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director’s letter Open for the Youth of America – Creating the Future, Starting Now! No matter where you look, no matter what you listen to and no matter who you talk with in plastics processing or other production-related industries, one major issue is preventing a comeback in US manufacturing. The US is currently experiencing a significant workforce shortage, a lack of both skilled people and those with a desire to work in manufacturing. In case you haven’t heard, there has been a major resurgence in manufacturing orders. In fact, in the last 60 days, I’ve been hard-pressed to find a plastics processor, mold builder, rubber products manufacturer or machining company that isn’t at full capacity and doesn’t have a full sales pipeline. In fact, many leading business executives have personally told me that things are to the point where they must examine the opportunities and carefully pick their customers in order to avoid the chaos of bringing in too much work at once. Recently, I had an opportunity to tour the production floor of a state-of-the-art CNC machine shop using only the finest multi-axis equipment. The general manager pointed out two spaces on the production floor where two new CNC machines were needed to churn out additional parts. However, the spaces were empty because the company’s management team had not yet been successful in locating the help needed to operate the quarter-of-a-million-dollar machines. MAPP’s recently published 2012 Economic Report revealed strong growth over the last 18 months and great optimism for continued growth and expansion over the next 12 months. As part of this study, over 130 executives provided detailed information on their top business challenges, and the one issue that quickly surfaced and separated itself from the pack was workforce development. Defined as recruiting, hiring, retaining, training and simply finding people, the workforce development issue is one that has hampered the growth and prosperity of the plastics industry for many years. It is an issue that seems to go away during economic downturns, but comes back like a tidal wave after a tsunami during upturns. To positively impact our industry and our Members, MAPP’s leadership team is investing significant resources to attract and lure the Youth of America into the industry. With a multi-pronged strategy, MAPP Members are actively reaching out to community colleges, trade schools and institutions that possess a significant supply of young adults to encourage them to use MAPP’s website as the primary web-portal to communicate and market their career interests, availability, level of education and immediate job desires. The goal of the MAPP Academy is to provide first dibs on these entry level resources to MAPP Members. With a simple click of a button, MAPP executives now have the ability to search and find candidates who will enable them to build the future of their companies. In the coming months, it will be the goal of MAPP’s team to form national partnerships with educational institutions from coast to coast, aiding in connecting their students to our industry. It’s time we change the image of manufacturing. It’s time we change our ways. It’s time we invest in the future. It’s time we invite the Youth of America into our industry to build the future!

Troy Nix, MAPP Executive Director

4 | plastics business • spring 2012

Manufacturers Association for Plastics Processors, Inc. (MAPP) 7321 Shadeland Station Way, Suite 285 Indianapolis, IN 46256 phone 317.913.2440 • fax 317.913.2445 www.mappinc.com MAPP Board of Directors President Kelly Goodsel, Viking Plastics Tom Boyd, Blow Molded Specialties Dan Cunningham, Parish Manufacturing Tom Duffey, Plastics Components, Inc. Lindsey Hahn, Metro Plastics Technologies Matt Hlavin, Thogus Products Companies Laurie Harbour, Harbour Results, Inc. Ben Harp, Polymer Conversions, Inc. Bob Holbrook, Viking Plastics Tom Houdeshell, Atek Plastics Stu Kaplan, Makuta Technics John Passanisi, PRD, Inc. Jeff Randa, PolyOne Distribution Alan Rothenbuecher, ICE Miller LLP 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

Strategies for Today’s Plastics Processors

Published by:

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

Advertising/Sales Janet Dunnichay

Managing Editor Dianna Brodine

Contributing Editor Jen Clark

Art Director Eric Carter

Circulation Manager Brenda Schell

Additional Graphic Design Becky Arensdorf


Plastics Business

Strategies for Today’s Plastics Processors

Contents Spring 2012

profile

features

6

trends

11

profile Training for Medical Excellence at Trademark Plastics .........................6 trends The Value of Value-Added Services ...................................................... 11

solutions

18

departments director’s letter ..................4

solutions Water Leaks are Money down the Drain .............................................. 18

product ............................16

strategies Incentivizing Employees for Productivity and Quality ......................... 26

association .......................22

production The View from 30 Feet: MAPP’s Plant Tour Events Benefit Attendees and Host ......................... 30

advertisers .......................46

outlook Dissecting Global Competition: Insights from the NAPIS ..................... 32 management Incorporating Sustainable Development Behavior into Supplier Selection ............................................................................... 37 industry Five Key Items to Consider When Evaluating a Company’s Financial Health .................................................................................. 40

plasticsbusinessmag.com

www.plasticsbusinessmag.com | 5


profile

Training for Medical Excellence at Trademark Plastics by Dianna Brodine

With one look at the Trademark Plastics facility, located in Riverside, CA, it is immediately obvious that this isn’t a typical injection molding business. With one conversation with CEO Erin Carty and her husband, COO David (Chenoweth) Carty, it is apparent that while tradition runs deep throughout the organization, it is innovation and energy that rule the day.

A Legacy is Built In 1989, Jerry Carty built upon his history as a moldmaker and industry educator by merging a small team of highly skilled individuals and a quote from Abraham Lincoln to form Trademark Plastics, Incorporated. Inspired by Lincoln, who wrote, “The best way to predict the future is to create it,” Jerry Carty wanted to build something that was “all his”, according to daughter Erin. While the original facility was located in Rancho Cucamonga, Trademark Plastics moved to Riverside in 2002. The opportunity to move into a first-class facility that was nearly double the size of its previous location was a plus, but the primary incentive was the city’s municipal utilities. At its Rancho Cucamonga facility, electricity costs had soared to more than $50,000 per month, with utility costs controlled by the state. The City of Riverside, in addition to much lower utility rates, also had

6 | plastics business • spring 2012

created an enterprise zone that offered wage reimbursements and local tax credits. Jerry Carty recognized the opportunity to not only save costs, but also to grow the future of his company. He chose to relocate Trademark Plastics into a corporate park occupied by two other manufacturing plants, thus ensuring that the company could add employees and take on new work without concern about cost or space constraints. Jerry Carty passed away December 2005, but his portrait still graces the Trademark Plastics lobby and his legacy lives on. Building upon the foundation created by Jerry, Trademark Plastics is now a premier medical molding facility, encompassing 100,000 square feet and led Erin. She has been with Trademark Plastics for all but its first month of operation. “I was supposed to be there to answer the phones for two days,” she explained, “and that was 23 years ago.” Now a certified Women’s Business Enterprise, Trademark Plastics has seen Erin do everything from purchasing and production control to running a machine and trimming parts. “I’ve pretty much done it all, and if I didn’t know how to do it, I walked in and asked questions.” Erin and David have made significant investments in both equipment and human resources. With a mission to


‘consistently supply our customers with products of the highest possible quality, advanced technology and on-time delivery at the most reasonable price,’ Erin and David have devoted their own passion and drive to give Trademark Plastics an edge in a competitive industry.

Technology Provides an Edge In January 2011, Trademark Plastics hosted a plant tour event for a group of 40 MAPP members from locations as far spread as Texas, Rhode Island and Michigan. When promoting the event, MAPP Executive Director Troy Nix said, “Trademark has strategically focused on building a best-in-class workforce that utilizes technology to separate themselves! As one of the top plastics companies in the US, Trademark utilizes state-ofthe-art processes in all facets of its business and is dedicated to developing highly talented professionals through a pursuit of excellence in workforce education and training.” “MAPP members were surprised by how well our facility showed,” David said. “We have one of the nicest, cleanest shops in the US, and we’re proud to showcase that.” In fact, according to David, the hardest part of closing any new business sale is getting the prospect to the facility. “Once they see Trademark, they’re locked.”

Molding more than 300 different medical products that extend from disposable components to heart valves, Trademark Plastics runs 45 injection molding machines ranging in size from 7-ton to 500-ton. The facility has three separate manufacturing rooms within its 100,000-sq.-ft. building, and the facility also houses equipment for sonic welding, pad printing, part design, prototyping, tool design, tool repair and assembly. With the company’s reputation for innovation on the line, technology plays a critical role in maintaining momentum. “We recently purchased three new Husky molding machines with auxiliary equipment, which included several new robots,” Erin stated. “In fact, we’ve added 11 molding machines in the last three years.” The facility also has been upgraded. An existing general molding room was transformed into a class 100,000 cleanroom, bringing the total cleanrooms to three (one class 10,000 and two class 100,000s). In addition, new packaging containment areas have been added to each clean room and a new assembly room was created. The focus, explained Erin, is on reducing the touches: “With medical molding, it’s important to limit any opportunity for contamination.” Whether overmolding, sonic welding, page 8 u

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profile t page 7 pick-and-place or part separation, adding automation while reducing labor has led to efficiencies, although Trademark hasn’t been able to place numbers on the value as of yet. Erin explained, “We’ve added another 20 percent in new business over the last 18 months. That hasn’t given us time to figure out exactly what efficiencies – in both production time and labor savings – the addition of robotics has provided.” And more work is in the pipeline. “With medical molding, there’s work that we have contracts for that is not yet in production,” David said. The increase in business is due primarily to customers that Trademark Plastics has served since Jerry Carty first started the company. “We’ve had some customers for over 20 years – ever since the doors opened,” stated David. “And the majority of our customers have been with us for more than six years. We have positioned ourselves to increase our business when our current clients increase their businesses.” “We believe that highly successful companies do not earn their profitability through higher utilization, but rather through

higher complexity and quality,” Erin explained. “Our customers come to us to help them grow, because we keep investing in new technologies and remain current with the plastics industry culture.” David went on to say, “Many companies want to create partnerships, from part design all the way to production. If we can provide that, then the partnership benefits everyone.”

