Plastics Business - Winter 2016 by petersonpublications

Plastics Business Winter 2016

Strategies for Todayâ&#x20AC;&#x2122;s Plastics Processors

ANNIVERSARY

Official Publication of Manufacturers Association for Plastics Processors

director’s letter

We are United, Driven and Duty-Bound! Pick up any top-rated business book about running a successful company and somewhere in the pages will be a reference to the need to have a clear vision of the future. Authors of these books recommend that a company’s vision statement be visible for all to see and encourage periodic examination of the vision to ensure viability and validate the course as business conditions evolve. Last summer, MAPP’s board of directors decided it was time to re-examine the vision of the organization to more clearly understand what the future should look like in the year 2020. Interestingly enough, this group of leaders outsourced the task to a dedicated team of MAPP members comprising both new and old members from across the US, along with some very engaged service providers. The mission for this team was to identify MAPP’s overall purpose, determine its core values and lay out the five-year vision.

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 Ben Harp, Polymer Conversions, Inc. Vice President Norm Forest, Dymotek Molding Technologies Secretary Ryan Richey, Precision Plastics, Inc.

• united in the belief that American plastics companies can compete and win if we help each other understand today’s best practices, • driven to provide cutting-edge resources and paradigm-shifting information to significantly strengthen the member companies served, and • duty-bound to connect plastics professionals for the purpose of promoting mutually beneficial knowledge sharing that propagates success and impacts industry sustainability.

Bill Bartlett, First American Plastics/Quad, Inc. Craig Carrel, Team 1 Plastics, Inc. Michael Devereux II, Mueller Prost PC John Hoskins, Octex Holdings LLC James Krause, Microplastics, Inc. Bob MacIntosh, Nicolet Plastics, Inc. Terry Minnick, Molding Business Services Tom Nagler, Natech Plastics, Inc. Brian Oleson, Centro, Inc. Eric Paules, Crescent Industries Missy Rogers, Noble Plastics, Inc. Alan Rothenbuecher, Ice Miller LLP Teresa Schell, Vive LLC Tom Tredway, Erie Molded Plastics, Inc. Mike Walter, MET Plastics, Inc.

Even more exciting is the fact that MAPP’s new focus over the next five years will be to maximize the engagement of its current membership base, to only target and recruit quality processors who understand and are committed to the “helping and sharing” mentality that forms the foundation of MAPP and to grow the overall value proposition.

Plastics Business

What resulted from several months’ worth of work is nothing less than astonishing. In fact, in the nearly 20 years of serving as MAPP’s director, I have never been more excited about the future of this organization. We are…

This strong commitment to the organization’s future wouldn’t be possible without the solid foundation set from the very beginning. It’s eye-opening to read meeting minutes logged more than a decade ago where the vision of the future was defined. Comparing the organization’s current position to what had been hoped for in the past gives credence to the vision planning process, as much of what we documented over a decade ago has actually been realized. Hard work, passionate industry professionals and a vision for what could be accomplished have led to years of success and a bright outlook for the next 20 years of this association. As I close this director’s letter in a celebratory format, I hope each of you understands that talking about the future with your team, envisioning what could be and documenting hopes, dreams and aspirations are an essential part of increasing the probability of reaching the pinnacle of success. Take time with your team to set a path.

Executive Director, MAPP P.S. Reflecting on this brings to mind that MAPP’s first-ever issue of Plastics Business was distributed to a couple of thousand professionals at NPE 2006. To know that this, our 10th anniversary issue of Plastics Business, is being sent to well over 12,000 industry professionals may at first seem like a tremendous feat; however, it always was our vision for the future!

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Strategies for Today’s Plastics Processors

Published by:

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 Brittany Willes

Art Director Becky Arensdorf Graphic Designer Kelly Adams

Circulation Manager Brenda Schell

Plastics Business

Strategies for Today’s Plastics Processors

Contents Winter 2016

ANNIVERSARY

Top 5 Challenges Going into 2016 Finding skilled employees Health care costs and regulations Implementing and improving processes Increased regulations Managing customer demands

focus

industry

solutions

features focus Plastics Business Celebrates 10th Anniversary........................................8 industry Strong and Steady: 2016 MAPP Business Forecast................................. 14 update OSHA’s New Scrutiny on Plastics Companies....................................... 18 view from 30 Visual Management for Safety in Manufacturing.................................. 22 Scholarships Relieve Financial Burden, Encourage Plastics Industry Careers................................................. 24

departments director’s letter................... 4 association.........................16 news..................................44 advertisers.........................50

outlook Tax Legislation Update for Plastics Processors..................................... 28 strategies Common Pricing Mistakes and How to Avoid Them............................. 32 solutions Utilizing Personality Tools to Find the Right Employees....................... 38 booklist Must-Read Books on Employee Motivation........................................... 46 management Charge: Less Management, More Leadership, Better Results................ 49

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focus

Plastics Business Celebrates 10th Anniversary Two men found themselves with side-by-side booths at a plastics industry tradeshow. One was an association executive ready to gain more visibility for his coalition of plastics processors; the other was a magazine publisher with a history of working with associations. The encounter sparked further conversations and, less than a year later, Plastics Business was born, with its first published issue in the spring of 2006. “Troy and I hit it if off right away, and the conversation continued through the show on the potential of a specific association magazine for MAPP,” said Jeff Peterson, president and owner of Peterson Publications, Inc. Starting Plastics Business was a risk for both organizations, as the industry already was somewhat saturated with plastics publications. However, focusing on the business aspect of plastics molding was the key – and the right fit based on the mission of the association. “Although we had a few years of experience in plastics decorating and assembly, the molding process was a new area for us to cover,” continued Peterson. “That meeting was the beginning of a terrific business partnership. Ten years later, Plastics Business is thriving, and some of those other publications are no longer being printed.” In those 10 years, 38 magazine issues have gone to press. During the leanest years of the economic downturn in the plastics industry, one – Summer 2009 – was scrapped as equipment manufacturers, resins suppliers and others offering services to the industry pulled back their advertising budgets in a bid for economic survival. There has never been a subscription cost for Plastics Business, and the magazine – which began with a couple of thousand copies and a small mailing list culled from association members – now is sent to more than 12,000 readers across the US. Additional readership comes from around the world through the digital edition and mobile apps, with interest from 23 countries, including India, Germany and Australia.

by Dianna Brodine, managing editor, Plastics Business

The magazine has been distributed at four NPE tradeshows, nine MAPP Benchmarking Conferences and countless PLASTEC, ANTEC and TopCon events. One economic downturn – leading to hard decisions and many articles about strategic planning, lean manufacturing and maximization of capacity – has been followed by an upturn that finds smart companies in even stronger financial positions. Hundreds of pages have been devoted to sharing best practices, processes and strategies – with the intent of strengthening an entire industry, rather than succeeding only on an individual level. It’s been a fun ride and, even as the magazine, the MAPP association and the plastics industry power forward into 2016, it’s appropriate to take a look back.

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page 10 u

There has never been a subscription cost for Plastics Business, and the magazine â&#x20AC;&#x201C; which began with a couple of thousand copies and a small mailing list culled from association members â&#x20AC;&#x201C; now is sent to more than 12,000 readers across the US.

www.plasticsbusinessmag.com | 9

focus t page 8 The first year Stu Kaplan and Makuta Technic’s lights-out micromolding capabilities graced the first cover, ERP software was featured in a Buyers Report and plastics processing companies were urged to perform ongoing audits of processes and systems to ensure profitability in the Spring 2006 issue. Kaplan, one of the earliest supporters of the MAPP association, had served as a board member and board president. His enthusiasm for the new magazine was evident in the interview, as was his dedication to the micromolding market he helped create.

PBspring2013.indd 1

5/13/2013 10:57:15 AM

… he understands more than most that being on the ground floor of new technology development means setting the standard for those who follow. Kaplan explained, “The trend toward micro-processing started here – we helped develop that market and because of this, we feel a responsibility to continue to push the technology envelope forward.” NPE was just around the corner, held in June that year at McCormick Place in Chicago, Illinois, and eyes were on automation. All-electric injection molding machines and robotics received significant attention on the show floor and in the magazine, as did processors with a laser focus on bringing technology to the production floor. Tom Duffey, president and owner of Plastics Components, Inc. (PCI) in Germantown, Wisconsin, was quoted in his company’s Summer 2006 profile article: “We knew we were going to have to compete in a global marketplace… We had to do something different right from the beginning,” stated Duffey. That ‘something different’ was complete process automation. For 17 years, since Plastics Components molded its first part, the plant has been fully automated. “We’ve never had an operator in the direct molding process… ever,” emphasized Duffey. The emphasis on automation hasn’t changed for PCI, as the company now operates a second facility fully lights out. One advertiser has been with Plastics Business since 2006. In every issue, readers will find Conair on the back cover, sharing its extensive industry expertise in auxiliary equipment ranging from granulators and blenders to its newest thermolators and cooling towers. Also advertising in the first issue – and proving that everything old is new again – Metro Plastics promoted its rapid prototyping options for initial mold design. Later that year, Metro Plastics Owner and President Lindsey Hahn discussed the capabilities of the machines installed, at that time, for 17 years.

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In 1989, Metro Plastics purchased its first Stereolithography (SLA) machine when the process was very new and consequently, quite inconsistent. “The part data was not reliable, and the machine did not always produce a good model,” explained Hahn. “In those days, we didn’t talk much about the process. If we made a good SLA part, we gave it to our customer. If it didn’t turn out so well, we used the model for our own personal R&D and from it, were able to make suggestions to the customer.” Metro had the foresight to visualize the potential of the SLA process back when few, if any, other molders recognized its value. “As far as we know, Metro was the first custom molder in the US to install the system,” stated Hahn.

