Don’t Let Your New Strategy Succumb to Your Old Culture

By: Tony Deligio 29. October 2014

U.S. Army Col. Fred Gellert shared that insight and others in a presentation that distilled some key leadership principles from his coursework as an instructor at the U.S. Army War College, where he is the director of force management studies. Speaking at SPI’s Equipment and Moldmakers Leadership Summit (Tucson, Ariz., Oct. 26-28), Gellert asked attendees to think about the environment into which they introduce a new strategic vision for a company.


“Culture eats strategy for lunch every time,” Gellert said. “You can have the best plans and the best strategy, but if the culture of the organization isn't right, none of that is going to matter over the long term because the existing culture will slowly erode away what you're trying to do.”


Companies interested in changing their culture, particularly as a means to support a new strategy, should consider what Gellert called embedding mechanisms and reinforcing mechanisms. The former involves who and what you promote in your leadership role, while the latter deals with processes that support those goals.


“Embedding is the most important,” Gellert noted. “What culture are you putting into the organization?” It’s also important to understand that cultures within a company aren’t typically monolithic, with potential sub cultures impacting strategy in different ways. How does manufacturing interact with sales and sales interact with accounting, for example. Do they represent distinct cultures within the greater company? “Do the manufacturing guys think like the sales people or like the budget people,” Gellert asked. “How connected are they as an organization?”


The title of the presentation was “Leading and Managing Change in a VUCA World,” wherein VUCA, which was coined in the military, stands for volatility, uncertainty, complexity and ambiguity. With his students, Gellert stresses the ongoing battle that is management, a concept that can be difficult to understand.


“The solutions of today, cause the problems of tomorrow,” Gellert said. “When we solve something today, almost invariably it sets us up for the problems of tomorrow. Managers want to knock down the target, they want to solve the problem, but the complexity of this is tough.”


Assessing those problems requires intelligence and data gathering, which poses its own obstacles. “Ambiguity….we get all kinds of intelligence, but what does it mean; what connects to what; what is the right interpretation; and what direction should we head to go in?”


Gellert simplified the concept of strategic intelligence into three keys; get the information, make the correct interpretation, and, most importantly, believe the information. “History is replete with examples where we had the information but didn't believe the interpretation,” Gellert said.


Finally, Gellert told attendees to push their companies to not only be proactive to their environment but take a hand in creating an environment that supports your goals.


“Shaping the environment is at least as important as responding to it,” Gellert said. “Try to put some focus into how you get ahead of things,” he explained, adding that companies should ask what parts of their organization don’t have to be as worried about today and can try to look forward. “When the future is unclear, invest in leader development, intelligence and a reserve.”

Taiwan Plastics Machinery Sector Balances Cost/Technology

By: Tony Deligio 22. October 2014

Despite that business and geographical predicament, the industry is thriving. Taiwan’s 400-plus plastics and rubber machinery companies generated $1.2 billion in sales in 2013, with the sector ranked fifth globally behind only Germany, Japan, Italy, and China, according to TAMI, the country’s machinery association (for perspective, Germany’s plastics and rubber machinery makers hauled in $8.2 billion in 2013).


In the opening ceremony for last month’s Taipei Plas, Shih-Chao Cho, Taiwan’s vice minister of economic affairs, lauded the sector, calling manufacturing a “bedrock” of the Taiwanese economy. In more recent years, the island nation sought greater recognition for its tech sector, aided by government backing. To wit: one Metro stop down from the Nangang Exhibition Center that hosts Taipei Plas is Taiwan’s Nangang Software Park, the home of technology giants like IBM, Sony, Yahoo, Microsoft, and Hewlett-Packard.


That same government hasn’t forgotten the manufacturing revolution that converted Taiwan from an agricultural economy in the not-too-distant past, however. That acknowledgement came in no small part from the presence of the economic minister, as well as the vice president of Taiwan, who attended the previous Taipei Plas in 2012, when he was the country’s premier.


Between a Low-Cost Rock and Technology Hard Place
“Taiwan is caught between technology advances of the west and the low-cost challenge of China,” Vice Minister Cho said in his address. “Most Taiwanese companies are small-to-medium enterprises, which can be a challenge in some ways, but it also means they’re more flexible.”


On the show floor, Taiwanese machine exhibitors displayed higher technology machines, but with an emphasis on economical versions of every day processes versus the money-is-no-object conceptual machines sometimes occupying Western company’s booths at shows like K.


So in Taipei, show visitors saw a lot of two-component machines for multimaterial headlamps and high-speed hybrids for inmold-labeled packaging. Not new to the world, or the region for that matter, but perhaps new to many local processors.


Harrison Wei of injection molding machine manufacturer Jon Wai laid out an example of how a company like his can step up with a more advanced machine than might be found out of China (or currently being used in Taiwan), but one that does not break the customer’s bank. “To face the competition from China,” Wei said, “we need more value added.”


To that end, the company showed three machines at the show, including high-speed units for IML and closures, the latter being a 16-cavity closure system running a 3.5-second cycle. Plenty of production, but nowhere near the output a molder might generate from the 96-cavities-and-up closure systems that rain down caps every couple seconds at other shows.  