Training Key to Transition and Quality When the MAPP organization was preparing to tour Trademark Plastics, emphasis was placed on the molder’s workforce development programs and its corporate commitment to education. Erin Carty credits much of Trademark’s training philosophy to David. “David brought his own experience of managing a large group of employees, along with his expertise in training, to Trademark,” said Erin. After serving in the US Navy, David entered the manufacturing industry with a background in operations management and safety. His discipline and work history made an immediate impact at Trademark. “We pride ourselves on the culture of our company,” he explained, “but the kind of growth we have experienced brings challenges. One of those challenges is to ensure our employees continue to grow, which is necessary for our company to succeed.” When Trademark Plastics first opened, the company had 12 employees, and now there are 180 employees, 109 of whom are permanent. Much of that growth has occurred over the last three years. A temporary agency is used to staff the facility as industry needs fluctuate. With 85 percent of its production in medical components, consistency is critical. “We have to make sure we have the right people in place, and our turnover ratio has to stay low,” David explained. To aid in maintaining the company’s stringent standards, David implemented an extensive training matrix that begins with the first day of orientation. Working with Paulson Training Programs, a training system was developed that has new Trademark employees – including temporary staff – spending two days in both the classroom and on the molding floor before they touch a machine. “It’s really helped us maintain our quality,” he said. The training matrixes show a path that can have basic technicians move all the way through to

8 | plastics business • spring 2012

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profile t page 8 master molder status. “From operator to technicians to OSHA, we utilize photos and procedures from our own molding process in the training program so our people can see what they will be doing on the floor.” In addition, Trademark has partnered with other organizations to provide for specialized needs. The company’s upper executives participated in a 12-week lean manufacturing course through the City of Riverside, and technicians have been through classes offered by RJG so they can move into roles as process engineers or, as is the case with two employees, certified as master molders. Trademark’s quality manager was recently certified as a lead auditor for ISO 13485 Medical Device Manufacturing. “Our best asset is our team,” said David. “Everybody is utilized to the peak of their abilities.” The company’s quality standards also go above and beyond, to the benefit of all of its customers. When one medical customer’s products required an extensive validation process, that same process was incorporated for every other Trademark customer. “Maintaining high standards benefits both the customer and us, so we can provide the best service,” Erin explained. “It has taken a tremendous amount of vision, dedication and energy to build a reputation as an innovator in such a diverse industry as

plastic injection molding. We pride ourselves on training our employees to be the best, and then passing that quality on to our customers.”

Soaring Together While technology and training play a large role in Trademark’s position as a highly competitive corporation in the US plastics industry, the company – and Erin Carty – will not forget its founder and the philosophy he lived by in his own company after years of working for others. “We have a big picture of my Dad in the lobby,” said Erin, “and it’s a reminder about what’s important. People worked at Trademark because they respected my Dad, and every year, we acknowledge the anniversaries of people who have been here five, 10 or even 15 years.” Seven core employees have been with the company since the day it opened, and another 65 staff members have been with Trademark for at least five years. “People used to tell my Dad all the time that he would never make it anywhere in business if he ran his business with his heart. But he said, ‘When I opened Trademark Plastics, it was my job to take care of these people and their families, and that’s what I’m going to do.’” Equally as dedicated to Trademark Plastics’ customers, Erin explained that they maintain close partnerships with their customers and industry vendors not only to remain competitive, but also because of the pride inherent in producing products that are used every day in the medical profession. “Our slogan is ‘Together We Soar,’” she said, “and we truly believe that. We are proud of what we are, but we are just as proud of what we are helping our customers to achieve.” n

10 | plastics business • spring 2012


trends

The Value of Value-Added Services

by Dianna Brodine

In today’s competitive environment, molders are often challenged to provide value beyond that inherent in the molding process. While cost, quality and turnaround time are critical, the “value add” may provide an edge that attracts new business and earns loyalty from existing customers. Product decorating and part assembly are two of the most common value-added services found in the plastics processing industry. Whether providing these services in-house or outsourcing the process to a qualified partner, there is value to be found for both molder and customer.

Royer Corporation: Digital Decorating Takes Off

Royer Corporation, Madison, IN, has risen to the top of the hospitality industry by providing one-stop service, from molding to decorating to packaging. Annually, the company molds and decorates approximately 300 million parts, with an emphasis on beverage stirrers, food picks, meat markers, name badges and plastics disposables for the cosmetic, food and bakery industries. With 16 injection molding presses, primarily in the 200-ton range, Royer molds 95 percent of the product it decorates and is well-equipped to handle multiple projects. However, it’s the decorating and packaging operations that add complexity to the process. “We have roller stampers, rotary stampers, screen printers – both single station and automatic – pad printers and digital printers,” explained Diane Amos, vice president of product development. “Our bagging equipment is just as diverse, with a tabletop bagger, a couple of inline baggers and equipment that applies double-sided tape.” The inline Combi bagger, purchased three years ago, has added a level of automation that increases the throughput each shift. “Before we bought that piece of equipment, we may have bagged 100,000 parts,” Amos said. “Now we get 4-5 times that. It’s a big part of our business.” The company also prints labels and bar codes to more easily track the product through the packaging and shipping process. However, Royer Corporation President Roger Williams explained that when making small disposable products, where overseas competition is intense, decorating is key. “Our emphasis is on digital printing,” he said. “After adding our

Digital printing gives Royer Corporation an edge over foreign competition, providing high-volume decorating with fast throughput. first digital printer 18 months ago, we now have five large flat bed digital printers and three small digital printers. With the digital technology, we can create a lot of different images with different colors. It’s a true value add, and our customers really seem to like it a lot.”

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Digital printing allows for the use of multiple colors without the expense and set-up issues associated with traditional decorating processes. With previous decorating methods, Royer struggled with ink issues, humidity, clichés, environmental concerns and keeping trained operators. Those issues have been eliminated with digital printing. www.plasticsbusinessmag.com | 11


trends t page 11 Digital printing allows for the use of multiple colors without the expense and set-up issues associated with traditional decorating processes. With previous decorating methods, Royer struggled with ink issues, humidity, clichés, environmental concerns and keeping trained operators. Those issues have been eliminated with digital printing. “There are still problems we’re dealing with,” stated Amos, “but we’re not mixing any ink or trying to match a PMS color in ink and foil. With the digital printer, we simply adjust the CMYK.” At Royer Corporation, the company has its own art studio, creates its own tooling, and then molds and decorates the product. For a recent project, the company printed a photo image on a disposable ring. Royer employees created the artwork through the company’s software and transferred it directly to the digital printer. “Color matching is really fast and we can quickly determine the right dpi,” Williams said. “It’s very userfriendly, and we can literally create an image in an hour or less. With disposable product, speed to market is important,” he explained. “Our mantra is ‘fast and flexible,’ and digital printing FR-NPE-PlasticsAd-3-75x4-875-PostShow-outlines.pdf gives us a leg up.” 1 4/5/12

That “leg up” is apparent in the increase in volume Royer currently is experiencing. From October 2011 through the end of January 2012, the company operated 24/7, and recently experienced the best booking months for January and February in the history of the company. “With digital printing,” explained Williams, “we can produce high-volume parts with quick throughput, and the cost savings that digital printing allows can be passed on to our customers.”

Decorating Supplies & Equipment, Inc.: A Variety of Processes under One Roof

Not every injection molder, however, can dedicate the space, equipment expenditures or personnel to establishing a decorating department. Paul Carnes, owner of Decorating Supplies & Equipment, Inc., offers his company as an alternative. A custom decorator located in Evansville, IN, Decorating Supplies offers the gamut of decorating services, including screen printing, pad printing, digital printing, laser etching and hot stamping on both vertical and roll-on applications, as 4:04 PM well as on flat and round parts. “Most molders offer limited decorating options,” explained Carnes, “because it’s difficult for a molder to get equipped with decorating equipment and the volume they’re producing may not warrant the investment.” Carnes acknowledged that if a molder focused on one type of business – for instance, caps or closures – then it might be advantageous to have pad printing or screen printing capabilities in-house. “However, if the surface has to be flameor corona-treated, then that’s another piece of equipment that has to be purchased,” he said. Automation also has expanded the decorating capabilities of some molders, and Carnes agreed the efficiency robotics lends to an operation is enticing. “But, there’s a very narrow definition of what types of parts and decorating will work. It requires an expenditure and volume,” said Carnes. “Molders sometimes get tunnel vision. They’re excited about offering decorating to their customers, but they aren’t evaluating all of the costs.” When asked about volume requirements for custom decorating, Carnes jokingly said, “We don’t do anything less than one!” Whether one part or parts in the millions, Decorating Supplies offers flexibility for both molders needing one type of decorating and those needing different types of decorating for a variety of projects. “One of our customers is a huge molder/ decorator – a million parts is a small order,” he explained. “The

12 | plastics business • spring 2012

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trends t page 12 customer does all of its own offset printing, but we provide the hot stamping. It allows the customer to be versatile, without making an equipment purchase.” In addition, molders can receive the benefit of a custom decorator’s extensive knowledge base without training its own employees or making special facility concessions. “If you get into something wet, you have to know chemistry,” Carnes said. “You may need air conditioned rooms, and you have to have mostly particulate-free areas. We have the knowledge to make a lot of formulations work, and our facility is ready to go.”