The cover companies Plastics Business has featured 28 companies on its covers. Many have been injection molding facilities, but blow molding made its first of several appearances in a Fall 2009 feature on Blow Molded Specialties, and rotomolding (Indiana Rotomolding, Fall 2012) also has received top billing. The operations have been in the family for decades (HK Plastics Engineering, Summer 2012), women-owned (Thogus Products Company, Summer 2007) and practically new startups (Dymotek, Winter 2009). Some were on the cusp of major facility expansions and others were tightening operations in preparation for a shift in the market. All showed a passion for entrepreneurism, customer service and making something that leaves an impact. As Missy Rogers, co-owner of Noble Plastics, explained in the Winter 2014 issue: “There is something really special about holding a product for the first time. It is like giving birth to a child, and to be able to share that with people and bring a solution into existence is a very rewarding way to spend your day.”

automotive components (Team 1 Michigan, Winter 2008) to highly complex electronic products (Plastikos, Fall 2011) and medical parts (Trademark Plastics, Spring 2012), the processors have each shared unique their unique procedures and practices with the rest of the industry so that readers could learn about employee wellness plans, product tracking, facility planning and much more from peers who had implemented solutions and succeeded in overcoming challenges. The industry issues Through the years, overseas competition has received its fair share of attention. In 2007, concerns about the production shift to China were rampant and an article focused on the potential hazards of that shift, including intellectual property issues and a reduction in part quality. Even then, highly complex parts and those requiring time-consuming decorative processes were being re-shored, and many US processors began to emphasize their custom molding skill sets. Today, while China still commands attention, production in Mexico, Vietnam and India has increased. Small to midsized US processors, however, have

The molders interviewed have functioned within a wide range of industries. From agriculture (i2tech, Winter 2011) and

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focus t page 11 found their niche and most are not competing on commodity products alone – or at all. Advancing technology always has been one answer to the questions arising from overseas competition. In issues over the years, Frigel has shared ways to utilize process cooling equipment to reduce utility costs, IQMS has advocated data management through ERP systems and RJG’s process validation for molds has ensured product consistency. Injection molding machines and auxiliary equipment became easier to operate and now have the ability to store multiple programs for easy recall. Resins have advanced almost by the minute, with recycled materials, bioresins and additives introducing new characteristics, while purging compound complexity also had to advance quickly as rapid changeovers became the norm, rather than the exception. One recurring concern of those in any manufacturing industry is the recruitment, training and retention of qualified employees. The topic has been approached in a multitude of ways in Plastics Business, including a Summer 2006 article discussing the Global Standards for Plastics Certification (GSPC) training program; a Winter 2010 feature on the “next generation” of plastics leadership (four company leaders under the age of 40); a Summer 2010 piece on recruiting youth at the high school level; a Spring 2012 article on incentivizing employees and a Summer 2013 write-up on advancing the STEM agenda. Whether removing the stigma surrounding manufacturing, developing consistent training programs or creating clear paths for advancement and employee incentives, the volume of baby boomers retiring over the next five to 10 years ensures this topic will remain in the magazine’s headlines. As Darren Scholl, director of operations for KW Container, explained in the spring of 2013: “I tell everybody – the only true asset you have is an employee. You can buy equipment – you can spend all the money you want to – but, you have to have people to run it. If you don’t have the employee side of it, you will not win the game.” Plastics Business always has emphasized the importance of a clear and active marketing strategy for ongoing business success, but one has to wonder how many found value in a Summer 2008 article on using Google AdWords. Subsequent articles on keyword optimization, viral marketing, social media strategies and brand development have hopefully offered more practical advice. Practical applications of strategies and procedures found at plastics processing companies around the US have found their way into the pages of every issue. Why reinvent the wheel when readers can take advice from companies that have already solved common problems? Mold maintenance, waste eradication, employee accountability, cyber fraud protection, faster changeovers and improved company culture – MAPP

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member companies have stepped up to share information that can make an impact in every plastics processing operation. The power of the MAPP network has been touted for years, but Plastics Business makes it possible for that power to stretch from coast to coast whether the reader belongs to the association or not. A rising tide lifts all boats, and the industry can only benefit when learning from one another. To a successful 10 years and many more The magazine has had its share of bloopers over the years, including a misspelled word on a cover (that one’s still a little embarrassing) and one issue with no words at all on the cover. As with anything, there are a few magazines pointed to with pride as “the best of the best” and a couple of issues where the unpredictability of publishing resulted in a sigh of relief when it finally went into the mail. Still, every issue was crafted with the reader in mind and an eye on what content could make the biggest impact on operational improvements. As Plastics Business celebrates its 10th year, the plastics processing industry provides an endless source of fascinating material for the future. This country manufactures amazing things in industries as diverse as automotive, medical, appliance, toys, defense, consumer goods and so many more. Skilled employees and visionary leadership teams are found in every facility and, as long as those people are willing to open a window into their operations, the industry as a whole will grow stronger, more efficient and better prepared to meet new challenges. Thank you for 10 years. We’re ready for more. n

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industry

Strong and Steady: 2016 MAPP Business Forecast Over 84 percent of plastics processing executives reported they had experienced either an increase in sales (61 percent) or remained flat (24 percent) over the last 12 months, according to the most recent State of the Plastics Industry survey from the Manufacturers Association of Plastic Processors (MAPP).

year. With a number of new programs being awarded, respondents found they are most optimistic about three key market segments: automotive, medical and consumer goods.

While sales trend increases are anticipated, certain indicators reveal that the positive momentum enjoyed by most over the last four to five years seems to be slowing a bit. “If you were to simply take the results of this report in a vacuum, all indicators are very positive,” stated Troy Nix, executive director of MAPP. “However, when examining the last five years of data, some of the trend lines simply aren’t as positive.”

Executives also hold optimistic outlooks for the medical industry. Medical device growth has been strong in recent history, and experts believe that this trend will continue into 2016. Constant innovation in the medical field, advancements in care for the growing elderly population and the support required for new medical devices requiring both housing and disposables lead many to predict that medical sector growth will persist throughout the year.

Reinforcing the automotive optimism, Steven Szakaly, chief economist of the National Automobile Dealers Association, In its 16th year, MAPP’s annual State of the Plastics Industry recently indicated that “new light-vehicle sales will rise to survey shows that executives 17.71 million units in 2016, a 2.3 Top 5 Challenges Going into 2016 predict optimistic trends for plastic percent increase from our forecast processors. Data for this survey of 17.3 million sales in 2015.” As Finding skilled employees were collected from 156 seniorthe automotive market continues Health care costs and level executives representing growing, companies find that new regulations companies from a variety of sizes products are being designed and Implementing and and processing disciplines. The produced more frequently. “The improving processes Increased regulations report generated from this survey overall pace of automotive design helps company leaders benchmark rollouts is unprecedented,” noted Managing customer how their companies stack up in one senior-level executive. Lower demands comparison to industry norms and fuel costs are anticipated to continue helps to calibrate the intuitive “gut throughout 2016, leading to more Adjustments to Compensation feel” that most executives constantly robust domestic automotive sales Due to Minimum Wage Legislation are looking to validate. growth.

As an example, MAPP’s latest published report indicates that 76 percent of the survey respondents anticipate an increase in sales over the next 12 months, compared to a reported 85 percent this time last year. The other trend that troubled Nix is the fact that 4th quarter over 3rd quarter 2015 sales growth was not as robust as in the last six years. “I’ve tracked this trend for some time and use it as a predictor of what’s to come,” he explained “Nearly 60 percent of executives in 2014 and almost 55 percent in 2013 reported strong growth over 3rd quarter sales performance, compared to a mere 40 percent this year. Don’t misinterpret this – the industry still is doing well, but I’m just not as comfortable with the trends.” While anticipated sales trends may not be as strong, companies remain optimistic about what is in the pipeline for the upcoming

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Consumer goods ranked third in the listing of segments about which respondents were most optimistic for 2016. Professionals are seeing an increase in consumer demand, including positive signs in consumers planning to upgrade. A strong economy, low inflation, low transportation costs and low oil prices are driving increased reported sales in consumer goods. According to the survey, although sales and business are projected to increase, executives find themselves facing a variety of challenges in the upcoming months. Recruiting and retaining skilled employees remains the top challenge, dwarfing all other issues. The aging workforce and the ability to attract today’s youth to the industry continue to impact operations, leaving

many companies in a constant search for talented workers. More companies are working to gain the attention of potential candidates in the job market by bettering their image and attempting to gain publicity as employers of choice. Rising costs due to new government regulations, particularly in relation to the Affordable Care Act and minimum wage legislation, are major challenges. While some industry executives have hired outside consultants to manage their companies’ health care plans, other senior leaders are adding resources in-house to find and implement the most affordable health coverage for their employees. Minimum wage legislation also is forcing many companies to make changes in their compensation in 2016. Nearly half of executives, 48 percent, plan on making slight to drastic adjustments to their wage structure to compete over the next year. Although there will be an increased cost in compensation, 40 percent of executives anticipate increasing the number of production employees. A positive trend in reshoring experienced over the last seven years is prominent in this year’s survey. Forty-one percent of executives responded that their customers are relocating work from offshore suppliers to US suppliers; another 37 percent noted that their customers are not actively looking for off-shore suppliers.

