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Plastics Business Fall 2015

Strategies for Today’s Plastics Processors

Investing in the Tool Room The ROI of Robotics Culture Shifts at the Morning Meeting

Official Publication of Manufacturers Association for Plastics Processors


Plastics Business

Strategies for Today’s Plastics Processors

Contents

solutions

8

review

industry

18

22

features solutions The Culture Shift of the Morning Meeting..............................................8 focus Investing in the Tool Room................................................................... 14 review MAPP’s Annual Benchmarking & Best Practices Conference: The Power of Influence...................................................................... 18 industry Reducing the Risks of Combustible Dust.............................................. 22 view from 30 American Export Expertise Leads to Presidential Award..................... 28 Molding Millennials: PMC and the Next Generation of Plastics Manufacturers................................................................... 30

departments director’s letter................... 6 news..................................34 association.........................36 advertisers.........................50

production Five Factors to Consider When Adding Robotics.................................. 38 Robotics ROI: The Bottom Line on Automation...................................... 42 booklist Business Books with a Lasting Influence............................................... 44 strategies Year-End Tax Planning for Plastics Processors..................................... 46

plasticsbusinessmag.com Cover photo courtesy of ToolingDocs

4 | plastics business • fall 2015


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director’s letter

A Thank You Worth Millions! I told a leadership story to the more than 500 industry professionals who attended MAPP’s annual benchmarking conference in Indianapolis. Although I’ve spoken on the topic of leadership several times over my career, I’ll honestly admit this was one of the most difficult addresses I’ve ever delivered as I openly revealed gory details about one of my greatest personal challenges. Since this personal issue dramatically impacted my physical stamina, energy and motivation levels, I decided to reveal the tactics I successfully used to survive and thrive amidst very challenging circumstances – a presentation entitled, “How Leaders Stay Motivated to Lead in the Worst of Times.” The method I used to rise above my situation entailed the implementation of a three-pronged approach designed to reduce physical and mental stress while realigning with my life’s purpose. All three tactics worked in unison to make the most of all my available resources – body, mind and spirit. Proper nutrition for healthy cell generation, cardiovascular exercise to increase the production of dopamine and a consistent focus on relaxation through meditation are just a few of the tactics I implemented with the scrutiny of my doctors. One of my daily assignments during meditation was to document my gratitude for the things that made my life worth living, including a directive to never document the same thing twice. Through this daily focus, I began to learn a great deal about myself and my life. The time spent concentrating on all of my life’s good fortunes actually worked as a very strong and powerful mind-altering force, which allowed me to better deal with my issue. Seeing life through the eyes of gratitude is scientifically proven to be a good health choice because of how it positively impacts the brain. This is a habit that truly impacts others, and gratitude is a gift that can be given at any time and at any place at no cost. The goals in hosting MAPP’s annual conference are to positively impact attendees, to help people become better organizational contributors, to impact their ability to manage and to improve their overall leadership abilities. In examining the post-conference feedback and the messages I’ve received since the event, I have come to understand that people took away something a little different from this year’s event. Yes, many indicated that the benchmarking information, the motivational speakers and the exchanges with their peers brought them great value. However, one of the most common takeaways pointed to the increased awareness of how the use of gratitude can improve a leader’s outlook, heighten energy and improve motivation levels. This helps leaders to better inspire and infect the people they touch each and every day. At the conclusion of my presentation, I admitted that practicing the act of showing gratitude also helped in growing my own awareness that there can be a silver lining to every dark cloud. Author Nicole Reed summed it up best by writing “Sometimes, the bad things that happen in our lives put us directly on the path to the most wonderful things that will ever happen to us.” To end my letter in this issue of Plastics Business, I would like to take this wonderful opportunity to sincerely thank each of the 500+ professionals for attending this year’s conference, as well as express sincere appreciation to all the members of MAPP for supporting each other.

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 Mike Walter, MET Plastics, Inc. Vice President Ben Harp, Polymer Conversions, Inc. Secretary Alan Rothenbuecher, Ice Miller LLP Bill Bartlett, First American Plastics/Quad, Inc. Tom Boyd, Blow Molded Specialties Craig Carrel, Team 1 Plastics, Inc. Norm Forest, Dymotek Molding Technologies Kelly Goodsel, Viking Plastics Ed Holland, M. Holland Company James Krause, Microplastics, Inc. Bob MacIntosh, Nicolet Plastics, Inc. Glenn Nowak, IQMS Eric Paules, Crescent Industries Ryan Richey, Precision Plastics, Inc. Missy Rogers, Noble Plastics, Inc. Teresa Schell, Vive LLC Tom Treadway, Erie Molded Plastics, Inc.

Plastics Business

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 Jen Clark Brittany Willes

Art Director Becky Arensdorf Executive Director, MAPP

6 | plastics business • fall 2015

Graphic Designer Kelly Adams

Circulation Manager Brenda Schell


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solutions

The Culture Shift of the Morning Meeting by Brittany Willes

In his book “2 Second Lean: How to Grow People and Build a Lean Culture,” author Paul Akers encourages companies to develop a “culture of continuous improvement.” Akers champions several methods for building such a culture, the most important of which is implementing morning meetings. When successfully executed, morning meetings offer a chance for increased communication among all employees. Several companies have found that better communication through daily meetings has resulted in a culture shift of greater production efficiency and a more positive working environment.

Structuring the daily meeting “As an automotive supplier, I’ve been involved in the Toyota Production System, which emphasizes lean production, for about 15 years,” said Kelly Goodsel, president and CEO of Viking Plastics, Corry, Pennsylvania. “However, with the tools employed with the Toyota Production System, it’s like teaching somebody how to use a hammer or a saw without then teaching them how to build a house.” Viking started holding what it refers to as “daily drumbeat meetings” in 2012 after attending Paul Akers’ presentation on 2 Second Lean at the MAPP Annual Benchmarking Conference. “We did some research Photo: The daily drumbeat meeting at on the 2 Second Lean approach, and we liked how simple it is,” Goodsel explained. Viking Plastics is used to communicate “It also really gets at the culture we’re trying to build, which is a culture of continuous between shift changes. improvement.”

8 | plastics business • fall 2015


A significant part of maintaining a culture of continuous improvement stems from the increase in open discussion and dialogue among all of the employees. When it comes to morning meetings “everyone knows it is the expectation to attend and communicate,” stated Tim Capps, president of Par 4 Plastics, Marion, Kentucky. “Our team deserves excellent communication. If our team does not have time to communicate, we are not managing properly.” As a general rule, daily meetings at Par 4 Plastics last less than 30 minutes. “Daily meetings are short and sweet, geared toward the daily activities of the business,” Capps affirmed. “I conduct meetings every day at 9 a.m., and they typically last 20 minutes. To respect everyone’s time, I end no later than 9:30. I start on time, expect everyone to be present and ready and I do not allow meetings to get sidetracked on any one subject.” Adhering to the set schedule is especially important in light of the information to be covered each day. For example, each morning Capps and his team go over information related to quality, lean manufacturing and daily production data – such as production hours, scrap, efficiency, mold changes, etc. – as well as information regarding human resources/safety, machine maintenance, tooling, shipping, production control, material, sales and purchasing. As Capps said, the number one goal for each meeting is communication among employees and throughout the company. “We believe in transparency,” he said. “As I lead the meeting, I take notes in real time. All notes then are sent to all employees throughout the company and also transferred to our break room TV monitor.” For companies, such as Viking Plastics, where employees work several different shifts, meetings are held at various times each day. Instead of a single morning meeting, Viking holds several 15 to 20 minute drumbeat meetings daily at 7 a.m., 8:30 a.m., 3 p.m. and 11 p.m. – one meeting for each shift change. At each meeting, the oncoming shift meets with the outgoing shift to discuss how things are running and any troubles the previous shift might have come across. Additionally, the daily agenda consists of reviewing the prior day’s sales volume, on-time delivery statistics, customer complaints and safety points/regulations. Employees also are notified of any customers who may be visiting the plant or new employees joining their teams. Drumbeats also are used to educate and to celebrate. “People are our most important asset!” Goodsel proclaimed. In keeping with its culture of continuous improvements, Viking employees seek to accomplish three things every day: identify waste, fix/improve the waste and share those improvements. Daily drumbeats offer the perfect opportunity for employees

“Our team deserves excellent communication. If our team does not have time to communicate, we are not managing properly.” – Tim Capps, Par 4 Plastics to explore and share ideas for improvement. Just as machines require maintenance, set-up, inspections and upgrades, so do people. Spending 20 minutes communicating between shifts provides each employee with the information needed to better prepare for the workday ahead. While daily meetings for companies like Par 4 and Viking follow set agendas which rarely change, some companies require more flexibility in their agendas. Vention Medical, headquartered in South Plainfield, New Jersey, has been hosting morning meetings for more than 10 years. “The structure and content changes from time to time, as needed. We re-evaluate the meeting every six months to make sure the format still is meeting our objectives,” explained Bryan Curry, director of operations. “The morning meeting typically is 15 minutes in duration and starts at exactly 8 a.m. Tardiness is not allowed, and the meeting will begin right on time without exception. This sets the tone for the discipline and execution expected for the rest of the day.” As Curry explained, morning meetings at Vention focus on five core issues. “First, we review the production schedule, including what we need to accomplish that day, such as mold sets, startups, line changes, etc.,” he said. “Next, we cover special events or visits happening at the plant before addressing any orders that are approaching due dates or require special attention. Then, we go over engineering and validation work scheduled for the production floor. Last, but most important, we talk about priorities. How do all of the activities for the day fit into the big picture in terms of importance?” According to Curry, a successful morning meeting is when everyone walks away understanding what the urgent issues of the day are and what the plan is for meeting those objectives. No such thing as over-communication In addition to having a more flexible agenda, Vention also holds an afternoon meeting. “We have found that follow up and accountability are important for our organization,” said Curry. “When we set objectives, goals and priorities at the morning meeting, we follow that up with an afternoon meeting at page 10 u

www.plasticsbusinessmag.com | 9


solutions t page 9 4:30 p.m. The same employees in attendance at the morning meeting review what the departments committed to accomplishing and what actually was accomplished. We review priorities, and each department is held accountable for executing the plan that was established in the morning meeting.” “The goal is primarily communication. As simple as it sounds, we have found that, for our organization, there is no such thing as over-communication,” Curry asserted. Capps echoed similar sentiments when he reflected on the benefits of hosting daily meetings. For Par 4 Plastics, the morning meeting has become “critical to all aspects of our business,” Capps said. “I never hear of someone saying we over-communicate. Our business constantly is changing, so we must communicate with each other in real time. Email, text messages and phone calls certainly are necessary, but they will never take the place of face-to-face communication.” “The level of interaction, employee engagement and relationships that are built in a 15- to 20-minute daily meeting is incredible,” noted Goodsel. “It breaks down barriers between employees and management, between departments, even between shifts – and