Polymer Conversions, Inc.: Automating the Assembly Process

At Polymer Conversions, Orchard Park, NY, the valueadded services provided by the custom injection molder’s secondary department are an integral component of the selling proposition. While the molder does offer decorating capabilities in the form of pad printing, heat transfers and label application (both manual and semi-automated with pneumatic machines), focus is on assembly methods. According Plastics Adthe 3_2011:Layout 1 3/28/11 3:01 PM Page 1 to

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Automated vision inspection is important at Polymer Conversions since some parts pass through several valueadded processes before completion. Ryan Carlson, process improvement engineer for Polymer Conversions, assembly processes include ultrasonic welding, heat staking, insertion of threaded inserts, spin welding, pneumatic assembly, manual assembly, adhesives, bagging and blister packaging. The secondary department is the fastest-growing division at Polymer Conversions, running three shifts with dedicated staff that includes maintenance technicians, set-up technicians and a supervisor. Carlson is a key addition to the company’s secondary department, hired one year ago to add automation in the assembly process areas. “I have a background in plastics, but I don’t get involved in molding at all,” he explained. “My job starts after the part comes out of the press.” The secondary department operates with one 6-axis robot pressside (although another unit is scheduled for delivery in July). Parts are handed via gantry robots from the molding machine to the robotic assembly and inspection unit, which interfaces with an ultrasonic welder before putting the completed part into a box. Before implementing the 6-axis robot process, the parts would be stockpiled as they came off the injection molding machine, stored in the warehouse and then taken into the secondary department to be completed. The second unit will utilize the same robotic arm, but the equipment will be customized to do placing and inserting of threaded inserts. “We have a few parts with up to 12 inserts,” explained Carlson. “The robot will take the inserts out of a


bowl feeder, position the inserts correctly and place the assembled part under a heat staking machine.” That system also will incorporate vision inspection before the next part is placed. “Automated vision inspection is important, because we have one part that goes through five or six different value-added processes,” Carlson said. “At the last step, the part passes under two cameras to verify that all steps have been done correctly.” Originally, said Carlson, the secondary department’s capabilities were driven by customer need. “We added our own equipment to address gaps – either the customer didn’t have those capabilities internally or because of increased sales, the customer was looking to outsource assembly processes to allow its own employees to focus on other activities,” he explained. “Now, we understand the value in offering secondary services as a way of impressing and holding on to customers.”

Once an assembly process becomes Polymer Conversions’ responsibility, Carlson and other company employees work to find efficiencies. “A customer visited recently and was surprised to see the improvements we had made in the processes they had outsourced to our facility,” he said. “We start out duplicating the customer’s process and then we work to make it more consistent, improving efficiency, quality and ergonomics. “Molding is just the first step,” explained Carlson. “We can do so much more for our customers – and that’s been the key. If we can provide the extras for our customers, there is no reason for them to take their business elsewhere.” Whether adding assembly and decorating services in-house or partnering with a custom provider, value-added services can provide an edge for molders looking to engage – and keep – customers in a competitive plastics processing environment. n

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performance and is an alternative to conventional plasticizers such

visit www.polyone.com.

New Milacron Injection Molding Machine Improves Energy Efficiency

The Magna T Servo, from Milacron, Batavia, OH, features a hybrid toggle technology that dramatically improves on the energy efficiency of a standard hydraulic system. The injection molding machine is available in sizes ranging from 55 to 400 tons and achieves higher energy efficiency than a hydraulic machine by using a variable-speed AC servo motor to drive a fixed-volume gear pump. The machine’s servo motor allows the pump to deliver only the required amount of oil for each stage of the process. The servo motor also can reverse the direction of pumping to reduce pressure, if necessary. If no additional flow is required, the pump will stop. As a result, the system requires less energy for oil cooling and ejects less heat into the plant, creating cost savings that provide a faster return on investment compared to a conventional hydraulic system. For more information, visit www.milacron.com/plastics. n

www.plasticsbusinessmag.com | 17


solutions

Mike Burroughs, plant manager at ToolingDocs, assesses a damaged mold.

Water Leaks are

Money down the Drain by Steve Johnson, ToolingDocs LLC

As most mold maintenance audits reveal, both internal and external water leaks continue to be the frontrunning causes of unscheduled mold downtime. Pitting – the simple act of electrons from one steel component migrating to another –

Molds and components have been prematurely replaced when they could have – and should have – made thousands of more cycles and parts, if only specific precautions had been taken to prevent, or at least slow down, the erosion. 18 | plastics business • spring 2012

wastes thousands of company dollars per year through excessive repair hours, additional tooling costs, press idle time, scrapped parts and missed or late orders. Molds and components have been prematurely replaced when they could have – and should have – made thousands of more cycles and parts, if only specific precautions had been taken to prevent, or at least slow down, the erosion. While pinched, cut or missing o-rings and other assembly oversights share responsibility as root causes for water leaks, rusted and pitted o-ring glands continue to be the main factors. Corrosion-preventative measures can be taken in mold design or through maintenance practices to save money.

Rust never sleeps Working 24/7 and nourished by heat, pressure, water and oxygen, rust takes no time off as it slowly eats away at molds.

page 20 u


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solutions t page 18 The eroding steel that is the result of this electrochemical reaction usually goes untreated until the leak is sufficient to stop production. Only then is a spotlight shined on the problem, and questions arise. From there, the focus of maintenance revolves around what is necessary to quickly get the mold back into production. In other words, focus is thrown onto stopping the leak versus stopping the rust. Band-aiding the leak is usually handled by • stuffing a larger o-ring into the pitted gland • stuffing two o-rings into the gland, whereupon the combined cross-sections are slightly larger than the single o-ring • filling the pits with epoxy (J/B Weld) or • filling the pitted gland area with silicone sealer (most popular). These are cheap and short-term fixes that don’t solve the problem, causing repair technicians to try again and again for a solution.

have seen major water leaks simply “re-directed” into buckets in an area around the press to keep the mold in production as long as possible. Is this shop floor ingenuity or poor molding practices? It depends on the culture of the manufacturer.

Products can dictate repair method When molding critical parts, as in medical products, any kind of water leak that could possibly migrate to the product is cause for shutting down. On other, less critical-to-life products, I

Defect Type X-Internal Water Leak

So as not to lose sight of reality here, there are companies with molds whose yearly volume requirements and/or customer resistance leave little money to repair a leak professionally and permanently. Those molds are set with rags tied where necessary Chart 1 - Defect Analysis Report to absorb and redirect the dripping Count Labor Hours Labor Cost Tooling Cost Total Cost water, with little thought given 28 173.25 $8,662.50 $2,810.00 $11,472.50 to related issues that occur when operating in this mode.

Chart 2 - Stop Reason Count Mold

Part Description

Configuration

Stop Reason

Count

6169

Closure Cap “C”

Standard

Internal Water Leak

6

6749

Top Cup “D”

Standard

Internal Water Leak

4

6986

Port “R”

Standard

Internal Water Leak

3

6870

Top Cup “C”

Standard

Internal Water Leak

3

5990

Threaded Sleeve

431

Internal Water Leak

2

6942

Round Cup

Standard

Internal Water Leak

2

6382

15 ML VHC “K”

Standard

Internal Water Leak

1

6471

18 ML VHC “L”

Full Thread

Internal Water Leak

1

6492

12 ML VHC “E”

Standard

Internal Water Leak

1

6723

Crank Handle

Standard

Internal Water Leak

1

5918

Outer Flange

Standard

Internal Water Leak

1

6717

3-Hole Locking Switch

(3 Hole)

Internal Water Leak

1

6816

Top Cup “B”

Standard

Internal Water Leak

1

6948

Large Ring “D”

Standard

Internal Water Leak

1 28

20 | plastics business • spring 2012

Then there are the “tweeners”. In these situations, a misguided decision is made to deal with random leaks as they occur by performing one of the “maintenance” steps outlined earlier. More involved, but permanent, repairs include grinding plates and tooling (usually involving dimensional restacking) or welding, brazing or nickel plating for future protection. If the leak is unfixable (cracked water lines or tooling), skip the repairs and buy a


negative pressure thermolator that draws water through the system rather than pushing it through.

Commonly affected areas In molds, most water leaks occur around static seals where dissimilar metals, such as a P-20 plate, contacts hardened steel tooling, such as A2, D2 or S7. This dissimilar contact sets the stage for the formation of Fe203, the reddish form of iron oxide that we know as rust. The oxide is a larger molecule than iron, so it puffs up and cracks, which exposes bare metal. Mobile oxygen in the metal moves deeper into the base steel, continuing destruction and creating the “rust lives” mythology. Cavity blocks and cores are the typical victims, where the walls and bottoms of glands pit and erode until the o-ring can no longer conform to the depth of the pit and water seeps past. The leaks can be enhanced by a mold’s opening and closing, acting as a virtual pump by slightly moving or shifting tooling with every cycle. This opens stress cracks that would normally not leak during a static bench test of the circuits.

Evaluating the costs But is anybody going to automatically send the mold out to get the leaks fixed correctly (i.e. welding, milling, grinding and/or resizing the o-ring) just because it’s the right thing to do? Not likely, unless there is viable return on investment in it. This is why it is important to assign an accurate cost to any problem a mold suffers. “Show me the savings” is the name of the game for justifying any repair. Knowing the true costs of water leaks in a company can be difficult for those that collect data using journal entries in typical work order systems. This fact alone provides a viable excuse for those inclined to not worry about water leaks until they interrupt production. But the numbers, when viewed as a whole and compared to the entire unscheduled stop list, can provide a convincing argument that something needs to be done to eliminate water leaks. Let’s take a look at a typical company’s water leak costs for one year after it started tracking issues through a Defect Analysis report. This company discovered some startling facts about the overall costs of the simple water leak, as seen in Chart 1 on the previous page. In one year, 28 molds were stopped for internal water leaks, with four more stopped because of external leaks (not shown here) where hose lines popped off, were too short or wore through (which soaks the entire mold vs. just one area).

