit is available to processors whose operations have been fully or partially suspended as a result of a government order or processors who experienced a greater than 50% reduction of quarterly receipts, measured on a year-over-year basis. The credit is equal to 50% of the qualified wages paid to employees from March 13, 2020, through Dec. 31, 2020. The definition of qualified wages depends upon the number of average full-time employees in 2019. For processors that had more than 100 average number of full-time employees in 2019, only the wages of employees who are paid during a shutdown or face reduced hours as a result of the plant’s closure or reduced gross receipts are qualified wages. However, for employers with 100 or fewer full-time employees in 2019, qualified wages also include amounts paid to all employees due to the reduced gross receipts. Qualified wages include amounts paid or incurred to provide and maintain a group health plan (on a pro-rata basis) and are capped at $10,000, making the maximum amount of FICA payroll tax credit $5,000 per employee. Processors receiving Small Business Interruption loans are not eligible for the Employee Retention Credit.

Employer FICA deferral

This provision of the CARES Act allows plastics processors to defer payment of their employer share of the Social Security tax (FICA at 6.2%) for payroll tax deposits required to be made between March 27, 2020, and Dec. 31, 2020. The amounts otherwise due during this period will be due in two installments – the first on Dec. 31, 2021, with the remainder due on Dec. 31, 2022.

24 | plastics business • 2020 Issue 2

Processors receiving loan forgiveness through the Paycheck Protection Program, however, are not eligible for the deferral for amounts due after they receive notification of forgiveness.

Net operating and excess business losses

The CARES Act made two significant changes in the Net Operating Loss (NOL) rules and temporarily removed a limitation on business losses enacted by the Tax Cuts and Jobs Act of 2017 (TCJA). First, the CARES Act removes the 80% of taxable income limitation that was enacted as part of the TCJA. Losses generated in any tax year beginning after Dec. 31, 2017, and before Jan. 1, 2021, (tax years 2018, 2019 and 2020 for calendaryear taxpayers) may offset 100% of the taxable income to which the loss is carried. The 80% of taxable income limitation is reinstated for tax year beginning after Dec. 31, 2020. Second, the CARES Act allows plastics processors to carry their NOLs back to each of the five taxable years preceding any losses generated in tax years beginning after December 31, 2017, and before Jan. 1, 2021, (2018, 2019 and 2020 calendaryear taxpayers). The IRS issued special guidance for taxpayers who have already filed their 2018 or 2019 tax returns and would like to avail themselves of the modified rules for NOLs. The CARES Act also delayed a provision originally enacted by the TCJA that limited “excess business losses for noncorporate taxpayers.” The TCJA had enacted a new limitation for owners of flow-through businesses (S Corporations, Partnerships or Sole Proprietorships). This provision, as enacted by the TCJA to be effective for tax years 2018 through 2025, limited business losses exceeding $250,000 ($500,000 in the case of married taxpayers filing a joint return) and were not eligible for carryback. The CARES Act allows excess business losses for tax years 2018 through 2020 and, if net operating losses are generated, allows for a five-year carryback period. Business owners should note, however, that the excess business loss limitation was just one way in which an owner’s loss could be limited. Taxpayers must still be at risk for and have sufficient basis to claim any ordinary loss. Further, passive shareholders may only offset passive income with passive losses.


Credit for prior year minimum tax (AMT credits)

The TCJA repealed the corporate alternative minimum tax (AMT). Taxpayers that had previously paid the AMT received Minimum Tax Credits (AMT Credits). The TCJA made those credits refundable over four years (2018 to 2021). The CARES Act accelerated the refundability of this credit, allowing the refundable amount in 2018, but making it fully refundable in tax year 2019. However, the CARES Act also provides for an election to take the entire refundable credit amount in tax year 2018.

Business interest limitation

The CARES Act temporarily increases the limitation on business interest expense for those subject to the limitation. The TCJA had introduced a new limitation for tax years beginning after Dec. 31, 2017, whose average annual gross receipts exceeded $25 million, a limitation that is subject to inflations (the limitation applied to companies with average annual gross receipts of $25 million and $26 million in 2018 and 2019, respectively).

deduction in the year paid or incurred, and the excess amount is carried forward as an interest expense to future tax years (indefinitely). The CARES Act temporarily increases the limitation on the deductibility of net interest expense to 50% of adjusted taxable income for any tax years beginning in 2019 or 2020. Processors concerned that their adjusted taxable income will be minimal or zero are allotted some relief in computing their 2020 adjusted taxable income limitation. At the election of the processor, the 2020 interest expense limitation will be 50% of its 2019 adjusted taxable income.

Qualified improvement property

The TCJA modified both the bonus depreciation rules and the definition of qualified improvement property. The TCJA increased the bonus depreciation percentage to 100%, retroactively, for property placed in service after Sept. 27, 2017, through Dec. 31, 2022. Beginning in 2023, the bonus depreciation percentage is phased down by 20% each year, with the accelerated “bonus” depreciation phased out by 2027.

Any business interest expense that exceeds the sum of interest income and 30% of adjusted taxable income is not allowed as a

page 26 u

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TAX PLANNING t page 25 In addition, the TCJA consolidated three types of improvement category assets into a new category called Qualified Improvement Property (QIP). For processors, QIP includes any improvements made to the interior of your facility that are placed in service after the date your facility was first placed in service. Improvements do not include enlargement of the building, elevators or internal structural framework. In writing the TCJA, a general 15-year recovery period was intended to have been provided for QIP. However, due to a drafting error, that specific recovery period did not make it into the final statutory language of the bill. As such, under the TCJA, QIP fell into the 39-year recovery period for nonresidential real property, and therefore is ineligible for 100% bonus depreciation. The CARES Act provided a technical correction to the TCJA and specifically identifies QIP as 15-year property for depreciation purposes. This also makes QIP eligible for 100% bonus depreciation. Given that it is a technical correction, the provision is retroactive, and processors can write off any QIP placed in service after Dec. 31, 2017.