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10 | plastics business • fall 2015

that makes people more comfortable doing their job on a daily basis.” Communication is essential for empowering employees to work together to build and maintain a culture of continuous improvement. As Capps noted, “Management doesn’t solve the daily problems. We communicate with our teams, and they are responsible for addressing the issues.” Viking also uses its daily drumbeats as a way of encouraging employees to work together to solve problems. Despite its brief duration, drumbeat meetings typically include a training exercise of some kind. This might be a “topic of the day” discussion, an informational presentation or a Q&A session. “We might throw out the question of why 1st shift does things differently than 2nd,” Goodsel explained. “Out of that comes discussions across shifts about what causes frustration from one shift to the next. It encourages employees to work things out amongst themselves instead of waiting for management to get involved. Empowering people to work with each other to figure out the problem and to fix it themselves does two things. First, it usually ends up being a more efficient answer because the people actually doing the work are solving the problem instead of management, who may or may not know what’s going on. Second, by empowering people to solve problems together, that transfer of power becomes an encouraging and motivating situation for the employees. They feel much more involved and engaged, and it encourages them to solve the next problem. They get to have more of a say in things.” Vention Medical likewise seeks to empower its employees by using meetings to encourage individuals rather than managers. One representative from the different functional areas (not a manager) is required to attend morning meetings. For example, the Quality Manager may attend the morning meeting, but the Quality Inspector is required to be there. “We do not want a bunch of managers meeting and then trying to disseminate information to the people who actually will be executing the tasks,” Curry said. “We want the individuals themselves participating in the meeting. As long as one member from each functional area is represented, other attendees are optional.” Avoiding culture by default As every manager and employee know, excellent communication does not happen all at once. It requires dedicated time and effort from all those committed to improvement, which is why daily meetings often become a crucial aspect of a company’s culture. For instance, prior to implementing daily drumbeat meetings, Viking Plastic had what Goodsel referred to as a “culture by default.” page 12 u


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solutions t page 10 “There wasn’t a real purpose or guiding tone,” Goodsel explained. Without a structure around the culture, different approaches and interpretations abounded throughout the organization, essentially allowing employees to go off in their own directions. The company was successful, but it was very unstructured. “Think of cows going across a field,” Goodsel said. “They all go their separate ways and eventually end up in the barn together, but it’s a lot more work.” Now, as a result of the daily drumbeat meetings, the company culture has shifted. “Now we’re more like a group of geese who all line up,” Goodsel commented. “It is a much more structured and productive environment.” Clearly, daily meetings are a great way to increase communication and shift company culture to one of improvement and greater efficiency. However, one can hardly expect to start seeing such positive results overnight. Improvement requires constant effort by all employees. “There are things we have to constantly work on,” Curry stated. “For instance, when we’re in a meeting and someone says ‘let me look into that,’ sometimes that information fails to get communicated back to the floor and priorities are not adjusted.”

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“Management needs to approach it from a position of respect for the individual. Part of the challenge occurs when people ask ‘why’ – we don’t always have the right answer or an easy answer,” Goodsel acknowledged. “It’s important to let people know that this is a journey. We don’t have an exact map, and we’re going to make some wrong turns. When we do make those wrong turns, everyone has to contribute to getting us all going in the right direction.” n


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focus

Investing in the Tool Room Cosmetic Specialties is a custom package company serving the cosmetics and personal care industry in Oxnard, California. With 37 injection molding machines, 135 active mold bases and 276 sets of inserts, efficiencies – or inefficiencies – in the tool room have a significant opportunity to affect quality, delivery times and bottom-line profitability. When Chris Gedwed became chief operating officer in 2011, production efficiencies were trending down and operating costs were up. Lead times were increasing, cavitation and run rates were decreasing, scrap was going up, machine downtime was up and overtime costs were rising. In addition, the customers were seeing the effects in the product, resulting in returned shipments. Attention turned to the tool room.

by Dianna Brodine

Lack of data leads list of concerns “We tried to pinpoint the problem, but we had too much scattered data,” said Gedwed. “For example, we had a mold that was causing production issues, so I wanted to find out how many hours and how much money we’d put into fixing the mold. It took two hours to find that data, and with 135 mold bases, that’s too much time.” In 2011, Cosmetic Specialties was experiencing an average of 15 unscheduled mold stops per week. In addition, there was an increased number of mold returns. Molds were leaving the tool shop to be put into injection molding machines, but were not running correctly. Finger pointing and frustration resulted. However, there was no systematic way to report the issues, and no consistent procedures for the process technicians and tool room technicians to identify the problem and communicate it. Without data on the reoccurring mold issues, there was no way to understand how much money and time were being wasted. And, without that understanding, it was difficult for anyone in the tool room to feel ownership in what happened once the tool left the area.

A systematic method of reporting and tracking tooling data has led to a 59 percent reduction in maintenance and repair costs for Cosmetic Specialties. Photo courtesy of ToolingDocs.

14 | plastics business • fall 2015

Part of the problem was a constantly changing landscape. “In our business, the market was changing and our customers were evolving,” said Gedwed. “Our mix of business had changed, moving from a provider of stock products to a more custom business. Runs were smaller and shorter, which led to more changeovers and additional pressure on the tool room. Shorter lead times created a just-in-time mentality, with product being shipped out the door as it was coming off the line. We also had transitioned from building molds to maintaining them when our customers asked us to run more proprietary molds. It brought a lot of stress to the organization, because it exposed performance issues and limitations that we had in our tool room.”


Those issues translated into a negative effect on profitability. In 2009, tooling maintenance and repair costs were under $165,000, but by 2011, costs had increased more than $28,000 to over $193,000. Most importantly, 37 percent of the costs over those three years were for unscheduled mold repairs and only 19 percent was attributed to preventative maintenance and cleaning. Investing in change Cosmetic Specialties needed to find a sustainable, long-term solution. “It was time to be more proactive and less reactive,” Gedwed explained, “and, that meant we needed a centralized location for all data collection. This would allow us to improve communication between the mold floor and the tool room, and it also would help us track money spent on maintenance and repairs.” A strict preventative maintenance schedule was established to support production, and that led to greater visibility into the molds that were most problematic. Visibility, however, was only the first step. “We needed a systematic approach to mold maintenance and documentation that would allow us to deal with every mold the same way each and every time it needed attention,” he said. The

company consulted with several organizations before choosing software from ToolingDocs to track mold data. Once a system had been identified for collecting and monitoring data, the rollout began. “First and foremost, I had to identify those who wanted to embrace change and those who did not,” Gedwed explained. “The employees who were not willing to move forward are no longer with the company, but we had many employees who stepped up.” With everyone on board, standardized training ensured all employees had the same knowledge base and understanding of how the processes needed to work. The shop layout was improved and the tool room area was organized to make necessary items more easily available for maintenance and repair activities. In addition, new benchmarks were created for mold performance and maintenance efficiency key performance indicators (KPIs). “We had to take ownership of what was going on in the tool room,” said Gedwed. “There was a breakdown in communication between the production floor and the tool room – both in terms of page 16 u

www.plasticsbusinessmag.com | 15


focus t page 15

Breakdown of Tooling Costs (2009-2011) PM & Cleaning $98,715 19%

Unscheduled Mold Repairs $190,627 37%

Scheduled Mold Repairs $106,651 20%

Spare Parts $124,912 24%

Breakdown of Tooling Costs (2012-2014) PM & Cleaning $79,282 25%

Unscheduled Mold Repairs $99,556 31%

Scheduled Mold Repairs $63,756 20%

Spare Parts $77,165 24%

Charts provided by Cosmetic Specialties.

what the problems were with each mold and how those problems should be fixed.” A two-step process was implemented – first, a systematic approach for reporting the defect was created wherein the location of the defect was listed first and the defect listed second. Technicians also were asked to open the mold and collect last shots for inspection. Once reports came back, the tool room followed a seven-step process for repair, performing those steps the same way each time so when an issue needed to be addressed, there was a system to help correctly identify the defect.

it every day, so there were growing pains,” Gedwed explained. 8 “However, improvement was seen from the beginning because even slightly improved communication was much better than what it had been.” In the end, company leaders had to set the example and the employees had to feel ownership in the results. “Consultants can come in all day, every day to tell you what you should do and how to improve,” Gedwed said. “They bring great information and solid resources, but then they leave. It’s up to us as leaders to make it happen – to implement what has been taught to us.”

