SCOTTSDALE, ARIZ. — SPI Molders Division members discussed insurance premiums, marketing and productivity issues during their annual conference, held Feb. 17-20 in Scottsdale.
A labor-law lawyer suggested the average plastics processor might consider linking with an employee-consolidation firm to reduce medical-insurance premiums.
``An insurer looks at your group as a risk pool,'' Theodore Tierney of Vedder, Price, Kaufman & Kammholz's Chicago office, said in a presentation. An alternate arrangement would be to take the ``freight-consolidation concept'' and make employees part of a risk pool of 5,000-10,000 people, he said.
Tierney said six of his clients — all small firms but none in plastics — have contracted for this service with Unified Cos. of Chicago for a year with reported premium savings of 30-50 percent.
Unified employs the workers and executes compensation and insurance functions.
``For other things, you are the employer,'' Tierney told the processors. The arrangement will not apply to collective-bargaining agreements and may not work with employee stock ownership plans.
He differentiated such an arrangement from cooperatives or chambers of commerce ``where the insurer still looks at you as the risk pool.''
Industry consultant Bill Tobin told the processors they are ``now in value-added marketing,'' which means ``you have to be a true partner with your client.'' Tobin is president of WJT Associates Ltd. of Boulder, Colo.
He distinguished between the terms ``customer'' and ``client.''
``We've changed from customer to client,'' he said. ``A customer can go anywhere he wants and get the same thing. A client comes to me because I offer a very special service to him.''
Usually, ``this service is cradle to grave, meaning you are in bed with the design and it is not competitively quoted,'' he said.
Tobin counseled molders to consider around-the-clock, seven-day, 24-hour molding operations, fully automated equipment and intolerance to lengthy purges, scrap materials or parts on the floor. ``The stuff you left on the floor was your profit,'' he said.
In a later interview, Tobin said: ``Molding is a 40 percent gross business. Most people walk away with 5 [percent]. That's 35 percent you left on the table.''
Consultant Bob Beard said domestic processors need to innovate to boost productivity for competition in today's global market.
``There is a lot of technology available that the industry is not using,'' he said, discussing high-thermal-conductivity molds and computer software programs for training, simulation, quoting and office functions. The technology can make the U.S. plastics industry into a global industry as opposed to just a national one, Beard said. He is president of Robert A. Beard & Associates Inc. of Kenosha, Wis.
``Productivity should be an ongoing quest for the Holy Grail,'' he said, suggesting a 20 percent productivity increase can boost profit by more than 300 percent.
``These industries can be a lot more profitable and a lot more aggressive,''Beard said.