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26 | plastics business • 2020 Issue 2

Concluding thoughts

Numerous other provisions, including the Paycheck Protection Program, the Economic Injury Disaster Loans and Emergency Grants, and individual tax relief, were enacted as part of the CARES Act; and Treasury seems to be issuing new guidance as quickly as issues or ambiguities arise. As you may suspect, these provisions don’t exist within a vacuum. Many provisions impact others, as well as existing tax incentives. As such, careful planning is advisable. n Michael J. Devereux II, CPA, CMP, is a partner and director of Manufacturing, Distribution & Plastics Industry Services for Mueller Prost. Devereux’s primary focus is on tax incentives and succession planning for the manufacturing sector. He regularly speaks at manufacturing conferences around the country on tax issues facing the manufacturing sector. More information: www.muellerprost.com


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28 | plastics business • 2020 Issue 2


www.plasticsbusinessmag.com | 29


OUTLOOK

The COVID-19 Effect: Preparing Your Business for a ‘New Normal’ by Laurie Harbour, president and CEO, Harbour Results

T

he COVID-19 pandemic has made one thing clear: Not every manufacturer is going to come out of this crisis intact. The industry has experienced a significant impact, causing ripples throughout the supply chain. And, if a business went into 2020 in a weakened state, it’s really going to show on the backside of this year. Ramping back up will certainly be a major challenge for the industry. Nearly all companies will be slowly restarting operations – first for OEMs and then suppliers. In North America, most manufacturers began operations in May with limited or staggered shifts and other safety precautions in place. While this ultimately is a step in the right direction, the reality is the industry still is facing serious headwinds as restrictions on public life remain in effect and will continue for some time. In fact, the marketplace will not return to normal until a COVID-19 vaccine is in place, which clearly will not occur in the near future. For now, the key questions we face are “What is the business going to look like when operations resume?” and “What do we need to do to better prepare the company for success?”

Challenges facing manufacturers

Companies will face a number of challenges as a result of this crisis. To start, a global recession is here. A recession to this extent is something we have not experienced in recent times – and, frankly, we don’t have a clear picture of how quickly the economy will rebound or if we can expect future recessions in the next two to five years.

Additionally, looking at most industries – automotive, recreational vehicles, aerospace, etc. – we can expect a 50% to 60% drop in production for the remainder of the year. As ramp-up activities proceed, suppliers also can expect business inconsistencies due to products and launches being modified or even canceled while others become a priority. Also, raw materials and supplies may be in short supply. In the end, companies with good supplier relationships will likely have an advantage as the supply chain opens up. Internally, reengaging a workforce safely could be difficult and costly. Additional resources to ensure safety standards are in place will be needed, and it is highly likely many employees will be nervous or unwilling to return until the pandemic is better under control. In fact, those who are close to or at retirement age may decide not to return at all – or they might decide to stay longer because of the impact on their 401(k). And finally, cash. It has been a continuing edict since this crisis started: Conserve your cash. Doing so will continue to be a challenge for manufacturers. Cash will be required to operate and meet customer demands, so companies need to be conservative because there is no clear picture as to how long the ramp-up will be or – even worse – if there could be a second wave of the virus forcing future shutdowns. Those who applied and received the Paycheck Protection Program loan should not become complacent and instead work to ensure those funds are used strategically and not just for labor forgiveness.

Preparing your business

One of the most critical factors to a company’s long-term

Manufacturing Industry Utilization Drops Significantly Harbour Results, Inc., (HRI) conducted a study to better understand how the COVID-19 pandemic is impacting smallto medium-sized manufacturers – both production and tooling. The results show that nearly two-thirds of those shops surveyed are operating at some level of reduced capacity or are closed. The industries experiencing the highest level of impact are the automotive and home appliance industries – on average, those shops in automotive have laid off 41% of its workforce. Additionally, across all manufacturing processes, companies have indicated that utilization has dropped from as little as 18 percentage points to as much as 35 percentage points.

30 | plastics business • 2020 Issue 2

All Process Types Feel COVID Restrictions 100% 90%

84%

80%

88%

82% 68%

70%

55%

60%

73%

69% 65% 47%

50%

75%

84% 62%

46%

40%

40% 30% 20% 10% 0%

Mold Builder Source: Harbour IQ

Die Builder

Secondary

Utilization without COVID Restrictions

Molding

Stamping

Die Casting

Actual Utilization

Other Production


outlook is the response of leadership, and this situation is going to challenge leaders now more than ever. As we transition to a different phase of the crisis – reopening – leadership must focus on several aspects. Align with Customer Demand Companies must have ongoing communication with their customers so that business operations align with supplier demands. Shops need to expect and prepare for variability and change, ensuring operations are flexible and conservative so as not to burn cash. For example, when looking at bringing back your workforce, understand what number is needed to achieve required utilization, remembering that you can flex up or down within a revenue range with limited additional resources. Drive Operational Efficiency Continuous improvement always should be a foundational element at shops, but in today’s crisis, looking for unique ways to drive efficiency will be absolutely critical for success. Bring back employees who can help you achieve the necessary gains. Challenge every aspect of the business to determine the best course of action to decrease production costs while maintaining or improving efficiency. If you have two facilities, do you need

to open both? Or can you temporarily focus operations in one facility? Can you leverage work-from-home protocols to drive down infrastructure costs? Can you revise roles and responsibilities to better utilize indirect labor? Can you reduce and stretch your administrative staff to do more with less? In general, be creative and challenge everything. Consistently ask, “Why?” Leverage Technology and Automation Shops must maximize the current technology and automation in place to improve efficiency and limit the number of employees utilized. Businesses must find avenues to run their operations with technology at the forefront. And, although this may seem strange, leadership should be looking at how smart investments in technology could improve operations, and based on what they find out, make a plan. Focus on Workforce Readiness Although often overlooked, workforce readiness is incredibly important for leading through this crisis. Companies need to take advantage of this time to look at the entire workforce and page 32 u

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OUTLOOK t page 31 make a plan for what talent they need to bring back, where to trim and where they have gaps. Additionally, plans must be put in place to reengage the workforce and bring them back safely, as well as how to handle those who don’t want to come back for health concerns. And, some shops may want – or need – to consider incentives, including bonus or hazard pay, to encourage people to come back to work.