“The implementation was difficult,” admitted Gedwed, “because we hadn’t previously enforced the need to collect last shots or asked for What happened? documentation. There was a In 2012, Cosmetic Specialties lot of concern about the time saw an instant drop of more required for those things, and than $60,000 in tooling it was my job to spend time maintenance and repair on the floor every day to make costs. That improvement has sure the process was followed. Collecting accurate data and improving communication between continued and, in 2014, tooling It was my job to bring the two the production floor and the tool room made an immediate impact. maintenance and repair Photo courtesy of ToolingDocs. sides together, making sure the costs were only $79,000 – a process technicians understood that the communication was massive change in only three years. Over that time, preventative critical and that the mold technicians were following the seven- maintenance and cleaning activities increased to 25 percent step process each and every time.” of the overall costs, and unscheduled mold repairs dropped to 31 percent of the cost breakdown. “In our business, there will Improving the communication system and data collection were always be unscheduled mold issues that have to be dealt with,” not processes that happened overnight. Much of the Cosmetic Gedwed said, “but, if we can be proactive in how the molds Specialties workforce does not speak English as its first are maintained, it’s possible to reduce the costs associated language, and it was a challenge to teach every employee to use with that unscheduled activity. We now have approximately six the same terminology. “It took nearly 18 months before I felt unscheduled mold stops per week, rather than 15, and the costs confident that the data was complete and I didn’t need to inspect have dropped dramatically.”

16 | plastics business • fall 2015

13


In three years, the injection molding company was able to reduce maintenance and repair costs by 59 percent, reduce unscheduled mold repairs by 48 percent and reduce unscheduled mold stops by more than 50 percent. Maintenance and repair costs for proprietary molds went down 64 percent over those same three years, and cavitation increased from 88 percent to nearly 95 percent. Machine downtime no longer is driven by tooling issues, and the company has saved over $200,000 in three years. “The key was in getting the team to embrace change,” Gedwed acknowledged. “They really took it on as part of their responsibilities to improve the costs associated with the tool room.” In the end, a system for documentation and a long-term approach to preventative maintenance, rather than a reactive action when performance issues were revealed during production, made a significant difference in company culture, quality metrics and overall profitability. “Good data puts the power back into management’s hands,” he continued. “We were able to reduce the annual cost on repairs and maintenance, identify costly and problematic molds and improve the efficiency of the work flow because we could see

“We were able to reduce the annual cost on repairs and maintenance, identify costly and problematic molds and improve the efficiency of the work flow because we could see exactly where the issues were occurring.” – Chris Gedwed, Cosmetic Specialties exactly where the issues were occurring. Our tool room no longer is a liability, but rather an asset.” n

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review

MAPP's Annual Benchmarking & Best Practices Conference: The Power of Influence What could you accomplish if you started each day with an attitude of gratitude? What would your leadership style look like? What would your organization look like? How would employee attitudes change if the attitudes of those leading the company changed? MAPP Executive Director Troy Nix opened the 2015 Benchmarking & Best Practices Conference by sharing the ways in which starting each day with intentional gratitude has shaped his effectiveness as a leader. Keying off of the conference theme – The Power of Influence – Nix advocated for influence that starts with positivity at the top of the company food chain and trickles down to impact each and every person within an organization.

Photo courtesy of Creative Technologies Corp.

This message was heard by the more than 500 attendees who converged on the JW Marriott in Indianapolis, Indiana, for the 2015 MAPP Annual Benchmarking & Best Practices Conference, held Oct. 22-23. The Power of Influence was felt through inspiring keynote speeches, peer-to-peer discussions on issues common to every molding facility and exchanges with industry experts in economics, behavioral change and market trends. Photo courtesy of Creative Technologies Corp.

Nix

While the keynote speakers offered insights to impact and influence every level of an organization, much of the value of this event was realized when plastics molders from across the US shared the knowledge earned through trial and error in their own organizations. Leaders from plastics processing companies talked to fellow attendees about • mold maintenance strategies that saved one injection molder more than $200,000 over a three-year time period (read full story on page 14); • adding camera equipment to an injection molding line as a visual management technique in a way that was embraced, rather than reviled, by employees; • pre-hiring assessments that are used to screen job applicants to increase the chances of a successful hire; and • building the ideal manufacturing organization from the ground up by integrating new technology, changing work flows and addressing health and safety issues. On the second morning of the conference, attendees gathered with peers with similar job descriptions to ask for feedback on one issue pertaining to their day-to-day routines. Operational and processing personnel discussed shift changes, procedure documentation and scrap issues; senior company leaders gathered to talk about training the next generation of management and assessing expansion needs; while human resources professionals talked to each other about training programs, shift incentives and employee retention programs.

Photo courtesy of Creative Technologies Corp.

18 | plastics business • fall 2015

Keynote presentations are summarized on the following pages. The MAPP Benchmarking & Best Practices Conference will return to Indianapolis on Oct. 13-14, 2016.


Photo courtesy of Creative Technologies Corp.

Grenny

Photo courtesy of Creative Technologies Corp.

Chris Reitzug, Roche Diagnostics (www.roche.com)

Joseph Grenny, VitalSmarts (www.vitalsmarts.com) “We are hopelessly naïve in understanding why people do what they do, so we are staggeringly inept at helping them change behavior.” – Grenny Author and speaker Joseph Grenny set out to change the way attendees change minds. In a society that loves quick fix answers to complex problems, Grenny explained that until the influence issues behind behavioral reactions are understood, changing minds isn’t possible.

Influence Personal

Help them do what they can't

Social

Provide encouragement

Provide assistance

Structural

Ability

Help them love what they hate

Change their economy

Change their environment

Chart courtesy of VitalSmarts.

Using six sources of influence, Grenny taught attendees the scientifically-quantified methods for influencing behavior, providing step-by-step blueprints for increasing productivity, shaping culture and resolving conflicts by understanding how best to influence others toward positive change. Attendees also were given one of Grenny’s books, “Crucial Conversations: Tools for Talking When Stakes are High.”

The Power of Purpose

Change Behavior – Change the World

Motivation

Whether approaching a problem at work or a problem at home, the problem-solvers – or influencers – first must look beyond the “easy” answers. The ability to change behavior, he explained, is predicated on understanding why the behavior is occurring in the first place. Once the reasons have been diagnosed, influential impact can occur.

Chris Reitzug first understood the power of purpose when he went into a manufacturing facility making the AccuCheck Advantage meter for diabetes care for Roche Diagnostics. When celebrating a production milestone, Reitzug toured the plant, met the people who worked on the production line and told them stories about the health impacts of diabetes and how the meter was helping the people using the product – maybe even someone they knew – live longer, better and healthier lives. Two weeks later, the plant manager called to report record productivity levels, record quality levels and zero absenteeism. These employees were no longer coming to work to punch a timeclock and take home a check; instead, they were coming to work to improve the lives of people with diabetes. Reitzug advocated using the power of purpose to live a life that means something to you and to those around you. Discover your purpose: Find the passions and strengths that make you the person you are. Plant your purpose: Apply those passions and strengths in an intentional manner. Be on purpose: Have a great attitude, give exceptional effort, rise above the circumstances and care deeply about the people in your life.

page 20 u

www.plasticsbusinessmag.com | 19


review t page 19

Reitzug

World-Class Customer Service at Blinds.com Steve Riddell, Blinds.com (www.blinds.com)

Steve Riddell is the chief operating officer for Blinds.com, the largest e-commerce organization in Houston, Texas, with sales of $100 million. He is an entrepreneur and motivational speaker who has been credited with leading Blinds.com to receive awards that reflect on cultural and customer service excellence, including Best Places to Work in Houston, Most Engaged Workplace in America and Best Call Center in the US. Riddell’s presentation was a lesson focused on his role in growing Blinds.com through exceptional customer service that often may have seemed unnecessary when compared to its competitors’ practices. As a company that does not make its own product, warehouse its own product or ship its own product, customer service was the sword by which the company would live or die. Photo courtesy of Creative Technologies Corp.

The first step was to stop focusing on today’s sale and, instead, view each customer in terms of lifetime sales and referral sales. As Riddell explained, looking at the lifetime

Riddell

Photo courtesy of Creative Technologies Corp.

Photo courtesy of Creative Technologies Corp.

20 | plastics business • fall 2015

Photo courtesy of Creative Technologies Corp.


value of the customer changes the way each transaction is viewed. Once that viewpoint changes, the emphasis is not on making quick sales or taking the most calls through the call center, but rather on creating a deep and meaningful customer experience where the customer feels safe in making a purchase decision. Riddell provided guidelines for creating that customer-centric culture. 1. World-class customer service for existing customers is cheaper than the money expended to gain new ones. Do not treat customers like a commodity. 2. Culture of competency is always better than a culture of compliance. Teach employees to do their jobs well and empower them to make decisions. 3. Angry employees make for angry customers. The culture in which employees work becomes the culture in which customers buy – or not. 4. Buyers love to buy from companies intent on doing things right. Corporate reputation and community involvement have an impact. 5. When customers brag about you, that has a direct impact on lifetime value. World-class customer service leads customers who return in the future and to referral sales. 6. In the absence of any other reason to purchase, people choose price. 7. Customer service is a profit center, not a cost center. Invest in customer service. 8. The key to long-term growth is customer lifetime value. 9. When things go wrong, customers will give you the benefit of the doubt. Even if mistakes are made, customers will stay if the situation is handled with honesty. 10. When employees are empowered, so is the customer.

Building Customer Relationships through Storytelling Kindra Hall (www.kindrahall.com)

Anyone can tell a customer that the product will be delivered on time, the original quote will be honored and the quality will be excellent. Customers and prospects hear those things from each and every company with which they interact. By shifting the focus to storytelling, said Hall, customers are shown those qualities in a tangible way. Hall explained that storytelling works because it creates an emotional connection that often leads to action, and stories are memorable long after a recitation of fact fades.

Hall

Photo courtesy of Creative Technologies Corp.