We can see from the Stop Reason Count (Chart 2, on the previous page) that the problem was spread among 14 different molds, with two molds accounting for 36 percent of the total leaks in frequency and costs. Direct tooling and labor costs are only part of the total expenses. The total labor hours (173.25) also can be applied to press idle time, in this case $45 per hour for another $7,796.25. Tack on another $4,200 for three hours (average) for each of the 28 stops for mold pull, reset and start-up times, giving a total cost of $23,468.75 for water leak issues. The math reveals the Total Defect Cost of about $4,000 each per year for the top two leakers (6169 and 6749), which are shown Chart 2.

Selecting a target Based on this list of leaking molds, the worst actor (6169) accounted for six stops, so this is a good place to start. Further review of the Corrective Action history revealed the mold had four o-ring groove locations that were pitted and in need of welding, refacing and stripping. Re-plating also was done, with the entire 18x24x2” plate surface re-plated in nickel. The cost of this repair included $675 to weld and spot face the four grooves and another $300 to apply nickel plating for a total cost of $975, making the ROI for this repair about four months since volumes were to remain constant in the upcoming year. Looking at it from this perspective makes the repair decision a no-brainer. It isn’t a good decision to automatically assume the cost of putting up with random water leaks is a less expensive means of dealing with them versus eliminating the problem. When looking at total costs, it becomes an easy and justifiable decision to fix the mold right. I also would question the high number of total leaks (28). Maybe some training in installing o-rings is in order. The company can now proceed to the next most frequent/ costly defect the molds suffer and eliminate it also, tackling each defect one at a time. Reducing costs of unscheduled downtime by 50 percent or more means thousands of dollars in savings, increased capacity and less stress in the shop and on the molding floor. n Steven Johnson is operations manager for ToolingDocs, a provider of mold maintenance training and consultation based in Ashland, OH. He 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.

www.plasticsbusinessmag.com | 21


association

MAPP hosted its second Member Exchange on April 12th as CEOs, presidents and general managers gathered to attack problems and gain ideas from one another on specific company challenges. Workforce development was an issue that continued to surface throughout the 60-minute rapid fire event as Member executives from across the country discussed successful hiring practices, unique employee retention methods and the need to work together to solve the worker shortage problem.

MAPP Holds Member Exchange Web-Conferencing The power of the MAPP organization is at its peak when Members are helping Members. MAPP’s Board of Directors and staff are very excited to announce the formation of its Member Exchange Groups. These groups consist of Member professionals who share common work positions and/or responsibilities such as human resources, purchasing or operations. The purpose of the Member Exchanges is to bring together staff level professionals who share common functions to discuss the key issues they face. MAPP’s leadership team hopes to eliminate “reinventing the wheel” through these types of exchanges, as learning from one another is one of the best professional development tools in existence today! Exchange Meeting Format: Exchange meetings are rapid fire conference call/web-based meetings where the goal is to quickly match a Member professional with a need or challenge with those who may have solutions or an experience to address the challenge. Immediately after swapping contact information, the next issue is brought forth by another MAPP Member company professional and attacked. MAPP’s facilitators are trained in using a webinar format to annotate ideas and log details on the topics discussed while ensuring each exchange is focused on ONLY those issues that concern the active participants. On March 30th, a large group of human resources professionals assembled in the first Exchange and discussed a variety of key topics including, but not limited to, employee incentives, effective training methods, training metrics, affirmative types of absenteeism policies and much more. This first Member Exchange proved to be very valuable to those who participated. One attendee commented, “I’ve been waiting for a discussion group like this where I can bring my questions and gain insights from others doing the same job. Time is always a factor, but MAPP actually created a way for me to solve my problems, help others and limit my time involvement – this is a great program!”

22 | plastics business • spring 2012

The next Member Exchange is on April 20th for those professionals who are responsible for procurement. This exchange also will provide a unique look at a new program offered by Grainger to MAPP Members, focused on facility lighting and related products.

MAPP Announces “Road To Excellence” for 2012 Benchmarking Conference Colin Powell once stated in an interview on leadership: “If you are going to achieve excellence in the big things, you develop the habit in the little matters. Excellence is not an exception, it is a prevailing attitude.” Close to 400 plastics professionals are expected to meet in Indianapolis, IN, on October 11-12, 2012 to engage in what has become an annual ritual for many plastics processing executives. MAPP’s Benchmarking and Best Practices Conference Committee has created a schedule packed full of best practices, leading-edge benchmarks, expert presentations and the best networking opportunities in the United States plastics industry. The core of this year’s event will provide a laser focus to business improvement strategies and tactics as business executives continue to aggressively focus on improving throughput and efficiencies with reduced resources. “The conference speakers we’ve recruited are making dramatic inroads in their own organizations by applying innovative methods to gain more from their existing assets,” stated Troy Nix, MAPP’s executive director, in a recent interview. “I’m excited because this conference will provide even more practical knowledge, so attendees can leave with actions plans to immediately impact the organizations they represent!”


MAPP’s leadership is keenly aware of the need to provide its Member executives with the operational and financial benchmarks they need to aid in their continuous improvement journeys. Recently, a number of MAPP Members identified the need to better understand benchmarks associated with Management Information Systems, as data in this arena is extremely hard to find. The rationale for collecting this information is that IT has become a business differentiator for leading companies and, in some cases, a competitive advantage. Senior leaders in MAPP Member companies, along with their IT professionals, worked to create an IT survey that will provide such benchmarks as IT expenditures as a percent of sales; IT labor manning; outsourcing trends; predominant workstation operating system and server brands; licensing fee norms for design software and much more. To learn more about this benchmarking initiative, go to MAPP’s website at www.mappinc.com. n

MAPP Addresses Workforce Development The most critical issue faced by the plastics manufacturing community is the lack of a skilled workforce. MAPP’s focus on uniting the Youth of America with our members is a long-term initiative designed to introduce young adults in various stages of their career development directly to MAPP Members. Students involved in trade schools, technical programs, college or other degreed programs now have the opportunity to communicate and market their skill sets directly to MAPP Members by utilizing the MAPP Academy portal on the MAPP website. Youth with an intereset in manufacturing are required to answer a short series of searchable questions, including career and immediate job interests, and are given the opportunity to upload their resume credentials to a database. MAPP members have the ability to tap into new, talented resources by using the Search and Find tools located in the password-protected area of the site.

MAPP Creates Benchmarks for Information Technology As all successful manufacturing executives understand, it is vitally important to measure the key performance indicators of any business. In fact, management theory innovator Peter Drucker coined the phrase, “what gets measured gets done,” and in most cases, this saying applies to all facets of business. Often times, actually identifying what to measure and defining the measurement is the most cumbersome event, and without benchmarking data, the task of establishing a goal of the future state is nearly impossible.

www.plasticsbusinessmag.com | 23


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strategies

Incentivizing Employees for Productivity and Quality by Amy Bauer

Those managing plastics operations – watching the metrics month in and month out – know that increasing productivity and focusing on quality measures, such as reducing waste, speeding delivery times and ensuring safety, has a direct effect on a company’s bottom line. The challenge, however, is in transferring this understanding to frontline employees, who may not always connect small daily actions and habits with overall profits. We spoke with three companies that are employing creative incentive programs to help workers understand the link between their actions and the company’s financial results. In turn, employees – and the companies – are reaping the rewards.

Blackwell Plastics: Profit-sharing plan “If you take care of people, they’ll take care of you,” said Jeff Applegate, president of Blackwell Plastics, Houston, TX. The custom injection molder and plastics extruder has had a profitsharing program as one of the cornerstones of its employee benefits for more than 30 years. At its discretion, the company shares a portion of its profits annually with employees, and a third-party administrator allocates the funds based on tenure and total annual wages, Applegate described. The Hartford Group manages the funds for employees, who direct where they would like the money invested, much like a 401(k). Unlike a 401(k), employees can’t add their own contributions. Applegate said there have been only one or two years that the company hasn’t made a distribution.

management have the benefit of a number of years of seeing their accounts build. “It can’t be something that a company does and expects to get that cultural benefit immediately,” Applegate said, but he noted that as employees’ nest eggs grow they become more likely to point out cost-saving actions to fellow workers. Challenges include keeping the plan top of mind and tying daily activity to profits. “Scrap, cycle time, productivity of their work matters and directly impacts the profits of the company, which they share in. If they can see every pellet as a penny and know that they share in that penny, it should help self-police,” said Applegate, who highlights various metrics in a quarterly letter to employees. Awards honor frugality Shorter-term positive reinforcement also is part of Blackwell Plastics’ toolbox for inspiring employees. The “Bent-Nail Award,” based on the adage that one is so frugal as to straighten a bent nail, is something that Applegate created to recognize individual actions. The award is comprised of a bent spike tied to a small metal tag that reads, “In recognition of your unselfish attitude and exercise of good judgment in managing company resources. We thank you for your contribution to all of our success.”

Employees are eligible for the plan after their first year of employment, with a vesting period of six years. Employees who leave the company before then forfeit the funds. “We chose the maximum vesting period so there’s a carrot, there’s an incentive for them to stay,” Applegate said of Blackwell’s 80 employees.

