Blog

Steering Clear of Culture Clashes in International Business

By: Tony Deligio 12. November 2014

Countries can be quite close geographically but oceans apart culturally, and that’s a fact often lost on business leaders in our increasingly globalized world, according to Joe Carella, managing director of executive education at the Thunderbird School of Global Management.

 

Carella addressed that paradox during a presentation at SPI’s recent Equipment and Moldmakers Leadership Summit (Oct. 26-28; Tucson, Ariz.). Carella began with some attention-grabbing numbers on just how globalized the world has become over the last two decades. In 1990, there were only 3000 “multinational” companies, but by 2010, that number had exploded to 80,000 multinational companies, which themselves had an additional 800,000 affiliates.

 

“The typical global growth strategy for a company is pretty simple,” Carella said, “go from mature markets to mature markets. Right now, we are at a time of profound change with a lot of innovation going on—new products, and new markets with a lot of potential. It’s reassuring to do business where your colleagues do, but the reality is markets are more complex than that. Only your actions determine whether you're going to be successful or not.”

 

To help display that complexity, Carella included a slide with the Inglehart-Welzel Cultural Map of the World. This “map” looks at countries distance from each other in terms of cultural values versus geographical space. Arranged as a graph, along the y-axis the map has survival values and self-expression values, while along the x-axis, it charts traditional values and secular-rational values.

 

With this system, nations are grouped along historic cultural boundaries, including Confucian, Orthodox, Islamic, Africa, Latin America, English Speaking, Protestant Europe, Catholic Europe, and South Asia.

 

“This is a great lens to see who you could do business with that you have not done business with before,” Carella said. On this map, seemingly disparate countries like Poland and India are actually next door neighbors when it comes to their value systems.

 

“In a time of change, it’s important to reconsider what binds you to others and how you understand what binds you to others, how you make connections,” Carella said.

 

Part of understanding those ties that bind is awareness of influences on individual behavior. To help visualize this, Carella displayed a pyramid with human nature at the base, culture in the middle, and personality/style at the top.

 

At the bottom of the pyramid, the influences are universal and innate, Carella said. While in the middle, they are specific to a group or category and learned, and at the top, they are specific to each individual can be innate or learned. At first blush complicated, this can be simplified as well.

 

“We are all ruled by fears, we are all ruled by hopes, no matter where you go in the world,” Carella said, “so there are many things that could bind you to people all over the world.”

 

Culture Clash
Even with cultural awareness, difficulties are inevitable when companies try to forge business relationships outside their own space. The top three problems identified in a Thunderbird survey were:

 

  • Different working styles and office norms
  • Inability to understand local culture
  • Cultural or national conflicts between staff

 

To overcome these and other challenges, Carella said leaders must develop a “global mindset”, defined as:

 

A set of individual characteristics that helps a global leader better influence individuals, groups, organizations and systems unlike his or her own.

 

“The ultimate challenge for a global leader is the ability to influence, and how do you influence others?,” Carella asked. “Communicating, trust, and research—understanding their mores. Communication is not just sharing but also listening. Ultimately you influence people by building trust.”

 

Even when you’re able to exert influence, Carella said truly successful global managers are able to let go of something they’re typically loath to: control. “The change you need to see within yourself, is not where you better understand culture or language alone, but the change is with being comfortable with being uncomfortable in uncomfortable situations,” Carella said. “Be comfortable with the fact that your expectations, the ones you have in your normal setting, are not going to be met.”

 

Carella closed with five "simple" and "hard" rules when working internationally:

 

"Simple" Rules

 

  1. Be patient when building trust and relationships.
  2. Speak more slowly than you normally do. Carella: “I see this especially when I deal with technical sales people—they get so passionate about the product, go million miles per hour.”
  3. Avoid slang, buzzwords cultural references. Carella: “Things that you take for granted—a slam dunk, for instance—that you think everyone should know, are not necessarily something others understand.”
  4. Pay attention to non-verbal clues.
  5. Build knowledge of your target market.

 

“Hard” rules

 

  1. Build networks, not one-on-one connections.
  2. Respect differences.
  3. Recognize the complexity.
  4. Be self aware and balance between the cultures and values.
  5. Test your knowledge with in country representatives.

