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Awards And Recognition Can Set A Company Apart From The Competition

And when the client is the winner, the reward is worth its weight in gold. EnterpriseIQ from IQMS is a winner itself, but as more of our clients are honored as Best in Class companies, we can’t help but feel like we are taking home a prize too. Our comprehensive manufacturing enterprise resource planning (ERP) software is designed with the plastics industry in mind. With features like multi-level/process BOMs, waste/scrap material calculations, unlimited unit of measure conversion and more, EnterpriseIQ is unsurpassed in the knowledge and understanding of all types of plastics manufacturing. Our winning combination helps to set our clients apart from the competition. Contact us for a free demonstration or more information. Email sales@iqms.com or call toll-free 866.FOR.ERP2 (866.367.3772). Smarter design. Happier customers.


director’s letter Manufacturers Association for Plastics Processors, Inc. (MAPP) 7321 Shadeland Station Way, Suite 285 Indianapolis, Ind. 46256 phone (317) 913-2440 • fax (317) 913-2445 www.mappinc.com

What’s in a Number? The number 2…the number 3.14159…the number 13…the number 28…the number 52…the number 100…the number 365…the number 1776…the sequence of numbers 9-11…what do these numbers mean? Some of our readers may only recognize a few of the numbers listed above. To others, depending on date of birth, religious upbringing, ethnicity and other demographics, there may be immediate and, in some cases, emotional ties to the numbers listed. (For the mathematicians in our readership, the number 2 is meaningful because it’s the only even prime number!) When we as consumers and business professionals interact and deal with numbers, our likes and dislikes of a specific number may be altered by “our position at the counter” as the buyer or seller. To further explain, one who is buying a $3.99 gallon of gas (the purchaser) may be dissatisfied with the number (price); however, the one who is selling the $3.99 gallon of gas (the seller) may really like the number. (In fact, the seller may like the price even more based on when he acquired the inventory – buy low, sell high.) Let’s bring this closer to home and link numerical relationships to the plastics industry. In a benchmarking study conducted by MAPP on the state of the polypropylene marketplace, numerous participants were asked about PP resin purchases. The data below represents a small excerpt taken from the final report, with each line showing individual company responses. As expected, businesses may purchase the same resin at different prices – prices which are impacted by a number of different factors. When viewing the data, most readers’ thought processes will automatically engage. Questions like “why” and “how do I compare” will immediately come to mind! Color

Annual Usage (lbs)


Unit Price /lb

Release Quantity (lbs)

PO Date







1-30 Days




Bulk Rail



1-30 Days







1-30 Days







31-60 Days




Bulk Truck



1-30 Days







61-90 Days




Bulk Truck



1-30 Days




Bulk Truck



31-60 Days




Bulk Truck



90-180 Days







61-90 Days







1-30 Days


Benchmarking activities are extremely valuable for plastics executives. It is nearly impossible to understand how well your company is performing if you have no data with which to compare. Comparison data leads to understanding performance gaps; understanding performance gaps leads to improvement and improvements ultimately lead to increased profitability. The information included in this letter is just a small sample of the type of information MAPP is providing to its Members, and over the coming months, MAPP Members will be asked to input data on a number of topics including but not limited to Operational Performance, Compensation Levels, Engineering Rates and Raw Material purchases. Why? Because it’s our responsibility, as the leading U.S.-based trade association for plastics processors, to help our Members understand “what’s in a number!”

Troy Nix Executive Director P.S. The numbers 27 and 28 correspond to MAPP’s 2011 Benchmarking Conference, to be held in the month of October.

4 | plastics business • spring 2011

MAPP Board of Directors President Matt Hlavin, Thogus Products Companies Vice President Kelly Goodsel, Viking Plastics Tom Boyd, Blow Molded Specialties Dan Cunningham, Parish Manufacturing Tom Duffey, Plastics Components, Inc. Lindsey Hahn, Metro Plastics Technologies Laurie Harbour, Harbour Results, Inc. Ben Harp, Polymer Conversions, Inc. Bob Holbrook, True Precision Plastics Tom Houdeshell, Atek Plastics Stu Kaplan, Makuta Technics John Passanisi, PRD, Inc. Jeff Randa, PolyOne Distribution Alan Rothenbuecher, Schottenstein, Zox & Dunn Co., LTD Scott Titzer, Infinity CleanRoom Solutions Mike Walter, MET Plastics, Inc. Rick Walters, DeKalb Molded Plastics Roger Williams, Royer Corp. Wendy Wloszek, Industrial Mold & Machine

Plastics Business Published by:

Strategies for Today’s Plastics Processors

Peterson Publications, Inc. 2150 SW Westport Dr., Suite 101 Topeka, Kan. 66614 phone (785) 271-5801 • fax (785) 271-6404 www.plasticsbusinessmag.com Editor in Chief Jeff Peterson

Advertising/Sales Gayla Peterson

Managing Editor Dianna Brodine

Contributing Editor Kym Conis

Art Director Becky Arensdorf

Circulation Manager Brenda Schell

Additional Graphic Design Eric Carter

Plastics Business

Strategies for Today’s Plastics Processors

Contents spring 2011







features profile Fast, Fluid and Flexible at Nicolet Plastics ............................6 production The View from 30 Feet: SPI Industries and the Morning Huddle..............................11 industry GHS Bringing Changes to OSHA HazCom Standard ...........12 management Succession Planning for Business Owners..........................17 strategies Nanotechnology: Big Problems Come in Small Packages ...24 solutions Evaluating Your Mold Maintenance Direction .....................26

departments director’s letter ..............4 association ................... 20 product ........................ 30 marketplace ................. 36 advertisers ................... 38

Visit our Website:


trends Polycarbonate and ABS Engineering Resins Markets See Global Tightening ..............................................................31

www.plasticsbusinessmag.com | 5


Fast, Fluid and Flexible at Nicolet Plastics by Dianna Brodine


icolet Plastics thrives on a level of manufacturing complexity that has stopped other injection molders in their tracks. With 62 employees, drawn from three neighboring communities in Northeast Wisconsin with populations under 1,000, Nicolet has excelled at evaluating and building employee skill levels, responding to project challenges with agility and serving its customers with Total Product SolutionsTM that run the gamut from product development to inventory management. It’s a unique environment that functions under an unusual manufacturing concept – and soon, other molders may be following the example set by Bob MacIntosh and the Nicolet Plastics team.

COVER: Doug Baril, vice president, engineering services; Bob MacIntosh, president and CEO; Ann Kroll, HR manager; and Joyce Warnacut, chief financial officer

Succeeding with High Complexity Nicolet Plastics, Inc. (NPI) was established in 1986 in Mountain, Wisconsin, a small community located in the middle of the Chequamegon-Nicolet National Forest. Nicolet, an ISO 9001:2008-certified company, serves its customer base from a 41,000 square-foot production facility, focusing on complex industrial and medical components and assemblies. NPI’s Total Product Solutions approach provides product design and development, tooling design and development, offshore tooling coordination, injection molding, tooling maintenance, part decorating, insert molding, secondary machining and assembly, point-of-use delivery and vendormanaged inventory. This concept changed the company focus from ‘making parts’ to ‘solving problems’ for its customer base. Nicolet specialized in low- to moderate-volume molded parts, but over time this created an incredibly complex manufacturing environment. The Plante & Moran complexity score at Nicolet was off the charts, and the leadership team knew change was critical.

6 | plastics business • spring 2011

“We were trying to figure out where we stood in regards to our peers in the industry, and it became painfully clear that complexity was in abundance. We had to make a choice – either create a niche by reducing our customer base to a more conservative number of customers, materials and tools or figure out a way to direct the complexity to be both manageable and profitable,” said MacIntosh.

The Method in the Madness: Quick Response Manufacturing Almost two years ago Nicolet Plastics made a decision to embrace the concepts of Quick Response Manufacturing (QRM) developed by Rajan Suri at the Quick Response Manufacturing Center at the University of Wisconsin. QRM is designed to focus on time, which leads to shorter lead times, which leads to lower inventory levels, higher margins, improved working capital position, more competitive pricing and lower overall cost throughout the business. QRM also addresses complexity by defining strategic variability and dysfunctional variability. Under QRM concepts, strategic variability (large number of options, customengineered products) can be exploited for competitive advantage. Dysfunctional variability (excessive inventory, ineffective systems, rework) must be eliminated. The intent was to endorse QRM as the cornerstone of Nicolet’s market focus, in order to capture better control of the complexity and establish a niche in the molding market for low- to moderatevolume parts. “I sent my quality manager and an operational staff member to one of the first seminars on QRM,” said MacIntosh. “They didn’t think it would apply to plastics, but I was still intrigued and looked into it for myself.” Nicolet had always prided itself on being responsive to its customers – fast, fluid and flexible. MacIntosh thought his employees would be able to get their arms around the complexity and make it work for them, rather than against them. Nicolet started by creating more flexibility within its personnel. “We’re located 75 miles north of Green Bay, in the Nicolet National Forest. It’s beautiful here and our area has many things to offer, but one of the things it doesn’t have is a large population of trained employees,” explained MacIntosh. “We had to deal with the skills we had there.”