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32 | plastics business • 2020 Issue 2

Sales have been and will continue to be difficult but should be a big part of strategic planning. Leadership needs to challenge its sales team to be creative and try tactics that may not have worked in the past but could provide opportunities in this new, evolving climate. There’s no question the industry will undergo significant changes as a result of this pandemic. On a more holistic level, there is the opportunity for positive change. Hopefully, this will be the shift in the industry that we’ve been waiting for. This includes businesses implementing new technologies and automation strategies, embracing a flexible workplace and placing a greater emphasis on keeping employees safe and healthy. The economic impact of the pandemic is going to be felt through December, and it will be sometime in the first quarter of 2021 when we start to see a rebound in the manufacturing industry. However, this rebound likely will be slow. Those leaders who step up, maintain their composure, continue to communicate with their team and look at every aspect of the business and how they can uniquely address challenges are the ones who will be best positioned for success through this very difficult situation. n As president and CEO of Harbour Results Inc. (HRI), Laurie Harbour leads a team of analysts and manufacturing consultants to help small- to medium- sized manufacturers develop shortand long-term strategies, improve their operations, reduce risks and optimize business. More information: www.harbourresults.com


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association

Quality Management Forum Held in March 2020 A suggestion by members that there were not enough resources for quality professionals in the marketplace led the MAPP team to create the Quality Management Forum. Held at PTA Plastics in Connecticut on March 11 and 12, attendees heard presentations, engaged in peer exchanges, problem-solved reallife scenarios and toured a world-class facility. “In terms of having tangible, actionable takeaways that we could implement immediately, this is the best event I’ve attended,” said Josh Romero, Natech Plastics. “The networking and education already have impacted our organization, and we’ve begun make big changes based on what we learned during these two days.” Attendees heard four presentations of best practices from their industry peers and were able to learn the “how” behind critical quality management issues and techniques. Presentations included best practices on culture, operators leading quality, qualitative risk management and lean manufacturing systems, and continuous improvement processes. Overall, the MAPP team hopes to continue the success of this event into 2021 and beyond. MAPP Members Step Up in the Crisis COVID-19 has shaken the world, but MAPP members have been looking to each other (the MAPP network) for help. Since the pandemic began, members have been reaching out for help and offering assistance across the US. Members have been discussing topics such as: temporary COVID-19 bonus pay and benefits, communicating short- and long-term planning, best practices for facemasks, urgent need for screw and barrel assembly, estimating mold cycle times and much more. Members have been successfully utilizing the Emergency Alert System, as well as the MAPP Discussion Forum, to turn to each other for parts, assistance, questions and business. The MAPP Emergency Alert system deploys an email that goes out to the membership instantly, connecting members to the network with a click of a button. Similarly, the Forum houses questions and answers for the membership that others can weigh in on and gather answers over time. Check out these benefits at mappinc.com. COVID-19 Crisis Management Series and Crisis Resources MAPP has been working tirelessly to curate the most up-to-date tools and resources for members during this pandemic, including the following: • The Resources Hub: COVID-19 Crisis Guidance, benchmarking, resources and important links and action items can all be found in one place directly from the home page on mappinc.com. • Expanded Online Events: Members can connect with

others facing similar challenges by making time for one of many online events. Brush up on a topic through expert-led webinars or have a discussion with industry peers during an online roundtable. Registration and more info can be found at mappinc.com/events. • The Plastics Discussion Forum allows members to post questions and concerns to the whole membership. Members who see the post have the potential to help other members by sharing their own experiences and knowledge. To get to the Plastics Discussion Forum, visit the homepage at mappinc.com. • Extensive Event Recaps: Whether you missed a recent MAPP COVID-19 event, attended a recent event and want to get a refresh or want to show a webinar to your team, event recaps are located all in one place for you to review. Check them out at mappinc.com/members/event-recaps-archive/. MAPP Hosts Weekly Virtual Leadership Exchange To bring processors across the industry together to share best practices and problem-solving, MAPP initiated weekly roundtable calls as the COVID-19 pandemic grew. For the course of four weeks starting in April, MAPP hosted a weekly virtual peer networking exchange for leaders in the plastics industry. Each Thursday, industry leaders joined the call to discuss best practices, common challenges, ideas and solutions to the common management and leadership hurdles being faced in the wake of the current crisis. During each exchange, leaders had the opportunity to submit their own questions for group discussion. Additionally, MAPP encouraged focused roundtable discussions on a specific topic each week. The first call involved leaders discussing managing the change in their business, and focused specifically on how they are improving themselves, their companies and their teams during this time. Find upcoming events on mappinc.com/events. MAPP Welcomes New Members and Sponsors AKKA Plastics, Inc. – Mitchell, Indiana Alwin Manufacturing Co., Inc. – Green Bay, Wisconsin Balda C. Brewer, Inc. – Ontario, California Bear Industrial Group – Mt. Clemens, Michigan Cortina Tool & Molding Co. – Franklin Park, Illinois DCT – Forest City, North Carolina Engineered Molding Solutions, Inc. – McHenry, Illinois Ensinger Precision Components – Putnam, Connecticut GERH Plastics – Boothwyn, Pennsylvania Motoman Robotics Division – Miamisburg, Ohio MPR Plastics, Inc. – Elgin, Illinois North American Lighting – Paris, Illinois OMG Tooling – Oklahoma City, Oklahoma RapidPurge – Essex, Connecticut Reed City Group – Reed City, Michigan n

www.plasticsbusinessmag.com | 35


BENCHMARKING

COVID-19: Business Policies and Best Practices by Ashley Turrell, membership & analytics director, MAPP