Supervisors, and Applegate himself, bestow the “BentNail Award” as they see employees being good stewards of company resources. The awards cost the company only a couple of dollars each, and their effect has been priceless, Applegate said. Some of the brainstorms that employees have been rewarded for include routing internal items in plastic egg crates rather than paper boxes, which cost money to replace as they wear out; reusing boxes for deliveries to regular customers; and seeking out lower cost, nontraditional sources, such as eBay, for replacing expensive fuses used in injection molding equipment.

Tying performance to profits Implementing a profit-sharing plan is a long-term strategy, Applegate said, and works best when supervisors and

i2tech: Importance of at-risk pay A twist on the profit-sharing model is the Variable Incentive Program (VIP) at injection molder Innovative Injection

26 | plastics business • spring 2012

page 28 u


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strategies t page 26 Technologies (i2tech) of West Des Moines, IA, which gives employees a wealth of monthly feedback. VIP pays each of its 186 employees a share up to 9 percent of their gross wages when the company reaches financial, quality, safety and other benchmarks. Metrics are measured monthly, and bonuses are paid quarterly. “You can’t get complete engagement throughout your organization without some version of at-risk pay,” said Josh Janeczko, owner and president. “You’re not going to engage employees financially if you’re not going to share with them.” In 2011, the program paid out in 10 of 12 months, representing $265,000 in bonuses. And over the nearly nine years the plan has been in place, employees have received the profit sharing in 75 of 105 months, with the company paying out just under $1.7 million in total bonuses. The company has been profitable for the past 33 quarters, and Janeczko attributes this in part to VIP’s effectiveness. He and his father, CEO Bob Janeczko, implemented VIP when they purchased the company in 2003 based on their experience

with incentive programs in their earlier careers. Bob Janeczko has a doctorate in education in industrial technology, his son explained. “Teachers are metric-based, and he is big into making sure we have a method and a way to incent employees,” Josh Janeczko said. Each November or December, i2tech’s senior management team sets the budget for the following year. They take care to set up goals that are challenging, but not impossible. “A profit-sharing program is only as good as one that pays,” Janeczko said. VIP details Employees earn a one percent bonus for every percentage point the monthly operating income goal is exceeded, up to a cap of five percent. If an operating income bonus is earned, employees then can earn an additional four percent based on performance in: Quality to customers (up to two percent) – based on monthly reports from clients Delivery (one percent) – based on monthly reporting from customers Safety (1/2 percent) – based on OSHA (Occupational Safety and Health Administration) frequency of incident guidelines Housekeeping (1/2 percent) – based on an audit by a retired quality inspector

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If the operating income goal isn’t met, no bonus is paid regardless of performance in the other categories. But Janeczko noted that in months when the income goal isn’t achieved, rarely are the other categories on target, proving the link between profits and quality measures. In the history of the program, 8.5 percent has been the highest payout, with the average bonus just over 3 percent. Annually, employees receive wallet-sized VIP cards printed with the company’s quality policy as well as its monthly goals, to keep the program and its metrics in mind. The financial incentives are matched with a commitment by i2tech to training and sharing information with employees. Workers participate in half-hour training sessions each Wednesday, and monthly all-employee VIP meetings led by Josh Janeczko review the previous month’s results and highlight ways to improve going forward. His message to employees: “Get involved and understand our business, our costs, our quality. What drives our focus is profitability.”


Employee buy-in “You’d be surprised how effective it is when employees know the successes and failures of our company,” Janeczko said. Even sharing small details, such as the $2,600 it cost to re-key the building when a key set was lost, opens employees’ eyes to the realization that they work in a place that has the same burdens and responsibilities as they have at home. Janeczko acknowledges that such a program isn’t right for every company. “We’re very open about our financials. It doesn’t work for everybody, especially if you’re not doing well,” he said. “If we were losing money, it would make it harder to share the light. Not that I wouldn’t do that. I think it’s how you turn it around.”

Deluxe Plastics: Recognizing good work Within the past year, Deluxe Plastics of Clintonville, WI has taken a close look at its options for motivating and rewarding employees. Peter Blaas, plant manager, says a profit-sharing program is among the company’s long-term goals, but for now smaller, more immediate rewards are engaging the custom injection molder’s 130 workers. Carl Bartle, operations superintendent, joined the company in fall 2011 and has since created a framework for rewarding employees on a regular and visible basis, such as through its own versions of employee of the week and month: Hero of the Week and Hero of the Month. Employees make nominations, and the management team chooses honorees. The Hero of the Week receives a certificate and a $30 gift card to a local business. The Hero of the Month is given a $60 gift card. Intermittent rewards also are part of Deluxe Plastics’ strategy. For example, Bartle purchased $200 worth of chamber bucks, redeemable at local businesses, in increments of $5. He split these among the company’s top four managers and asked them to share the bucks with workers whose actions stand out. Bartle also buys $10 of vending machine tokens weekly and gives those to supervisors to reward workers on the floor. Small actions that contribute to a more productive environment – keeping a positive attitude, catching an error, relieving someone on a break quickly – are the target.

At Deluxe Plastics, challenge coins reward excellence and are redeemable for paid time off. The newest program Bartle is implementing is modeled after a reward system he experienced in the US Army – challenge coins. Bartle has created customized poker chips featuring the company name and logo on one side and the words “In recognition of excellence” on the other. These coins will be worth an hour of paid time and will be available to supervisors and top managers to hand out. At the time of this writing, Bartle was reviewing the budget and determining the parameters to which that hour of paid time would be subject. He anticipates allowing employees to collect the tokens and redeem up to a half or full day off. Improving morale and cooperation “At this point, the goal is creating that positive interaction between supervisors and employees,” Bartle said. “When a supervisor comes to you, it’s not always something good. Not everybody’s going to be the Hero of the Week, but everybody needs some recognition once in a while.” And while quantifiable results are difficult to ascertain, Blaas and Bartle said the results have been noticeable. “We’re definitely seeing a marked increase in morale on the floor,” Bartle described. That’s translating into increased cooperation among workers. “We’re more in tune with employee needs now because we’ve broken down barriers to communication between the leaders and the workers,” he said. “People are not afraid to say, ‘I was falling behind and this person stepped up and helped me out.’ There wasn’t a whole lot of helping going on before. People were sticking to, ‘This is my job, so this is what I’m going to do.’” “It’s easy to go around the factory and look for what’s bad,” Bartle said. “You really have to look for the person that’s going the extra mile – they’re making sure the sticker on the bag is straight or they’re helping a fellow employee.” His advice to companies considering the implementation of a rewards program: “Start small. Recognize individuals. It has made quite a bit of difference, and I don’t think it has to be very elaborate.” n

www.plasticsbusinessmag.com | 29


production

The View from 30 Feet:

MAPP Plant Tour Events Benefit Attendees and Host

by Jenny Taylor, MAPP

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. One of the most important foundations of the MAPP organization is the principle of Members connecting with Members. The MAPP Board of Directors and staff believe that learning from each other is the lifeblood of the organization, and this fundamental principle is why MAPP hosts plant tours each quarter. What better way to challenge the norm than to see how others run their operations? The anatomy of a plant tour is filled with small and large details, but they all begin in the same place. Every November, the MAPP organization begins planning for the upcoming year with a particular focus on the plant tours. The process begins with three key questions: • How do we provide value to Members? • As a national organization, are there geographical areas with which we want to connect? • Which companies have or are implementing unique processes that are positively impacting culture, operations, sales and marketing, customer relations, etc.? The answers to these questions have led the MAPP organization to host plant tours all over the United States. At times, the hardest component in planning a plant tour is convincing executives that they have a unique approach to some component of their operation. Companies often conduct business in a certain way simply because it is “how they’ve always done it,” without realizing they are doing something special. However, after some discussion, most companies gain an understanding that their unique approach can benefit the entire MAPP membership. This “ah-ha” moment has been one of the more impactful moments for the hosting company, providing a profound sense of pride and achievement.

30 | plastics business • spring 2012

Once the plant and theme is determined, then the real work begins to coordinate marketing, hotels, presenters, packets for attendees, food and many other details. Although these aspects are key to the success of the event, the true benefit comes when members engage in the red card/green card exchange. This interaction is the heart of the MAPP plant tours. After hearing presentations from the host company and walking through the plant, attendees gather together to share what they saw and learned. This is facilitated through red and green index cards, upon which members are encouraged to jot down their observations. Green cards equal concepts, processes and ideas that the attendee sees as positive. Red cards equal those concepts, processes and ideas that may be hindering the company’s effectiveness. Through this process, attendees are able to positively reinforce the things the host company does well, while making suggestions as to areas that may need to be evaluated. Time and time again, the MAPP office hears how host companies have listened to the feedback and then made changes to their operations to increase the strength of the company. At the same time, MAPP’s plant tours provide real-life, practical and hands-on experiences so that each attendee walks away with at least 2-3 ideas they can implement at their own plant. The quest for excellence is a continuous journey and companies who stand out from the pack are constantly seeking to improve. n


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outlook

Dissecting Global Competition:

Insights from the NAPIS In today’s plastics industry, it is crucial for companies to have solid financial and competitive benchmarking data to support their strategies as well as to proactively manage relationships with customers, suppliers, lenders and investors. Enter Plante Moran’s North American Plastics Industry Study (NAPIS), which examines best practices and characteristics that shape the success of North American processors. How can plastics processors remain competitive amidst pressure from Mexico and China? Plante Moran dissected the factors related to global competition – press rates, quality, launch capability and productivity.