Asked about the technology/output disparity, Wei relayed a story in which a customer had initially considered a competitive high-technology machine from a well-known brand, but upon realizing the total cost would be two-and-a-half-times higher and cover one machine and one mold, versus one machine and three molds, the client opted for Jon Wai.


“It was for an ice cream application,” Wei recalls, “they only needed for five months out of the year.”


Film Extruders Step Up
Taiwanese extrusion equipment manufacturer Avita Machinery Co. Ltd. is also working to thread the cost/quality needled. “Our position is in middle,” Avita’s Allen Tsai explained at Taipei Plas. “We don’t want to go too low—our machines can’t compete in low price—and I don’t want to leave our quality to meet their price. We want to go up in quality not price.”


Tsai said that in many instances, roughly comparable equipment from China can be 20% lower in price, forcing company’s like his to offer other enticements. At the show, Avita ran an ABA-style coextrusion line (pictured below), creating three layers, including a thicker inner layer for lower cost materials, from two extruders by splitting the melt stream in the die. Coextrusion is increasingly replacing monolayer output in Asia, according to Tsai, thanks to greater efficiencies, with a 20-µm stretch film now capable of being thinned out to 12 µm.  


“This extruder represents a trend in blown film,” Tsai said. “Our customers want lower production costs.” Acknowledging higher technology, however, Avita equipped the line at the show with automatic gauge measurement and gravimetric blending. At shows in the west, systems ranging up to 11 layers, or much, much higher if you consider so-called micro-layer films. Three layers might seem more quaint than novel, but again, consider the market.


“We believe multilayer film will grow by double digits,” Tsai said, acknowledging the higher technology niche his company, and country, are trying to occupy. 

IKEA’s Sustainabilty Efforts Will Soon Become Yours

By: Tony Deligio 15. October 2014

If you want a good example, peruse furniture maker IKEA’s 2013 sustainability report. The company has stated a number of sustainability goals for its operations and projects, including a 2015 plan for all its “main home furnishing materials” to be made from renewable, recyclable or recycled materials.


Home furnishing materials, including packaging, were composed by 91 and 98 percent renewable, recyclable or recycled materials in 2012 and 2013, respectively, showing how close the company already is to the 2015 marker.  


How is it getting there? Here are a couple of examples that directly involved suppliers of plastics goods, as well as packaging:


By setting our own goals for sustainability, we can have a positive influence on our suppliers too. Until recently we used thousands of tonnes of plastic shrink film, which was difficult to recycle. We challenged our shrink film suppliers to find a solution, and with our support they did. New types of film now in use are not only strong but also use less plastics and can be recycled to be used again as a raw material.


And another, this time directly related to a product:


The KAJUTA table lamp uses 75% less material than its predecessor, TALLVIK. It contains 35% reused or recycled materials, is 100% recyclable and easily stackable making it more efficient to transport.


These efforts extend to closing the loop on various material streams, including plastics:


One effort focused on polyethylene plastic wrapping which was collected from stores, recycled and used as a raw material to make desk pads. We discovered that recycled wrapping is a viable raw materials that costs less than buying virgin or recycled material from other sources. We also learned about practicalities such as keeping the material clean in store and at our supplier, as well as improving the efficiency of collecting and transporting the wrapping…further pilot recycling projects are underway with other materials including polypropylene and corrugated cardboard.


The ultimate goal, by the end of fiscal year 2020, the company has said it hopes to see a fourfold increase in “sales from products and solutions for a more sustainable life at home.”


That’s real money, and reflects real opportunities for plastics processors who can help IKEA and like-minded companies achieve such goals. Has your shop been asked to help an OEM or retailer get greener?

Will Your Future Shipments of PE Come From North Dakota?

By: Tony Deligio 15. October 2014

On October 13, the state which trailed only Texas in oil production in 2013 with a record output of 313 million barrels, announced its plans to work with Badlands NGL LLC and build an estimated $4 billion processing facility that will convert ethane gas into PE.


The next day, speaking at the Great Plains & Empower ND Energy Conference, North Dakota’s Governor Jack Dalrymple (pictured below with microphone), explained his rational.


We are making great advances in our energy industry by adding value to our resources right here in North Dakota. North Dakota is a national powerhouse in energy production and we have taken important steps to convert our energy resources into products of greater value. Still there is much more opportunity ahead for us to take value-added energy to a whole new level.


North Dakota, as well as other states participating in the fracking revolution, have struggled at times to find an outlet for the so-called “associated gas” that comes up through the shale formation fissures whose primary target is oil. Some fields have turned to flaring, burning off natural gas liquids (NGLs) like ethane, propane and methane. This has been particularly true of North Dakota, according to this LA Times article, which reported that the amount of gas flared in the Bakken oil field has almost tripled since 2011, “sending gas worth more than $1 billion a year into the sky.”