The first thing to go was the old way of looking at production. Traditional floor management would require a mold hanger, materials handler, production technicians, process technicians, a supervisor and another manager for each shift. The team at Nicolet Plastics decided to redefine floor management by defining the talents required for an ideal shift, ignoring job titles and other employee categories in favor of staffing based on the skills needed to run the production floor. “The first time the management team asked for input on necessary skills from the workforce, the response was, ‘Well, we need a mold hanger, a materials handler…’,” laughed MacIntosh. “We had to redefine the parameters and force employees to think in a new direction.” Nicolet Plastics built a skills matrix, including both soft skills (interpersonal, ability to work in team environment) and hard skills (technical ability to start a press, do a mold change, understand quality levels and measurements). Once the skills were defined, the next step was to evaluate the employees in terms of their skill levels. Written and practical testing were done to determine competency levels. From here, Nicolet could see what training would be needed to staff the ideal shift. When evaluating the skill sets found on the floor, Nicolet immediately saw crossover. A staff member previously defined as an operator also might be able to put on water lines or clean out a hopper, skills that crossed over into materials handling or process technician duties. “If we have each employee focusing on the higher end of his skill range, we have a cross functional pollination of the workforce that allows us to be more nimble,” explained MacIntosh. Employees were rewarded for their technical abilities and their willingness to learn new skills, participating in a credentialing program to grow their individual production and process-related skills. This program page 8 u

www.plasticsbusinessmag.com | 7

profile t page 7 was developed in-house to support the QRM initiative. New pay ranges were defined for each skill level, so as employees progressed in their ability to handle more complex issues, their value to the company increased – and so did their wage. With fewer than two years invested in QRM, Nicolet Plastics is beginning to see significant results. “We saw some results last summer where we would have, by our measurement of last shot to first shot, presses that were down eight hours between changeovers,” MacIntosh said. With employees handling as many as 90-100 mold changes per week, the changeover inefficiency was significantly reducing running time. “We’re now averaging just shy of two hours, and our goal for this year is 45 minutes.” Production efficiencies also have been realized. Previously averaging 52-56 hours per shift per day of production on 16 presses, Nicolet has seen production averages as high as 70 hours per shift. Nicolet now is experimenting with running two 12-hour shifts and has seen as much as 152 hours of production time out of a single 12-hour shift.

Willing to Have the Tough Conversations Resin pricing volatility has challenged 3:01 the PMprofitability Plastics Ad 3_2011:Layout 1 3/2u8/11 Page 1 margins for many a molder over the past two to three years.

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8 | plastics business • spring 2011

CAPTION: Nicolet Plastics operates two 12-hour shifts with 62 employees in the community of Mountain, WI.

Nicolet Plastics launched a program to help itself and its customers better manage that volatility. “We went through the difficult process of breaking out the costs associated with each customer and each part,” said MacIntosh. “We broke out the resin component, packaging affiliation and inserts.” The part breakout had shown that not only were the resin increases challenging profitability, but Nicolet also discovered that it had not priced some parts correctly. “That was a rude awakening,” stated MacIntosh. “Some of those part prices had been priced below profit levels for over 10 years.” The evaluation established a baseline that Nicolet could then take to its customers. MacIntosh admitted that sitting down with the customer the first time through wasn’t easy, since most customers were looking at pricing increases. “Those were difficult conversations,” he said. “The first year was the most difficult and gaining the trust of our major customers took some time.” Nicolet provides its customers with quarterly updates and adjustments, and some customers are provided annual updates if the market remains within the agreed upon range. Customers have seen prices move in both directions and that has added credibility to the program. “We believe we have a methodology that, as the volatility in the market either increases or recedes, allows us to make adjustments as we go forward.” Initially, Nicolet lost a few parts to competitors, but MacIntosh pointed out that some of those parts have since come back. “We’ve always said that we won’t compete on price,” he explained. “Our customers respect the value proposition and the transparency that we bring to the table.”

Bringing it Together and Watching it Succeed March marked the twenty fifth year in business for Nicolet, an anniversary the company plans to commemorate with a celebration and open house. As the company observes its silver annipage 10 u

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Redefining Distribution

t page 8 versary, Nicolet is looking to add additional skill sets to give the company the ability to take on larger, more complex projects, such as a business development position, additional engineering capacity and enrolling two employees in RJG’s Master Molder courses. Nicolet has been marketed as fast, fluid and flexible, and QRM has been the tool that delivered concepts to improve in all areas. The recession survival in 2009 was in large part due to the adoption of QRM. Nicolet squeezed more than $200,000 out of finished goods inventory and the company’s flexibility improved when Nicolet’s culture realized that supporting long runs also would reduce flexibility and lengthen response time.

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When looking to the future, MacIntosh has decided to take his company’s strengths to those potential customers that might be seeking a fast, fluid and flexible partner. A recent operational assessment by a Manufacturers Association of Plastic Processors (MAPP) partner suggested that marketing should be a focus for improvement. As a result, Nicolet Plastics is looking to separate itself from the crowd by working with a marketing consulting firm. MacIntosh explained, “As you continue to evolve, you need to decide who you are, where you want to go and what you’re staffed with. Bringing it all together and watching it succeed is fun, but continuing to test yourself is good, too.” Nicolet Plastics is succeeding on more than one level. That same operational assessment scored Nicolet as one of the strongest operations within the MAPP organization, ranking among the top three by excelling in data assessment, longterm planning and cultural transformation, among other key criteria. For MacIntosh, however, growing the business is not as important as the responsibility he feels to the employees who staff the company and to the community in which it resides. “Businesses only go in two directions – they grow or they decline. What this business means to this community is too important to see it flounder,” stated MacIntosh. “We work hard with our people to make them more successful, and that is pretty rewarding for all of us.” n


The View from 30 Feet: SPI Industries and the Morning Huddle 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. An ownership transition at SPI Industries triggered a re-evaluation of operational methodologies throughout the plant. With a desire to ‘turn the culture and turn the ship’, President James Doster implemented a morning meeting to share critical benchmarks and process updates with his staff. In this View from 30 Feet, Doster shares the thought process behind the plant’s morning huddle – and some of the results he’s seen. Data Tracked in Daily Huddle:

When Doster assumed the presidency of the South Bend, IN injection molding business from his father, he saw an opportunity to grow the business. “I didn’t want this business to be ‘okay’ – I wanted SPI to be great,” explained Doster. “Even if we don’t gain any business, I want to see us get better at what we’re already doing, to improve the quality of life for employees and improve output for our existing customers.” The first step was an operational assessment by Harbour Results in April 2010. “As expected, we scored very poorly on the assessment. I knew there were several areas where we were doing enough to get by, but no more,” Doster said. As a result, SPI engaged Harbour’s services and now Mark Shircliff, senior manager, is on-site several days a month. A morning meeting was implemented to increase operational awareness for everyone in the plant. “We’ve been doing things a certain way for so long that it’s hard to flip a switch,” stated Doster. “The morning meeting forces us to stay on track.” Previously, the management team would review metrics once a month – quality, scrap, etc. That wasn’t enough. While the employees were doing their jobs, they weren’t working toward the same goal. Now, SPI has isolated nine metrics and those metrics are reviewed in the huddle every morning with a management team. Every morning at 8 a.m., the director of purchasing, customer service manager, director of engineering, director of manufacturing, a representative from shipping, the first shift foreman and three members from the quality team gather for 15 minutes. “The daily huddle helps to align the entire company. We find out what we need to focus on today to get product out the door and which metrics might not be meeting our standards,” said Doster.

1. 2. 3. 4. 5. 6.

Sales Value Produced Labor Hours (Regular and OT) Sales Value Produced per Labor Hour Scrap Percentage and Cost of Scrap Period to Date Sales (Shipped and Invoiced) Safety (Days Without Injuries/Employee Hours Lost/ Medical Costs) 7. Secondary Hours (Hours Spent Away from Press) 8. Lost Scheduling Hours (Due to Breakdown, Slow Changeovers, Resource Shortage) 9. Tooling Issues (Repair Needs)

The metrics are posted on a white board, with access for everyone in the facility. The director of manufacturing and the head foreman are responsible for making the heads of other shifts aware of trouble spots and other critical issues. Each month, data from the previous months provide a history that makes the daily number more meaningful. “It started out with just numbers on a board. Now those metrics have a graph that charts the data from the last two or three months. We take those numbers and educate the team about the impact on the bottom line – down to the operator level – and how it influences their bonus,” Doster said. At SPI, the end goal is to have each employee understand his or her effect on the business. “I want them to ask, ‘How does what I did today drive that number?’,” explained Doster. To that end, Doster holds a full company meeting each quarter with every shift to talk about the numbers on the board and what they mean. “It’s a slow process to educate every person on that line. It will be worth it, though, because when they start looking at the numbers and understanding what they mean, then I don’t have to manage them. They will manage themselves.” n

www.plasticsbusinessmag.com | 11


GHS Bringing Changes to OSHA HazCom Standard by Glenn D. Trout, MSDSonline

OSHA announced earlier this year that it plans to publish a final rule in August that will align the Hazard Communication Standard (HCS) with the global hazard communication system known as GHS. Plastic manufacturers should pay attention to these developments and plan accordingly since HCS violations rank among the top five most cited OSHA standards for the plastics industry, and GHS alignment will result in additional compliance responsibilities under HCS.