W

hen the Manufacturers Association for Plastics Processors (MAPP) asked plastics executives to rank their top priorities for the year in January 2020, no one could have anticipated the pandemic and the quick shift in business that would take place. As business leaders pivoted on their initial plans and strategies, they leaned on one another to fill in both the practical aspect of what needed to be done and to learn new ways to adapt – and help their workers adapt – to what is being called the “new normal.”

furlough and recalls, company-specific plans varied from “gut feel” to a detailed outline. The most robust policies included formulas and standardized instructions on making decisions on workforce reduction as well as how companies prioritize employees and guidelines for when employees can anticipate being called back. Additionally, companies included detailed outlines for furloughed employees that explained how the employee can contact the local government to receive assistance ASAP.

Practical and tactical

Beyond checklists and procedures, plastics leaders also shared best practices in communication, morale building and leadership during this trying time. With nearly every company executive reporting that keeping morale high is a key concern, here are a few examples of how plastics leaders are engaging with their employees keep spirits high, all while maintaining operations and keeping employees safe:

To assist, MAPP generated a series of benchmarking compilations for industry leaders to refer to as they began to develop new plans. The series includes more than 500 pages of policies, procedures, communication examples and resources to help plastics companies navigate the various changing aspects of their business. For example, in the initial outreach, the final product – COVID-19 Policies & Procedures – included examples of how business executives were communicating internally with their staff, sharing information with customers, changing policies for visitors and contractors, and full infectious disease action plans to be deployed for scenarios just like the one manufacturing businesses are facing today. As companies moved to remote work or were deemed essential and needed employees to still be present for production, two additional compilations were developed: Essential Worker Employee Transit Letters and Policies for Remote Workers/Working from Home. The most substantial policies explain expectations, work hours, frequency of contact and communication with supervisors, and a comprehensive checklist for IT security.

Best practices

1. Supporting Local Businesses and Communities Companies such as All-Plastics in Texas and Polyflex in Michigan are helping both their employees and their local communities. As their teams continue to show up each day for work, the employees are lacking in team and group events. To help, companies are working with local food vendors to get individually wrapped lunches and snacks delivered for employees for safe meal delivery. Instead of the standard boxes of pizza, for instance, two slices at a time are boxed together for a grab-and-go feast instead. Companies using this tactic report that employees appreciate the gesture, and their local vendors are more than happy to accommodate.

And finally, more leaders need to make tough decisions about workplace safety and employment levels. To start, executives shared how their companies would address an employee who tests positive to COVID-19. The most in-depth policies not only address an employee who tests positive, but also show tiered approaches to various situations. These include a positive employee test, an employee with symptoms, an employee who came in contact with someone with COVID-19, a sick spouse or family member, an at-risk employee or an employee who recently traveled to an affected area.

2. Videos and Messages from the Team Communication is king right now, but with so much required distancing and employees working from their homes, getting the same message to everyone now is even harder than before. To that end, companies like Sussex IM had its company leadership record encouraging video messages and updates that can be shared with all employees. At Sussex IM, the company has many languages spoken on its plant floor, so to make sure all employees heard the message, the CEO recorded a video in regard to being an essential business, the importance of their work and the importance of staying safe right now and then had it translated into four additional languages. This video played throughout all the lunchrooms and during every shift.

While some companies are ramping up, others must make workforce reductions. In sharing policies for employee layoffs,

Other organizations are bringing in not just leadership, but all employees. One company had employees at home record a short

36 | plastics business • 2020 Issue 2


video message of gratitude to those still coming into the facility, and employees in the facility recorded short video messages to those working from home, sharing how they were doing and how much they are looking forward to being together again. These videos were compiled and shared so everyone could see and hear the gratitude and the community throughout the company, no matter where they were. 3. Homemade Masks for All Employees To maintain safety and increase the comfort levels of employees, plastics companies are asking their employees to wear masks during their shifts. However, masks have become harder to come by, so some companies are taking on this challenge themselves. At Crescent Industries, the human resources director reached out to a seamstress, but the individual was only able to make about half of the masks the company needed in a timely manner. So, along with the seamstress’ contribution, the human resources director, the CEO and his wife took it upon themselves to sew the remaining masks. These handmade masks, which can be washed and reused, were distributed to each employee in the organization.

celebrate and acknowledge their employees. Organizations like Westec Plastics have hosted spirit weeks for employees to help unite those coming into the facility and add fun and levity back into the workplace. These spirit weeks included jersey day, flannel shirt day and Hawaiian shirt day. Companies also are giving bonuses for perfect attendance during this time or offering loyalty bonuses. Others are giving out small gifts, such as gift cards to local restaurants and sweet treats. Finally, some also are bringing their virtual team into the bonding activities by hosting virtual coffee breaks or water cooler chats – just a short time for everyone to get on a video call and catch up, allowing all team members to feel connected during this global crisis. No matter where they fall during this pandemic, every company is getting creative and leaning on their community and their peers like never before. n More benchmarking compilations and virtual best practice sharing: www.mappinc.com

4. Gifts, Recognition and Team Bonding More than ever, companies are looking for creative ways to

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www.plasticsbusinessmag.com | 37


ECONOMIC CORNER

What Will the Economic Aftermath Look Like? by Chris Kuehl, managing director, Armada Corporate Intelligence Editor’s Note: This article was written on April 16, 2020.