The number of customers who are moderately to aggressively looking for off-shore suppliers continues to decrease. While business is coming back to the US from foreign suppliers, companies are noticing an increase in customer demands. Over 60 percent of executives noted that customer specifications and requirements for new business are more demanding than in the past. Managing customer costs and expectations leads some companies to look to off-shore suppliers when purchasing their production tooling. Roughly 56 percent of companies purchase tooling overseas – down seven percent from last year. Thirty-nine percent of respondents do not purchase any production tooling from off-shore suppliers – up six percent from 2015. With increases in sales and opportunities, nearly three-fourths of companies report their current profits as being acceptable or great. Ninety-eight percent of executives expect business activity to either increase or remain steady over the next twelve months. The survey indicates that the overall health of the US plastics industry for 2016 can be summed up with two words: strong and steady. Join MAPP on March 3, 2016, at 11 a.m. EST for the State of the Plastics Industry webinar for more information on the full report. Register at www.mappinc.com. n

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association

MAPP Manufactures Information to Help Members Compete Many outside of the MAPP organization do not fully realize that MAPP is in the business of production; it just so happens that its products are information-based. Like the members it serves, MAPP continually works to produce information to help staff-level executives improve their own operations. The keynote studies completed on an annual basis include MAPP’s State of the Industry Report, the Machine Rate Report for Injection Molders, the Wage and Salary Report and, working in conjunction with Plante & Moran, the North American Plastics Industry Study, MAPP edition. In addition to these reports, MAPP also conducts a variety of needs-based surveys to meet the needs of changing business conditions. • MAPP State of the Industry Report Available Now: The MAPP State of the Industry Report now is available on the MAPP website. This report addressed over 30 economic indicator questions including, but not limited to, sales forecasts, production backlog, quoting hit rates, material and production tooling trends and more. Participants receive the report at no cost, and the report also is available for purchase on the MAPP website. • Attendance Policies and Procedures Study: Members of MAPP’s human resource peer networking group have commissioned a benchmarking study on current attendance policies and procedures in plastics manufacturing companies. Although this study is a compilation of attendance policies used by other members (minus company-specific details), it helps HR professionals better understand opportunities to improve their own policies. MAPP Plant Tour Event: STIHL, Inc. Thursday, April 28 n Virginia Beach, Virginia Purpose: MAPP’s plant tour events are designed to provide members with new ideas and paradigm-shifting information about the way operations are managed in their own businesses. MAPP Board of Directors President Ben Harp explained, “When business leaders are able to see a process outside of their own, it serves as an immediate benchmark. I’ve seen other MAPP Member facilities on these tour events and asked myself the proverbial, ‘why aren’t we doing it this way?’ question.” MAPP’s proprietary facilitation engagement process creates an experiential learning environment for all attendees. Topics of Focus: STIHL Inc. is strongly committed to quality people, products and processes. Two plants on the company’s

16 | plastics business • winter 2016

Virginia Beach campus run 89 injection molding machines, including more than 20 with RJG’s eDart units. These units are run by 22 Master Molder I and eight Master Molder II technicians, all of whom were trained together. In STIHL’s polymers plant, technicians injection mold, blow mold, weld and assemble everything from engine housings to decorative shrouds. These plastic parts then are supplied to the on-site assembly line or exported to other STIHL Group plants. Benefits of Attending: STIHL’s MAPP Members will have the opportunity to explore production operations and better understand how STIHL’s management team successfully maintains a strong culture of engagement, innovation, continuous improvement and process excellence in its operations. Spots are filling quickly. To register, visit www.mappinc.com. MAPP Welcomes RTi as a New Sponsor Resin is the most critical cost component in a processor’s business – ranging from 45 to 85 percent of the total cost of business. A network that spans the globe and 20 billion pounds of transactional benchmarks gives RTi the ability to bring knowledge and transparency to its clients, creating a clear vision regarding the resin markets. Each of RTi’s resin experts has more than 25 years of experience in the plastics industry selling, processing or buying resin. RTi resin experts dedicate 100 percent of their time to analyzing critical market drivers from the well head through the manufactured finished product, using its vast network. Market drivers such as feedstocks, exports, pricing benchmarks, supplier actions, producer inventory levels and operating rates all have an impact on the price of resin. Most processors feel volume dictates the price paid, which is not correct! Using real-time market knowledge to create strategies and actions will dictate the price processors pay for the resins they purchase. MAPP Forms Quick Mold Change Consortium Driven by an active regional membership base located in southern Indiana, MAPP formed a consortium designed to improve mold change time. According to Executive Director Troy Nix, “When the ability to deliver product on-time to customers becomes more difficult because less machine time is available, then every second counts in the changeover process.” Representatives of MAPP’s 15-company consortium met in late January to view video footage of an actual mold change conducted by one of the consortium members and then supplied a comprehensive critique. It is the goal that all members positively benefit from involvement in the

consortium by improving the efficiency and effectiveness of their own mold change process. 2016 Benchmarking and Best Practices Conference Mark the calendar now for a one-of-a-kind event to be held Oct. 13-14, 2016, at the JW Marriott in Indianapolis, Indiana. The 2016 conference is the most popular business conference in the US plastics industry. This year’s theme, Perseverance – The Secret of All Success, will not only serve as the backdrop, but help to inspire and motivate those who attend. Details and registration are coming soon to www.mappinc.com. MAPP Welcomes New Members • Sapona Plastics LLC, Asheboro, North Carolina • Advantage Plastic Products, Concord, New Hampshire • Molex, Inc., Lincoln, Nebraska • Hayward Industries, Clemmons, North Carolina

MAPP Welcomes a New Sponsor: Mathelin Bay Nearly 100 percent of plastics processors say they buy resins and additives well. Mathelin Bay has helped over 90 percent of plastics consulting clients buy even better and recover what they have been losing – with no upfront cost of obligation. • Reduce resin, color concentrate and performance additives costs (supply chain and technical consulting) • Increase recycled usage and green product sales • Manage resin pricing volatility • Pick the right materials and manage margin pressures • Evaluate plastics companies for middle-market, private equity investors Visit www.mappinc.com for a cost reduction program exclusively for MAPP members. n

Call to action: Share the ways you train and develop your best assets As I step into my new role as president of the MAPP Board of Directors, it’s important to recognize Board Members, past and present, for their leadership and selfless pursuit of greatness for the Association. The Board Presidents I have worked with while serving on the Board have set a stellar example for me to follow – Tom Duffey (PCI), Matt Hlavin (Thogus Products), Kelly Goodsel (Viking Plastics) and Mike Walter (MET Plastics). The Association and Board have benefited from their contributions. Also, thank you to the MAPP Membership and Sponsors who make the Association stronger by helping member companies improve their businesses. Their sharing is the foundation of our organization.

by sharing our mutual knowledge and experiences. How do you handle employee development and training? What are your best practices in these areas?

This time of year, it’s natural to reflect on the past year and create resolutions for what might be done differently in 2016. As I think of our Association, I want to harness the power of 341 of the best molders in the world to focus on issues crippling our industry, and one area we have the opportunity to improve is employee development and training.

When you receive the email, please take a moment to share at least one thing that works well within your organization, and then review the submissions from other companies. My hope is this results in at least three improvement ideas that can be implemented in your facility. We can unleash new energy in our businesses through effective employee training and development programs, and I believe this is a New Year’s resolution we should all keep in 2016.

Unfortunately, today’s job applicants are not prepared to help our businesses. Schools have cut spending or eliminated funding for Skilled Trades Programs, and companies have done the same to compete in a global marketplace. It’s sad, but I can count on two hands the number of certified mold-building apprentice programs in my home state of New York. I believe, through the power of MAPP and our 341 members, we can find and prepare the best possible people for our businesses

In early March, you will receive an email communication from MAPP asking you to share your approaches to developing your employees and building their skills through training – whether formal or informal. All feedback will reside on the MAPP website, allowing every MAPP Member company to read through the submissions, unfiltered to find ideas, that can be utilized to make improvements in their own programs. Contact information also will be available for further discussion and sharing between members.

I wish the MAPP family a Happy New Year full of health and success for your families and your businesses. I’m excited to see what we can accomplish together. Ben Harp President, MAPP Board of Directors

www.plasticsbusinessmag.com | 17

update

OSHA’s New Scrutiny on Plastics Companies Over the past year OSHA has reinvigorated its regulations, focusing on key industries classified by the North American Industrial Classification System (NAICS). As an industry listed in one of those target groups, plastics manufacturers and related businesses are under increased scrutiny. In fact, today there are thousands of companies that have never been subjected to OSHA rules in the past that must now scramble to make sure their safety management programs meet the agency’s requirements and, if not, bring them up to the appropriate standards.

by Robert Levandoski, CSP, CIH, president, Fuss & O’Neill Manufacturing Solutions

As a result of this change in focus, many plastics businesses have a newfound sense of urgency when it comes to safety management. Why is this such an important issue today? Currently, each OSHA Serious Citation carries a fine of up to $7,000, and simple accidents can lead to a site inspection – resulting in hundreds of thousands of dollars in fines. In 2016, the cost for each citation is expected to increase to $12,740. The fines are just one type of trouble that can be caused by inadequate safety management and resulting accidents. The negative publicity that often accompanies a serious accident can be devastating and demoralizing to any company. Why is the plastics injury under particularly close scrutiny? Plastics companies face higher-than-typical risks of machinery injury exposure, particularly with plastic injection molding equipment, which is a major source of amputation. OSHA has been paying particular attention to reducing the risk of amputation, which – along with lacerations and burns – are some of the most common serious injuries at plastics companies with inadequate safety management programs.

Rob Levandoski is the president of Fuss & O’Neill Manufacturing Solutions. He can be reached at RLevandoski@fando.com.