What is GHS? GHS stands for the Globally Harmonized System of Classification and Labeling of Chemicals. It was born out of the 1992 United Nations Conference on Environment and Development, a.k.a. the Earth Summit, and is intended to create a global approach to the hazard classifications of chemicals and the communication of chemical hazards via labels and safety data sheets. (Under GHS, material safety data sheets (MSDS) are called safety data sheets (SDS), in addition to more substantial changes we’ll discuss later in this article.) GHS is not a global law; it’s a system for classifying chemical hazards and communicating those hazards to the people who may be exposed to those chemicals. It uses a building block approach, which means countries adopting GHS may select only those aspects of the system it wishes to incorporate into its own standards. Furthermore, countries that adopt GHS also are responsible for its enforcement. The United States played a key role in the development of GHS, and OSHA’s HCS was one of four major chemical hazard standards that served as the basis for the global system. To date, 67 countries have adopted or are in the process of adopting GHS, and adoption on a wide scale is expected to enhance protection of workers and the environment while reducing costs and regulatory burdens related to international chemical trade.

What Will Happen to HCS? To understand how HCS will be modified, let’s quickly review HCS in its current form. Adopted in 1983 for the manufacturing industry, HCS was expanded in 1987 to cover all industries. Today, it covers 40 million workers in over 5 million workplaces.

12 | plastics business • spring 2011

Its stated purpose is “to ensure that the hazards of all chemicals produced or imported are evaluated and details regarding their hazards are transmitted to employers and employees.” OSHA estimates that there are over 880,000 hazardous chemicals covered under HCS and everyone in the lifecycle of those chemicals probably has at least some responsibilities. Chemical manufacturers are required to evaluate the chemicals and products they produce to identify potential hazards, and then provide information about those hazards via warning labels and MSDSs to the importers, distributors and endusers that receive their products. Similarly, importers and distributors must supply labels and MSDSs to their customers. End-users and employers must take measures to keep employees who are exposed to hazardous chemicals safe by preparing a written hazard communication program, maintaining a hazardous chemical inventory, ensuring that on-site containers are properly labeled, providing employees access to MSDSs for all hazardous chemicals and training employees on the safe handling of chemicals and how to properly read MSDSs and warning labels. Again, employer responsibility under HCS has five key components. • • • • •

Written plan Chemical inventory Labels and warnings Employee training MSDS management

After the alignment, plastic manufacturers should see that the overall protections outlined in HCS have not been reduced and that modifications apply only to those provisions of HCS that must be changed to align with GHS.

Major Changes to HCS The two biggest changes GHS brings to HCS are to the hazard classification criteria and hazard communication. GHS hazard definitions are criteria-based and each type of hazard covered is considered a “hazard class” – such as acute toxicity and carcinogenicity – and unlike in the HCS, most of these hazard classes also are subdivided into “hazard categories” to reflect

the degree of severity of the effect. This is the concept of “classification.” With GHS alignment, chemical manufacturers must identify both the hazardous effect (e.g., carcinogenicity) and how severe that effect might be (e.g., Category 1 or 2). GHS breaks hazards down into three classes: 1) health hazards; 2) physical hazards and 3) environmental hazards. However, the GHS-modified HCS will only cover the first two classes, as environmental hazards are outside of OSHA’s regulatory domain. The EPA will cover environmental hazards when it aligns with the GHS. Thanks to the reclassification of chemicals and changes to the SDS format, chemical manufacturers and some importers/ distributers will likely need to produce new labels and SDSs that incorporate those changes.

Biggest Impact on Plastic Manufacturers The second key area of change under GHS is to labels and SDSs, and these changes will have the biggest effect on plastic manufacturers. To start, while HCS takes a simple performance-oriented approach to labels (meaning OSHA explains the results it wants, but not how to achieve it), GHS takes a more detailed explanatory approach, providing specific how-to provisions for labels. With GHS alignment, each container of a classified hazardous chemical is to be labeled, tagged or marked with the following elements: 1. Product or chemical identifier clearly indicated at the top of the label that matches the SDS. 2. Contact information for the product supplier, including the company name, address and telephone number. 3. Hazard Pictograms. Transport pictograms will have the same background and symbol colors currently used (since DOT has already aligned with GHS). For all other sectors, pictograms will have a black symbol on a white background with a red diamond frame. It’s a far simpler system compared to the current 38 shapes, colors and symbols being used in just North America today.

We know

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In its 7th year, CMAI’s Plastics Processors Conference will again take place in the U.S. and Europe. These conferences explore various topics pertinent to the plastics industry. There will be an overview of the PE, PP, PS, EPS, ABS, PET, PVC, PC, Nylon and PBT markets, insight into the industry dynamics impacting resin prices, a comprehensive review of energy markets and economic drivers, coverage of near term market issues and a look ahead at supply/demand and prices. More information can be found at www.cmaiglobal.com

Note: GHS allows for a black frame to be used for shipments within a single country. OSHA, however, is proposing that CHEMICAL MARKET ASSOCIATES, INC.

page 14 u



t page 13 a red frame be used regardless of whether the shipment is traveling inside or outside of the country. 4. The signal word should be clearly marked at the top of the label beneath the product identifier. GHS permits the use of only two signal words (and only one at a time) – DANGER or WARNING – to emphasize the hazard and distinguish between hazard levels. 5. A hazard statement that describes the level of hazard should appear under the signal word. Signal words, hazard statements and pictograms have all been harmonized and assigned to each hazard class and category in GHS. Once a chemical has been classified, the relevant harmonized information can be found in HCS under the new Appendix C. 6. Lastly, the label should include the appropriate precautionary information. Since OSHA does not currently require precautionary statements, this is a key change to HCS. As of now, precautionary statements in the GHS are not harmonized. The intent is to harmonize precautionary statements in the future; until that time, OSHA is expected to mandate the use of the GHS examples, which it anticipates will end up being the harmonized statements. Keep in mind these requirements are for classified hazards. For unclassified hazards, the shipping label should include the product name, supplier contact information and as supplemental information, a description of the hazards and appropriate precautionary measures.

Workplace Labeling GHS allows authorities like OSHA to determine what types of workplace labels will be required, and OSHA has signaled it will continue to give employers flexibility in this area by allowing them to choose “to label workplace containers either with the same label that would be on shipped containers for the chemical under the revised rule, or with label alternatives that meet the requirements for the standard.” OSHA also will continue to give employers alternatives to affixing labels to stationary containers and portable containers used to transfer materials from other labeled containers, so long as the portable containers remain under the control of the employee who performs the transfer and are used within a workshift.

14 | plastics business • spring 2011

Also not changing are the requirements that labels be presented in English – though additional languages are permitted as needed – and that labels must not be defaced or removed unless immediately replaced with new labels.

Safety Data Sheets MSDSs, as was mentioned earlier, are redefined as SDSs under GHS and remain the backbone of HCS compliance. The alignment standardizes the format and quality of information provided on the SDS. Under GHS, SDSs are presented in a 16-section format with a required ordering of sections. It is essentially the ANSI Standard for SDSs, with a few minor tweaks. The sections, in order, are as follows: 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16.

Identification Hazard(s) Identification Composition/Ingredient Information First-Aid Measures Fire-Fighting Measures Accidental Release Measures Handling and Storage Exposure Control/Personal Protection Physical and Chemical Properties Stability and Reactivity Toxicological Information Ecological Information Disposal Considerations Transport Information Regulatory Information Other Information

To be GHS compliant, an SDS needs all 16 sections; however, OSHA will not be enforcing sections 12-15, which fall outside their jurisdiction. SDSs will continue to allow provisions for confidential business information (CBI), or trade secrets as they are known in HCS, with the understanding that provisions for trade secret protection should not compromise the health and safety of users and claims should be limited to the names of chemicals and their concentrations in mixtures.

Training Under OSHA’s HCS revision, employers will have two years from the effective date of the final rule to train employees on the new rules. Training should address changes to a company’s written hazard communication plan, changes to labels and changes to SDSs. page 16 u

P NT AP OU /M SC om DI s.c R oc B E ngd EM li M .too w


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industry t page 14 How to Prepare for GHS Chemical manufacturers are responsible for much of the work that needs to be done in order to make the entire system GHScompliant and many (if not most) have already begun the work of transitioning to the new standard. Many employers, on the other hand, have only a vague notion of what it is coming and how to prepare. For that reason, we will focus on the steps employers can take to make the transition to a revised HCS a smooth one. • Have an HCS plan, maintain a checklist of key plan components and review it regularly. • Inventory your on-site chemicals. • Make sure you have a complete and up-to-date library of SDSs. • Stay current with OSHA on the federal, state and local levels. • Keep an eye on GHS key dates and how they impact your plan. • Prepare yourself for the eventual SDS churn, keeping your archiving needs a priority. • If you’re still using paper, consider transitioning to an electronic system. • Make sure your secondary labeling system is GHScompliant. • Start developing a training plan for your employees.