T

he status of the global economy has altered just a bit from what it was just a couple of months ago. It seems that all those standard concerns regarding inflation and deflation, interest rates, consumer confidence, industrial output and just about everything else that once preoccupied the minds of the economists have faded from view – replaced by reaction to the modern day plague of COVID-19. The focus now is on the “lockdown recession,” an economic catastrophe that is unparalleled in its origins and complexity. We all know by now that nearly the entire world has been brought to a standstill by the effort to control the spread of the virus, and every day brings more evidence of that economic impact. There have been over 22 million layoffs in just three weeks, retail sales plunged by 8.7% and oil prices have fallen to below $20 a barrel. The stock market has lost all the gains made in the last five years, industrial production has ground to a halt, and much of the damage has yet to be catalogued. Given that these cascades of bad news come every day, it seems more useful to try to focus on what the economy might look like when this crisis has been declared at an end. That aftermath is likely to look very different from those that have followed previous recessions, such as the one the world endured in 2008-2009. This one has been termed a “lockdown recession” because it was entirely artificial – a recession brought to you via government edict. Prior to the arrival of COVID-19, the economy of the US was in pretty fair shape. Nobody was expecting a particularly strong year, but growth was at 2.1% at the end of 2019 and, until the middle of March, the GDP growth rate had been holding at about that 2.1% level. The bottom dropped out of the economy with the announcement of the lockdown, and now Q1 estimates are as low as -6% to -10%. Those who are venturing a prediction for the second quarter are asserting that GDP growth could be as low as -20%. On the other hand, there are those who point out that Q2 numbers will be collected through June, opening the door to a possible rebound at the end. Most assert there will be a recession (formally), as there will be negative growth through the first two quarters. To escape a recession that affects the entire year, there will have to be a return to the economic conditions that existed prior to the outbreak of the virus. In fact, there will have to be more growth and more activity than had existed prior to the pandemic if affected business is

38 | plastics business • 2020 Issue 2

to recover a significant percentage of what has been lost. How likely is this? It will all come down to timing and consumer attitude going forward.

Three economic scenarios

1

There are three scenarios under discussion at this point. The first is the May Rebound. This assumes the lockdown is lifted early in May and that recovery can be underway by the end of the month. This rebound then picks up speed in June and July and allows for a significant recovery in the last two quarters of the year. The estimate is that GDP will shrink by around 1.6% over what it was at the end of 2019. Given that 2019 ended with a growth rate of 2.1%, a decline of 1.6% leaves the US economy with a 2020 growth rate of 0.05%. That is obviously a miserable rate of growth – and is as slow as the economy has been since the recession of 2008 – but, it is not an actual, formal recession (as defined by the National Bureau of Economic Research as two consecutive quarters of negative growth). This scenario delivers negative growth in Q1 and very slow growth in Q2, while Q3 and Q4 return to close to 2.0%. What will it take for this scenario to develop? First, the COVID-19 infection rate will have to peak as predicted – late April. This means a leveling off of new infections, hospitalizations and fatalities. This has occurred in China, South Korea, Taiwan and Singapore, as well as several of the European nations. Some US states are reporting a similar experience. The second thing that has to happen is a return of consumer confidence. If a restart is declared – but people still resist shopping, dining out, traveling and going to work – there will be no robust recovery. Third, the government will have to continue to offer assistance to affected business and to the population affected by job loss and economic dislocation. Thus far, the assessment holds that people will resume their old patterns fairly quickly, but there will be exceptions in populations that have been deemed vulnerable and in regions that have been hit hard.

2

The second major scenario is the Summer Rebound. This version holds that recovery efforts will not begin until at least June and possibly not until July. The lockdown stays in place through May and into June, and then slowly retreats through the summer. If this is the scenario, there will be a 5.5% decline in the GDP – and that takes the whole of 2020 into recession territory. This likely


would mean that Q1 and Q2 would be in severe recession, with GDP losses near 6.0% to 10.0%. The Q3 numbers would likely struggle back into positive growth territory, but that will not be robust enough to counter the impact of the previous quarters. The estimate is that Q4 will start to approach normal growth of 2.0%, but that will not be enough to keep the year out of recession. To get this “U”-shaped recession, there will have to be setbacks and delays. The virus will remain pervasive and persistent, and the peak will be delayed until sometime in May or even June. The consumer will remain very cautious and unwilling to accept the “all clear” declaration. Business will be reluctant to bring people back to old work patterns, and there will continue to be severe declines in sectors connected to travel, leisure and entertainment. There also would have to be setbacks in nations that have been moving towards normalcy. The Asian states already have had to deal with secondary infections as people have traveled back home, and it is not clear whether people who have been infected once can be considered immune to reinfection.

3

The third scenario is by far the most miserable, as it asserts there will not be a recovery period until the end of the summer or into fall. This means a GDP decline of between 6.0% to 10.0%, and that would be worse than the 2008 decline. Recovery would not even start until the end of Q3 or perhaps Q4. The chances of a retail boom fade and the travel/tourism season will have passed. This is the “L” recession, and it drags on for years. The majority of the unemployed stay in that situation for an extended period of time. One of the worstcase assessments came from the St. Louis Fed, which predicted a loss of over 50 million jobs if recovery is delayed into the fourth quarter. To put that in some perspective, the Great Recession of 2008 cost around 9 million jobs. As grim as these jobless numbers are, it is important to understand that some 80% are expected to return almost immediately upon the lifting of the lockdown, but that still leaves a gaping hole in the job market.