As damaging as OSHA fines and bad publicity can be, there’s another financial reason that it’s important to ensure that the work environment is safe: Productivity is undermined by an unsafe work environment. Accidents lead to equipment stoppages and equipment damage. Frequent accidents can also lead to staff morale issues that can undermine productivity. Of course, unsafe workplaces also experience much higher workers’ compensation costs than businesses with effective safety management programs. Most businesses want to do the right thing and protect their employees. Good intent, however, doesn’t always equal success when it comes to safety management. It’s not just those companies that cut corners that run afoul of OSHA. In most cases, the businesses that get in trouble are ones that thought they were covered by good safety management programs, only to find that their confidence was misplaced.

18 | plastics business • winter 2016

First steps This is the time for all plastics businesses to reevaluate their safety management programs. In this ever-evolving regulatory environment, every plastics manufacturing company should expect to be the subject of an OSHA inspection, and each manufacturer needs to be sure that it is in compliance. The first step is to conduct a pre-inspection assessment of the safety program. This usually is accomplished by hiring a consultant to conduct the same type of inspection as OSHA. This pre-inspection survey should identify the same conditions that would be discovered by OSHA, but without the penalty. The process most often will provide ample time and planning to develop and implement mitigation strategies to solve problems before they are discovered by OSHA. A key to an assessment is to conduct a thorough evaluation of all equipment to determine whether it is operating properly, whether maintenance plans are effective and verify whether safety measures originally installed by the manufacturer are in place and functioning. One of the most dangerous hazards in any manufacturing operation is machinery that’s not operating

or maintained properly – that is, not working in the fashion its operators expect or for which it was originally designed. Loose or misaligned machine components, missing or damaged guards, custom modifications or frequent breakdowns can cause serious harm to operators and bystanders. One of the most commonly discovered areas of noncompliance can be found around the operation of injection molding machinery. Horizontal injection molding equipment poses serious amputation hazards, and a survey can determine whether sufficient guarding is provided on equipment, if suitable safety training is being provided, if appropriate lockout/tagout procedures are in place and whether additional safety measures are needed to protect workers. When unsafe conditions or other problems are identified, plans can be put in place to address them. When it comes to mitigation, there are no “out-of-the-box” answers. Every mitigation program – indeed, every safety management program – must address the unique operations page 20 u

www.plasticsbusinessmag.com | 19

update t page 19 and workforce of an individual company. There are, however, common threads. Safety training, for instance, is a particularly important element of most companies’ safety management programs. Training should provide managers and workers with a comprehensive overview of common injuries found in injection molding, thermoforming and extrusion operations; the causes of these injuries; and ways to best avoid them. Many companies use a “train the trainer” approach through which in-house trainers learn the information and skills they need to provide ongoing education to management and staff. Safety and maintenance surveys and plans shouldn’t only happen in anticipation of a visit from OSHA. They should be standard protocol for any manufacturing business, and they must constantly be re-evaluated and updated. This isn’t just a safety issue. Proper maintenance has a huge impact on a company’s bottom line. Effective maintenance also keeps equipment running properly, production schedules on-target and product quality high. When it comes to the bottom line, maintenance can actually save companies thousands or even millions of

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Training should provide managers and workers with a comprehensive overview of common injuries found in injection molding, thermoforming and extrusion operations; the causes of these injuries; and how to best avoid them. dollars every year by avoiding costly unanticipated downtime, equipment repairs, replacement losses caused by production shutdowns or slow-downs and unnecessary worker compensation claims due to injury. In fact, it costs companies five to 10 times more to act reactively to resolve breakdowns than to implement proactive maintenance programs. Clearly, maintenance is a vital element of any production plan, and corporate executives need to consolidate maintenance and safety into their long- and shortterm business plans. Proactive approach Not all of the manufacturing companies that seek assurances about their safety management programs are doing so because they fear OSHA penalties. Many companies go through the process because they want confirmation that their programs are effective and exceed the minimum criteria established by OSHA. These companies place a high value on workplace safety, have comprehensive programs in place and want to be sure that those programs are as strong as they can be. There are advantages to being proactive. Regardless of whether the company is large or small, when an employee is injured on the job, that injury reduces the production capacity and effectiveness of the equipment involved. Accidents also leave production floors short-staffed, which can have a far-reaching impact – not just on the equipment involved in the accident, but with processes down the line. Of course, if a piece of equipment isn’t running because an accident occurred or because there’s the possibility of an accident, the company is losing money due to lost productivity of that equipment. Ultimately, it doesn’t matter whether a company’s safety management programs are evaluated out of concerns over potential OSHA penalties or in an effort to be proactive. The bottom line is that when companies are certain that their safety programs are effective and meet their unique safety needs, the workplace is safer, the workforce is more productive, high quality product is produced and the company is more profitable. n

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

Visual Management for Safety in Manufacturing An operator in a rubber molding facility is hard at work. He uses a steel hook to help move the newest batch of product down the conveyor. As he works, the steel hook assist device gets caught on the conveyor and nearly pulls his arm down the line. Further down the conveyor, a chopper knife cuts the steel hook in half. “There are a lot of bad things we could take from this experience,” stated Greg Vassmer, chief technology officer for Trostel, Ltd., the facility where this incident took place. “This was a relatively new operator who had just finished training. He should have known to press the emergency stop button when he sent a quarter-inch piece of steel down the line, but he didn’t. The good thing is he let go of the steel bar when it hooked onto the edge of the conveyor. The chopper could have cut his arm off.” Luckily for the conveyor operator, in June of 2013, Trostel invested in a Visual Management System. The company originally installed ten cameras to monitor critical areas of the factory and has since added seven more. The camera system has 30TB of hard drive space that can store 60 days’ worth of recordings. Additional cameras and monitors on the plant floor allow operators to see what is happening during all of the downstream operations. “The person on the top floor of the mezzanine can see if the person at the blend mill is ready to receive material as it drops out. The person at the end of the batch-off can see the person loading the conveyor at the top of the stairs,” Vassmer stated. In this case, when the conveyor operator lost his steel bar, another worker saw it and was able to press the emergency stop. “Our camera system is a continuous improvement tool. It’s not a security system or an employee monitoring system,” remarked Jayson Irwin, Trostel’s plant manager. “It is a process monitoring tool. Not all potential failures can be predicted, so when they do occur, this tool allows us to perform better root cause analysis investigations so we can put in place permanent corrective actions.” According to Irwin, the biggest challenge in installing the system was cost, which was a significant portion

22 | plastics business • winter 2016

Trostel's visual management system consists of 17 cameras that can store 60 days of recordings.

of his facility’s annual capital budget. “It was tough to convince some of our leaders of the intangible benefits of a system that cost so much,” Irwin stated. “However, those same leaders now are very much in support of this tool. This approach has resulted in improvements in safety, quality and productivity.” The visual system speaks to Trostel’s culture of openness and continual improvement. “Trostel has a good working relationship with the Independent Union of National Amalgamated Workers Union, Local 711, and we were able to explain to our employees the benefits of this tool,” Irwin affirmed. “The main benefit is being able to go back and observe what happened when a failure is later identified. We also explained that we were going to use this as a teaching tool to show all employees videos of mistakes being made so that everyone could learn from these mistakes. This has allowed us to put in place better Standard Operating page 24 u

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view from 30 t page 22 Procedures (SOPs), develop better training for new employees and better lay out the work cells.” Returning to the case of the conveyor operator, additional safety precautions have been put into place. The rollers at the beginning of the conveyors now have height sensors. If an operator’s arm goes into the system, the entire machine comes to a stop. The conveyor operator received more training and the emergency stops were made more prominent and moved closer to where the operator stands. “Now, if someone gets caught, they can still shut off the machine using another part of their body, if they have to,” Vassmer asserted, “while the person down below acts as a back-up.” “We never blame the individuals,” Vassmer said further. “We assume they meant to do right. When a problem occurs, we can go back and see what happened. Furthermore, we can see if there are safety issues, such as if there are dangerous practices in the warehouse. These are the areas we know we have to improve. Each step takes us closer to where we want to be as we go through our journey of continuously improving our operation.”

Scholarships Relieve Financial Burden, Encourage Plastics Industry Careers Bob and Charllotte Janeczko, owners of Innovation Injection Technologies (also known as i2tech), West Des Moines, Iowa, have enjoyed fulfilling careers in the plastics industry. Wanting to give back to the industry that has given them so much, the Janeczkos opted to create the Bob and Charllotte Janeczko Endowed Scholarship for students studying plastics engineering at the University of Wisconsin-Stout. As the price of college tuition keeps rising, students are feeling the strain as they struggle to balance school and work. Proud alums of the university, the Janeczkos know firsthand the rewards of a career in the plastics industry and the importance of helping the next generation pursue similar careers.

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Bob Janeczko is a Chicago native and former executive with Morton Metalcraft and John Deere, as well as a professor of industrial technology at Western Illinois University. Charllotte Janeczko grew up in Rosendale, Wisconsin, near Fond du Lac, and is a retired teacher. They purchased Innovation Technologies (i2tech) in 2003. i2tech engineers plastic components and subassemblies, and Bob serves as chairman of the company. “We made our money in plastics, and we’re glad to be able to help young people with a career in this great industry,” said Bob, who graduated from UW-Stout in 1963 with a degree in technology education. Bob and Charllotte met while attending UW-Stout. According to Bob, UW-Stout is “a unique institution,” one which has afforded the Janeczkos many important opportunities. “If you’re successful, we believe you have an obligation to give back in a meaningful way,” he stated. The Janeczkos decided the most meaningful way for them to give back was to help encourage and relieve the financial strain on the next generation of plastics engineers. In 2010, the Janeczkos pledged in excess of $1 million to be used in the form of scholarships for students majoring in plastics engineering. The first students began receiving scholarships that fall. “We wanted to leave a legacy,” remarked Charllotte. “It’s a positive way to be remembered.”