Hall said determining what stories to tell could be as simple as thinking about the following defining moments: • Your “firsts” – first customer, first time molding a product, etc. • Your proudest moment • Your biggest challenge From those moments, craft a story with three simple elements: the “normal,” the “explosion” and the “new normal.” First, set the scene by describing the people and places in the event. Include the emotions felt and specific details. Be strategic in thinking about where the story is heading. Then, describe the moment – the explosion. Finally, describe the new normal. Use a detail from the “normal” to pull the listener back to where you started. Provide a progress report on what was learned from the event. And, finally, offer a directive – a way for the customer or prospect to connect with what was learned through the experience. With a story to share, customers, prospects and even employees will feel a deeper connection to the words you attribute to your organization. Instead of telling them that the organization has strong family values, a commitment to quality and a willingness to go “above and beyond,” show them through stories that can be told during client meetings, through videos, online via social media or a company website, in print material and through presentations. n

Storytelling can build trust with customers and prospects, enhance communication and grow the brand of companies that use it effectively as a strategy.

www.plasticsbusinessmag.com | 21


industry

Reducing the Risks of Combustible Dust provided by Grainger

Combustible dust, as defined by the Occupational Safety and Health Administration (OSHA), is “a solid material composed of distinct particles or pieces, regardless of size, shape or chemical composition, which can present a fire or deflagration hazard when suspended in air or some other oxidizing medium over a range of concentrations.” The presence of this dust, both in open and unseen areas, can present a grave hazard to employees, employers and facilities as explosions can be catastrophic in nature. An OSHA Fact Sheet, titled “Hazard Alert: Combustible Dust Explosions,” explains how dust explosions can occur. “In addition to the familiar fire triangle of oxygen, heat and fuel (the dust), dispersion of dust particles in sufficient quantity and concentration can cause rapid combustion, known as deflagration. If the event is confined by an enclosure such as a building, room, vessel or process equipment, the resulting pressure rise may cause an explosion. These five factors (oxygen, heat, fuel, dispersion and confinement) are known as the Dust Explosion Pentagon (Figure 1). If one element of the pentagon is missing, an explosion cannot occur.” Combustible dust explosions typically occur in two waves. The first wave, also known as the primary explosion, starts with just the “right” concentration of airborne accumulated dust. This dust is held captive within a limited or enclosed space, such as inside the chamber of processing equipment. This captive dust then is subjected to a heat source, which causes the dust to ignite. The ignited dust can burn very rapidly and release gases, causing the pressure to rise within the enclosure, and can result in an explosion. Unfortunately, the first explosion usually is only the beginning. The primary explosion disturbs and shakes up dormant dust, which

22 | plastics business • fall 2015

Ignition Dispersion of dust particulates

FIRE

Combustible dust

Confinement of dust cloud Oxygen in air

Figure 1. The Dust Explosion Pentagon

has collected over time on a variety of surfaces within the area. Some examples of these surfaces can be on top of or underneath machinery, ledges, rafters, duct work, inside suspended ceilings, on top of support beams, etc. The second wave, or secondary explosion, occurs as this additional dust becomes suspended in the air and also ignites. Secondary explosions often are more destructive than primary ones because of the sheer volume and concentration of additional dust available to fuel them. Many employers and employees are unaware of the potential threat of dust explosions or fail to recognize it as a serious hazard in their facility. In the Chemical Safety Board (CSB) video, “Combustible Dust: An Insidious Hazard,” Stephen Selk, a CSB investigator says, “The big problem with combustible dust is that we underestimate its hazards. We become complacent and we fail to take the necessary precautions.” There also may be inadequate information available to help employers recognize a combustible dust hazard on their Safety Data Sheets (SDS). After reviewing

Photo: Dormant dust, which has collected over time on a variety of surfaces, can contribute to secondary explosions.


the SDS of 140 substances known to create combustible dust, the CSB found they contained deficient information to assist the end user in determining the hazard: 41 percent of the documents did not warn of the potential hazard at all, while the remaining 56 percent did not clearly or specifically describe the hazard in a way which was easy to identify (CSB, 2006). There is a long list of industries vulnerable to the hazard of dust explosions, including, but not limited to, the following: agriculture, chemicals, food (such as sugar, candy, spice, starch, flour, feed), grain, fertilizer, tobacco, plastics, wood, forest, paper, pulp, rubber, furniture, textiles, pesticides, pharmaceuticals, tire and rubber manufacturers, dyes, coal, metal processing (such as aluminum, chromium, iron, magnesium, zinc), recycling operations and coal. OSHA suggests completing an in-depth dust hazard assessment analyzing the following areas: • Materials that may be combustible • Processes that utilize any combustible dust • Open and especially hidden areas where dust may collect

• Opportunities that may cause dust to become airborne • Any source of ignition The key to the hazard assessment is correctly identifying whether or not the dust is indeed combustible. The National Fire Protection Agency (NFPA) Standard for the Prevention of Fire and Dust Explosions from the Manufacturing, Processing and Handling of Combustible Particulate Solids (NFPA #654) and NFPA #454, Standard for Combustible Metals, Metal Powders and Metal Dusts, both define combustible dust as “any finely divided solid material that is 420 microns or smaller in diameter and presents a fire or explosion hazard when dispersed and ignited in air.” Other variables to consider, in addition to particle size, are how the dust will be dispersed, what kind of ventilation is available, air currents, sources of ignition and the presence of physical barriers to either provide dust confinement or which provide separation of work processes one from another. In addition to the hazard assessment, controlling and eliminating combustible dust also is critical. Per OSHA, the following are page 24 u

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industry t page 23

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Figure 2. What happens during a combustible dust explosion

ways to mitigate combustible dust: • Create a program to inspect for and test for the presence of dust; implement housekeeping and control measures. • Use only appropriate dust collection systems and filters. • Recognize and eliminate fugitive dust, which may escape from process equipment or ventilation systems. • Reduce the amount of horizontal surfaces which may collect dust and require cleaning. • Regularly inspect for dust residue in hidden and open areas. • Provide access to hidden spaces to facilitate inspection. • Identify specific housekeeping practices close to ignition sources so dust clouds are not created. • Use only explosion-proof vacuum cleaners. • Do not place relief valves in close proximity to dust deposits. OSHA also provides several suggestions for controlling ignition sources, including the following: • Only utilize approved electrical and wiring equipment and methods. • Bond and ground equipment to the ground and control static electricity. • Control open flames, sparks, smoking and friction. • Segregate materials to prevent combustible material from work processes. • Put distance between heated surfaces/systems and dust exposure. • Follow proper operating instructions when using cartridgeactivated tools. • Implement a preventative equipment maintenance program. The 2006 CSB investigative study concluded engineering controls and adequate safety practices exist in general industry to control combustible dust, but no comprehensive federal standard was in place to require adherence to these practices. The CSB advocated for OSHA to form a new combined standard based on the existing five NFPA standards (NFPA Standards 654, 664, 61, 484 and 655). In 2013, CSB voted to put this issue on its “Most Wanted Safety Improvements” program. The CSB has


recommended the following codes be included in the proposed combined standard: • Hazard assessment • Engineering controls • Housekeeping • Building design • Explosion protection • Operating procedures • Worker training. n Grainger has the products, services and resources to help keep employees safe and healthy while operating safer facilities. It also provides a network of safety resources that help companies stay in compliance and protect employees from hazardous situations. Count on Grainger for lockout-tagout, fall protection equipment, confined space products, safety signs, personal protective equipment (PPE), emergency response and so much more. For more information, visit www.grainger.com. This publication is not a substitute for review of the applicable government regulations and standards, and it should not be construed as legal advice or opinion. Readers with specific compliance questions should refer to the cited regulation or consult with an attorney.

Sources for information www.csb.gov Combustible Dust: An Insidious Hazard www.osha.gov OSHA Fact Sheet, Hazard Alert: Combustible Dust Explosions Hazard Communication Guidance for Combustible Dusts Combustible Dust Combustible Dust in Industry: Preventing and Mitigating the Effects of Fire and Explosions www.nfpa.org NFPA 654, Standard for the Prevention of Fire and Dust Explosions from the Manufacturing, Processing, and Handling of Combustible Particulate Solids NFPA 664, Standard for the Prevention of Fires and Explosions in Wood Processing and Woodworking Facilities NFPA 61, Standard for the Prevention of Fires and Explosions in Agricultural and Food Processing Facilities NFPA 484, Standard for Combustible Metals NFPA 655, Standard for Prevention of Sulfur Fires and Explosions (Rev. 5/2014)

www.plasticsbusinessmag.com | 25


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view from 30

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

American Export Expertise Leads to Presidential Award Dymotek Corporation, Ellington, Connecticut, is an injection molding provider of precision parts to the defense, aviation, aerospace, medical, electronics, automotive and industrial/ consumer goods industries. While the company has an extensive reach into so many markets, Dymotek also reaches more than 35 countries by exporting its molded goods. That export expertise led to a special honor for Dymotek during the summer of 2015 as the company was one of 26 awarded the President’s “E” Award for demonstrating a sustained increase of export sales over a four-year period. Established by Executive Order of the President in 1961, every year the President’s “E” Award acknowledges those companies which strive to increase American exports, create jobs and continue building export markets. According to a US Department of Commerce press release, US Commerce Secretary Penny Pritzker honored 45 American companies and organizations. “Today’s awardees have made substantial contributions to increasing US exports, which are critical to spurring economic growth and job creation,” she said. “Exports continue to be a driver of our economy, supporting more than 11.7 million jobs in cities and communities across the country. Furthermore, these exporters are examples of the historic progress in our export growth. In 2014, US exports hit an all-time high of $2.34 trillion, accounting for 13.4 percent of GDP. By exporting more Made-in-America goods and services, US businesses are growing faster, hiring more workers and paying better wages.” Dymotek has established and maintained strong partnerships with regional suppliers, and CEO Norm Forest pointed to those relationships as critical to the company’s understanding

28 | plastics business • fall 2015

From left: Secretary of Commerce Penny Pritzker; Dymotek Chief Technology Officer Victor Morando; Dymotek CEO Normand Forest; Arun M. Kumar, Director General of the US and Foreign Commercial Service and Assistant Secretary for Global Markets, US Department of Commerce; and Congressman Joe Courtney (D-CT).

of export requirements. Forest advised companies to “reach out to your regional export assistant centers. They offer training on what documents and information is required in global logistics.” By nurturing those regional relationships, Forest and Dymotek have come a long way over the years. “I remember years ago, we struggled with getting products from here to there because it was very different from what we were used to,” Forest stated. “Through hard work we now have become experts in the arena. There are a lot of programs page 30 u