To see this scenario play out will require almost everything going wrong. The virus fails to fade until late in the summer and, by the time it does, there are perhaps 100,000 fatalities and perhaps five times that many serious cases. At the time of this writing, there were around 22,000 fatalities. Getting to that grim prediction would be very hard. Most importantly from an economic recovery point of view, the consumer would remain extremely wary and unwilling to resume old habits. It would be likely that many businesses would remain shuttered even if allowed to reopen. They would expect few customers and would prefer to wait for a more secure moment. The retreat on the lockdown will likely be in stages and slow. The first step might be opening more retail outlets, as there already

are many stores that have been deemed essential. The second step would likely include service establishments and restaurants, as it would be assumed that steps could be taken to make these establishments less risky. The third phase would be opening up to conferences and meetings, as there would be ways to adopt protocols to protect attendees. The final phase would be the return of events and venues that draw large crowds. The bottom line is that normal will look very different than it once did. 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

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SAFETY

Surviving an OSHA Inspection Coordinated by Liz Stevens, contributing writer, Plastics Business

C

hris Whitehorne, director of safety at professional services company US Compliance, shares his extensive, valuable knowledge and advice regarding the Occupational Safety and Health Administration and its inspections of manufacturers’ plants.

Part 1: Get to know OSHA

OSHA has jurisdiction over approximately seven million worksites and normally conducts inspections without advance notice. The agency prioritizes its inspections in this order: imminent danger situations, severe injuries and illnesses, worker complaints, referrals, targeted inspections and follow-up inspections. Triggers for OSHA inspections Based on Whitehorne’s 10 years of experience with US Compliance, the most common motivations for OSHA inspections are employee complaints, national or local emphasis programs, reporting of serious injuries and fatalities, referrals and follow-up inspections. Employee complaints that spark an OSHA inspection can come from active employees or former employees. Whether complaints are filed online or via phone, individuals are asked for their job status – active or former. In cases where a complaint is filed by a former employee, OSHA will typically send a letter to the facility in question. “If you respond to that letter, as long as you respond sufficiently, then they close out that employee complaint and they don’t come on site,” said Whitehorne. On the other hand, a complaint from an active employee who reports an imminent danger – such as having to enter confined spaces without proper monitoring or working at heights greater than 12 feet without fall protection – will trigger an onsite OSHA inspection. Whitehorne offered a simple solution to manufacturers who want to eliminate the potential of employee complaints leading to OSHA inspections: Listen to employees’ concerns, track them and address them in a timely manner. In many cases, complaints are ignored. “Employees come to a point where they’re so disgruntled and concerned about their own health and safety that they notify OSHA,” said Whitehorne, “so the best thing you can do is make sure you have a system in place for employees to voice their concerns, and make sure you actively respond.”

40 | plastics business • 2020 Issue 2

The three national emphasis programs that Whitehorne cited as OSHA inspection triggers that are most pertinent to the plastics and rubber industries include Amputations/Hazardous Machinery, Hexavalent Chromium and Combustible Dust. These are three examples of potential hazards that OSHA is targeting now, among its eight current national emphasis programs. To review all of OSHA’s national emphasis programs, visit www. osha.gov/enforcement/directives/nep. OSHA’s local emphasis programs are established by its 10 regional offices. Whitehorne’s advice? “Identify what your local emphasis programs are and make sure you’re all buttoned up in those areas.” To identify OSHA’s 10 regions and check on the local emphasis programs in each of them, visit www.osha.gov/ enforcement/directives/lep. A facility’s OSHA history Whitehorne stressed the importance of keeping track of one’s history with OSHA. “Have there been inspections in the past at your facility?” he asked. “Do you know what sites have had past citations? And most importantly, do you understand the citations and have you made sure your facility has addressed them and responded correctly?” Via the OSHA website, www.osha.gov/pls/imis/establishment. html, manufacturers can look up their establishment and see its OSHA inspection, violation and penalty history. The information is especially important for manufacturers with more than one site. Those owners can get the full picture for each of their establishments, understanding that a violation at one facility will put sister sites with the same violation in line for penalties in the costly Repeat category.

Part 2: The inspection process

An on-site visit by OSHA begins with an opening conference during which the OSHA compliance officer explains the reason for the inspection. The visit continues with one or more review/ inspection activities, and ends with a closing conference. The review/inspection aspect of an OSHA visit, explained Whitehorne, “includes a documentation review – where they are looking at programs, training and OSHA logs. There is a site inspection, typically tying in with employee interviews. And, depending on your process, they may look at industrial hygiene samplings as well.” In the closing conference, the OSHA compliance officer will outline the findings, make recommendations for improvements, and describe the possible


citations that may be issued for violations. At a future date, there will be post-inspection proceedings. Be prepared To be ready for the day that an OSHA inspector knocks on the door, Whitehorne recommended being proactive and having an internal OSHA inspection plan. “Most importantly,” said Whitehorne, “know your risks and address them.” It is important for manufacturers to identify the top three to five risks at each facility and be sure they have been addressed. Next comes eliminating common red flags so that the site is in topnotch condition with “good housekeeping, proper lighting, clear aisles, proper PPE being worn, and clear access to all emergency equipment.” The three most common issues that Whitehorne sees being targeted by OSHA are lockout/tagout, haz-com and guarding. “Really, these are the primary areas of focus when they are coming into a facility, so it’s important to address those well in advance of OSHA showing up.” Make a plan Whitehorne stressed the value of making a plan for how personnel at a facility will handle an OSHA inspection visit. It is crucial to plan who will meet with the OSHA compliance officer, and who else might need to be on hand to answer questions. Whitehorne pointed out that while the plant manager or an EHS person or someone in charge of maintenance might be the designated contact for an inspection, it’s smart to have a backup contact in case the primary contact is not on site. As part of the planning, said Whitehorne, “know when to use your resources during inspections. If you know that OSHA has come regarding a national emphasis program, such as lockout/ tagout, it’s critical that you have whoever wrote your lockout/ tagout program and whoever wrote your specific procedures involved in the inspection process.” The inspection The first agenda item during an inspection – the opening conference – is an important opportunity because, as Whitehorne put it, “this is your last chance to possibly stop or limit that inspection.” After an OSHA compliance officer has described the reason for the inspection, it may be possible to correct a misunderstanding or to manage a narrowly focused inspection. But, as Whitehorne pointed out, “Just be aware that even if OSHA comes on site for an employee complaint or an emphasis program, they can extend the scope if they see open and obvious safety concerns.” During a visit, OSHA compliance officers have the right to