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goes a long way toward helping students focus more on their education while spending less time worrying about finances. “It is really cool to see alumni giving back, especially when they have had successful careers as a result of graduating from UW-Stout,” stated Travis Mullen, one of two recent scholarship recipients. As a result of the financial aid from the Janeczko Scholarship, Mullen will be able to work fewer hours at his parttime job, which will allow him more time to study and focus on his educational goals. “The financial pressure that is present with all college students has been relieved a great deal,” he affirmed. Mullen and fellow recipient Max Zamzow each received $7,500 as part of the Janeczko Scholarship. The scholarship is not the only way in which the Janeczkos continue to give back to both UW-Stout and the plastics engineering community. Beginning in 2011, the Janeczkos regularly have offered students in the Society of Plastics Engineers the opportunity to tour the Innovations Technology injection molding facility. The company also began offering internships in 2012 to UW-Stout students. Former intern Clayton Barrix was hired in 2014 after he graduated. “Clayton has

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Bob and Charllotte Janeczko established a scholarship within UW-Stout’s plastics engineering program. Max Zamzow (left) and Travis Mullen (right) were the most recent recipients.

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Tax Legislation Update for Plastics Processors When it came to passing tax legislation late in the calendar year, Congress did not disappoint this past holiday season. As in past years, Congress passed a massive tax bill in December. This practice has become quite common – allowing select provisions in the Internal Revenue Code to expire, then retroactively reinstating them at the end of the year, just in time for the IRS to update the tax forms prior to tax season. The Protecting Americans from Tax Hikes Act of 2015 (PATH), which passed on Dec. 18, 2015, was coupled with an omnibus spending bill, which commentators dubbed as “taxibus.” Many lawmakers believed PATH was “must-pass” legislation as, without the legislation, hundreds of thousands of individuals and companies would have seen a higher tax bill for 2015. However, this year’s legislation was quite different from that of years past. Several provisions have been made permanent, giving much-needed certainty to plastics processors. Below is a summary of the most prominent tax provisions affecting the plastics industry. Increased expensing limitations for Section 179 property The legislation permanently extends the small business expensing limitation and phaseout amounts, in effect from 2010 to 2014 ($500,000 and $2 million, respectively). Prior to this legislation, the amounts were reduced to $25,000 and $200,000, respectively.

by Michael J. Devereux II, CPA, CMP, partner and director of plastics industry services, Mueller Prost

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The expensing limitation is modified by indexing both the $500,000 and $2 million limits for inflation beginning in 2016. Air conditioning and heating units placed in service in tax years beginning after 2015 also are eligible for expensing. Research tax credit There are several key points to be aware of related to the Credit for Increasing Research Activities. First, the credit has been permanently extended. In addition, for tax years beginning after Dec. 31, 2015, PATH allows eligible small businesses with average sales of less than $50 million over the prior three tax years to claim the research tax credit against the Alternative Minimum Tax (AMT). Also, small start-up companies with less than $5 million of gross receipts can claim the credit, up to $250,000 a year, against their FICA payroll tax liability. Plastics processors that are developing new tool designs, developing part-specific manufacturing processes or improving production processes through automation may qualify for the research tax credit. The new provisions in PATH, along with taxpayerfavorable regulations issued over the past two years, should increase the amount of credit plastics processors may claim and monetize. Bonus depreciation PATH extends bonus depreciation for assets acquired and placed in service during 2015 through 2019. For property placed in service during 2015, 2016 and 2017, the bonus depreciation percentage is 50 percent. The percentage phases down to 40 percent in 2018 and 30 percent in 2019. In addition, taxpayers may elect to accelerate the use of AMT credits in lieu of bonus depreciation, under special rules for property placed in service during 2015.

28 | plastics business • winter 2016

Work opportunity tax credit (WOTC) The legislation extends the work opportunity tax credit through 2019. The work opportunity tax credit rewards companies for hiring within specific targeted groups, such as qualified veterans, food stamp recipients and ex-felons. In addition, the credit has been modified, beginning in 2016, to apply to employers that hire qualified long-term unemployed individuals (i.e., those who have been unemployed for 27 weeks or more) and increases the credit with respect to such long-term unemployed individuals to 40 percent of the first $6,000 of wages paid. The WOTC is one of the few credits that may offset the AMT, making it particularly advantageous to those taxpayers subject to the AMT. Extension of reduction in S-Corporation recognition period for built-in gains PATH permanently extends the rule reducing the period for which an S Corporation must hold its assets following a conversion from a C Corporation from 10 years to five years to avoid the tax on “built-in” gains. Processors contemplating switching from a C Corporation to an S Corporation now have more certainty with respect to planning for the built-in gains tax. ViveAd_Mockups_1.6.16.indd 2

§179D energy efficient commercial buildings deduction Available to taxpayers implementing energy efficient improvements to lighting, heating, cooling, ventilation and hot water systems of commercial buildings, this provision allows for accelerated deductions worth up to $1.80 per square foot. The legislation extended these deductions through 2016. Moratorium on medical device excise tax Enacted as part of the Affordable Care Act, the medical device excise tax imposes a 2.3-percent excise tax on the sale of medical devices. PATH imposes a two-year delay on the tax through calendar year 2017.

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Common Pricing Mistakes and How to Avoid Them CEOs often overlook the importance of pricing in generating attractive financial returns. Especially in recent years, companies have invested heavily in understanding and managing their costs. Of course, understanding and managing costs is important. However, research shows companies have hit – or, worse, crossed – the point of diminishing returns from cost cutting. Meanwhile, too few companies proactively manage pricing as a lever to improve profits. The power of pricing It only takes a quick look at the Profit Equation (Figure 1) to see that Price is the only variable that has a multiplier effect on profit. And, unlike Volume, Price can be impacted by management behavior. Another often overlooked aspect of the Profit Equation is that both aspects of Revenue – Price and Volume – are influenced by customer preferences and priorities. Yet, companies typically spend much more time understanding and cutting costs rather than understanding customers and why they value certain products and services.

by Amy Fulford, managing partner, enlight

Amy Fulford is the managing partner and founder of enlight, a Seattle, Washington-based boutique consulting firm. Before starting enlight, she was employed at The Boston Consulting Group, Alcoa Inc., Procter & Gamble and Huntington Bank. Fulford has worked in many industries and sectors, including transportation, building and construction, consumer products, financial services, distribution, manufacturing, nonprofit and professional services. Contact Fulford at amy.fulford@enlightadvisors.com or www.enlightadvisors.com.

Back in 2004, research about pricing revealed that it can be the most powerful variable that affects operating profit. Researchers evaluated the impact of a one percent improvement in four variables on operating profit. They built an “average income statement” from a composite of companies in the Global 1,200 index, and their analysis revealed that pricing can have a powerful impact on operating profit1 (Figure 2, page 34). Even if the impact on a specific company is not as significant as in this example, a small improvement in pricing is likely to unlock value because pricing rarely is used as a tool to improve financial performance. Meanwhile, many companies have already achieved the maximum benefit from cost cutting – and some have cut costs to the detriment of the business. The evaluation debunked a common myth espoused by CEOs: Lower price and make it up in volume. The researchers looked at how much volume would have to increase to break even from a one percent reduction in price. They found that the “average” company needed to generate a 3.5 percent volume increase to break even from a one percent price reduction. Furthermore, the research revealed that the “maximum typical” volume increase resulting from a one percent price reduction is 1.7 to 1.8 percent – far short of the 3.5 percent increase needed to break even from the price reduction2.

Figure 1. Courtesy of enlight.

32 | plastics business • winter 2016

Three levels of pricing Companies should consider three different levels of pricing when evaluating pricing opportunities:

Companies typically spend much more time understanding and cutting costs, rather than understanding customers and why they value certain products and services.

List Price is the published price that is visible to anyone. It represents the desired selling price.

Invoice Price is the price negotiated with an individual customer. Often, the Invoice Price includes several negotiated discounts, and it may include upcharges for special services or accommodations, such as expedited freight or special packaging. Most often, the Invoice Price is less than the List Price.

Pocket Price is the net amount a company collects for a given product. The Pocket Price is less than the Invoice Price because it accounts for the effects of hidden discounts that companies allow after the sale. Extended accounts receivable terms or expedited freight not charged to the customer are examples of the hidden discounts.

Eliminating pricing mistakes requires making sure the List Price is as high as possible, while effectively managing the negotiation to Invoice Price and minimizing (or even eliminating) the hidden discounts that reduce the Pocket Price. Three common pricing mistakes Given the importance of pricing, it’s helpful to understand the most common pricing mistakes that companies make. Based on research conducted by enlight, the three most common pricing mistakes include the following: Targeting the wrong customers by failing to understand 1 the market dynamics that drive customers to purchase products. When targeting the wrong customers, companies do not understand who values their product the most or why they value it. The companies also don’t appreciate differences in what’s important to end users vs. influencers vs. channel partners. This is the mistake companies make most often. In fact, 57 percent of the pricing mistakes in enlight’s analysis involved targeting the wrong customers. Examples of this mistake include the following: • considering distributors or channel partners to be customers, • emphasizing product attributes and benefits that are not important to customers and • trying to be all things to all people instead of targeting specific customer segments.

When a company focuses on the wrong customers, its representatives often get feedback that the prices are too high because the customers don’t necessarily value what makes the products unique. When the company focuses on the customers that most value its products, those customers are often willing to pay higher prices because they understand the value they get in return.