NGLs that aren’t flared and remain in the crude oil extracted from the Bakken pose more of a threat than wasting a fossil fuel, however, with several high-profile explosions of crude-hauling rail cars leading to calls for regulation. Illustrating the growing size of the threat, the number of tank carloads of Bakken crude has risen from less than 10,000 in 2009 to more than 400,000 in 2013, according to NPR.


In a statement released by Governor Dalrymple announcing the huge, new project, the issue of flaring was addressed:


This project is fully aligned with our goals to reduce flaring, add value to our energy resources right here in North Dakota and create diverse job opportunities across the state. By advancing the responsible development of our energy resources and by adding value to all of our resources, the opportunities in North Dakota are boundless.


Given that the plant will have the capacity to produce enough PE for every citizen of North Dakota to take home more than 4500 pounds annually, Dalrymple acknowledged that Badlands will have to target customers beyond the state’s borders, and perhaps look even further abroad:


Badlands intends to market the majority of the polyethylene products domestically, but product will also find its way to markets in Asia, South America and Europe.


Badlands is working with Spanish contractor Tecnicas Reunidas and Texas based petrochemical development consultant Vinmar Projects on the proposed plant, with a preliminary engineering analysis to be completed this year, including technology evaluations, engineering and planning, and final site selection.


This project joins four proposed shale-gas-fueled crackers in Ohio, Pennsylvania, and West Virginia, involving Braskem, Shell, Appalachian Resins, and a Thai/Japanese partnership of PTT and Marubeni.


Such projects involve big price tags and bigger lead times, but even if only half come to fruition, the impact on global plastics production and trade balances can’t be understated. Similarly, if a similar tact is taken in other shale-oil producing states regarding flaring and associated gas, the potential for a massive new supply of plastics and petrochemical feedstocks is massive. 

Will NPE2015 Challenge NPE2000 In Size?

By: Tony Deligio 14. October 2014

Brad Williams, director of trade show marketing and sales at NPE organizer SPI, told Plastics Technology during a early October interview that the SPI’s internal numbers clocked NPE2000 at 1,041,000 net square feet of exhibits, while NPE2015 has currently booked 995,000 net square feet of exhibit space. That leaves approximately 50,000 net square feet of space left on the exhibit floor, with “plenty of sales activity still happening,” Williams said.


“We are wall bound,” Williams added, noting that the Orange County Convention Center isn’t suited for temporary, exterior exhibits, “but we do feel good about the prospect of a show the same size as NPE2000.”


From that high-water mark in 2000, NPE experienced contraction for three straight show cycles, albeit the 2009 event’s decline came along with the global economy’s fall in the midst of the Great Recession. The swine flu pandemic didn’t help, either.


In 2012, SPI inaugurated a new locale with renewed growth for its triennial event, and NPE2015 looks to maintain that momentum, and in some ways, recalibrate the global plastics industry’s focus.


As part of an NPE feature in our upcoming November issue, which kicks off Plastics Technology’s NPE coverage, I spoke with Peter Smith, CEO of additives supplier Addivant. Fully independent of its former owner, Chemtura, as of 2013, Smith noted that Addivant sees NPE2015 as being important for his company and the global plastics processing industry.


“Chinaplas, over the last decade, has grown to be so large that it was where all the action was,” Smith said. “I think what we’re going to see now is a balance. I don’t think China is going to disappear, by any means, but I think North America will come back in such a major way that it will be the go-to location for the next generation of equipment. It will be the go-to location for the next generation of polymers, and therefore, if you’re in the business of processing polymers, there won’t be a better location than NPE.”


New Spaces Pique Exhibitor Interest
Addivant isn’t alone in that assessment, with Williams running through various programs, which were new to the show in 2012 or will be come March, that are drawing major interest from exhibitors.


Back in 2012, SPI kicked off its Customer Service Centers program for major additives and materials suppliers, with six signing up for conference space off the OCCC show floor to conduct one-on-one’s with key accounts.


For NPE2015, Williams said 12 companies have already signed up, with a total of 15 projected to be offered by the time the show rolls around. That dozen contains some of the most recognizable names in plastics production, including:   


  • Dow Chemical
  • DSM
  • DuPont
  • Eastman Chemical
  • ExxonMobil Chemical
  • LyondellBasell


Williams also added that many other material and additive suppliers, including more household names like BASF, SABIC and 3M, will be at show as well, opting for a traditional booth space.


New to the Orlando showfloor in 2015 will be the IDSA-sponsored Design Center and NPE3D, both of which have already been expanded due to demand. When I spoke with Williams, 11 of the 15 spaces in the Design Center were occupied, while NPE3D has already signed up 18 exhibitors, with around eight spaces left.


The Super Bowl of Plastics
I began work in plastics publishing in 2000, just a few months after the massive NPE2000 was held at McCormick Place in Chicago. My veteran colleagues at the time described the triennial event as the Super Bowl of Plastics, a fitting moniker given the size/U.S. influence. I—no kidding—mistook the show edition of that publication for a phone book.


Intervening shows contracted along with the domestic plastics industry, but both are suddenly resurgent, and I for one think NPE2015 could kick off something big for the show and the sector. 

« Prev | | Next »

RSS RSS  |  Atom Atom


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