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view from 30 t page 28 out there to help international commerce, so take advantage. Reach out to your strong partners in your regions to put forward a partnership of strength from which you can execute on your supply of products.” As part of the company’s efforts to build strong partnerships and strong communities, Dymotek has gone a step further by exporting knowledge and experience into local classrooms. Three years ago, Dymotek began supporting the Manufacturing Technology Program at Asnuntuck Community College in Enfield, Connecticut. Since then the approach has cloned to other community colleges in Connecticut. The purpose of the program is to provide younger students with industry training and experience. As part of the program, the candidate takes pertinent classes for the first semester and then works a couple of days a week through the second semester. According to Forest, the program has proven highly beneficial. “Our first student was a huge success,” he said, excelling within the program to the point of venturing to Europe for extended training. With such positive results, “it was an easy decision to continue, and the very next candidate has blossomed into a junior quality engineer.” In addition to fulfilling Dymotek’s directive of reaching out to the community, involvement with the Manufacturing Technology Program neatly fits into the President’s “E” Award standard for creating jobs within the market, further benefiting Dymotek. “The strength is we get a candidate that has been given the foundation of the technical basics in the field, including the importance of responsibility,” Forest stated. “The output from the college has been so successful that we now participate as a sponsor even if we don’t have a role available in our company as a way to give back.” Combining a global market strategy with a strong commitment to its local community, Dymotek has established itself as a leader in regional economic development. US Rep. Joe Courtney (D-CT), who presented the award, congratulated “the Dymotek team for its outstanding work to build strong overseas markets and their commitment to our region. Increasing exports is critical to the economic recovery, and these awards recognize companies paving the way for a growing export strategy.” According to Forest, it was “an absolute honor to participate in the ceremonies in Washington, D.C. The recognition is positive for manufacturing in the US, as well as the Northeast. We are able to execute ‘world-class customer experiences’ through strong partnerships with local suppliers to our region in Connecticut.”

30 | plastics business • fall 2015

Molding Millennials: PMC and the Next Generation of Plastics Manufacturers As the economy has recovered in recent years, manufacturing industries have seen a surplus of jobs accompanied by a shortage of skilled talent. In response, manufacturers such as PMC SMART Solutions, Cincinnati, Ohio, and Shelbyville, Indiana, have been reaching out to local colleges and high schools, encouraging students to consider careers in plastics manufacturing. “We currently have two programs geared toward enticing younger talent,” affirmed Lisa Jennings, president of PMC. “One program is run by Shelly Carter, the HR manager at our facility in Shelbyville, Indiana. She has been doing a lot of work with the local high schools and technical schools, informing younger students of the benefits of careers in plastics manufacturing. These students have the opportunity to participate in programs we helped develop in the Shelbyville community.” The second program, which Jennings is involved with, focuses on attracting slightly older workers, specifically millennials considering whether to enroll in college or technical college, or if they want to enter directly into the workforce. “This program has been a big focus for 2015,” Jennings stated. “With the resurgence of manufacturing within the US, we were struggling to find talent for engineering positions. We decided to bring in early career team members by creating a program to attract millennials and involve them in a variety of areas of our engineering and manufacturing processes.” Over the course of roughly a year, participants are exposed to and involved in all different areas of PMC’s engineering and operations. They gain experience in tooling, manufacturing, engineering and more before determining which track they are best suited for: quality engineering, program management, manufacturing, engineering or production. As part of its recruiting efforts, PMC has partnered with local regional colleges with strong engineering and co-op programs, such as Indiana University at Purdue and Rose-Hulman Institute of Technology in Terre Haute. “These schools are the real focus page 32 u


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view from 30 t page 30 spots for us due to the location of our facility and our past success in hiring from them,” Jennings explained. “Our plan is to develop close relationships with the school’s faculty and administration so we can understand who the students are that are coming through particular classes and showing potential for our organization needs.” PMC also has focused its attention inward. According to Jennings, “What we’re really focusing on with millennials, and internally at PMC, is conveying our real purpose and why we exist. Our slogan is ‘Manufacturing Technology that Saves Lives.’ We want to connect this next generation to our greater purpose because we’ve found that is what a lot of millennials crave. It’s not just the individual or incremental accomplishment, but how those accomplishments are tied to a greater purpose.” Part of that greater purpose involves impressing upon younger hires how and where they can grow within the company, as well as providing important work opportunities. “We focus on how they will be given meaningful work that is theirs,” Jennings asserted. “They’re not just going to be an assistant or spend all their time making copies. They are given projects with high

Over the course of roughly a year, participants are exposed to and involved in all different areas of PMC’s engineering and operations. They gain experience in tooling, manufacturing, engineering and more before determining which track they are best suited for: quality engineering, program management, manufacturing, engineering or production. expectations and support to meet those expectations. We’ve found that the variety of work is very enticing to them.” While PMC’s recruitment program hasn’t been in effect for very long, it already has seen many positive results. In one year, the company has made three direct hires and taken on two co-op employees. Another student was hired through a local community technical program that PMC helped develop.

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For a mid-size company, having six new hires in the course of 12 months is significant. PMC’s decision to focus on attracting younger, early career talent certainly has proven itself beneficial. “A lot of mid-size companies have a tendency to want to hire someone who has been in the workforce for a while,” explained Jennings. “They want someone with specific experience, someone who can walk in the door and get right to work. We’ve all been pleasantly surprised with these millennials and are excited about their future with PMC. Yes, we do have to spend time training and helping them understand the nuances of each job, but they are smart, motivated, capable people, and they have made contributions right away. Early results are very promising.” n


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news

Paulson Releases New Thermoforming Training Course

Beaumont Receives Patent for Therma-flo™ Technology

Paulson Training Programs, Chester, Connecticut, recently released an interactive CD and online thermoforming training program. Titled “Thin Sheet Thermoforming,” the six-lesson training program is designed specifically for the training needs of the thin sheet thermoforming manufacturer, covering all aspects of the process. Users will learn the function of each component of the thermoforming line, plastic behavior during the thermoforming process, sheet extrusion fundamentals, optimization of operating controls, safety around the thermoforming machinery and thermoforming for maximum efficiency and profit. For more information, call 800.826.1901 or visit www.paulsontraining.com.

Beaumont Technologies, Erie, Pennsylvania, announced that the patent for Therma-flo™ was issued Aug. 4, 2015, by the US Patent and Trademark Office. Therma-flo technology has a method and systems patent for characterizing the injection moldability of plastic materials. Therma-flo initially was developed to measure and quantify how a polymer flows through a mold under a wide range of cavity and/or runner thicknesses/diameters. Therma-flo is part of a fully integrated and semi-automated test cell at Beaumont that includes the Therma-flo moldometer tooling, an injection molding machine with specially developed controls and a high-speed data collection system. For more information, visit www. beaumontinc.com/therma-flo.

New Powder Loaders Available from Conair The Conair Group, Cranberry Township, Pennsylvania, announced two new powder conveying units for handling PVC and other powders down to one micron in size, including regrind. Units are available in a PR (powder receiver) model for use in central vacuum systems and a self-contained PM model with integral vacuum motor. The integral-motor version is ideal for conveying material from gaylords or bins directly to a molding machine or extruder. The PM motor loaders come in three sizes with conventional DC brush or brushless motors, with the ability to transport up to 1,000lb/ hr (454kg/hr) over distances up to 50ft (15.25m). The PR powder receivers come in five different sizes, ranging in volume from 0.143.0cu ft (4 to 85l) and accommodating line sizes up to 4" (101mm) OD. For more information, visit www.conairgroup.com.

M. Holland Launches MH2GO M. Holland Company, Northbrook, Illinois, announced the introduction of MH2GO™, a tablet-based information technology application for customers and suppliers when transacting business with the company. The application provides account managers and product managers with functionality and information when interfacing with customers and suppliers. From a customer’s office, an M. Holland account manager can access real-time pricing and inventory information, generate quotes and confirm orders. For suppliers, the tool enables product managers to track up-to-the-minute sales activity and report on the status of target projects. MH2GO also is accessible from an account manager’s regular computer, cellphone and corporate intranet. For more information, visit www.mholland.com.

34 | plastics business • fall 2015


Maruka Presents Compact All-Electric TOYO Model Maruka USA, Pine Brook, New Jersey, has introduced the all-electric Si-55-6 from TOYO. The most compact machine in TOYO’s SI series, the 55-ton model is meant for medical molders. Its v-shaped clamp directs force to the center of the mold, resulting in more uniform pressure on the entire mold surface. Other new features include Hitachi motors, digital load cell for stability, reduced drag on the screw and extruder, easy access to the clamp and ejector and mold protection system. For more information, call 973.487.3800 or visit www.marukausa.com.

Wittmann Battenfeld Highlights Medical Technology Competence Wittman Battenfeld, Vienna, Austria, has introduced a medical version of the all-electric EcoPower. Attention was paid to the interior mold space, which comes equipped with smooth surfaces, stainless steel covers and covered guide rails. The exhaust air conduits of the pneumatic valves are bundled and thus guided out of cleanroom space. Moreover, the machine as a whole has been provided with a water cooling system with a closed cooling circuit, alcohol- and solvent-resistant paint, nickel-coated clamping plates with covered threaded drillings and a laminar flow box, which supplies air with low particle content to the interior mold space. All openings in the mold area and the threading of the clamping plates are covered. The barrel insulation also minimizes emissions into the environment. For lubrication, exclusively food grade lubricants are used. For more information, visit www.wittmann-group.com/en_us.html.

FIPA Releases Series of Round Quick-Changers with SAFE-LOCK Mechanism FIPA Inc., Cary, North Carolina, released a new series of round quick-change systems that provide a connection between assembly and material handling robots and gripper systems. Designed to withstand strong vibrations and rapid acceleration, the new SR Series quick-changers feature snap-on SAFELOCK mechanisms, color-coded locking indications (red for locked, green for open) and pneumatic air connections incapable of being misaligned. Made of anodized aluminum alloy, SR Series quickchangers currently are available with diameters of 50mm, 90mm and 150mm; feature a repeat accuracy of +/- 0.025mm; and can withstand working pressure of up to 6 bar and working vacuum of up to -1 bar. Lifting force, maximum torque, maximum bending moment and weight varies for each device. For more information, visit www.fipa.com.