Comparing apples to apples It is important when conducting this kind of analysis to compare apples to apples. Therefore, for purposes of comparison, let’s assume each fictitious company in each country has • 50,000 square feet of manufacturing space • 20,000 square feet of logistics space

32 | plastics business • spring 2012

by Jeff Mengel, Plante Moran

• 15,000 square feet of office space • a 25-machine operation and • floor space allocated relative to a broad array of machine sizes. In addition, we are assuming direct manufacturing hours are based on 85 percent uptime for days in operation (three shifts 250 days/year in Western economies and 300 days/year in Asia). This is equivalent to 58 percent theoretical utilization (compared to an average of 40 percent for the plastics industry based on NAPIS data).

Direct costs Direct staffing levels tend to be around 10 percent of the cost of sales. Here’s how direct and indirect labor breaks down: Location

Direct Labor

Indirect Labor

China Inland

$1.93

$5.20

Mexico Interior

$2.88

$13.93

Indiana

$16.27

$20.48


When it comes to labor, it doesn’t get much cheaper than China. Interestingly, however, indirect labor in Mexico is relatively pricey. The lesson here is simple: if a company employs considerable direct laborers, it is beneficial to have a presence in Mexico. However, a highly automated plant with a lot of indirect labor – engineers, mold-setters, toolmakers, quality, logistics and maintenance personnel, etc. – makes it no longer as beneficial to be in Mexico. Outside of labor, manufacturing floor space and electricity are direct cost considerations for companies. Here’s a quick comparison: Location

Floor Space ($/square foot)

Electricity ($/kilowatt/hour)

China Inland

4.86

0.1161

Mexico Interior

7.28

0.1151

Indiana

6.75

0.0614

Although there isn’t a significant difference in the cost of floor space among China, Mexico and the United States, electricity is a different story. Mexico and China are comparable but are much more expensive than Indiana. Please note, however, that electricity costs are highly dependent upon where you reside in the United States, ranging from $.05/kwh to $.20/kwh.

Tonnage Size

China Inland

Mexico Interior

Indiana

40

11.15

19.75

24.10

300

29.89

43.74

46.59

1000

69.60

89.37

84.16

When working with a 40-ton press, Mexico and China are less expensive than the United States. However, as size increases, it becomes more competitive; for a high tonnage press, Mexico is actually more expensive than the United States.

Beyond the press rate Plastics tend to put more emphasis on the press rate, but it’s only one piece of the puzzle. There are four equally important aspects to consider: launch capability, productivity (cycle time), yield (quality) and flexibility (complexity management). Launch capability is focused on anticipating customer requirements. How fast can you go to market? How quickly can you meet customer needs? How efficient is your production part approval process? And if production must be handed off page 34 u

Other cost drivers There are a variety of other cost drivers, some of which make the United States more attractive than its so-called low-cost counterparts and some of which are problematic. For example, there are much more stringent regulatory requirements in the United States, including taxes, work rules and safety and environmental regulations, that don’t need to be addressed in other countries. In addition, operating in the United States requires partnering with a variety of professionals – legal, insurance, etc. – resulting in substantial fees. On the other hand, the United States provides companies with access to a highly talented workforce. This is huge and the number-one reason why indirect labor costs jump up to $13.93/ hour in Mexico (versus direct labor costs of $2.88/hour). The United States also affords greater access to customers. The greater intimacy and responsiveness a company can provide, the better position it is in. Finally, teamwork is much better in the United States, where there are better staff retention levels and communication protocols.

Comparing press rates If we calculate the press rate for Mexico, China and Indiana using the set of assumptions dictated previously, we arrive at this:

www.plasticsbusinessmag.com | 33 PRLTD_AD_3.75x4.875_062810.indd 1

6/28/10 12:50 PM


outlook t page 33

Competing with China requires meticulous attention to detail in the product you make, which are often larger products, requiring just-in-time delivery, and with a level of technical complexity that needs to be actively managed.

from the launch team to the manufacturing team, how efficient is this process? Next, how are cycle times managed? Factors include actively managing process windows (narrow is better), machine repeatability and uniqueness of materials processed. Less variation in a process means better repeatability. Likewise, better machines and processes equate to better parts. The United States tends to be highly automated, while China and Mexico are much more craft-oriented. Although commodity materials are common across all three regions, the United States produces more parts using engineered materials than Mexico or China. Third is yield. Quality costs drive manufacturing complexity, with higher indirect costs and system noise. Quality is better in the United States than in Mexico and China. The expected scrap rate as a percent of sales in the United States is 1.5 percent; in China and Mexico, it is 3 percent. Finally, it’s much easier to be flexible and manage complexity in the United States than in other regions. It’s very common for companies to accumulate molds, tools and resins to the point that they become inflexible, which affects profitability. Dealing with complexity is key to retaining profitability as you grow.

The bottom line is that determining how competitive you are versus Mexico or China requires consideration of a number of factors, not just rate. Oftentimes, you can obtain a cheap rate in China and still not be the cheapest producer due to the other issues.

The proof is in the pudding: a cost of sales comparison A typical US molder achieves an 81 percent cost of sales (or 19 percent gross margins) and an operating income of 7 percent. This is due to the following cost breakdown: materials, 46 percent (resins = 36 percent); overhead, 25 percent; and direct labor, 10 percent. The key for US plastics molders is to manage these items. If this is done effectively, companies can manage their income statement. In Mexico, the average cost of sales is 80 percent. That means, by and large, molders achieve a one percent benefit in Mexico versus the United States. China, as expected, paints a different picture. The average cost of sales in China is 67 percent, yielding 33 percent gross margins. (There, materials equal 48.7 percent of costs, direct labor is 2.3 percent and overhead is 16 percent.) This is why people go to China. It is cheaper – that much is clear – at least until you look at the big picture and take all factors into consideration.

What if…? So how can US plastics molders be competitive? By reducing headcount and improving quality and utilization. What if, by reducing complexity and increasing automation, a company reduced headcount by five percent? This alone would result in an operating income of 8.5 percent – an increase of 21.4 percent from the average of 7 percent. By improving quality by

Dos and Don’ts: Food for Thought Do

Don’t

Compete for ANY product consumed in North America

Expect to beat China on small, slow or simple product

Manage complexity – it is based on your business

Expect your customer to be fair – seek leverage

Manage how you are organized – headcount is the single biggest global cost difference

Seek heavy manual assembly

Seek tough product – quality is a major global risk factor

Assume logistics are static

Seek automation – may be a game changer

Maintain the status quo – you will be left behind

34 | plastics business • spring 2012

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outlook t page 34 25 percent (by decreasing defective parts per million from 15,000 to 11,250, for example), operating income would increase to 7.3 percent. By improving utilization by 10 percent, the operating income would increase to 8.6 percent. And by combining all of the above, companies would increase their operating income to 10.2 percent – a 45.7 percent increase! (These metrics, by the way, are accomplished by the top 25 percent of the industry and distinguish top performers from average molders.)

In conclusion US molders can complete with Mexico, especially those with heavy automation, complexity and commitment to quality. Two areas where Mexico excels, however, are in heavy manual assembly and logistics (but only if you are shipping within Mexico). If you’re shipping to Mexico or require significant manual assembly, it may behoove you to do it in Mexico. It’s difficult to compete with China if you’re doing so within their competency (commodity molding or lower technical molding), the product is consumed in China or the product is easily transported (smaller, nested and not subject to just-

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in-time inventory procedures). The best way to compete with China is through significant headcount reduction (it would take a 40 percent reduction in US headcount through automation to have equivalent labor content) and heavy automation for labor cost savings and quality improvement. Competing with China requires meticulous attention to detail in the product you make, which are often larger products, requiring just-in-time delivery and with a level of technical complexity that needs to be actively managed. n Jeff Mengel is a partner at Plante Moran and leads the firm’s Plastics Industry Team. Mengel is a CPA with over 30 years of experience and has been studying the industry through benchmarking studies for over 15 years. He can be reached at jeff.mengel@plantemoran.com. Processors can participate in the 2012 North American Plastics Industry Study at http://plastics.plantemoran.com. Participants are assured confidentiality and will receive a free 70 page report within two weeks, comparing their company versus quartile data within North America.

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36 | plastics business • spring 2012


management

Incorporating Sustainable Development Behavior into Supplier Selection

by Larry Nitardy, ComAssist

As we work to make our companies more sustainable, it’s necessary to evaluate not only ourselves but also those we select to help us achieve an improved “triple bottom line.” Our vendors and suppliers today will need to be collaborative partners tomorrow if we want to achieve more impactful financial, societal and environmental results. To evaluate a potential sustainable collaborator, consider a teachable, measurable and repeatable process that outlines the questions and judges the responses. These might be the same guidelines used to drive your internal sustainable development efforts. When choosing sustainable development partners, consider the following issues.

Culture and Commitment

Look for potential suppliers that have an observable culture of sustainable development and continuous improvement. You should be able to witness their culture in action when dealing with company officials and representatives. Potential collaborators with a sustainable development culture do the following: • Share their own sustainable development goals, including how they measure their own success. • Promote sustainable development as a differentiated value, through both sustainable products and sustainable enterprise practices. • Explain the improvements they are making in their marketing and selling efforts and how those improvements will help achieve our own goals. • Ask about our sustainability goals and strive to find ways to help us achieve them.