 

“Global leaders need to manage across diverse cultural systems, diverse political and institutional systems, time and geographic distance, as well as individual and group preferences,” Carella said. Despite those myriad challenges, and the cultural chasm, he offered a hopeful insight.

 

“The world is full of different political systems, but business succeeds in all of them, shouldn't you be successful in them too?”

 

Are PE Prices Likely To Drop?

By: Lilli Manolis Sherman 12. November 2014

How much relief in PE pricing we are likely to see and when, is up in the air at the moment. However, after the 3ȼ/lb September price hike, prices have been flat and are expected to continue that way into early 2015. It’s now been two years since the last decrease in North American PE prices. Since then, prices have moved up 21ȼ/lb. This while PE suppliers have enjoyed hefty profit margins.

 

Mike Burns, v.p. for PE at Resin Technology, Inc. (RTi), who a year ago predicted that PE prices would be higher again in 2014, offers some of his latest observations on market conditions. Burns consistently has driven the point that while the price of oil has nothing to do with the cost to make a pellet in North America, it has everything to do with the price of pellets globally.

 

Burns now points out that the PE market dynamics have been quickly changed by the unexpected drop in oil and naphtha prices. “Latin America has turned to Korea to meet their PE resin needs at a significantly lower price. He says that regardless of the still relatively tight supplies, North American PE suppliers will need to address the global price that is set by the price of oil and make downward adjustments.

 

Every global feedstock related to PE production tumbled in October, with the exception of flat pricing for natural gas and ethane: ethylene fell 15ȼ/lb, oil fell $17/bbl, naphtha fell $120/m.t. These decreases resulted in lower global PE prices, with the exception of Europe, where for the short term, tight ethylene supplies will keep PE prices firm.

 

There are two market changes Burns ventures that will push domestic PE suppliers to respond to today’s PE price level: an escalation of imported finished goods such as stretch film and can liners; and, the build-up of supplier inventories outpacing demand. He notes that PE exports so far have represented 17.7% of all North American PE production, which is on the lower side of the three-year average of ~20%. Latin America remains the primary destination, accounting for about 60% of exports.

 

At this juncture, Burns sees two choices for North American PE suppliers. One is proactive, whereby suppliers gradually decrease prices regardless of current tight inventories. However, he finds this unlikely to take place due to year-end incentives for sellers and product managers. He says 2014 has been a good year for suppliers, and processors ought not expect a proactive price reduction.  The other is reactive:  suppliers wait until their inventories build up without an export market, supply outpaces demand, and sales are lost to Asia PE manufacturing. In order to continue to manage inventories, Burns ventures that North American PE suppliers will have to sell resin nearly 15% less than domestic prices.

 

Want to find or compare materials data for different resins, grades, or suppliers? Check out Plastic Technology’s Plaspec Global materials database.

 

EPS Foam Manufacturer Molds On Despite Environmental Attacks

By: Tony Deligio 11. November 2014

Over the past 40 years, a lot has changed at ACH Foam Technologies, an expanded polystyrene (EPS) foam manufacturer based in Denver. But one thing remains the same: the company’s commitment to recycling. For ACH Foam, and the majority EPS foam manufacturers, recycling has always been a key operational strategy, a fact often overlooked by EPS critics.

                     

“We’ve been recycling since day one,” explains Frank Kiesecker, ACH’s Senior VP of Sales and Marketing. “It’s environmentally and economically the right thing to do.” 

 

Today ACH is recycling more than ever, with recycled materials jumping from 4.1 to 5.4 million pounds over the last year. EPS has one of the highest recycling rates among all plastics: in 2012, 93.7 million pounds of both post-industrial and post-consumer EPS were recycled, and 127.3 million pounds of EPS were recycled in 2013.

 

“The numbers are pretty impressive when you consider that EPS is 98% air,” says Mary Burk, who works in corporate marketing for ACH.

 

At all of ACH’s facilities throughout the country, the company recycles 100% of its own production scrap, also known as post-industrial material. ACH also collects clean post-consumer EPS from the surrounding community.

 

“At ACH, we try to lead by example. We feel that EPS recycling is important to our global outlook, and we’re proud to offer our community additional recycling opportunities,” says Burk.