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Conclusion OSHA has targeted August 2011 for the publishing of the final rule to align HCS with GHS. At that time, OSHA also will announce the effective date for the final rule. Employers will have to train all employees on GHS (reading labels and SDSs, etc.,) within two years of the effective date and will have to be in full compliance within three years. OSHA understands that during the transition, some employers will be following the old HCS and some the revised HCS; to that end, the agency will continue to enforce compliance, but will accept adherence to either the new or the old standard. To learn more, visit our GHS Answer Center at http://blog.msdsonline.com and check out OSHA’s website at http://www.osha.gov/dsg/hazcom/global.html. August is right around the corner; by acting now, you should have plenty of time to prepare for the coming changes. n Glenn D. Trout is the president of MSDSonline, a provider of on-demand compliance solutions for tracking and managing hazardous chemicals and material safety data sheets (MSDSs) and other critical environmental, health and safety (EH&S) information. Find MSDSOnline at www.MSDSonline.com or call 888.362.2007.


Succession Planning for Business Owners by Nichole Crawford, JD, LL.M, CLU, ChFC, CAP, Federated Insurance

By nature, business owners are entrepreneurs. They’re an optimistic breed – comfortable with risk, able to confidently figure things out and skilled at building something significant. Historically, they have seen opportunities and seized the ones that made sense. These same traits can be applied to proper business succession planning as well. Yet many business owners put succession planning on the back burner. A present-time focus on building and growing the business may be at the expense of the future. The problem with a lack of succession planning is that the future may be here all too soon. The legacy you eventually want to pass on to your loved ones in the “distant” future can be greatly impacted by the long-term provisions you make – or don’t make – now.

first step for business owners is to examine their ultimate goals. These may include • Provide liquidity to meet emergency needs and allow for a smooth transition of the business. • Minimize estate and gift taxes. • Pass the business to children active in the business, but treat all children fairly. • Provide retirement income for themselves. Once owners have established their view of the bigger picture, they can start working on the details of a plan that will make their vision a reality. In order to get the right pieces in place, it may be helpful to examine some of the common mistakes business owners make when working on their exit strategy.

Business owners No Will who don’t have a An individual without a will has an plan in place may be … an informal “understanding” estate plan in place, even without relying on “wishful doing a thing. He or she is actually is like having no plan at all. It thinking.” They may electing to use a state’s intestacy law, think, “My family which mandates who gets how much defers negotiations, decisions and knows what I want and when. Some states distribute to happen after I’m enforceable rights and obligations 50 percent to the surviving spouse gone,” or “Everyone and 50 percent to the children. All will agree, so there’s to a later time. states distribute adult children’s no need for a formal, inheritances outright and, for minors, written plan.” In some when he or she comes of age (18 or 21). A large inheritance cases, this couldn’t be further from the truth. What if there received too early may cause great, unexpected damage to the are children who are involved with the business and others business. who are not? Did the business owner intend for them to inherit the business equally, even though one or more may not have Estate planning documents, including wills and trusts, play an any intention of contributing to its operation? The answer essential role in making sure a business owner’s intentions are will most likely vary, depending on which child you ask! Are carried out. A revocable living trust can avoid probate and hold the key employees on board with working for the business assets for distribution to heirs until they reach a certain age. It owner’s heirs, or will they move on to other opportunities after also can help to protect assets from the heirs’ creditors or keep the business owner is gone? Will the banks holding notes from assets in the family in the event of a divorce. the company trust the new owners’ ability to make payments Additionally, trusts are commonly utilized to help minimize or will the notes be called? Will long-time customers be estate and gift taxes. After a one-year repeal in 2010, the comfortable with the new ownership? estate tax has returned in 2011. The amount an individual Many business owners want to pass their business to family can pass to his or her heir without incurring estate taxes (the members, but haven’t answered the question of “how.” The estate tax exemption) is currently $5 million per person ($10 page 18 u

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t page 17

million for a married couple), with a top rate of 35 percent for the estate, gift and generation-skipping transfer taxes. While it may seem that planning for minimizing taxation may be unnecessary with the high exemption amount and reduced tax rate, this is not necessarily the case. These amounts apply for the next two years (2011 and 2012) and are scheduled to return to 2001 levels (a $1 million exception and a 55-percent tax rate) in 2013. No one can predict what Congress will do in future years, but given the long-term fiscal realities of the federal government, it is probably safe to assume that there will continue to be some sort of estate tax in one form or another. The only estate tax law that matters is the one in effect when the business owner passes away, so the prudent course of action is to create a plan with some built-in flexibilities to adapt to future changes in the law.

No Formal Succession Plan

Many business owners have an “understanding” with their intended successor, whether it is a partner, child or children or a key employee, and, therefore, don’t feel they need a written buy-sell agreement. Unfortunately, an informal “understanding” is like having no plan at all. It defers negotiations, decisions and enforceable rights and obligations to a later time. Consider the implications following the unexpected death of an owner if no value has been locked down to bind the IRS, the seller and the buyer; if no buyer has been guaranteed; and if no terms of payment have been laid out to assure income to the family (at a time when earned income from the business will stop). With no buy-sell in place, all terms of a transfer must be negotiated. While alive, negotiations are private and between owners. After death, negotiations are public and must include creditors, franchisors, executors, heirs, the IRS – and a probate judge. Even with a formal plan in place, another way a business succession plan can fail is when the owner doesn’t share the estate and business transfer plans with the people who will be affected the most – family, employees, franchisors, creditors and customers. Change can be stressful – even good change. How humans react to a “total surprise” change is unpredictable. With no discussion prior to a transfer event, there can be misunderstandings and unnecessary stresses, as well as lasting human and financial repercussions. Discussing future plans also can lead to conversations about how to put the future owners in the best position to succeed. For example, the current owner(s) may want to delegate some authority and “groom” the successors in the time leading up to the owner’s exit.

No Funding

Successful business owners often have a solid plan in place for transition of their business and estate (wills, trusts, buy-sell agreements, etc.). However, even the best plans almost always need cash to pay debts, settlement costs and possibly estate taxes. An estate plan with no plan for funding will transfer an estate diminished by both settlement costs and the cost of raising cash in a hurry. The same funding flaws may be found in buy-sell agreements. The buyer has several options for funding a buy-sell agreement. A savings or “sinking” fund could be established, but depending on the time frame involved, may not be sufficient to accumulate funds for a buy-out. An installment sale, through which the new owner pays the purchase price over time to the family or estate of the departing owner, may not provide the owner’s family

18 | plastics business • spring 2011

with the income and security they need. Finally, life insurance can be a cost-effective way to provide the necessary funding to carry out a business owner’s wishes. Life insurance proceeds are available immediately upon a premature death of the insured, when the funds are needed most, and the death benefit received often can be obtained for pennies on the dollar. Depending on the circumstances of the buyer and the seller, a combination of these funding options may be appropriate.

No Expert Advice

If you had a brain tumor, would you go to see the general practitioner at the local clinic? Of course not! You would see a specialist, like a neurologist. Planning for the transition of your estate and business is much the same. Estate and business succession planning is a highly specialized area of the law. While the company’s general corporate attorney may have worked with the business for many years, he or she may not be prepared to handle all the nuances of transition planning. Business owners would be well served to partner with an attorney with specialized knowledge and extensive experience in these areas.

of time. For successful business owners, business succession planning is a key tool to fulfill their core values and pass on the legacy they desire. Remember, decisions you make today will affect your loved ones tomorrow. n Nichole Crawford is manager and counsel – advanced life sales for Federated Insurance. This article is intended for general information purposes only and should not be construed as legal, tax or financial advice with respect to specific facts or circumstances. The contents of this article may be subject to regulations and restrictions in your state and are not provided as a substitute for any state standards that may apply. Neither Federated nor any of its employees provide legal, tax or financial advice. You should consult with your independent professional advisors regarding your specific estate planning needs. © 2011 Federated Mutual Insurance Company. All rights reserved.

No Updates

A business owner does not get a second chance to do postmortem planning. The planning needs to be done right the first time. But planning is not a one time event, where a buy-sell agreement and trust are drafted, signed and put in a drawer until needed some day in the distant future. Laws change. Family dynamics change. The son who was planning to take over the business may have decided to pursue other interests, but a granddaughter who was too young to work in the business then is now showing her management skills. A partner may have unexpectedly passed away, changing the plan for the remaining partners. Having a plan in place is the first step, but keeping the plan up to date is an ongoing process. Plans should be reviewed periodically to make sure they still reflect the business owners’ intentions and current laws.