Pricing too low by setting pricing without consideration for target customers and what they value. enlight’s research page 34 u

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strategies t page 33 Operating Profit Improvement per 1% Improvement Price

11.0

Variable Cost

7.3

Volume

Fixed Cost

3.7

2.7

Figure 2. Courtesy of The Price Advantage.

revealed that pricing too low accounts for 33 percent of pricing mistakes. Typically, companies make this mistake because of one the following practices: • cost-based or historically-based pricing methodologies, • customer-driven pricing methodologies or • volume-driven management. When a company prices its products too low, it obviously erodes the company’s financial performance by leaving money on the table with every transaction. Two possible negative impacts are more subtle and can have lasting effects: • Overinvestment: If the products are valued by customers and priced too low, the company creates a false sense of demand. Typically, when companies experience high demand, they invest in inventory and capacity (instead of simply raising price), which further erodes financial performance. • Quality problems: Eventually, the situation will create quality problems for the company. Either demand will be so high that the company cannot maintain quality and meet the high demand or the company will be forced to cut costs to improve financial performance, which will affect quality. Pricing too high by also setting prices without consideration for target customers or what they value. enlight’s research revealed that pricing too high only accounts for 10 percent of pricing mistakes, despite the fact that companies tend to worry that their products are overpriced. Typically, when a company prices its products too high, it must attract customers by heavily discounting prices.

When companies price their products too high, they make attractive profits on every transaction. However, customers are

34 | plastics business • winter 2016

keenly aware of the value they get for their money, and once they conclude products are overpriced, they stop buying. Customers will remember that they were taken for granted and will be reluctant to trust the company again. Underlying causes and how to correct them Understanding the types of pricing mistakes is important, but it’s equally important to understand the underlying causes of the mistakes. In enlight’s experience, there are three causes of pricing mistakes. Setting the wrong initial price is a “one-time” decision that relates to a company’s pricing methodology and its target margins. Typical pricing methodologies are flawed because they do not start by understanding the most important variables in setting price. • Which customers value their products the most and why? • How much value do the products create for those customers?

The following are typical pricing methodologies employed by companies and the pitfalls of using them. • Competitor-based pricing: based on actual or expected competitor pricing. This methodology often is wrongly called market pricing. It is a mistake to abdicate one of the most important (and potentially lucrative) decisions to a competitor. • Customer-based pricing: based on specific guidance from customers. This methodology may be inaccurately referred to as market pricing. Customers focused on paying the lowest possible price will volunteer unrealistically low price guidance, especially in advance of a negotiation.

• •

•

Historical-based pricing: based on prior prices for similar products. This method of pricing is relatively arbitrary and often only continues the pricing mistakes of the past. Cost-plus pricing: based on a markup over costs. The mechanics of cost-plus pricing often are flawed in one or more of the following ways: ° Using old cost standards ° Incorrectly assigning some costs to individual products ° Ignoring some costs ° Setting low margin targets Value pricing (often called market pricing) is the ideal methodology. Unfortunately, many companies view value pricing as too difficult and default to one of the other methodologies. Value pricing requires that companies understand their collective customers well enough to set list prices based on the sum of the financial, functional and emotional value the customers enjoy when using the products. Not effectively managing day-to-day pricing decisions is a dynamic problem that relates to negotiations with individual customers. Day-to-day pricing decisions often

are flawed for one or more of the following reasons: • inadequate value proposition • no pricing rules • no accountability • insufficient or flawed data • flawed incentives Companies must establish the appropriate processes and polices to effectively manage day-to-day pricing decisions. Allowing a disconnect between strategy and pricing is a common problem that goes unaddressed and leaves significant money on the table. Typically, strategy-pricing disconnects result when the strategy: • competes on price instead of focusing on the value created for customers, • does not revamp operations to earn an attractive return at market prices or • sends mixed signals and confuses customers.

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strategies t page 35

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Action steps There are three steps to correcting a strategy-pricing disconnect. Clearly define target customers and the value they get to determine the maximum possible price each product can generate on a sustained basis. This step requires that companies understand and quantify the financial, functional and emotional value customers get from using the products and focus on the customers that most value the product.

Optimize the business model to ensure that the company can earn sufficient return at the prices that the products need to be offered. Companies must understand and optimize the factors that drive revenue and costs. Revenue drivers are the factors that cause a customer to purchase the product, influence whether the customer purchases one or 100 products at once and/or determine whether the customer is likely to be a repeat customer. Cost drivers are the costs that are necessary to successfully deliver the products that customers value.

Align and reinforce the brand image to ensure the company sends consistent signals about who they are and why customers should buy from them. Communications, brochures and sales person interactions are examples of the signals companies send to customers. Of course, any marketing activity also constitutes signals. When the signals that a company sends are not aligned with its business strategy and with customer perception, it creates confusion that can erode price.

In conclusion, pricing is an incredibly powerful lever that companies typically underutilize. The most common pricing mistakes are either targeting the wrong customers or simply pricing too low. To correct these mistakes, take the following actions: • Utilize a value-based pricing methodology to set the right initial price. • Establish (and enforce) effective policies for managing day-to-day pricing decisions. • Eliminate disconnects between a company’s business strategy and its product pricing. n References 1. Michael V. Marn, Eric V. Roegner and Craig C. Zawada, The Price Advantage (Hoboken: John Wiley & Sons, 2004) 4-6. 2. Michael V. Marn, Eric V. Roegner and Craig C. Zawada, The Price Advantage (Hoboken: John Wiley & Sons, 2004) 6-7.

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solutions

Utilizing Personality Tools to Find the Right Employees by Dianna Brodine, managing editor, Plastics Business

It’s often said that people are the most important asset in any business, but what happens when that asset … isn’t? Making a bad hiring decision has consequences far beyond the financial, although the US Department of Labor and Statistics has said a poor hire can cost as much as 30 percent of that person’s first year salary potential. Other negative effects include the depressed workplace culture that can occur when a team is required to lift an individual who isn’t pulling his own weight; a decrease in customer satisfaction due to a fall in product quality or customer service; and a downward slide in efficiency as time, money and resources better spent elsewhere are poured into an employee not suited to the job. With so many industry conversations revolving around the difficulty in finding qualified candidates, much energy has

38 | plastics business • winter 2016

been devoted to increasing interest in manufacturing as a career, but little time has been spent talking about ways to ensure manufacturing is the right fit for the individuals being recruited. Filling a position with the wrong person can have a larger negative impact on the bottom line than an unfilled position. At the 2015 MAPP Benchmarking Conference, a panel of plastics processing executives discussed the use of personality indexes as a method of narrowing the prospective employee field to ensure the right applicant is hired. The indexes can reveal behavioral indicators that predict adaptability, reliability, a willingness to be coached and more – allowing employers to match candidates to the jobs that require those traits.

According to the Society of Human Resource Management, up to 60 percent of employees and candidates are being asked to take workplace assessments, and the assessment industry is growing at more than 10 percent per year. Tom Duffey, president and owner, Plastics Components, Inc., Germantown, Wisconsin; John Ogorek, Chief Financial Officer, Nicolet Plastics, Mountain, Wisconsin; and Tommy Johns, plant manager, WeissAug Co., East Hanover, New Jersey, shared insights into how the assessments have changed the hiring processes at their facilities. Tom Duffey Plastics Components, Inc. Culture Index Some of the biggest regrets in my career have been in bad hiring decisions and the difficult consequences that come when bad hiring decisions are made. I’ve always prided myself on my ability to coach and mentor people to achieve higher levels of performance, but in some cases I was failing miserably, and I couldn’t understand why.

to talk myself through or out of situations where the evidence was clear. My advice is not to start the process if you’re not willing to deal with the answers. If you’re not committed to it, you may end up in an uncomfortable position when it tells you something about you or your team that you’re not ready to deal with. John Ogorek Nicolet Plastics The Predictive Index I have over 20 years of experience with The Predictive Index, but we just started using it in January of 2015 at Nicolet Plastics. We currently are using it primarily in a hiring context. The Predictive Index does not necessarily find a cultural fit, but a behavioral and motivational fit between an applicant and a position. Employees are more productive when they are placed into positions where they have a natural fit. We use the assessment early in the candidacy process. We email the assessment to candidates and use it as a screening tool to help identify applicants who have the best chance of succeeding.

About four years ago, we learned about Culture Index, and it was like a light had come on. It changed the way we approach managing our organization, and it dramatically changed the way we approach bringing people into our organization. The Culture Index is a personality profile test. It idenfities the way people are hard-wired permanently. You cannot rewire people – you can only influence them within the ways they are hard-wired. That hard-wiring can be a barrier, because we tend to hire people we like. I’ve hired and then subsequently fired a lot of people I’ve liked, but who weren’t a fit for what we were asking them to do. To take that variable out of the equation, we made a decision that any new candidate coming into the organization – every applicant, for every position – will do the Culture Index evaluation before we even meet them. Then we only interview the people who have a profile that fits the position. Internally, we’ve developed a profile for every position in our organization, and it’s different for every role. If we’re hiring a quality auditor, our intention is to find candidates and only interview candidates who have a profile that matches the job profile. If we don’t do that, the difference creates tension, discomfort and unhappiness, and we’ll ultimately end up with a bad outcome. Our success rate and happiness rate are much better since we started using this across the board, but the hardest lesson in utilizing Culture Index was realizing we might not like the answers we received when the assessment is done. We’ve had to be willing to accept what it tells us, and in a couple of cases, I tried

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solutions t page 39 There’s a second prong to The Predictive Index’s approach: in addition to assessing the candidate, we also assess the position. We’re looking for fit between the two, because the closer those two profiles mirror, the less energy the employee has to expend trying to adapt their behavior vs. just being in their behavior. That’s where the real power comes from. Not only are we assessing all candidates for every position, but we also are two-thirds through the company in assessing our existing employee base. We have profiles for most of the positions in the company, and when we’re looking at these profiles vs. the assessments, it’s rare to find an exact fit. We still have to determine whether or not they’re effective in their role, but now we have more information on why someone may be struggling and what we can do to help them. It shows us exactly how to provide opportunities through coaching or whether we may need to move them into a different position within the organization to help them succeed. We’ve emphasized to our employees that the assessment is about fit or development – there’s no such thing as a “good” or “bad” score.

