In recent years, sales of plastic sheet have enjoyed steady growth with intensified competition. As a result, per-pound sheet prices and conversion margins are getting more competitive, making it difficult for many small independents to remain profitable — and independent.
Larger producers are armed with modern equipment and the resources to develop new products and deliver them on time. Some of these giants are shifting their efforts to acquiring smaller producers.
With limited resources, it is tough for small independents to compete. To succeed, they have to work smarter.
John Witt, chief executive officer of Witt Plastics Inc. in Greenville, Ohio, says, ``No single element is, by itself, the silver bullet to making it through a highly competitive environment.''
Witt touts three key components of success: using technology effectively, emphasizing quality products and services, and investing in employees.
Technology is an excellent informational tool to enhance intra- and inter-company communications. Witt uses a system that produces profit-and-loss data for each job in real time. This data is available to managers to help them make difficult decisions. For example, when should the company alter production processes to improve job profitability and when should it merely walk away from unprofitable business?
When technology like this is made widely accessible throughout a company, computer literacy increases and employees become more likely to use it to solve their problems.
Witt's system also gives each employee instant access to profit-sharing account balances, company policies and procedures and other announcements and postings.
Externally, information technology provides a quick, accurate way to communicate with vendors and customers about product specifications, pricing, inventory on-hand, order status, shipping data/traces and more. Most customers and prospects can access these communications via a Web site.
One of today's best methods for improving the quality of a company's products and services is seeking ISO registration. The process forces the establishment of customized, written procedures for maintaining high-quality standards that reflect a company's own corporate culture.
The improvement in the quality of products made under such a system is often dramatic. Improvement in the procedures developed to help make better products and the strengthened customer relationships that stem from both are even more so.
Of all the components affecting the success of a company, none are more important than its people. An effective, twofold approach places heavy emphasis on training to build skills and fair compensation and recognition for employee efforts.
Witt has built a training room and hired a full-time specialist to develop its programs for employees, who attend weekly training sessions on a variety of topics.
Witt offers a bonus system that computes special bonuses weekly and pays them monthly. Historically, these bonuses have equaled about 13 percent of an employee's salary, which typically translates into a 16-17 percent bonus. During a one-year period, Witt paid over $3,700 per employee for improvements in performance.
Of all the different business success systems offered today, chances are, the one that's going to work best for you is the one you're going to commit to using.
The Witt approach reminds us of the logical steps we know a company must take to be successful. It's no surprise that we need to have good people and produce good products to survive.
What we need to be sure we know is that technology — the one key to success that we thought would cost us the most money to implement — is actually one of our very best business-building bargains! Think about that.
Pendell wrote this article for Witt Plastics Inc., a plastic sheet extruder in Greenville, Ohio.