Take Action

If aspects of the business owner’s estate and business succession plans are essentially “no plan,” steps should be taken to correct the defects before they cause a disaster. The control is in the hands of the owner – if he or she chooses to exercise it. He can choose to go to an attorney. She can choose a generalist or estate planning specialist. He can choose to ignore or take advantage of the generous estate tax provisions that exist. She can choose to arrange leveraged, certain and cost-effective funding ahead

www.plasticsbusinessmag.com | 19

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MAPP’s Board of Directors has implemented an aggressive strategy to identify and team with leadingedge technology and service providers who possess the ability and know-how to substantially impact the Membership base. MAPP’s newly-created sponsorship committee works with each sponsor to customize impactful, value-added program offerings available to each Member. As a result of these efforts, MAPP’s 3/2u8/11 3:01 leadership PM Page 1 team is excited to welcome four new MAPP Corporate Sponsors.

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May (Best Practices in Reducing Waste – More Shipments with the Same Amount of Resources)

MAPP will be hosting an innovative plant tour event on Thursday, May 5th with MAPP Member executives from across the United States converging at Plastic Components, Inc. (PCI) in Germantown, WI. PCI’s executive team has taken dramatic actions to examine, identify and completely eliminate waste and non-value added activities from its operations. As a result, top line throughput has dramatically increased by over 75 percent, with the same number of professionals running the business – PCI is doing much more with less!


New Opportunities to Enhance Business Operations and Profit

As a benchmarking and information hub for the plastics industry, MAPP works to provide its Members with data and information in order to provide executives with insight on specific nuances and opportunities within the industry. Over the next 9 months, MAPP will be conducting a total of 7 major benchmarking exercises. • This Spring, MAPP launched the 2011 Wage and Salary Survey. MAPP’s Study on Wage and Salary has become the go to source for plastics manufacturing executives in determining competitive wage rates and pay levels. With nearly 50 different job titles, survey participants will have access to various statistical data including starting wages, median salary data and job tenure, along with historical data for a number of job classifications. • MAPP’s strong partnership with Plante & Moran will produce the 2011 Plastics Industry Benchmarking Report, covering key performance indicator trends in the areas of strategy, marketing and financial performance. MAPP Members participating in this survey process will receive a company-specific report showing comparisons between industry norms and provided data. The results of this study will be presented at MAPP’s 2011 Benchmarking Conference. • MAPP, in conjunction with lead strategic partner Harbour Results, Inc., will launch the 2011 Operational Flexibility Survey in June. Recognized as the most comprehensive operational study available to plastics executives, this survey will provide direct benchmarks to company executives, resulting in significantly improved knowledge and awareness levels to help them understand how current business activities align and correlate with future success. The results of this page 22 u

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association t page 20 study will be presented at MAPP’s 2011 Benchmarking Conference.

MAPP Member Plastikos Named Processor of the Year

• In July, MAPP’s leadership team will again produce the Plastics Engineering Services Report. This study examines the types of fee- and non-fee-related engineering services offered by plastics processors to end-use customers and OEMs. This report is the only published document defining average rates and trends in providing fee-forservices.

MAPP Members DeKalb, Steinwall Also Honored Plastikos, Inc., Erie, PA, was named Processor of the Year by Plastics News at its executive forum in Summerlin, NV. The injection molder, a member of MAPP since 2007, serves the medical, automotive, electronics, aerospace and telecommunications industries. Plastikos was honored for its engineering strength, continuous improvement efforts and environmental management efforts, among other excellent qualities. Molders are considered for Processor of the Year based on seven categories, including financial performance, quality, customer relations, employee relations, environmental performance, technological innovations and industry/public service. Other finalists evaluated for the award were MAPP Members Atek Plastics, Kerrville, TX, and Steinwall, Inc., Coon Rapids, MN. In addition, MAPP Member DeKalb Molded Plastics was awarded the first Excellence award in Customer Service and Steinwall, Inc. received the first Excellence award in Employee Relations. Congratulations to all of these MAPP member companies!

• MAPP, with its initiative to help members better understand the raw materials marketplace, will benchmark specific resin families throughout 2011 with two additional studies planned. In its recently released Polypropylene Resin Usage Study, MAPP’s staff consolidated data on over 68,000,000 pounds of PP data, helping members to identify material selection and cost-reduction opportunities. MAPP relies on the expertise of Corporate Sponsor Chemical Markets Associates, Inc. (CMAI) to provide in-depth analysis on market trends, feedstock and other drivers impacting cost and availability. n





























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Big Problems Come in Small Packages

by Kevin Murch, SZD

Although the advantages nanotechnology brings to manufacturing are not often disputed, the risk the proliferation of nanotechnology may pose to human health is still very much in question. Like anything else, the risks associated with nanotechnology will lead to increased regulation and with that, increased litigation. Thus, there is a business risk that comes along with nanotechnology as well. Companies will need to do their best to prepare themselves to comply with new regulations and to limit their exposure to the inevitable lawsuits to follow.

A. What is Nanotechnology? How Does it Apply to Plastics? In its most simplistic definition, it is really small stuff used to make bigger stuff. Perhaps a better definition is the one used by the National Nanotechnology Initiative (NNI): A nanometer is one-billionth of a meter. A sheet of paper is about 100,000 nanometers thick; a single gold atom is about a third of a nanometer in diameter. Dimensions between approximately 1 and 100 nanometers are known as the nanoscale. Unusual physical, chemical and biological properties can emerge in materials at the nanoscale. These properties may differ in important ways from the properties of bulk materials and single atoms or molecules.

Nanotechnology is used in manufacturing where nanoparticles can be manipulated to make products such as tennis rackets, baseball bats, bicycles and similar products lightweight but at the same time, stronger. Nanotechnology is used in pharmaceuticals to simplify the administering of medication. It is used to make clothing stain resistant. Nanotechnology can be applied to make space-saving products. According to the NNI, almost all electronic devices manufactured in the last decade use some sort of nanomaterials. The plastics industry uses nanotechnology in a variety of ways. Materials reinforced through nanotechnology are used in thermoplastics because they are capable of resisting heat, provide dimensional stability and are capable of conducting electricity. Plastic nanotubes also are being created with nanotechnology. These nanotubes are flexible, lightweight and durable, and are being used in the automotive, aerospace and chemical industries. Finally, special nanocomposite foams have been created and are expected to replace solid plastic because they are much lighter. The impact of nanotechnology in the future seems immeasurable. The hope is that by using nanotechnology,

24 | plastics business • spring 2011

companies will be able to make safer and stronger products. It will allow for energy efficiency in homes, offices and vehicles. Better medical devices. Better medicine. Could there be a downside? Of course.

B. Risks and Concerns (in other words, the downside) How prevalent is the use of nanotechnology? Researchers estimate that by 2015, nanomaterials will be incorporated in over $1 trillion worth of products. The NNI reports that in 2001, federal funding for nanotechnology was approximately $464 million. Presently, that amount has risen to $1.5 billion. The increased reliability on nanomaterials comes with increased concerns. Concerns involve predictability, the impact on the health of employees and consumers and the impact on the environment. Predictability is an issue because no one really knows how these nanomaterials will behave over time. The behavior of materials at the nanoscale is not the same as those observed at larger scales. George Kimbrell from the International Center for Technology Assessment explained the “scientific consensus on nanomaterials is that nano does not mean merely tiny, but rather materials that have the capacity to act in fundamentally different ways.” Of special concern is the health of employees involved in manufacturing products incorporating nanomaterials. For the manufacturing employees who will have the most extensive exposure to nanomaterials, there is a real health risk in handling such small materials. Due to their extremely small size, nanomaterials have the ability to move throughout the environment unnoticed. Inhaled nanomaterials can flow through the body undeterred by the human body’s natural defenses that would usually serve to block larger particles. There is simply no way of knowing how each and every nanomaterial will behave once inside the body or what longterm effects it may have. Many have equated the potential risk of nanomaterials to human health to those created by asbestos. The study of the potential health risks of nanomaterials has its own name – nanotoxicology.

C. Regulation of Nanotechnology Given the uncertainty associated with nanotechnology, a major focus has been shifted to the regulation of nanotechnology and nanomaterials. Debates exist with respect to whether existing regulation is sufficient or whether nanomaterials merit individual government attention. As recently as 2007,

the Bush administration held the collective opinion there was no need for special regulation of nanomaterials. However, the following year, other opinions arose. In Nanotechnology Oversight: An Agenda for the New Administration, J. Clarence Davies explored the need for special regulation. Davies focused on four federal regulatory bodies – the Food and Drug Administration (FDA), the Environmental Protection Agency (EPA), the Consumer Product Safety Commission (CPSC) and the Occupational Safety and Health Administration (OSHA) – all of which have some authority to regulate nanomaterials. Davies suggested actions the regulatory bodies could take, both together and independent of one another, to assist in regulation. For example, the EPA, which administers the existing Toxic Substances Control Act (TSCA), could define nanomaterials as “new” chemical substances. Treating the materials as “new” rather than simply smaller versions of existing chemicals would subject the nanomaterials to many TSCA regulatory authorities. The EPA also could explore the application of other existing laws under its authority to nanomaterials and push for revisions of those laws to give them teeth in the face of potential risks. Similarly, the FDA could determine which nanomaterials are “new” for regulatory purposes. In other words, when already approved products begin to incorporate nanomaterials, will the product then be considered “new”? If so, additional testing and approval may be required. Davies suggested OSHA should require education and training concerning the use of nanomaterials. OSHA could use its existing regulations to monitor and review safety standards related to nanomaterials. As this shows, opinions are moving toward greater regulation of nanotechnology.