The Predictive Index is an important part of our evaluation process. It helps us identify a candidate’s behavioral drivers and motivational needs, but it is not a complete replacement for the hiring process. Skills, intelligence, experience and values still need to be assessed through more traditional means, but The Predictive Index provides a powerful tool to assess areas that can be difficult to put together in the traditional interview process. Tommy Johns Weiss-Aug Co. TTI Success Insights We’re using TTI Success Insights to try to get some vision into the indivdual during the hiring process, looking at behaviors, motivators, competencies and communication. I personally put the most emphasis on the behaviors and communication sections of the assessment. Those areas provide insight into how the individual communicates, in what areas the applicant may struggle to communicate and how each person likes to be page 42 u

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40 | plastics business • winter 2016

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solutions t page 40 communicated to – which is important, especially as we look at generational differences. The report also provides a behavioral wheel with eight different behavior styles. A dot is placed on that wheel to tell us specfically what behavioral styles are hard-wired into that individual, which gives us an idea of whether or not the person will fit within the team they would be joining. Five years ago, we still were using handwriting analysis, but the current HR group wanted a more scientific way of evaluating applicants. The assessment has become a type of tie-breaking tool for us, as a way of differentiating between the top two or three candidates. We do not test all candidates or new hires, but we typically ask anyone moving into a position with direct reports or a higher profile to take the assessment. The reason we don’t test all applicants is cost-based – the turnover at the entry level makes it difficult to justify the cost of assessing every potential employee. Once an employee is hired, we give the assessment to each individual to read. We encourage them to reflect on areas where they have a perceived weakness. The tests aren’t perfect, but we’ve found we can use the report as a training plan, because it’s identified the areas that could impede the employees’ abilities to succeed in their jobs, and we want to help our employees shore up those areas that have been identified. We’ve actually lost a candidate or two because we’ve asked them to take the assessment. I’m not sure whether those individuals felt it was too intrusive or if they weren’t comfortable with the idea. To circumvent those feelings, discussions need to happen so everyone understands it’s a way to make sure both the employee and the organization are successful moving forward. Conclusion With a rise in focus on workplace culture, finding employees who are the “right fit” has never been more important. Assessments, while not definitive, assist in finding those applicants best suited to the specific job. The Predictive Index explained via its website: “An accurate personality-based assessment can provide objective insights into key personality traits intrinsically related to workplace performance. The insights help key talent functions avoid mistakes related to bias, politics, ‘gut decisions’ and chance. These types of errors can produce a litany of organizational issues that can devastate business results.” Additional information regarding the three assessment methods discussed in the article can be found in the sidebar and on the companies’ websites. n

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Descriptions of each assessment program are taken from the respective websites. Culture Index www.cindexinc.com There must be an objective process in which you can actually identify what talent your organization is seeking. The Culture Index Program comes bundled with a position assessment, allowing executives, hiring managers and all other persons contiguous with the position to be able to objectively measure what work skills they individually want from the position to be filled. This assessment becomes the key ingredient in the talent recruitment strategy as it provides a baseline of style, demeanor, character, drive, impetus and energy from each decision maker as to the type of talent needed for that specific position. Talented accountants and engineers would not be considered to be talented salespeople, as the skills and personality required are quite opposite for the respective positions. The Predictive Index www.predictiveindex.com Through a unique blend of scientific assessments, groundbreaking software, top-notch management training and professional consulting from the world's best workplace behavior experts, The Predictive Index can help you overcome the most complex business challenges. The Predictive Index predicts primary personality characteristics that describe, explain and predict dayto-day workplace behaviors. We've conducted over 500 validity studies to ensure our science-based assessments can accurately predict the drives and needs of people in any job function, in any industry, anywhere in the world. The Predictive Index Behavioral Assessment is quick (it takes less than six minutes to complete) and easy to analyze. Administer assessments, review results, conduct behavioral job analysis, fit-gap analysis and look at the collective behavioral patterns for groups or teams on any device. TTI Success Insights www.ttisuccessinsights.com TTI Success Insights develops and distributes assessments that are used to help hire, retain and develop individuals in businesses and organizations throughout the globe. We believe superior performers are selected when the job is able to talk, and our selection process begins with an understanding of the intrinsic knowledge and key accountabilities needed to be successful in a specific job. To find the best talent, we recommend executing a streamlined process that measures an individual’s behaviors (DISC), motivators and soft skill competencies for the job in question.

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S P E C I A LT Y M AT E R I A L S

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news

SRR Acquires Natoma Partners, LLC

PolyOne Unveils New Color Palette

Stout Risius Ross, Inc., a global advisory firm specializing in investment banking, valuation and financial opinions and dispute advisory and forensic services, announced that it has acquired Natoma Partners, LLC. Natoma Partners is a prominent Chicago-based management consulting firm providing forensic investigation, litigation consulting, expert witness testimony and other financial consulting services. The acquisition will complement and broaden SSR’s commercial litigation and forensic services capabilities. For more information, visit www.srr.com.

PolyOne, Cleveland, Ohio, announced the release of InVisiOSM Color Inspiration 2017, a collection of four influential and emerging color palettes. Global megatrends and insights in color research influence the development of palettes that capture the current zeitgeist for designers and developers. The new palettes – Wabi Sabi, Wanderlust, Bodhi and hYpeer – seek to highlight current and future trends. For more information, visit www.polyone.com.

Paulson Offers New Injection Molding Seminar A new seminar series has been released by Paulson Training Programs, Inc., Chester, Connecticut. Data Driven Molding is a hands-on certification course that incorporates machine time and classroom instruction. It is given in three one-week modules over four to six months at Paulson’s new Technical Center in Tampa, Florida. Attendees will learn to easily analyze data, diagnose problems, maintain molding process optimization and become fiscally savvy personnel who can mold jobs for maximum profit. For more information, visit www.paulsontraining.com or call 800.826.1901.

IQMS Announces 2016 User Conference IQMS, Paso Robles, California, announced the 2016 User Conference agenda. It includes something for everyone, from executives to the plant floor and everywhere in between. Functional and experience level tracks will cover high-level overviews to best practices, tips and tricks, as well as innovative advance application sessions. New this year will be daily keynotes from industry experts that will touch on trending topics that affect all manufacturers. IQMS Pinnacle is April 5-7 at Caesars Palace in Las Vegas, Nevada. For more information, visit www.iqms.com.

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Riverdale Introduces Automatic Drum Refill for Liquid Colors

METTLER TOLEDO Launches New Halogen Moisture Analyzer

Riverdale Global, Aston, Pennsylvania, has developed a material handling system that automatically refills one or more liquid color drums during the molding or extrusion process, eliminating downtime when switching drums and reducing the occurrence of transitional or off-specification product with little or no color. The new auto-refill system eliminates the time and labor required for operators to monitor color levels, transport and prepare replacement drums, and wait until online drums are ready for replacement. For more information, visit www.riverdaleglobal.com.

METTLER TOLEDO, Greifensee, Switzerland, announced its newest halogen moisture analyzer, the HC103. It measures moisture content in minutes, enabling fast response times for quality control and in-process control. A large color touchscreen, graphical user guidance and real-time drying curve make the HC103 easy to use, even for untrained operators. The metal housing, as well as flat stainless steel surfaces in the drying chamber, mean the HC103 is easy to clean and offers a long instrument lifetime. For more information, visit www.mt.com/moisture.

Conair Offers TW-S Thermolator Conairâ&#x20AC;&#x2122;s new TW-S Thermolator temperature control units feature better performance, reliability and cost savings. The units are 36 percent more efficient wire to water, offer an average yearly operating cost savings of $740 per Thermolator and now have a 50 percent increase in the pump operating envelope. (Figures are based on 52 weeks x three shifts per day x five days per week x eight hours per shift. Verified in lab testing.) These advancements make the new Thermolator available for high-flow or high-pressure applications for which the previous models could not achieve the operational requirements. Available in 10 standard models, from .75 to 10hp pump and with a heater ranging from 12 to 36kW. For more information, visit www.conairgroup.com.

New Course from Routsis Training Teaches Proper Documentation Routsis Training, Dracut, Massachusetts, announced the release of Process Documentation for Scientific Molders, a new online training course covering the importance of proper documentation for both machine inputs and outputs and the procedures for documenting and maintaining a Scientific Molding Process. Course participants will learn the definition of scientific process documentation; the differences between machine-dependent and machineindependent process documentation; how to document processes for hybrid machines; and how to document barrel and recovery, 1st stage injection, 2nd stage packing, part cooling and mold clamping. For more information, visit www.traininteractive.com. n

www.plasticsbusinessmag.com | 45

booklist

Must-Read Books on Employee Motivation A solid organizational plan and stellar leadership will not move a company forward if employees are not engaged and working toward the end goal. These four books represent some of the best on motivating the people working within your facilities. Not surprisingly, employee motivation starts at the top – leadership must be prepared to empower, educate and empathize with those who carry out daily operations. Drive: The Surprising Truth About What Motivates Us Author: Daniel H. Pink Released: April 5, 2011

were able to trust each other so deeply that they would literally put their lives on the line for each other. Other teams, no matter what incentives were offered, were doomed to infighting, fragmentation and failure. Why?