 

The closed loop recycling—along with the fact that EPS has a smaller environmental footprint than other competitive materials, is non-toxic and inert, and, despite some claims otherwise, doesn’t contain CFCs, HFC, HCFCs, or formaldehyde—is often ignored in the high-profile efforts to ban EPS. There will likely be more growth in EPS recycling as more companies follow the example set by Chick-Fil-A, Walmart, and Best Buy to begin corporate EPS recycling initiatives.

 

A Forest of Foam
At ACH’s Denver plant, row after row of four-foot-square EPS blocks reaching 16 feet in the air tower over visitors. Handwritten information on each column details everything from the production date and weight of the EPS column to its density and percentage of recycled material.

 

The blocks emerge from a vertical mold that looks like a large upright cabinet and stands nearly 25 feet tall. Material is fed into the top of the mold, and after a 4- to 10- minute cycle, depending on the product, the mold door swings open and the new block slides out along rollers towards a scale.

 

When the EPS first exits the mold, it’s not fully cured. Post mold, heat curing—done in special “heat rooms”—accelerates the drying process and creates dimensionally stable blocks. When asked how one moves the columns around from the mold to the curing room, an ACH worker responds dryly, “very carefully.” A modified dolly featuring longer forks at the bottom and at the back help workers maneuver the EPS monoliths.

 

Newly formed blocks are also subjected to a partial vacuum within the mold to speed up cooling. This added step pulls residual moisture from the block for a drier, better-fused product.

 

The peak production season for ACH, which has 400 total employees, runs from May through November. During that time, the Denver facility operates two shifts, six days a week. Kiesecker noted that despite the rows and rows of EPS blocks present during a recent tour, inventory was actually a little low. The facility generally tries to have several million board feet on hand.

 

From Beads to Foam
The EPS comes to ACH in small beads ranging from 0.5 to 1.3 mm in diameter. Kiesecker pulls a handful from a raw material bag and polystyrene resin runs through his fingers like grains of sand. Pre-expansion heats the beads so they release pentane gas and swell to almost 50 times their original size.

 

A computer-controlled weighing system actively manages how many beads are introduced into the expansion equipment. Next, steam and an agitator mixes the expanding beads. The heat of the steam causes pentane to be released. A level indicator notes when the specified volume has been reached. After a pressure-equalization phase, the expanded beads are moved into a bed dryer where all the condensed moisture is removed from the surface. The entire process takes approximately 200 seconds start to finish.

 

After drying, the expanded beads are “aged,” allowing them to fill back up with air and stabilize in a process that takes between 12 and 48 hours, depending on the desired density. Once this step is completed, the beads are ready to be molded into blocks.

 

EPS Bans Push Forward Unabated
Away from the bustling production floor looms proposed restrictions on EPS. In Denver, ACH’s hometown, the City Council was asked to consider a petition banning EPS. Supporters noted that cities like Portland, San Francisco, Oakland, and Berkeley have proven that a “Styrofoam ban is good for business, consumers and the environment.”

 

Petition signers added comments describing EPS as “despicable,” calling it “toxic waste” and stating that the proposed ban would “stop the waste landfill.” At ACH, however, the reality is that EPS is in high demand for recycled content insulation and packaging.  Material that is not reused for new EPS products is densified and sent to a processor to be made into picture frames, hangers and even interior moldings.

 

“Right now, the supply of recycled foam is not keeping up with demand,” says ACH’s Burk. “There’s an incentive for would-be recycling entrepreneurs to change the debate.”

 

To learn more about EPS recycling, check out these links courtesy ACH: 

EPS Industry Alliance – www.epspackaging.org

Dart Container’s Home for Foam – www.homeforfoam.com

ReFoamIt – www.refoamit.com

Waste to Waves – www.wastetowaves.com

Thermoforming: The Shape of Things to Come?

By: Tony Deligio 11. November 2014

Competing in the production of hollow parts with blow molding and rotomolding, and pitted against injection molding in non-hollow segments as varied as packaging and instrument panels, thermoforming continues to gain markets and applications, even as many designers remain largely oblivious to it. (To get a taste for the variety, check out this slide show of award winners from the event’s parts competition).