D. What Steps Should You Take Now? It is likely just a matter of time before the first large class-action cases are filed asserting a connection between the use and exposure of certain nanomaterials and personal injury. Some commentators warn that the risk and danger of overexposure to nanomaterials will result in the same type of mass tort litigation that arose from the undisclosed risks associated with asbestos. While there is no way for manufacturers and other employers to avoid a determined plaintiff’s attorney, there are steps they can take to limit their litigation risk and exposure. First, manufactures and employers must stay informed with regard to new regulations and proposed regulations. Business owners do not want to end up in litigation over something as simple as posting a warning on its products or properly training its employees. The regulatory landscape may be quickly changing and businesses need to keep up or suffer the consequences. Second, companies should review their insurance policies with their carriers to determine whether existing policies are sufficient or if additional coverage will be necessary. If there

is a concern about the use of nanomaterials in the workplace or in products, it is much better to address the issues with the insurance companies now rather than after a lawsuit is filed. Third, businesses may want to consult with experts in the field of nanomaterials. Such experts may be able to identify potential risks not readily apparent to the everyday business owner or employee. Additionally, in the two birds with one stone category, an expert will likely be familiar with all existing regulations and potential regulations that could impact the business and its employees. The one certainty that can be taken away is that nanotechnology is here to stay. Although nanotechnology serves to benefit us all greatly, there are, like with everything else, risks that must be weighed as well. Companies must be diligent in monitoring their use of nanomaterials and its effects on employees and products. No one can completely avoid a lawsuit, but everyone can take affirmative actions to lessen the impact of litigation on their bottom line. n Kevin Murch is a partner in Schottenstein Zox & Dunn’s Litigation and Trial Law Practice Group. He can be reached at 614.462.2217 or kmurch@szd.com.

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www.plasticsbusinessmag.com | 25


Evaluating Your Mold Maintenance Direction by Steve Johnson, ToolingDocs

“How do we compare?” This question has been long posed by companies that feel like their mold maintenance process could be improved, but weren’t sure if the effort would be worth the time and trouble. However, with the recent economic melt-down came a change of perspective, and mold repair – long shunned as an expensive cost center for a company – now is being dissected to see if there is a dollar to be saved. But day-to-day shop turmoil, combined with a lack of appropriate tools with which to accurately measure critical efficiencies in a firefighting culture, has led companies instead to resort to solutions like cutting staff with hopes that the remaining employees can man-up and get things done. These companies end up missing the bigger picture.

Get a Grip In order to cut costs and still improve maintenance efficiencies, a clear understanding of the specific details involved in keeping each mold in good running order is needed. But these details only evolve when there is clarity gained through a systemized approach to mold maintenance. A cohesive, data-driven tool room results when the structure of how everyday work is planned and performed is strengthened. Mold maintenance work is repetitive by nature. Shops should learn from past experiences so that obstacles faced in the past can be mitigated or eliminated completely. To aid in the learning process, mold maintenance teams must master five maintenance principles that, together, will ensure efficient production of quality parts on time.

The Fab Five These principles not only dictate the culture and direction of a shop, but also directly affect the cost of a company’s product and profitability: • • • • •

Leadership Skills Maintenance Strategy Documentation System Shop Skills Shop Design

Within each of these five principles lies several potential shop stoppers. In order to see real, measurable improvement, a shop needs to be strong in all five principles, not just in one, two or three. Otherwise, any progress toward a continuous

26 | plastics business • spring 2011

improvement or proactive culture is halted and a reactive strategy gets new life. Historically, shop skills alone kept many companies afloat. Imagine what could be accomplished if a group of skilled craftsmen had a motivating and involved leader who used a maintenance strategy based on data from a proven documentation system in a well-designed shop. Talk about a culture change!

Start at the Top Let’s look at “Leadership Skills”. Maintenance programs need an energetic, qualified leader who can target issues and drive changes – someone who makes sure the ship is steaming full ahead, but not in circles. A good leader knows how to motivate his technicians, hold them accountable to higher shop standards and use data as his map through treacherous waters. The exact opposite leadership style would be that of a “cruiser” who waits until problems come his way before reacting. For the cruiser, there is no clear or measurable direction for his tool room – and he doesn’t want one. It’s easier to just blame fate and work on the fire. What is the Plan? Without an effective game plan that fits every mold in a company’s fleet, even a qualified leader of a skilled mold repair team can run a project aground. Google the words “maintenance strategy” and a plethora of options appear – from ‘Predictive’ to ‘Preventative’ and many more – all with the same basic goal in mind: to prevent issues before they occur. The difference is how these strategies “fit” with mold repair. Most companies attempt to use the popular PM strategy, which is basically to clean molds, install new tooling and perform other tasks at a predetermined frequency. The problem is that the correct frequency and tooling replacement has typically not been qualified through accurate data analysis. It’s more a guess based on either experience with the tool or an opinion. This “guess” can cost companies hundreds of thousands of dollars by over- and under-maintaining molds. Replacing good tooling with new tooling just because a cycle count or date popped up could cost much more than investing the time, skills and tools needed to qualify the decision using a Reliability Centered Maintenance (RCM) strategy. With RCM, historical corrective action reports, along with standardized tooling bench inspections and useful forms, provide the

CAPTION: A clean, well organized shop is a critical element in the success of a systematized mold maintenance process. Note the shop layout with essential tooling and documentation easily within reach to streamline the process.

information needed to minimize costs while keeping a mold reliable and in good running condition.

Accurate Documentation Record keeping is the most prevalent weak point in maintenance shops where repair technicians – especially boomers – are more adept at repairing things than writing about them in a manner that provides clarity or reporting value. They are more likely to write “fixed it” on a standard work order form than pen a clear, corrective action using standard shop terms. A valuable system is one that is designed to be easy-to-use (many drop down lists, standardized terminology, minimal typing, lots of images) throughout a mold’s Run/Repair life cycle and then turns the raw data into actionable information (reports) for managers and repair technicians alike.

Shop Skills The skills and experience of the repair team will ultimately determine how much improvement is realized. A repair team that has a great leader with a proven maintenance strategy and a kick-butt documentation system would be mired in mediocrity without also having a commitment to training employees in new maintenance technologies and bench techniques.

Regardless of what documentation system is used, it must be capable of employing standardized shop and industry terms and their definitions or the data is nothing more than useless journal entries. Accurate information will greatly surprise even the crustiest skipper, who may be more accustomed to navigating by memory or feel.

It’s common for today’s repair technicians to have 20 or 30 years of experience, but from that experience is limited to working at only one or two companies. Their exposure to new ideas, bench techniques and methodologies has been limited to a small pool of fellow repair techs. In fact, getting them out from behind their benches and into a training environment where they can talk and page 28 u

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Knowledge Experience Support Team Training In-Mold Sensors Process Control Stability y The right processes are running y One processing language for everyone y Management gets at-a-glance updates

Molders benefits

Containment y Automatically keep nonconforming parts from shipping y Eliminate costs and headaches of manual inspection

Control y DECOUPLED MOLDINGSM processes y Less scrap

t page 27 work side-by-side with repair techs from different backgrounds improves not only performance, but also morale and attitudes. In addition, the financial benefits that come as a result of enhancing technical skills are undeniable. A highly skilled repair technician in today’s lean shop needs to be an expert in defect troubleshooting, wearing the hats of an electrician, toolmaker, welder and processor, while also being comfortable at a PC. Now this is a valuable employee who won’t come cheap, but the continuous improvement of a shop can be stifled by inexperienced, low-balled mechanics just putting in their time.

Shop Design The final pieces of the continuous improvement puzzle are the design, cleanliness, organization level and general working atmosphere of the shop where the craftsman plies his trade. Too many shops are dark, dreary places to work because someone believes that all a repair tech needs is a bench, some hammers and a few rags. Even though molds are the heart and profit center of a molding company, the operating room too often is set up for meatball surgery with the aim of patching the molds and sending them back to service. Shops need to take advantage of a “work cell” bench design to minimize the steps and frustration of hunting for the right tool to do a job. Think the repair process through – the tools required are probably already there, but need to be better organized. Ultimately, mold maintenance is a continually evolving craft in which a company’s direction needs to be assessed and then measured to help it grow. The days of freelanced repairs and unaccountable black art methods are over. Today’s successful mold repair shops exercise maintenance transparency and standardization of terms and techniques for consistent, reliable and profitable production runs. The time for evaluating a company’s mold maintenance direction cannot come soon enough. n

RJG, INC. | www.rjginc.com | phone: 231-947-3111

Steven Johnson is operations manager for ToolingDocs, a provider of mold maintenance training and consultation, based in Ashland, OH. His tooling maintenance experience includes eight years as senior tooling engineer for Abbott Laboratories, a leading medical device manufacturer, and 24 years as a toolmaker at Calmar, Inc., rebuilding high cavitation, closetolerance multi-cavity injection molds, as well as blow molds, cutting dies, rubber compression and silicone (LSR) tools. He also designed and developed MoldTrax™, a documentation software system for tracking mold performance and maintenance. To learn more, call 800.257.8369 or visit www. toolingdocs.com.