interview employees. Whitehorne said that, generally, OSHA will request that a few employees be brought for interviews, which allows plant management to choose employees who are knowledgeable about the plant and its safety programs. OSHA may choose to interview specific individuals, but this is the exception rather than the rule. The interviews will be conducted in a private setting, but employees may ask to have someone from management or one of their peers present. Whitehorne recommended that the facility’s designated inspection contact stay out of earshot but within sight during the interviews, to be available for any questions that may arise. Inspection tips Keep all records for safety programs and training up to date and easily accessible. Give the OSHA inspector just the records requested, but not the entire library of documentation. Provide one program or one training record at a time, as requested. When it comes to OSHA injury logs, Whitehorne reminded manufacturers that OSHA-reportable injuries must be added to page 42 u

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SAFETY t page 41 a facility’s OSHA log within seven days. “There’s nothing worse than an OSHA inspector coming on site,” said Whitehorne, “and asking for your OSHA logs – typically three to five years’ worth – and you’ve got to run to HR, and they’ve got to backlog it for the last two months to get all that data on them. It’s really important that OSHA log information is accurate and readily available.” Make sure that plant workers are wearing proper PPE while an inspection takes place, and make sure that the inspector wears it too. Have the designated plant contact accompany the inspector for the entire inspection; failing to do this can lead to inspectors writing up violations that might easily have been challenged or explained by the plant contact. “Take good notes,” Whitehorne urged. “If they are taking notes down, don’t be afraid to ask, ‘Hey, what are you taking notes for?’ They should explain to you what they’re doing and why they are noting something.” Also, take the same photos that OSHA does. If they take a photo, take the same one for your own notes. Whitehorne had some key advice for concluding the inspection walk-through. “Most importantly, if there are quick fixes you can make, make them.” Why do it immediately? “It shows good

faith – you’re abating a hazard,” he said, “and OSHA will take that into consideration if they even record a violation for that problem. If there is anything you can immediately fix, you want to do that during the walkthrough.” The closing conference During the last agenda item in an inspection – the closing conference – the OSHA compliance officer will explain the violations that will be relayed to the OSHA area director for possible citations. The officer will describe what is expected of the employer if citations or penalties are imposed by the area director, the time period allowed for OSHA to issue citations (six months), and the options available to the facility once citations have been issued. While the opening conference is the last chance to stop or limit an inspection, the closing conference offers an equally important occasion. “It’s your last opportunity to demonstrate compliance,” said Whitehorne. If, for example, program records that were requested at the start of the visit could not be found but, in the interim, they have been located, get them in front of the inspector during the closing conference. “Abate as much as possible,” advised Whitehorne. “Show everything that’s closed out, as much as possible, before the inspector leaves the facility.”

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42 | plastics business • 2020 Issue 2


Part 3: OSHA citations

Following an on-site inspection, OSHA has six months to issue citations for violations. In certain cases, OSHA may issue citations but offer an expedited informal settlement agreement with reduced penalty amounts. When citations are received, a manufacturer may accept the citations without argument or may choose to challenge the allegations. In all of these instances, the manufacturer may request an informal conference at the OSHA area office to discuss or challenge allegations and to negotiate penalties, but the conference must take place within 15 days of receiving citations. If, after an informal conference, the manufacturer still feels that a resolution has not been reached, a formal contest process can be initiated. An expedited informal settlement agreement may be offered for first-time offenders. “And if you showed good faith during the inspection and all your hazards fell below the willful category,” explained Whitehorne, “they will offer you a 30% reduction immediately on the citations issued. You can sign the agreement and close out that inspection.” In other cases when presented with citations, said Whitehorne, “you can accept the citations, pay them, abate the issues and move on. OSHA will maintain the violation records for five years to

You take color and compounding seriously. So we take it personally.

reference for potential repeat citations.” But Whitehorne stressed the value of requesting an informal conference. “We always recommend the informal conference, no matter what,” said Whitehorne. “Even if you get the expedited informal settlement, it could still be beneficial to attend the informal conference.” The informal conference “The informal conference,” said Whitehorne, “is truly informal. You walk in, you sit down with your inspector and the area director, and you go through your packet of all the citations that were issued to you.” Who should attend? “We always recommend that you show up as the EHS manager,” said Whitehorne. “But it’s really important to show commitment from higher-ups within the organization, such as the VP of operations or the operations leaders, to demonstrate that everybody in the organization owns this.” Whitehorne recommended arriving with a plan to show that all issues have been abated or, if not abated, what interim controls have been put in place and the long-term plans for abatement. page 44 u

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SAFETY t page 43 “This is your opportunity to communicate your commitment to safety and health,” said Whitehorne. “Maybe it’s been six months since OSHA has been at your site. You can say, ‘Here are all the things we’ve done in six months. Everything’s been abated. We want to show our good faith efforts to improve workplace safety.’" There are a number of items that can be negotiated in the informal conference. Regarding an alleged violation, was it valid or not? Has the correct citation number been cited? Other negotiations can include the violation category – serious or non-serious – and the abatement period. The affirmative defense stance An argument that can be used to ask for dismissal of a violation/ citation is the Affirmative Defense Stance – “A claim which, if established by the employer and found to exist by the Compliance Officer, will excuse the employer from a documented citation.” There are three explanations that a manufacturer can cite in arguing affirmative defense: • Compliance creates a greater hazard • Impossibility or infeasibility of compliance • Unpreventable employee or supervisory misconduct, or an “isolated event”

Strict criteria must be met for these arguments to be successful.