Sepro Introduces Robots for Large Molding Machines Sepro Group, La Roche-sur-Yon, France, has announced three new lines of Sepro robots for plastics injection molding machines with 800 to 5,000 tons of clamping capacity. The new robots improve upon the Sepro G4 Line, which previously covered high-tonnage molding applications. In general, the new S7 and 7X robots have longer kick (Y-axis) stokes, longer vertical (Z-axis) strokes and can handle larger payloads than their G4 predecessors. The Strong Line robots extend the range of Sepro’s robots to serve machines up to 2,800 tons. All of the new robots operate using the same control platform developed by Sepro for injection molding applications. For more information, visit www.sepro-group.com. n

www.plasticsbusinessmag.com | 35


association

MAPP Expands with New Members MAPP’s leadership team welcomes the following new members:

program manager, Bill Kaiser, at bkaiser@mappinc.com with any questions.

Corning, • Nibco Inc. (Georgia) • • Corning, Inc.Inc. (California) • AquaCal (Florida) (California) • Ames Industries, Inc. (Pennsylvania) Ames Industries, • Letica Corp (Michigan) • • Cumberland Plastic Inc. Solutions, LLC (Alabama) (Pennsylvania) • Wescon Plastics LLC (Kansas) • Lauren Plastics Cumberland (Michigan) • • Excel Injection Plastic Molding (Mississippi) Solutions, LLC • Kenco Plastics, Inc. • Nibco Inc. (Georgia) (Indiana) (Alabama) • AquaCal (Florida) Wescon LLC • Vantec, Inc. (Iowa) • • Letica CorpPlastics (Michigan) (Kansas) • Bo-Witt Products, Inc. • Lauren Plastics (Michigan) ExcelPlastics, Injection Molding (Indiana) • • Kenco Inc. (Indiana) (Mississippi) • Vantec, Inc. (Iowa) • Bo-Witt Products, Inc. (Indiana) Congratulations 15-Year MAPP Members! Congratulations to the following members for their 15-year tenure as MAPP members. The MAPP leadership team and board of directors appreciate the dedication each of these companies has shown!

MAPP Continues Popular Plant Tour Events in 2016 MAPP has announced the next location in its ongoing series of Plant Tour Events. OCTEX is an injection molding solutions provider in Sarasota, Florida, providing innovative, skilled and technologically advanced solutions with an industry-leading time-to-market to the leaders in the markets it serves. OCTEX has a strong cutting edge and nascent technology focus, and the company is proud to manufacture components that are the building blocks for some of the world’s top medical, industrial and consumer products. From the simplest task to the most complex endeavor, OCTEX knows that when you live to engage, innovate and evolve, everything is possible.

• • Pyramid PyramidPlastics, Plastics,Inc. Inc. • • Gros GrosExecutive Executive Recruiters Recruiters

• •

•CEW CEWEnterprises Enterprises Plastics Solutions, Inc. Inc. • PlasticsSolutions,

Grainger Offers Enhanced Savings Program to MAPP Members Grainger’s executive team has enhanced the MAPP Grainger savings program by adding an additional 602,000 heavily discounted SKUs to its existing discounts on products and benefits. These new items will cover safety, electrical, cutting tools, abrasives and more, including the following: • • • • •

Electrical: 30 percent off Hand tools: 25 percent off Material handling: 25 percent off Motors: 30 percent off Power tools: 20 percent off

This modification will add additional cost savings to every member company using the program, and the MAPP team appreciates the continued support and use of the Grainger discount program. Keep in mind that this program is a leveraged buying program, which means that the more each member spends, the more the entire membership saves. Contact Scott Harte, Grainger's national account manager, at 630.334.4574 (scott.harte@grainger.com) or MAPP’s inside

36 | plastics business • fall 2015

Save the date for this Plant Tour Event on Thursday, Feb. 4, 2016. MAPP members attending this event will have the opportunity to examine the production floor and business operations of OCTEX. MAPP Member executives wishing to attend this event will be notified when registration opens at www.mappinc.com. Incoming and Outgoing Board Members Recognized MAPP is pleased to announce its expansion of leadership and expertise with the newest members of the Board of Directors: Mike Devereux, Mueller Prost; Terry Minnick, Molding Business Services; Tom Nagler, Natech Plastics; and John Hoskins, OCTEX. A sincere thank you for the leadership, support and dedication of the outgoing board members. Their guidance has led MAPP to what it is today. Thank you to Kelly Goodsel, Viking Plastics; Tom Boyd, Blow Molded Specialties; Ed Holland, M. Holland Company; and Glenn Nowak, IQMS, for their service. MAPP Machine Rate Survey Available Soon MAPP recently completed the data analysis from the Machine Rate Survey, and the report will be available shortly. Data was collected from more than 150 MAPP member companies across the US, and those who participated in this survey process will receive the information allowing them to benchmark their performance against MAPP’s nationwide community of plastics processors. For more information on this report, visit www.mappinc.com. n


www.plasticsbusinessmag.com | 37


51

production

Five Factors to Consider When Adding Robotics When adding robotic automation to production lines, project owners should consider involving all parties, like the manufacturers of the machine, robot, automation, end-ofarm tool and guarding. There are many considerations that can impact the time, money and labor saved when automation is brought into a facility, and a robust team provides a better opportunity to capitalize on those savings. Here are five factors that should be considered.

Related Robotics ROI: The Bottom Line on Automation page 42

by Jason Holbrook, Krauss Maffei Corporation

Jason Holbrook is sales manager for Krauss Maffei Corporation. In Krauss Maffei’s injection molding machine division, Holbrook brings with him a strong background in plastics injection machine technology and automation in several key end markets, including automotive, appliance, packaging, medical and consumer. For more information, email jason.holbrook@ kraussmaffei.com or visit www.kraussmaffeigroup.us.

38 | plastics business • fall 2015

Space Requirements As industries pursue the most efficient means of production, space requirements have become an increasingly important feature of production cell design. Simply put, facilities are trying to shoehorn more production into tighter spaces, while also maintaining a safe and ergonomically correct working environment for the laborer. Historically, a fully automated injection molding machine cell has consumed approximately three times (3x) the machine width to include the machine, guarded production cell, supporting equipment and work-inprocess (WIP). More recently, this is being reduced to two times (2x) the width and, in some cases, one times (1x) the width by utilizing a more efficient linear cell design. To achieve a cell two times (2x) the width, keep the automation on the non-operator side of the molding machine, integrating the guarding to the top of the conveyor or elevating the conveyor itself above 2,200mm from the floor. By restricting robot strokes from exceeding this area, a very tight production cell can be accomplished. Both options have advantages and disadvantages, but most disadvantages easily can be overcome with creative thinking. Achieving a cell one time (1x) the width most commonly is done utilizing a longitudinally mounted (L-Mounted) robot, which traverses to deposit the parts at the clamp end of the machine. The additional traversing stroke required adds a little cost to the robot, but minimizes the guarding and conveyor cost, while also providing more real estate – which adds its own value. The idea of this design is to place more machines next to one another with all of the parts deposited at the clamp end, so the machine operator simply can walk along an aisle to tend a lot of machines. Twoplaten machine designs contribute to this solution because their clamp is two-thirds the length of the old traditional ram or toggle machines, and there is no hydraulic tank or breather bags to contend with above the clamp.

2

Safety Issues Cell layout is critical to the efficiency of a production cell. Too often, this is overlooked in the initial stages of project, resulting in perimeter guarding encompassing an entire cell, consuming too much real estate and hindering movement and interaction for the operators managing the cell.

Guarding often is an afterthought, which often leads – at the eleventh hour prior to production readiness – it to be inadequately erected. ANSI establishes clear descriptions that OSHA adopts for oversight. These requirements have changed in recent years to improve the safety of the operator. OSHA inspections have become more critical in this area, making it important for cell designers to educate themselves on these latest revisions. One good example is the overhead solid panel guarding in any operator aisle


where a moving piece of the automation operates overhead – this aisle must be guarded with a solid panel. Another mistake that often is seen is the use of metal mesh or expanded metal perimeter guarding in areas where polycarbonate panels would be the proper choice. The distance the perimeter guarding of metal mesh needs to be from any potential moving part of the automation is directly related to the mesh hole size being used. Typically, this distance can be from 24" to 36" around the perimeter, resulting in guarding three times as large. If this is done with polycarbonate panels, the perimeter guarding can be as close to the automation as it needs to be. So, although polycarbonate panels are more expensive than metal mesh, when following ANSI/OSHA guidelines, the polycarbonate solution may require less square footage, meaning it will be less expensive. The use of light curtains often is suggested in place of solid panels, and there are areas where this can be very beneficial, but keep in mind that inertia of the human body has to be taken into account. A solid panel will stop a human body from moving through a barrier; a light curtain will not. The distance of the light curtain to any moving part of the automation, congruent to the time it takes for that automation to come to a complete halt, determines the distance the light curtain needs to be positioned from the automation. Most often, this too results in a larger guarded area, where the solid panel is the better choice. That said, light curtains have their place in automation when applied correctly.