Dukane Expands Ultrasonic Welding Line for Medical Applications Dukane Corporation’s Ultrasonics Division, headquartered in St. Charles, IL, has expanded its line of iQ servo-controlled ultrasonic welding systems for medical applications and other high-value components. New high-frequency welders (30, 40 and 50 kHz) are targeted for smaller medical parts such as valves, ports, filters and implant components. Meanwhile, a larger press platform (15 kHz and super 20 kHz) targets larger part sizes for medical applications. These new welders also employ the company’s new Melt Match™ technology, which delivers greater repeatability, stronger welds, easier validation calibration and lower manufacturing cost versus standard pneumatic welders. For more information, call 630.797.4902 or visit www.dukane.com/us. Frigel Microgel RCP Water Chillers Ideal for Process Cooling Applications Frigel North America, East Dundee, IL, introduced the Microgel RCP line of self-contained, water-cooled chillers. The 12 new models are single-zone units designed to meet the needs of PET, closure molds, multi-cavity molding, high-speed medical, blow molding and other applications that need refrigerated high pressure/flow coolant. Turbulent flow and low temperature rise across process heat exchangers, molds, etc. are the hallmark of these new products. Available in sizes ranging from 9.2 to 126.7 tons, Microgel RCPs are equipped with shell-and-tube condensers to function with a Frigel Ecodry® closed-loop clean water cooling system or a conventional evaporative cooling tower system (with or without heat exchanger), making them an option for nearly any facility. For more information, call 847.540.0160 or visit www.frigel.com/na. IQMS Announces Latest Release of EnterpriseIQ ERP Software IQMS, Paso Robles, CA, announced the latest release of its EnterpriseIQ ERP solution. EnterpriseIQ 7.8.1 features more than 900 new tools and reports across all aspects of the software with a focus on providing functionality and efficiency. The new tools and features enhance all aspects of the software including quality management, statistical process control, shop floor synthesis, customer relationship management, scheduling, human resources and more. Enhancements include a Certified Employee option, which enforces special employee certification and training requirements assigned at the Bill of Material level; Lot Control enhancements for more in-

30 | plastics business • spring 2011

depth lot control capabilities and expanded tracking tools for quality assurance; and assembly process enhancements with increased flexibility to allow for substitutions and adjustments that need to be made ‘on the fly’. For more information, call 805.227.1122 or visit www.iqms.com.

DME Adds Quick-Coupler Type Water Jumpers to Cooling Product Line DME Molding Supplies, Madison Heights, MI, recently added Quick-Coupler Type Water Jumpers to its line of MRO cooling products. This product enables processors to plumb a mold for cooling using significantly less mold space. The advantage of the Quick-Coupler Type Water Jumpers is that they can either be embedded in the mold itself or run on top of the mold. This gives molders greater flexibility and can reduce the amount of hose necessary. Also, it gives the mold a cleaner look and reduces the likelihood of setup errors. The Jumpers have added benefits such as unrestricted flow paths that maintain full flow rate of hose used, a locking sleeve that prevents accidental disconnection and unlimited installation options to fit around obstacles or install in compact spaces. For more information, call 800.626.6653 or visit www.dme.net. New Blender Controls from Conair Offer Choices Conair, Cranberry Township, PA, now offers new blender-control options for extruders and injection molders. SmartBlend™ SB-1 and SmartBlend™ SB-2 offer, respectively, standard and highperformance control for either process. SmartBlend SB-1 is the standard control for Conair TrueBlend blenders. Automatically calibrating itself to material flow rates, the SB-1 uses direct-to-target dosing and generally hits ingredient targets in one shot. The SB-1’s control algorithm intelligently analyzes dozens of weight readings in milliseconds, filtering out electronic noise and the effects of vibration to yield accuracies that are considered the industry standard. The SB-2 control offers the same benefits of the SB-1, but is based on a different “feed forward” algorithm that uses incremental dispenses in each batch to hit the target weight more accurately. The set-up of the SB-2 is similar to the SB-1, but also features a Virtual Network Client view to allow remote monitoring and control of the blender. It also has built-in help screens and can deliver alarm notification via text message. For more information, call 724.584.5500 or visit www.conairgroup.com. n


Polycarbonate and ABS Engineering Resins Markets See Global Tightening POLYCARBONATE

Current Market The first quarter of 2011 has seen a strong start to the year for polycarbonate markets in North America with ongoing supply restrictions, good demand and high costs prompting further price increase announcements from suppliers in March 2011. Bayer Material Science has restarted its polycarbonate operations at Baytown, Texas but has yet to lift its force majeure declaration. Demand from most sectors remains good, with the automotive sector starting the year strongly and better demand also now evident from the construction sector. From a supply perspective, at the time of writing Bayer has not yet indicated when its force majeure (FM) may be lifted, although the plant is now running. Otherwise, all domestic producers are running at high rates in order to satisfy demand. There has been no impact yet on imported polycarbonate volumes from Asia due to the devastation in Japan caused by the recent earthquake and tsunami. It is still too early to tell whether there will be any significant impact on world PC markets from the aftermath of this disaster; however, there are already some restrictions on feedstocks in Japan becoming evident.

by Adrian Beale, CMAI

announcing an increase of 22 cents per pound across the board for PC and PC alloys, effective April 4, 2011; Bayer announcing an increase of 25 cents per pound, effective March 31, 2011; and Styron announcing an increase of 22 cents per pound for PC and 19 cents per pound for PC alloys, effective April 1, 2011.

Market Analysis The cost of producing polycarbonate in March was essentially flat from the month of February. Energy complex values stabilized at relatively high levels and petrochemical derivatives

Phenol - PC Chain Benzene

Phenol Cumene

Bisphenol A



Acetone Chlorine Caustic Soda Carbon

SABIC Innovative Plastics (SIP) announced an increase Monoxide in polycarbonate grades and blends of 14 cents per pound, effective February 28, 2011. Styron also announced an increase in polycarbonate North America Polycarbonate Cash Cost and Market Price and polycarbonate blends prices of 14 cents (General Purpose Grade) Cents Per Pound per pound, effective March 1, 2011. For general purpose, grades of polycarbonate in February prices were around $1.60 – $1.90 per pound. However, in March there was widespread success in moving prices up following the price increase targets of 14 cents per pound, with increases ranging from 7 to 14 cents per pound. On average, prices have moved up by 10 cents per pound and so the representative price range is now $1.70 – $2.00 per pound for March. The wide price range represents the fact that these general purpose grades of polycarbonate are used across a number of different industry sectors. Small buyers or consumers buying specialty or colored grades are now paying prices in the $2.50 – $3.50 per pound range. There now have been further price increase announcements made for April with SIP



180 160 140 120 100 80

60 40 20 0 Jan-09 Jul-09 Jan-10 Jul-10 Phenol Contribution ECU Contribution PCB General Purpose Market Price

Jan-11 Jul-11 Jan-12 Jul-12 Acetone Contribution Conversion Costs (Var. + Fixed) ~ PCB General Purpose Margin ~

page 32 u

www.plasticsbusinessmag.com | 31

trends t page 31 also lost their upward momentum. Benzene contract prices increased marginally from $4.35 per gallon last month to $4.39 per gallon in March, leading to an increase in phenol costs of less than 1 cent per pound (as can be seen from the chart entitled North America Polycarbonate Cash Cost and Market Price - General Purpose Grade on page 31). Acetone prices also were broadly stable compared to last month, in line with steady upstream propylene prices for March. With a slight reduction in energy and hence conversion costs this month, overall costs of polycarbonate production are essentially the same as last month. As can be seen from the chart, market prices for general purpose polycarbonate grades have increased by an average of 10 cents per pound this month, thus leading to an increase of around 10 cents per pound in theoretical producer margins from last month.

Outlook It is still too early to tell whether there will be any significant impact on world polycarbonate markets from the earthquake and subsequent devastation in Japan. While overshadowed by the human side of this tragedy for Japan and the apparently worsening situation at the damaged nuclear installations, there also are

chemical and petrochemical industry implications arising from the earthquake and tsunami off the northeast coast of the country. Most of the polycarbonate production facilities in Japan (and especially the ones which produce polycarbonate for export to the U.S.), are situated in the southern part of Japan and were not impacted by the earthquake. Normal production is continuing; however, in some cases the raw material BPA is supplied by plants in regions which have been badly damaged. In addition, there are phenol plants in both Kashima and Chiba which also are down. Currently, the Mitsubishi Gas Chemical polycarbonate capacity in Kashima is down and may be down for several months, and the Idemitsu polycarbonate capacity in Chiba is down due to shortages of feedstock. As a result, some Japanese polycarbonate producers have suspended offers of supply until the situation becomes clearer. On balance, Japan is a net exporter of polycarbonate with most exports going to China, so any impact on Japanese polycarbonate production is most likely to contribute to a further tightening in Northeast Asia markets which also may ultimately impact global markets. On the demand side in Japan, the top Electrical/Electronic and Auto makers – Sony, Toshiba, Toyota and Honda – have already announced a shutdown of their production lines. Japan provides high-end core parts for electronic production in China, South Korea and Taiwan and high-end automotive components for production in North America and Europe. If Japanese plants remain shut down for any period of time, then supply to the above regions will be greatly impacted.