Most people believe the best way to motivate is with rewards such as money – the carrot-andstick approach. That's a mistake, says Daniel H. Pink. In this provocative and persuasive new book, he asserts that the secret to high performance and satisfaction – at work, at school and at home – is the deeply human need to direct our own lives, to learn and create new things, and to do better by ourselves and our world.

The answer became clear during a conversation with a Marine Corps general. “Officers eat last,” he said.

Drawing on four decades of scientific research on human motivation, Pink exposes the mismatch between what science knows and what business does – and how that affects every aspect of life. He examines the three elements of true motivation – autonomy, mastery and purpose – and offers smart and surprising techniques for putting these into action in a unique book that will change how we think and transform how we live.

Today’s workplaces tend to be full of cynicism, paranoia and self-interest. But the best organizations foster trust and cooperation because their leaders build what Sinek calls a Circle of Safety that separates the security inside the team from the challenges outside. The Circle of Safety leads to stable, adaptive, confident teams, where everyone feels they belong and all energies are devoted to facing the common enemy and seizing big opportunities.

Leaders Eat Last: Why Some Teams Pull Together and Others Don’t Author: Simon Sinek Released: Jan. 7, 2014 Why do only a few people get to say “I love my job”? It seems unfair that finding fulfillment at work is like winning a lottery; that only a few lucky ones get to feel valued by their organizations and that they belong. Imagine a world where almost everyone wakes up inspired to go to work, feels trusted and valued during the day, then returns home feeling fulfilled. This is not a crazy, idealized notion. Today, in many successful organizations, great leaders are creating environments in which people naturally work together to do remarkable things. In his travels around the world since the publication of his bestseller Start with Why, Simon Sinek noticed that some teams

46 | plastics business • winter 2016

Sinek watched as the most junior Marines ate first while the most senior Marines took their place at the back of the line. What’s symbolic in the chow hall is deadly serious on the battlefield: great leaders sacrifice their own comfort – even their own survival – for the good of those in their care.

Turn the Ship Around!: A True Story of Turning Followers into Leaders Author: L. David Marquet Release Date: May 16, 2013 David Marquet, an experienced Navy officer, was used to giving orders. As newly appointed captain of the USS Santa Fe, a nuclear-powered submarine, he was responsible for more than a hundred sailors. In this high-stress environment, where there is no margin for error, it was crucial his men do their job and do it well, but the ship was dogged by poor morale, poor performance and the worst retention in the fleet. Marquet acted like any other captain until, one day, he unknowingly gave an impossible order, and his crew tried to follow it anyway. When he asked why the order wasn’t challenged, the answer was, “Because you told me to.” Marquet realized he was leading in a culture of followers, and they were

all in danger unless they fundamentally changed the way they did things. Turn the Ship Around! is the true story of how the Santa Fe skyrocketed from worst to first in the fleet by challenging the U.S. Navy’s traditional leader-follower approach. Struggling against his own instincts to take control, he instead achieved the vastly more powerful model of giving control. No matter the business or position, leaders can apply Marquet’s radical guidelines to turn their own ships around. The payoff: a workplace where everyone takes responsibility for their actions, where people are healthier and happier and where everyone is a leader. The Enemy of Engagement: Put an End to Workplace Frustration – and Get the Most from Your Employees Author: Mark Royal and Tom Agnew Released: Oct. 28, 2011 A lot of frustrated people can be found in most workplaces today. It’s not just the incorrigible office grump or the permanent slacker. Instead, it refers to dedicated workers

who are prevented from achieving their peak potential by organizational obstacles. Better enabling these employees to succeed represents an untapped avenue for radically improving productivity. Packed with the latest research findings from the prestigious Hay Group, The Enemy of Engagement uncovers the hidden impediments to performance – excessive procedures, lack of resources, overly narrow roles, and more – and outlines best-practice solutions for eliminating them. This is not an insignificant issue facing businesses today. According to Hay Group’s study, depending on the industry, between one-third and one-half of employees report work conditions that keep them from being as productive as they could be. The Enemy of Engagement gives managers powerful new insights and research-based tools for ensuring their teams are both willing and able to make maximum contributions. n Book summaries provided by the publishing entity.

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June 6-7, 2016 Franklin Marriott Cool Springs Franklin, Tennessee

Presentations will cover the latest advancements in plastics decorating and assembly – with added opportunities for IMD and IML presentations and workshops. Subjects to be covered include: • Surface Treatment Technology • IMD with Laser Etching • Digital Inkjet Solutions • Laser Welding • LED Curing Technology • Metallic Ink for IML/IMD

• Adhesive Selection • In-mold Thermoformable Laminates • Plastic Staking Methods • Digital Printing In-Mold Labels • Clean Vibration Welding • 25+ papers on innovations and technologies!

Also scheduled:

Supplier Trade Fair and Networking Reception Visit plasticsdecorating.com/topcon/2016 for hotel information and registration.

management

Change: Less Management, More Leadership, Better Results by Randy Pennington, principal, Pennington Group

Research shows 70 percent of all change efforts fail to achieve their desired results. The sad reality is that change – as it is addressed in most organizations – fails because it is overmanaged and under-led. To make change work, you must stop thinking of change as a process to be managed and start viewing it as an opportunity to engage people who must be led. Here are four ideas to help. Change the way you think and talk about change. You change a light bulb when it burns out. Athletic teams change coaches when they consistently lose. Organizations change when …

If your initial response was, “when things aren’t going well,” then you have an opportunity to change your perspective on change. Companies that can quickly identify, anticipate and adapt are the winners in a world where business demands change overnight. Examine the language you use to describe and promote change. Are new ideas encouraged or ridiculed? Are changes only discussed from the perspective of a crisis to be averted, or do you reinforce opportunities for proactive improvement? Our language reflects our thinking, and when it comes to leading change, our thinking drives our action. Involve others in crafting and implementing solutions. People support what they help create. Most importantly, people support and take positive action to change for their reasons, not ours. Do the hard work of communicating the need and opportunity for change based on what is important to those from whom you need support. Compliance can be mandated, but commitment is volunteered.

Use resistance as your friend. The normal reaction to resistance is emotion. When employees push against change, we want to push back. We try to reason with the resistors. If that doesn’t work, we resort to bargaining, manipulation, using power to mandate compliance or ignoring the people and the problem.

Our language reflects our thinking, and when it comes to leading change, our thinking drives our action. by others. Doing so allows you to identify potential barriers to making change work and increases your odds of building support. Go first. All change creates moments of instability and anxiety. Substantial change that comes at you in waves can either make you bold or make you timid. Timid organizations don’t anticipate the future. Timid people don’t invest in themselves or take the actions that enable them to quickly adapt.

Those who you seek to influence want you to be bold. Focus on adding so much value that anxiety and fear are minimized. Strategically invest in the future, and inspire hope. Change rarely fails because of a faulty process. It often fails because of people-related reasons. We increase our opportunities for success when we invest less time managing change and more time leading it. The Great Depression of the 1930s saw the demise of many companies, but also gave us many of the most recognizable brands of our day. The same will be true of today. Fifty years from now, we’ll look back on this time as the crucible that spawned legendary brands and businesses. They will be the ones who made change work. n Randy Pennington is an award-winning author, speaker and leading authority on helping organizations achieve positive results in a world of accelerating change. For more information, visit www.penningtongroup.com or email info@ penningtongroup.com.

That perspective is wrong, however. If there is no resistance, there is no change. Ask questions and listen. Be patient, and realize that the concerns raised by a few are probably shared

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50 | plastics business • winter 2016

INDIANAPOLIS OCTOBER 13 & 14, 2016 WWW.MAPPINC.COM/CONFERENCE

Deep discounts and FREE standard shipping for MAPP members Maintenance

Repair

Operating Supplies

As a benefit of belonging to MAPP, you can save time and money on product you use every day. MAPP members saved more than $2.7 million – an average of $7,457 per member – with Grainger in 2015.

Grainger offers MAPP members significant discounts off nine categories, including: • 30% off motors • 30% off safety (people) • 30% off electrical • 30% off power transmission • 25% off safety (facility) • 25% off hand tools • 25% off material handling • 25% off abrasives, lubrication, welding and machining • 25% off power tools

Members also received 10% off all other Grainger catalog and online products, as well as FREE shipping (restrictions apply).

Start saving with Grainger today!

Visit www.mappinc.com Grainger hotline: (888) 326-8605 Other freight charges will be incurred for such services as expedited delivery, air freight, freight collect, sourced orders, export orders, hazardous materials, buyer’s carrier, shipments outside the contiguous U.S. or other special handling by the carrier.

The Grainger shipping box design is a registered trademark of W.W. Grainger, Inc.

NEW

Thermolator meter cheater

Saving up to $740 in yearly energy costs, the new, super-efficient Thermolator temperature-control units can cut your electric meter readings dramatically. What’s more, with greater flow at higher pressures, higher max temperatures and almost 36% greater pump efficiency, you may be able to use a 2-hp unit in applications that once required a 5-hp unit. Higher-kW heaters can cut heat-up time by one third too. Find out more about the new Thermolator TCUs.

Visit conairgroup.com/thermolator.

Storage

Conveying

Drying

Blending/Feeding

Heat Transfer

Size Reduction

Extrusion

1.800.654.6661 • 724.584.5500 • info@conairgroup.com • www.conairgroup.com

Systems