3

Wrist Choices Injection molding applications have, more often than not, been automated with (3-axis) linear robots compared to (6-axis) articulated robots. Although the later have become more popular in recent years, they bring with them their own restrictions not inherent to linear robots. To compensate for the flexibility that a typical 6-axis articulated robot has over a 3-axis linear robot, manufactures of linear robots now offer 5-axis and 6-axis servo robots where an A-B-C-Servo wrist is added to the bottom of the vertical arm on a linear robot. This provides the best of both worlds – faster mold harvesting of the linear robot, with articulated human-like movements for post-molding applications, while still being mounted to the top of the stationary platen and not consuming real estate beside the press, as is typical of a floor-mounted 6-axis robot. Now, there are plenty of times where the 6-axis articulated outperforms the 3-5-6-axis linear robot, and those are typically where orbital movement of the post-molded part through an automated cell is most efficiently done, where a linear robot

simply doesn’t have that degree of freedom or tatk time to complete the operation. Herein lies the importance of 6-axis robots, and they are often more properly used in conjunction with a linear part harvesting robot in post-molding applications.

4

EOAT Design End-of-Arm Tool (EOAT) design, like guarding, often is an afterthought not considered until the mold has arrived, and the molder is under pressure to produce production volume parts. It is very common then for a process engineer to fabricate an EOAT on-site from an erector set of components on hand, without the art of form and function being utilized to its fullest. More often than not, this then is the same EOAT running the application months into production, causing headaches at set-up and contributing to inconsistent position tolerance. An EOAT should be considered part of a system that operates with the mold. From the part’s point of view, the mold is its initial “fixture,” holding its position in very tight tolerance. Once it’s released from the mold, tolerances are added to that position. The accuracy of the EOAT picking the part from the mold will determine the accuracy to which it is being handed off. If positioning tolerance is critical to part positioning postmolding, then the stack-up of tolerances needs to be considered from the mold to the EOAT to the automation. In these cases, consider the EOAT as one of three parts to a system: 1. mold 2. EOAT 3. automation The stack-up of tolerances from this three-point system determines the position accuracy of the part; the robot and molding machine are simply carriers for the first two pieces of the system. Operators often find that the stack-up of tolerances from the system exceeds far beyond the allowances of the part assembly print. What results is the manufacturer chasing one end of the allowance to the next – a self-defeating exercise. An EOAT should have nearly as much forethought given to it as the mold design, with the idea being to hold the stack-up of tolerances as tightly as possible. The EOAT should be built in such a robust manner that it doesn’t beat itself to death through daily use. Keeping features tightly positioned to main mounting position and nesting the parts in Delrin pockets is very common practice to a successful EOAT design. Part sensing and independent vacuum and gripper circuits also contribute to proper EOAT function, so make sure to consider these facts when outfitting a robot. page 40 u

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production t page 39

5

You Can’t Argue with Results Over 70 M&A Transactions

Vibration Isolation Lack of vibration isolation in an automated cell contributes to more problems than most consider: • premature component wear • position inaccuracies • extended cycle time

Vibration, as with most energy, travels in a sine curve. Less resistance results in lower frequency. The more mass, the lower the resistance and the lower the frequency becomes. As mass is reduced throughout the movement of vibration, the higher the frequency becomes. In the case of sine curves from the forces of the molding process, once it terminates, it will become noise, heat or vibration – vibration being the path of least resistance. A molding machine is designed to have the forces travel through the stationary platen, down through the frame of the machine to the vibration isolation pads and, finally, to the concrete floor. When a robot is positioned on top of the moving platen, it’s like setting a tuning fork on top of the platen. The mass of the stationary platen is very large compared to the riser of the robot. The mass of the riser of the robot is larger than that of the traversing stroke – and, so on. By the time vibration gets all the way through the kick strokes, vertical arm and wrist flip to terminate at the EOAT, the mass of material for that sine curve to travel through has been reduced exponentially, resulting in uncontrollable vibration. The further the strokes are extended, the higher the frequency of this vibration, and the worse it becomes. The solutions to such problems are rather simple: • Ground the vibration. • Reduce the length of travel needed to execute the operation. To ground the system, consider adding an outrigger vertical support leg to the traversing beam of the robot. The more mass this leg has, the easier it will be for the vibration to take that path of least resistance to a vibration isolation pad at the bottom of the beam to the floor. This prevents the vibration from working its way out through the kick stroke, reaching the EOAT. To minimize strokes, consider positioning insert pick-up or degating stations as close to the traversing beam and robot riser as possible, rather than mounting them on the floor where the robot must extend itself to max stroke. This will tighten the capability of position tolerances and minimize the impact of vibration. This also prevents premature wear and tear on linear bearing surfaces.

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production

Robotics ROI: The Bottom Line on Automation When automating your facility, current perception is leaning toward classifying robots as a commodity, with purchasing decisions based solely on price and delivery. That is a path typically leading to a poor return on investment.

by Ronald K. Bryant, Yushin America

Ronald Bryant is Yushin America’s Equipment Sales Manager. He has decades of industry design experience that includes ultrasonic and thermal assembly, web converting, metal forming, robotics and custom automated machinery. For more information, call 401.463.1800 or visit www.yushinamerica.com.

42 | plastics business • fall 2015

What is the reason for your need to automate your molding process? Sometimes, what seem to be the most obvious reasons truly have no chance of an acceptable payback. Therefore, it’s important to document every perceived benefit and pitfall that is anticipated. That list will have a two-fold benefit: First, it will guide you to a sound business decision, and second, it can be a talking point when working with and selecting a vendor. Your list of benefits will guide your vendor’s product selection to fulfill your documented needs. Your list of cons may be shortened by your vendor’s suggestions of possible solutions that you were not aware were possible. ROI – the basis for your purchasing decision Before contacting potential vendors, create a list of specifications (see sidebar on next page). That effort will ensure that you receive a proposal that will meet your minimum needs and will be easily comparable between vendors. When determining the cost savings to enable ROI calculation, don’t forget to capture all of the possible savings. Ask the following questions: • How many seconds of mold-open time will be saved during each cycle? • How many seconds of overall cycle time will be saved during each cycle? • How many more saleable parts will be made each month? • How many parts are scrapped each month due to the following: a) scratches or blemishes caused by dropping or mishandling? b) rejects caused by inconsistent mold cycles? c) rejects caused by missing components that should have been over-molded?


• How many fewer parts will be scrapped each month as a result of the addition of a robot? • How many more machine hours will be available for other profitable projects? • How many fewer labor hours will be needed each month? • What is the current fully burdened cost per molding cycle? • Will your current labor be replaced with lower skill level (i.e. lower cost labor) • Will your current labor be eliminated? • Will your current labor be spread over multiple operations or presses? • Do you currently have mold damage due to inattentive employees or processes that are less than optimal? • How much floor space will be saved by a reduction in “Work-In-Process” inventory? You may find that it is wise to create several ROI analyses. For example, the first analysis may prove a calculated savings of “X” dollars simply by using automation to remove a sprue/ runner from the molded parts. The runner could be deposited directly into a grinder for re-introduction into a subsequent molding cycle, while the parts drop to a conveyor to permit bulk packing. The next analysis may show a calculated savings of 1.6 “X” dollars by also securing the parts with the robot’s tooling to place them on a belt conveyor that will deliver those parts for manual inspection and pack-out. This option will permit optimized molding cycles (which will be consistently shorter) and elimination of rejects caused by dropped parts scraping one another. The third analysis may include post-molding operations such as runner removal, inspection with a vision system or vision sensor, decorating and/or packaging. Inclusion of any or all of those operations may significantly reduce the need for manual intervention, improve the quality of your products and even permit you to retain or obtain additional business. That third analysis may provide calculated savings that are three, four or more times that of your first analysis of runner removal. Before sharing the results of your possible savings, it’s important to take an objective look at the skill sets that currently are available to ensure the success of this step into automation. If your facility currently has no hands-on experience with robotics, vision equipment and automated packaging, do not entertain a quick integration or a payback that is close to your calculations. Walk before you run. Unless your personnel have experience with robotics, do not expect to do more than simple pick and place operations with your first foray into press automation. After they have become comfortable with the equipment and it is meeting or exceeding your payback calculations, it will be time to add additional functions like inspection, decorating or packaging. By adding operations to the base knowledge of your employees’ abilities, the likelihood of a successful implementation significantly increases.

Creating a list of specifications can ensure all vendors send a proposal that is consistent and meets your minimum needs. Provide the following information when requesting a quote: • • • • • • • •

• • • • •

The robot will mount to a IMM. The IMM has a clamp force of tons. The IMM model is a . The distance from the IMM’s robot mounting surface to the lowest overhead obstruction is . The distance from the IMM’s robot mounting surface to the centerline of the press is . The vertical distance between the tie bars is . The horizontal distance between the tie bars is . The robot will release the molded parts: a) on the operator’s side of the press b) on the non-operator’s side of the press c) at the clamp end of the press What is the dimension from the press’s centerline to the outside of the safety door or other obstruction in the direction of robot travel? What are the parts that the robot will be transporting? How heavy are they? How many cavities? Are mold prints available? (Complete prints are not always needed at this stage, but a basic layout is very helpful to determine End-of-Arm Tool design, which in turn permits an estimate of the required robot payload capacity.) What do you expect the robot to do? (Remove parts and set them on a conveyor or bulk pack them? Place component(s) into the mold for an overmolding operation?)