 

The global thermoformed product market consumed an estimated 7.3 billion lb of plastic in 2013 and is estimated to use 7.6 billion lb in 2014. Going forward, it’s expected to top 9.4 billion lb by 2019, rising with a compound annual growth rate (CAGR) of 4.3%, according to BCC Research.

 

The Society of Plastics Engineers annual Thermoforming Conference is as good a barometer as any to the market’s performance, and it has enjoyed continued growth over the last five years, in both attendance and exhibitors, according to Jim Arnet, conference chair for the 2014 Thermoforming conference and exhibition, and director of sales and marketing, at Hagans Plastics Co. Inc., an AS9100-based custom thermoformer and injection molder.

 

That event, held in mid-September at the Schaumburg Convention Center in Schaumburg, Ill., drew more than 800 attendees, with better than 300 of those first-time visitors, according to Arnet.

 

Arnet estimates that the conference and exhibition has grown at approximately 10%/year each year over the last two years, and for the three years prior to that, it expanded at a rate of around 5% annually. Total exhibitors in 2014 were flat, year over year, with 86, but overall machinery displayed was up, according to Arnet, including seven of what he called “large equipment exhibits.” Exhibits were boosted by new players to the market, including Uway and WM Wrapping Machinery.

 

In terms of changes to the long-running event, Arnet said that once again in 2015, the conference and exhibition ran during the work week, versus starting on a Sunday. This change was first implemented in 2014 and will be retained going forward.

 

SPE’s Thermoforming Division also made a concerted effort in 2015 to draw OEMs to the event, mailing out approximately 11,000 targeted post cards to brand owners. “We can see some of the results of that campaign with our first-time attendance numbers,” Arnet said. “These steps will continue into 2015 and going forward. I would expect that our conferences will keep on pace and continue to increase in both attendees and exhibitors.”

 

A growing event reflects expanding business in the overall thermoforming sector. “I see thermoforming as having slow and steady growth over the next few years along with the extrusion,” Arnet said.

 

Attracting Future Thermoformers
Expanding industries require new talent, and SPE also used the Thermoforming Conference to pique the interest of area youth in a technology that likely none has ever heard of. As part of SPE’s Plastics Van educational program, two high schools visited the exhibition, bringing around 90 students with them.

 

“They are our next generation of plastic producers,” Arnet said. “We try to have students each year. They learned about polymers, extrusion and thermoforming. The program goes on all throughout the year, all across the country. It’s a very worthwhile educational program that the SPE is pleased to be involved with.”

 

In 2015, the 24th Annual Thermoforming Conference, which if history holds will be bigger still, will take place August 31-September 2 in Atlanta at the Cobb Galleria Centre and the Renaissance Atlanta Waverly Hotel.

Technical Manual &Test Methods For In-Mold Label Technology Now Available

By: Lilli Manolis Sherman 5. November 2014

What appears to be a unique publication, “In-Mold Label Technical Manual & Test Methods” has just been released by The Netherlands’ Alexander Watson Associates (AWA), a 44-year specialist firm in label and product decoration research and consultancy, with a focus on the specialty film, paper, packaging, coating and converting sector.

 

According to AWA, the new $85 manual (quantity discounts are available), is a first-of-a-kind project, which provides a compilation of a broad set of widely accepted standards. This first edition contains test methods, and will be added to accordingly in subsequent editions. Included are test methods for surface tension of plastic films; test methods of inks and coatings, such as adhesive coat weight for plastic films, adhesive coating uniformity, basic and advanced ink adhesion, and chemical resistance; and, test methods for printed labels such as die-cut label dimensions, label flatness, and electrostatic charging of labels. There is also a segment on label storage and packaging recommendations.

 

In-mold labels are a niche and growing labeling technology, which offer exciting opportunities to designers, material suppliers, converters, packaging technologists, and all involved in the value chain of their conversion and use. AWA says its new manual provides a cornerstone for improving the understanding of the basic characteristics that ensure the use of this unique product decoration technology.

 




« Prev | | Next »

RSS RSS  |  Atom Atom


All rights reserved. Copyright © Gardner Business Media, Inc. 2014 Cincinnati, Ohio 45244