Current Market ABS markets in North America have continued to strengthen in March following an already positive start to the year in the months of January and February. Most significantly, there appears to be much less flexibility this month on pricing; some large consumers managed to negotiate a delay in price increases or a lower price increase in general in January and February; however, producers are taking a harder line for March and April and consumers are finding that they have fewer options for avoiding the higher prices. Demand continues to be good especially from the automotive sector and also from general appliances and electrical/ electronic end users. Even the building and construction sector is picking up in preparation for second quarter, which is typically the strongest part of the year. From a supply perspective, all producers are currently running well and there has been no repeat of last year’s force majeure declarations by ABS producers. Nevertheless, strong demand in Asia is currently contributing to a reduction in available volumes from that region.

32 | plastics business • spring 2011

page 34 u

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©2011 Stratasys Strat Inc Inc. All ri rights hts reserved. d

trends t page 32 Even though raw material costs are not increasing as rapidly as they have in previous months, the ongoing firm cost position and the balanced-to-tight market continue to encourage producers to move ABS market prices up. So far, there have been further price increases announced for April, including an increase from INEOS ABS of 5 cents per pound and from Styron, an increase of 7 cents per pound for general purpose grades and 9 cents per pound for high heat grades, all effective April 1. In addition, SIP announced an increase of 13 cents per pound, effective April 4, 2011, for general purpose grades of ABS. Styrolution has announced an increase of 5 cents per pound for general purpose and high heat grades of ABS, effective April 8, 2011.

Benzene - ABS Chain Benzene


Ethyl Benzene


Much of the ABS sold in North America is done on the basis of formula pricing related to raw material indices. There also are index-based prices, which have some time lag involved. The remainder of the ABS is sold on the basis of freely negotiated prices. ABS prices in North America can be broadly split into prices for general purpose injection molding grades and prices for extrusion grades for sheet and pipe. Historically, extrusion grades have traded at a discount to injection molding grades, but this discount is not fixed and can vary with changes in the market. Last month, the price range for general purpose injection molding grades of ABS was 130 – 145 cents per pound. Prices have again increased by an average of 5 cents per pound, taking the representative price range to 135 – 150 cents per pound for March. It should be noted that this is an average price range and reflects many differing agreements made between many different parties. In addition, some of this month’s price movement is due to delayed February price increase implementations. This price range is designed to represent delivered prices to converters. Clearly, prices to distributors will be somewhat lower than this.

Market Analysis As can be seen from the chart entitled “General Purpose ABS Cash Cost and Market Price Forecast”, during the month of March, the total cost of producing ABS increased Acrylonitrile Propylene by around 1 cent per pound compared to February. Acrylonitrile costs were relatively stable again for March, based on stable propylene prices, and only registering a slight fall in General Purpose ABS Cash Cost And Market Price Forecast price. This was offset by a marginal increase Cents Per Pound 160 in styrene prices as underlying benzene also Forecast moved up marginally for March. The only 140 real movement was from butadiene contract prices, which increased again in March and 120 which look set to continue to increase further in the coming months. However, the impact 100 on the total cost of producing ABS resin from 80 this move in butadiene is only around 1 cent per pound, hence the overall increase in cost. 60 As described previously, the market price range for general purpose grades of ABS 40 increased on average by 5 cents per pound again this month resulting in an increase 20 in theoretical producer margins of around 0 4 cents per pound for March. Producer Jan-09 Jul-09 Jan-10 Jul-10 Jan-11 Jul-11 Jan-12 Jul-12 margins have been improving since the start Styrene Contribution Acrylonitrile Contribution of 2011 (as can be seen from the chart at left) Butadiene Conversion Costs (Var. + Fixed) ~ and a further improvement also is expected GP ABS Market Price Pre-tax margin Crude C4

Butadiene / PBR

ABS Resin


34 | plastics business • spring 2011

page 36 u

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trends marketplace t page 34 next month as the announced price increases for April are worked through.

Outlook There is ABS production capacity in Chiba, Japan, which is one of the areas which has been impacted in the aftermath of the earthquake. Japan typically imports around 3,000 tons per month of ABS and exports around 12,000 tons per month of ABS, primarily to China. On balance, therefore, it is likely that this disaster in Japan will lead to more tightening in global ABS markets than the reverse, despite the shutdown in downstream consuming capacity, although of course it is too early to say with any certainty what the market impact will be. From a U.S. perspective, any tightening of Asian ABS markets in Asia could lead to restrictions in availability of ABS for export to the U.S., which will keep markets here finely balanced and increase the probability of success for the numerous announced price increases which currently exist in the market. Imports from Asia are already under some pressure due to strong demand from China. As a result, little relief is expected from the current record high ABS prices for the remainder of the year, as shown by the price charts. n Adrian Beale is director – global engineering resins for CMAI (Chemical Market Associates Inc.). From its inception in 1979, CMAI’s goal has been to add value to its clients’ operations by providing accurate, timely market and business advisory services for the worldwide chemical, plastics, fibers and chlor-alkali industries. At every level, CMAI focuses on understanding how its services can best support its clients by anticipating needs and developing innovative solutions. For more information, contact Beale at 281.752.3230 or email abeale@ cmaiglobal.com.

36 | plastics business • spring 2011

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ASACLEAN - Sun Plastech, Inc. ............................................................. www.thebestpurge.com ........................................................Inside Front Cover Beaumont Technologies, Inc. ................................................................... www.beaumontinc.com .................................................................................. 16 Chase Plastics............................................................................................ www.chaseplastics.com.................................................................................. 10 Chemical Market Associates, Inc. (CMAI) .............................................. www.cmaiglobal.com..................................................................................... 13 ComAssist ................................................................................................. www.comassistky.com ................................................................................... 32 The Conair Group, Inc. ............................................................................. www.conairnet.com......................................................................... Back Cover Federated Insurance .................................................................................. www.federatedinsurance.com ........................................................................ 22 Frigel Intelligent Process Cooling ............................................................ www.frigel.com/na ......................................................................................... 16 Harbour Results Inc. ................................................................................. www.harbourresults.com................................................................................ 35 Hotset ........................................................................................................ www.hotset-worldwide.com/us/pb ................................................................. 29 INCOE Corporation .................................................................................. www.incoe.com .............................................................................................. 23 IQMS......................................................................................................... www.iqms.com................................................................................................. 3 M. Holland Company................................................................................ www.m-holland.com ...................................................................................... 27 Manufacturers Association for Plastics Processors (MAPP) .................... www.mappinc.com ......................................................................................... 38 Moulds Plus International ......................................................................... www.ultrapurge.com ...................................................................................... 35 Mueller Prost PC ....................................................................................... www.muellerprost.com/re .................................................... Inside Back Cover PLASTECEast .......................................................................................... www.plasteceast.com ..................................................................................... 37 Polymer Resources Ltd. ............................................................................ www.prlresins.com......................................................................................... 19 PolyOne Distribution ................................................................................ www.polyonedistribution.com ......................................................................... 9 rapid prototype + manufacturing, a Division of Thogus........................... www.partswithouttooling.com ....................................................................... 21 RJG, Inc. ................................................................................................... www.rjginc.com ............................................................................................. 28 Stout Risius Ross ...................................................................................... www.srr.com .................................................................................................... 8 Stratasys .................................................................................................... www.stratasys.com/mapp ............................................................................... 33 Strategic Marketing Partners (SMP) ......................................................... www.marketingformanufacturers.com ........................................................... 18 SZD Co., LPA ........................................................................................... www.szd.com ................................................................................................. 25 ToolingDocs ............................................................................................. www.toolingdocs.com .................................................................................... 15

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www.mappinc.com 38 | plastics business • spring 2011

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Is your company...

 Improving customer part designs to improve manufacturability?  Designing tools, molds or dies?  Developing prototypes or models (including computer generated models)?  Applying for patents?  Testing new materials?  Testing new concepts or technology?  Implementing robotics or production control software?  Streamlining or improving production and manufacturing processes to achieve higher standards in quality and productivity?

If you answered “YES” to any of these activities, your business may qualify! For details, contact Michael J. Devereux II or Adam J. Herman, CPA/ABV/CFF, CVA, ASA at 314.862.2070 or e-mail mdevereux@muellerprost.com.


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Plastics Business - Spring 2011  

Plastics Business - Spring 2011