Stewardship Behaviors

Once we see that our potential partners have a culture of and commitment to sustainable development, we can identify and evaluate a series of stewardship behaviors that help

judge potential collaborators. Partners who currently exhibit stewardship behaviors are the most capable of helping us maximize our sustainability results while minimizing our investments and risk. Stewardship behaviors by which collaborative partners can be evaluated include the following: 1. Environmental/Planet Behavior Touch: Normally, less touch means a more sustainable position for all parties. Establish valid goals for the behavior of touch, and then ask questions about how potential collaborators can help you achieve them. • Is this supplier working to reduce the number of times I have to touch its product, including packaging and waste disposal? • Does this supplier help me reduce the usage of this product or service over time, as well as providing the most relevant, reliable product or service today? • Does this supplier have or promote more than one utility for this product or service? Can one intended touch give multiple benefits? • How does the product or service touch our air, water and other natural resources? 2. Societal / People Behaviors Teach: Collaborative partners should educate and coach your team on the environmental, social and profit aspects of their products or services. Determine the impact your potential partners have on teaching your team by asking the following: page 38 u

www.plasticsbusinessmag.com | 37


management t page 37

Strong sustainability collaborators will show very visible signs that they treat sustainable product development and the triple bottom line improvement seriously in their content management and story telling. • What is the general level of “teaching” being provided by this supplier, both in working with the product or service and its non-work value? • Is that supplier going to help optimize our triple bottom line by taking on some of the burden of improving and increasing knowledge about the impact of using its product or service? • Does it invest in our teams’ performance with education that increases productivity and reduces negative impacts? • If you ask the supplier to do more training, is it able to do it at no increased cost to you? Collaborative suppliers need to be prepared to “teach” your teams about their products’ sustainability value and encourage the use of materials and services in the best ways to achieve triple bottom lines. Over time, “teaching” should become like price, service and quality – a basic qualification to becoming a collaborative partner.

and story telling. They exhibit pride in their health and safety performance and talk about how they use it to their advantage. Tout: Human resource departments see that the best new talent wants to work for the most “sustainable” companies, and they want to know about the sustainability involvement of the employees. Potential partners can help achieve an attractive workplace. We might want to know the following: • How can this supplier help me tell our sustainability story to our current and future employees and the community in general? • Specifically, how does choosing its product or service help us build and tell our sustainable development story? 3. Financial/Profit Behaviors Time: Our best partners will pay attention to “time” behavior in the development of their products, helping to minimize the time their product is in our supply chain and maximize the margin gained from that time. • Can they explain specifically how long their product or service will be in our supply chain? • Do they have the capabilities to help us shorten that time? • What is the life cycle prior to our use of the product or service? • What is the life cycle afterwards? • Will this supplier reclaim ownership of the residue or recycle value of the product? • Better yet, can this supplier help to find a way to get a secondary or tertiary use out of the product?

Treat: When evaluating “treat,” we are basically looking at how a product or service meets all environmental, health and safety regulations. But ultimately, all of us will benefit when we favor companies that go beyond the basic requirements and show propensity toward, and attention to, not only meeting regulations but reducing personal, community and environmental risk at a fair cost to us. Consider the following:

Talent: When considering “talent” as a behavior, consider the contribution of intellectual property and its value. The best collaborative partners will have a plan and execution steps in place to increase the value contribution of their product and service, as well as improve its impact on the world around us.

• Does this supplier have a story that creates a sense of pride in its products’ or services’ attention to the human condition? • Is the supplier continually working on its contribution to the value of our own products’ and services’ impact on the triple bottom line?

• What talent does this supplier bring to my sustainability effort? • Is its product or service leading-edge? • Does it invest in understanding the life cycle impact of its offering? • Are alternative resources being considered?

Strong sustainability collaborators will show very visible signs that they treat sustainable product development and the triple bottom line improvement seriously in their content management

Treasure: At the end of the day we all need collaborators who have our financial well-being in mind. Fundamentally, the most valued collaborators must have the potential to help lessen

38 | plastics business • spring 2012


our unit costs over time, while achieving a higher sustainable value-add to our stakeholders. Think about these aspects of treasure: • Does this potential supplier understand our cost structure and the impact its product has on it? • Does it have a plan to reduce costs and increase unit value over the planning period? • Does it strive to reduce our environmental impact, improve our societal contribution and make a direct contribution to our financial bottom line? Our partners of the future will need to be fully integrated functions of our value chain. “Treasure” may be discussed last on this list, but it’s most always first on our minds. The number one goal for “for-profit” organizations should always remain achieving a level of profit that sustains our existence.

In sustainable development, it can be said we need to “Begin with Never Ending in Mind© ” – a goal of maximizing our present while preserving a future for those who will follow us. If that is true, it certainly follows that stewardship behavior is what will achieve that goal. The behaviors reviewed can be evaluated and measured, not only in our supply chain but in manufacturing, marketing and logistics as well. Maybe the best way to evaluate our potential partners is to look at them just as we would look at ourselves by asking, “How are we behaving as a sustainable enterprise?” n Larry Nitardy is founder and president of ComAssist, a boutique commercial assistance practice providing coaching, consulting and contracted services on both qualitative and quantitative methods to grow revenues, increase margins and map and execute sustainable development. He can be contacted at lnitardy@aol.com or by calling 423.312.3439.

www.plasticsbusinessmag.com | 39


industry

Key Items to Consider When Evaluating a Company’s Financial Health By Michael D. Benson, David M. Evatz and Michael J. Molling, SRR

The plastics industry, like many other manufacturing sectors, has experienced a significant amount of volatility over the past few years. End market contraction, fluctuating raw material prices, restrictive financing markets, general macroeconomic uncertainty and inconsistent operating performance are just a few of the challenges faced by middle market plastics processors.

considerations, in order to assess financial health and benchmark performance relative to both past internal results and industry/competitor metrics.

Given the extent of these challenges, it is no wonder that many processors would consider a fitting measure of financial health to be the successful emergence from the recession with improvements in some of these areas – and perhaps this is fair. However, a higher bar of financial health becomes necessary as the US economy continues to gain steam, labor markets finally gain traction, financing markets begin to thaw and company operating performance trends toward more normalized levels.

Profitability relative to peers Strong profitability metrics relative to peer companies within a given industry (or sub-industry) can be a key measure of a company’s success over the long run. Profitability metrics are effectively a proxy for a company’s ability to control costs (raw materials, labor, administrative, etc), price products effectively and make efficient use of its assets. Profitability also exerts considerable influence on a company’s access to senior and subordinated debt financing and also impacts a company’s long term growth rate. Thus, it is no wonder that profitability metrics have a significant impact on value, including value in the context of a merger and acquisition transaction process.

In particular, business owners should examine a variety of financial and operational metrics, as well as qualitative

Pricing leverage and ability to control raw material price fluctuations are two of the key factors driving profitability.

EBITDA Margin by Sector (Trailing 12 Months) 30.0% 25.0%

CHART 1

20.0%

20.2%

21.5%

23.1% 22.4% 24.0% 23.4%

15.0%

13.0%

13.8% 13.8% 11.4%

12.7% 12.5% 9.7%

10.0%

10.9% 10.9% 8.3%

8.1%

8.0%

8.1%

12/07 12/08 12/09 12/10 12/11

3/12

7.7%

6.8% 4.8%

5.0% 0.0%

8.3%

7.7%

12/07 12/08 12/09 12/10 12/11

3/12

12/07 12/08 12/09 12/10 12/11

Medical Plastics

Plastic Packaging

3/12

12/07 12/08 12/09 12/10 12/11 Industrial Plastics

3/12

Automotive Plastics

EBITDA is earnings before interest, taxes, depreciation and amortization.

Liquidity 40 | plastics business • spring 2012 Liquidity in a general sense refers to a company’s ability to convert assets to cash and meet short term


Debt / EBITDA Ratio by Sector 4.0x 3.4x

CHART 2

3.5x 2.9x

3.0x

2.6x

2.5x 2.0x

2.0x

2.6x

2.2x 1.9x

1.8x

2.0x

0.5x 0.0x

2.2x

2.1x 1.7x

1.5x 1.0x

2.2x

1.2x

1.3x

12/07 12/08 12/09 12/10 12/11

3/12

1.2x

1.0x

1.0x

12/07 12/08 12/09 12/10 12/11

3/12

0.9x 0.6x

0.6x

12/07 12/08 12/09 12/10 12/11

3/12

0.6x

0.5x

0.6x

12/07 12/08 12/09 12/10 12/11

Medical Plastics

3/12

Plastic Packaging

Industrial Plastics

Automotive Plastics

Growth Evenhave companies profitability metrics, flowsseveral and airtight balance sheets can customer prices overcash the next years. Processors that have Companies that uniquewith or strong proprietary products are consistent stagnate without sufficient future growth prospects. A strong company today that fails to achieve top line other generally able to hold or even increase prices, while processors material contracts and are able to successfully implement growth may be a weak company tomorrow as rising labor and commodity costs begin to squeeze that produce “commodity” products and have many potential operational strategies are generally better positioned to create a margins. competitors may be less able to hold prices or avoid price more stable resin cost structure which, as the largest component cost of goods sold,seen can significantly impact profitability. decreases. InAsaddition, controlling costsmargin, is critical to of industry discussed in relationresin to profit the plastics has also significant divergence in sustained andgrowth improved profitability. Most major grades of across sectors. Currently, processors serving end markets tied to housing (such as building recent years, plastics industry has seen a sustained resin have increased the past several years, and with In products over and appliance) have not yet experienced significant growththe coming out the downturn, whereas processors packaging, and heavy truck sectors have seen in margins across sectors. For growth example, processors the recent increases in oilserving prices the andmedical, high global demandautomotive for divergence improve the past focused on the medical and plastic packaging sectors have commodities,prospects the expectation is markedly for upwardover pressure on two resinyears.