Conclusion

While an OSHA inspection can be stressful, knowing what to expect during the inspection and conferences goes a long way toward reducing the anxiety level. So does knowing one’s OSHA history, being up to speed on national and local emphasis programs, and being aware of the potential “hot spots” at one’s facility. With knowledge in hand, manufacturers can review their sites to correct any obvious red flag issues, keep documentation complete and current, and plan for who will represent the facility and interact with the compliance officer. Each bit of knowledge, preparation and planning takes a big bite out of the anxiety that can accompany an OSHA inspection. n Chris Whitehorne is in his 11th year with US Compliance. He manages and provides EHS services in a multitude of industries, and also has extensive experience in managing OSHA inspections, reviewing and investigating serious accidents and completing comprehensive health & safety audits. More information: www.uscompliance.com

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44 | plastics business • 2020 Issue 2


BOOKLIST

Not Your Typical Business Podcasts by Dianna Brodine, managing editor, Plastics Business

I

have a love/hate relationship with podcasts. I love the ease of them, and it’s great to be able to pop in my earbuds and listen while I’m out for a walk or replying to emails in the office. The Armchair Expert Podcast is (as far as I’m concerned) the best thing ever, and I can go down the rabbit’s hole with all sorts of true crime podcasts and never emerge. But, business podcasts can seem a bit … dry … so I went on a hunt for episodes with a bit more edge. Here are my recommendations for those who want the message and the lesson without the boredom.

Business Wars

Netflix vs. HBO. Nike vs. Adidas. Business is war. Sometimes the prize is your wallet or your attention. Sometimes, it’s just the fun of beating the other guy. The outcome of these battles shapes what we buy and how we live. Business Wars gives you the unauthorized, real story of what drives these companies and their leaders, inventors, investors and executives to new heights – or to ruin. Sample podcasts: • Ford vs. Chevrolet: Technology in the Fast Lane • Harley and the Biker Wars: The Freedom Wars • Anheuser-Busch vs. Miller – The Beer Barons

Spectacular Failures

Corporate crookedness. Family feuding. Hilariously half-baked decisions. Host Lauren Ober tackles some of the most spectacular business failures of all time, and what could have been done to avoid them. Some of these stories are shocking. Some are funny. Some

are just downright sad. But each one will give you a totally new perspective on big business … and big failure. Sample podcasts: • Toys R Us Goes Bust • The Inferno that Transformed American Labor • Family Fighting Sends U-Haul on a Detour

Cautionary Tales

We tell our children unsettling fairy tales to teach them valuable life lessons, but these Cautionary Tales are for the education of the grown-ups – and they are all true. Tim Harford (Financial Times, BBC, author of “Messy” and “The Undercover Economist”) brings you stories of awful human error, tragic catastrophes, daring heists and hilarious fiascos. They'll delight you, scare you, but also make you wiser. Sample podcasts: • Bowie, Jazz and the Unplayable Piano • How Britain Invented, Then Ignored, Blitzkrieg • Buried by the Wall Street Crash n

A Book from the MAPP Executive Director

Anyone who has heard Troy Nix speak at a MAPP Benchmarking & Best Practices Conference knows the man can command a room. With heartfelt stories and impactful messages, his opening message is my favorite thing at every conference event. Now, there’s no need to wait for October to roll around – Nix has published Eternal Impact: Inspire Greatness In Yourself And Others. Drawing on three decades of reflection and positively influencing people, Nix shares his unique philosophy that will inspire, inform, motivate and empower you. Available at most online retailers, this mix of compelling stories, humor and practical advice will show you how to make changes to positively affect more people.

www.plasticsbusinessmag.com | 45


SUPPLIER DIRECTORY Employment Services

Insurance

Process Monitoring

AJ Augur Group, LLC www.ajaugur.com Page 32

Federated Insurance www.federatedinsurance.com Page 44

IQMS www.iqms.com Page 3

Equipment/ Auxiliary Suppliers

Legal

RJG, Inc. www.rjginc.com/registration Page 33

Conair go.conairgroup.com/totalsystem Back cover Frigel www.frigel.com Page 39 Plastic Process Equipment, Inc. www.ppe.com Inside back cover Progressive Components https://procomps.com/profile Page 7

Benesch www.beneschlaw.com Page 41

M&A Activity MBS Advisors www.mbsadvisors.com Page 15 Stout www.stout.com Page 19

MRO Supplies

SIGMASOFT Virtual Molding www.virtualmolding.us Page 25

Purging Compounds Purgex Purging Compounds www.purgexonline.com/ free-sample Inside front cover

Resins Amco Polymers www.amcopolymers.com Page 13

Wittmann Battenfeld www.wittmann-group.com Page 23

Grainger www.grainger.com Page 34

Yushin America, Inc. www.yushinamerica.com Page 10

Molds/Tooling

Chase Plastics www.chaseplastics.com Page 32

A-1 Tool Corporation www.a1toolcorp.com Page 29

M. Holland www.mholland.com Page 43

B A Die Mold www.badiemold.com Page 28

PolySource www.polysource.net Page 26

Tax & Advisory

Foaming Agents

Carson Tool & Mold www.carsonmold.com Page 29

iD Additives www.idadditives.com Page 21

Concept Molds www.conceptmolds.com Page 29

Hot Runners

Ivanhoe Tool & Die Company, Inc. www.ivanhoetool.com Page 28

Events/Organizations Manufacturers Association for Plastics Processors (MAPP) www.mappinc.com Page 20

INCOE Corporation www.incoe.com Page 27 Synventive Molding Solutions www.synventive.com Page 9

Operations Consulting Harbour Results, Inc. www.harbourresults.com/plastics Page 37

46 | plastics business • 2020 Issue 2

Mueller Prost www.muellerprost.com Page 11 Plante Moran www.plantemoran.com/napis Page 20

Training Paulson Training Programs, Inc. www.paulsontraining.com/ contact-us Page 31

A guide to this issue’s Plastics Business advertisers.


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Plastics Business 2020 Issue 2