Modern robots can have a life expectancy of 15 years or more. They can be retooled and reprogrammed an infinite number of times over their lifespan. Therefore, other factors that should be strongly considered have to do with the manufacturer of the equipment and the organizations providing after-sale support. That support often is thought to be just field service. However, operator and maintenance training is critical, as well as engineering and programming support. These after-the-sale support functions permit you to maximize your investment by maximizing the robot’s abilities in a changing environment. When selecting vendors based on a set of specifications and description of desired results, you will drastically improve the value of the results that you will get in return. An ROI calculator is available at www.yushinamerica.com/ accessories/roi-calculator/. n

www.plasticsbusinessmag.com | 43


booklist

Business Books with a Lasting Influence by Dianna Brodine

The Booklist in the Summer 2015 issue of Plastics Business struck a chord, so this issue features book recommendations by Troy Nix, executive director of Manufacturers Association for Plastics Processors (MAPP), some of which were given to him by members of the MAPP Board of Directors. While the Summer 2015 list detailed some of the most highly touted books of this year, the Fall 2015 Booklist reviews books that have had a lasting influence on those who lead the association, including one on becoming an influencer. Influencer: The New Science of Leading Change Authors: Joseph Grenny, Kerry Patterson, David Maxfield, Ron McMillan and Al Switzler Released: 2013 Whether your goal is to change minds, change markets or change the world – anything is possible for an influencer. We all want to learn how to help ourselves and others change behavior. And yet, in spite of the fact that we routinely attempt to do everything from lose weight to improve quality at work, few of us have more than one or two ideas about how to exert influence. For the first time, "Influencer" brings together the breakthrough strategies of contemporary influence masters. By drawing from the skills of hundreds of successful influencers and combining them with five decades of the best social-science research, “Influencer” shares eight powerful principles for changing behaviors – principles almost anyone can apply to change almost anything. Start with No: The Negotiating Tools the Pros Don’t Want You to Know Author: Jim Camp Published: 2011 “Start with No” introduces a system of decision-based negotiation. It offers a contrarian, counterintuitive system for negotiating any kind of deal in any kind of situation – the purchase of a new house, a multimillion-dollar business deal or where to take the kids for dinner.

44 | plastics business • fall 2015

It is full of dozens of business as well as personal stories illustrating each point of the system. It will change your life as a negotiator. Leadership from the Inside Out Author: Kevin Cashman Released: 2008 Framed in seven simple, yet profound, “mastery areas,” this book serves as an integrated coaching experience that helps leaders understand how to harness their authentic, valuecreating influence and elevate their impact as individuals, in teams and in organizations. Cashman demonstrates that his trademark "wholeperson" approach – we lead by virtue of who we are – is essential to sustained success in today's talent-starved marketplace and provides a measurable return on investment. The One Thing: The Surprisingly Simple Thing Behind Extraordinary Results Author: Gary Keller with Jay Papasan Published: 2013 YOU WANT LESS. You want fewer distractions and less on your plate. The daily barrage of emails, texts, tweets, messages and meetings distract you and stress you out. The simultaneous demands of work and family are taking a toll. And, what’s the cost? Second-rate work, missed deadlines, smaller paychecks, fewer promotions – and lots of stress. AND, YOU WANT MORE. You want more productivity from your work. More income for a better lifestyle. You want


more satisfaction from life, and more time for yourself, your family and your friends. In “The One Thing,” you’ll learn to cut through the clutter, achieve better results in less time, build momentum toward your goal, dial down the stress, overcome that overwhelmed feeling, revive your energy, stay on track and master what matters to you. The Ultimate Question 2.0: How Net Promoter Companies Thrive in a Customer-Driven World Author: Fred Reichheld Published: 2011

good profits and true, sustainable growth. You also generate a vital metric: your Net Promoter Score. Since the book was first published, Net Promoter has transformed companies, across industries and sectors, constituting a game-changing system and ethos that rivals Six Sigma in its power. Practical and insightful, “The Ultimate Question 2.0” provides a blueprint for long-term growth and success. n The Winter 2016 issue of Plastics Business will highlight recommendations from readers. Send the title of the book that has most influenced your business to dianna@ petersonpublications.com.

In the first edition of this landmark book, business loyalty guru Fred Reichheld revealed the question most critical to your company’s future: “Would you recommend us to a friend?” By asking customers this question, you identify detractors, who sully your firm’s reputation and readily switch to competitors, and promoters, who generate

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www.plasticsbusinessmag.com | 45


strategies

Year-End Tax Planning for Plastics Processors by Michael J. Devereux II, CPA, CMP, Mueller Prost

With year-end approaching, plastics processors likely will benefit from year-end tax planning. With income taxes on the rise and guidance published daily, processors will need to consider a number of different available options to ensure they are (legally) minimizing their income tax burden.

Michael J. Devereux II, CPA, is a partner at Mueller Prost, a CPA and business advisory firm, and leads Mueller Prost’s Plastics Industry Services group. Mueller Prost’s Tax Incentives Group is nationally recognized and has assisted hundreds of companies in the manufacturing sector to identify and utilize tax incentives. Mueller Prost is a member of MAPP and offers MAPP members three hours of complimentary tax and accounting advice. For more information, call 314.862.2070 or email mdevereux@muellerprost.com.

First, income tax planning is not done in a vacuum. Taxpayers must look at the current year, as well as 2016, as some of the choices processors should consider include whether to accelerate or defer income from 2015 to 2016, or vice versa. So, when taxpayers analyze their options, they should run two years of projections to ensure the taxpayer and the planner understand what they are missing or obtaining by doing this planning.

46 | plastics business • fall 2015

Second, taxpayers should no longer only concern themselves only with the income tax. The US has four sets of rules passing through an income tax return, and none of them correlate. Those include the income tax, alternative minimum tax (AMT), selfemployment tax and the net investment income tax. Having a tax planner involved who understands that these do not correlate is extremely beneficial to taxpayers and ensures full advantage is taken. The following is meant to provide plastics processors with some ideas and tips with respect to year-end tax planning.


Flow-through entities and related companies Many small businesses are organized as flow-through entities, meaning the company’s income, deductions and credits are passed through to the owners of the company, with the owner responsible for the income tax associated with the items attributable to the entity. These include S Corporations, partnerships, LLCs and sole proprietorships. Therefore, tax planning for the company must be done in conjunction with the company’s owners. Along those lines, owners of flow-through entities may have been limited to utilizing losses from prior years due to basis limitations, passive loss limitations or at risk limitations. Taxpayers must go through all three tests to obtain a loss associated with a flowthrough entity. If the taxpayers flunk one of the tests, they must carry forward the losses under specific rules. Generally, this is a great place to start to determine whether owners can recognize their loss.

necessary to coordinate the income tax items for both entities. For instance, rental real estate is a passive activity, with certain exceptions. Too often, the real estate entity generates a loss, which may only be offset with other passive income. However, under the right circumstances, taxpayers may group activities (a term of art for entities) on their tax returns. If the ownership is identical between the operating entity and the real estate entity, and the only income the rental entity realizes is rent received from the operating entity, the taxpayer may be allowed to group those two activities, thus allowing the real estate loss to offset income from the operating entity. Tax assets In addition to suspended losses due to basis, at risk or passive limitations, other tax assets may exist. These include net operating losses (NOLs) and credit carryforwards. Taxpayers have already “paid for” these items, and it is important to consider these tax assets to determine whether or not a taxpayer can trigger these to offset current year income or tax liabilities.

Moreover, for those owners who own their buildings in a separate entity and rent to the operating businesses, proper planning is

page 48 u

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www.plasticsbusinessmag.com | 47


strategies t page 47 Tax credits can be extremely beneficial to plastics processors. Tax credits are more valuable than a deduction or loss. Deductions or losses, while beneficial, merely reduce taxable income, where credits are dollar-for-dollar reductions in income tax liabilities. Common tax credits in the plastics industry include, but are not limited to, the following: • The R&D tax credit, which rewards companies for the development of part-specific manufacturing processes, mold design or automation techniques. • The Work Opportunity Tax Credit (WOTC), which rewards companies for hiring within targeted groups of employees, such as qualified veterans, ex-felons or those on food stamps. • The Fuel Excise Tax Credit, which refunds a portion of the excise tax paid on propane used in plant forklifts. Proper planning and documentation is required in order to qualify for these credits. Working with specialists in these areas can increase these benefits significantly. Tax extenders “Tax extenders” are a host of over 50 provisions within the tax code that periodically expire, requiring Congress to renew annually or bi-annually. Many of these provisions expired on Dec. 31, 2014. Although passage is not guaranteed, Congress regularly and retroactively reinstates these temporary provisions. Undoubtedly, these provisions will affect tax returns. They are broad in scope and affect every plastics processor operating in the US. Provisions affecting the plastics industry include, but are not limited to, the following: • The R&D tax credit; • The Work Opportunity Tax Credit; • Bonus depreciation, which allows taxpayers to write off 50 percent of the cost basis of specific assets before they begin to depreciate their asset; • Section 179 expensing election, which allows taxpayers to write off up to $500,000 of the cost basis for specific assets (this provision is phased out on asset purchases between $2 million and $2.5 million in property placed in service during the tax year); and • Energy Efficient Building Deduction, which allows processors to accelerate depreciation related to energy efficient improvements related to lighting, HVAC and/or building envelope. The US House and US Senate have taken a different tack in renewing these provisions. The US House is considering each provision separately, passing bills to make select provisions permanent. While the leadership on both sides of the political

48 | plastics business • fall 2015

spectrum would like these provisions to be permanent, they disagree on how to pay for these provisions. Processors should not expect much traction with the US House bills, as President Obama has threatened to veto these provisions since there is not an offset to the cost of these provisions. The full US Senate has not yet taken up the tax extenders. However, the Senate Finance Committee passed the Tax Relief Extension Act of 2015 to extend these popular provisions for two years through Dec. 31, 2016. In addition, the Tax Relief Extension Act of 2015 improves many of these provisions. For instance, the bill would allow the eligible small businesses to use the R&D credit to offset the AMT and start-up companies to offset payroll tax liabilities. Processors should monitor congressional progress with respect to these provisions, as they will certainly impact their year-end tax planning. Other considerations This year, processors will need to pay special attention to the reporting provisions that take effect this year with respect to the Affordable Care Act. These reporting requirements are not limited to large employers, and companies must ensure they are prepared to file the proper forms in a timely manner. In recent years, many states have become more aggressive in assessing tax liabilities on companies not located in their state, arguing “nexus” within their state. While many states have exceptions for limited activities within their state, it is important to identify employees (typically sales employees) that may be soliciting business across the country, potentially providing nexus to that state. Proper planning for state and local taxes may be extremely beneficial to plastics processors and has the potential for lowering the overall income tax liabilities. Conclusion While there still are many unknowns due to congressional inaction, plastics processors would be well-suited to begin planning now to ensure their 2015 tax liability can be minimized within the law. n


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Plastics Business - Fall 2015  

Plastics Business - Fall 2015