page 42 u

4-Year Revenue Compound Annual Growth Rate by Sector 20.0% 17.5% 15.0%

16.7% 14.1%

12.5% 10.0% 7.5%

10.2%

9.7%

9.7%

8.2%

9.2%

10.2% 8.6%

7.9%

6.5%

5.0%

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6.5%

6.0%

3.9%

3.1%

2.1%

2.5%

0.9%

2.9%

2.9%

12/07 12/08 12/09 12/10 12/11

3/12

0.9%

0.0%

-0.4%

-2.5% -5.0%

12/07 12/08 12/09 12/10 12/11

3/12

12/07 12/08 12/09 12/10 12/11

3/12

-4.3% -3.8% 12/07 12/08 12/09 12/10 12/11

-3.6% 3/12

Medical Plastics Industrial Plastics Automotive Plastics As a mutual company, our number one Plastic Packaging concern is policyholders, not stockholders. Qualitative Factors Discover the value of having a financially sound insurance company with your Quantitative metrics, although incredibly valuable and instructive, don’t tell the whole story of a company’s financial health. Business owners must also examine qualitative factors that can significantly impact their best interests in mind. company’s future. Key factors include: End markets served – non-discretionary products, which are common in medical and packaging, Visit www.federatedinsurance.com generally less to find a are representative nearvolatile you. and better able to withstand an economic downturn relative to discretionary products such as automotive  Customer concentration – unless there is a unique or proprietary product/process that provides leverage and protection, companies with customer concentration are generally more susceptible to pricing pressure and potential resourcing It’s Our Business Yoursmeasure of a  Book of business – maintaining and tracking a new business scheduletoisProtect a key company’s future growth prospects as well as its diversification strategy ®

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Even companies with strong profitability metrics, consistent cash flows and airtight balance sheets can stagnate without sufficient future growth prospects. A strong company today that fails to achieve top line growth may be a weak company tomorrow as rising labor and commodity costs begin to squeeze margins.

industry t

As discussed in relation to profit margin, the plastics industry has also seen significant divergence in growth across sectors. Currently, processors serving end markets tied to housing (such as building page 41 products and appliance) have not yet experienced significant growth coming out the downturn, whereas processors serving the medical, packaging, automotive and heavy truck sectors have seen growth prospects improve markedly over the past two years. 4-Year Revenue Compound Annual Growth Rate by Sector 20.0% 17.5%

CHART 3

15.0%

16.7% 14.1%

12.5% 10.0% 7.5%

10.2%

9.7%

9.7%

8.2%

9.2%

10.2% 8.6%

7.9%

6.5%

5.0%

6.5%

6.0%

3.9%

3.1%

2.1%

2.5%

0.9%

2.9%

2.9%

12/07 12/08 12/09 12/10 12/11

3/12

0.9%

0.0%

-0.4%

-2.5% -5.0%

12/07 12/08 12/09 12/10 12/11

3/12

12/07 12/08 12/09 12/10 12/11

Medical Plastics

Plastic Packaging

3/12

-4.3% -3.8% 12/07 12/08 12/09 12/10 12/11 Industrial Plastics

-3.6% 3/12

Automotive Plastics

Qualitative Factors

generated higher EBITDA margins, on average, relative to Liquidity Quantitative metrics, although valuable andLiquidity instructive, tell the whole story a company’s other end markets such as automotive and incredibly general industrials. in adon’t general sense refers to of a company’s ability to financial health. Business owners must also examine qualitative factors that can significantly impact This is largely due to higher margin companies’ ability to better convert assets to cash and meet short-term debttheir obligations. company’s factorswith include: manage resin and otherfuture. costs, Key combined a greater ability Even companies with strong profitability metrics and rapid  End markets served – non-discretionary products, which are common in medical and packaging, to hold or even increase prices. (See Chart 1 on previous page.) growth can find themselves with a challenging liquidity are generally less volatile and better able to withstand an economic downturn relative to discretionary products such as automotive position if a close eye is not kept on short-term cash inflows and outflows.  Customer concentration – unless there is a unique or proprietary product/process that provides

leverage and protection, companies with customer concentration are generally more susceptible to pricing pressure and potential resourcing One important operational metric that measures a company’s  Book of business – maintaining and tracking liquidity a new business schedule is a key measure a CCC, which is the cash conversion cycle (CCC). of The company’s future growth prospects as well as its diversification strategy combines several activity ratios (days sales outstanding, Milacron Servo Hybrids days inventory outstanding and days payable outstanding),

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evaluates how effectively a company is using its working capital to facilitate cash flow. Another important measure of liquidity is the current ratio, which compares fairly liquid assets against short-term claims on the business. A company in distress is more likely to experience a higher CCC metric as suppliers restrict access to trade credit and inventory begins to accumulate. Likewise, the current ratio narrows as short-term debt increases relative to current assets.

Leverage Closely related to liquidity is the concept of leverage. Leverage, if used effectively, can increase returns to shareholders and fuel growth of a business. Thus, an optimal capital structure is generally one that includes some degree of debt. However, excessive leverage can negatively impact a business in an environment of economic turmoil. The plastics industry saw a wave of bankruptcies, partial defaults and restructurings over the past several years as a result of pre-recession LBOs that were funded with an aggressive amount of debt, as well as other companies with imbalanced capital structures. Perhaps the simplest leverage ratio relates total debt to assets. While important, more instructive and more commonly used

42 | plastics business • spring 2012

page 44 u


industry t page 42

A strong company today that fails to achieve top-line growth may be a weak company tomorrow as rising labor and commodity costs begin to squeeze margins.

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leverage ratios when assessing financial health are the debt/ EBITDA and interest coverage ratios. Debt/EBITDA ratios not only measure a company’s ability to pay off its existing debt load, but they also provide the approximate amount of time required to pay off debt. In today’s market, smaller companies (i.e., less than $10 million in EBITDA) can in some cases fund total debt/EBITDA in a range of 3.0x to 4.0x, while larger companies may be able to fund debt up to 5.0x or higher, depending on the situation. Interest coverage and related metrics measure a company’s ability to meet fixed obligations on outstanding debt, including principal and interest. (See Chart 2 on page 41.)

Growth Even companies with strong profitability metrics, consistent cash flows and airtight balance sheets can stagnate without sufficient future growth prospects. A strong company today that fails to achieve top-line growth may be a weak company tomorrow as rising labor and commodity costs begin to squeeze margins. As discussed in relation to profit margin, the plastics industry also has seen significant divergence in growth across sectors. Currently, processors serving end markets tied to housing (such as building products and appliance) have not yet experienced significant growth coming out the downturn, whereas processors serving the medical, packaging, automotive and heavy truck sectors have seen growth prospects improve markedly over the past two years. (See Chart 3 on page 42.)

Qualitative Factors Quantitative metrics, although incredibly valuable and instructive, don’t tell the whole story of a company’s financial health. Business owners also must examine qualitative factors that can significantly impact their company’s future. Key factors include the following: • End markets served. Non-discretionary products, which are common in medical and packaging, are generally less volatile and better able to withstand an economic downturn relative to discretionary products such as automotive.


• Customer concentration. Unless there is a unique or proprietary product/process that provides leverage and protection, companies with customer concentration are generally more susceptible to pricing pressure and potential resourcing. • Book of business. Maintaining and tracking a new business schedule is a key measure of a company’s future growth prospects, as well as its diversification strategy. • Condition of M&E/IT infrastructure. A company’s ability to invest in infrastructure can impact its ability to generate an optimal operating environment, as well as its ability to attract new business opportunities.

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All of these factors can drive significant changes (either positive or negative) to the metrics of financial health discussed above. For instance, a company that successfully diversifies its customer base is likely to have increased opportunities for growth, along with improved margins. In contrast, a company with customer concentration that loses one of its key customers could be at significant risk and could certainly experience erosion in margins, cash flow/liquidity and leverage metrics.

Conclusion There is no one “magic metric” that will fully inform business owners on the health of their company. Rather, business owners must utilize a variety of metrics and qualitative considerations to fully ascertain the financial health of their company. As the US economy edges toward a stronger recovery and M&A markets gain momentum, plastics processors that actively track, understand and are able to use this information to make informed strategic decisions should be able to take full advantage of the tailwinds that seem to be upon us. As the saying goes, knowledge is power, and power in this context implies a significant future competitive advantage. n SRR’s Investment Banking Group, with significant experience in the plastics industry, provides mergers and acquisitions (M&A) advice, private capital-raising services and other financial advisory services to privately held and family-owned businesses, portfolio companies of private equity firms and divisions of large corporate parents. For more information, contact Michael D. Benson, managing director, Investment Banking at 248.432.1229 or mbenson@srr.com; or David M. Evatz, director, Investment Banking, at 312.752.3328 or devatz@srr.com. SRR is a trade name for Stout Risius Ross, Inc. and Stout Risius Ross Advisors, LLC, a FINRA-registered broker-dealer and SIPC member firm. Data for supporting charts is sourced from S&P Capital IQ and public filings.

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ASACLEAN/Sun Plastech Inc. ...............................................................................www.thebestpurge.com........................................................................Inside Front Cover Beaumont Technologies, Inc. ..................................................................................www.beaumontinc.com ................................................................................................. 23 Chase Plastics...........................................................................................................www.chaseplastics.com ................................................................................................... 8 Chem-Trend .............................................................................................................www.chemtrend.com ................................................................................................ 24,25 Conair.......................................................................................................................www.conairgroup.com.................................................................................... 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46 | plastics business • spring 2012


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Plastics Business - Spring 2012  

Plastics Business - Spring 2012