SWOT is a well-known marketing acronym, representing a process used to help businesses take an in-depth look at themselves.
SWOT stands for strengths, weaknesses, opportunities and threats. By careful evaluation of these points, an organization can begin to improve its operation and, ultimately, its bottom line. The SWOT approach can be a real eye-opener for those companies willing to honestly evaluate their good and bad points. However, it also can be difficult and sometimes painful. But the end result will be a better understanding of your place in the market, and the steps needed to become a better, more efficient business.
This same procedure can be applied, in a broader sense, to the plastics industry. As with any market, we have been hit hard in recent years by the economy's general downturn. However, a review of our strengths, weaknesses, opportunities and threats can be helpful for putting into perspective what the future can bring for those in this industry. They are not addressed in their exact order, but all are covered.
What is the biggest threat facing your company? I contend our biggest threat as an industry is foreign competition. It has been reported that more than 2 million manufacturing jobs have been lost over the past 2½ years. How many of those were lost in the plastics industry to overseas processors that operate at much lower costs? Plastics manufacturers find it hard to compete with those countries not facing the standard costs of manufacturing that U.S. firms do, including energy, transportation, insurance and labor costs.
Our country was built on manufacturing, which throughout history has provided quality jobs for Americans. This foundation is rapidly eroding and steps must be taken to stem the tide. Perhaps legislation can help give manufacturers breaks. However, this can be a lengthy process.
I believe U.S. processors can compete today with better education, cooperation and understanding of the different segments in our plastics industry. Statistics show that the United States is the largest consumer of molded plastic products. The needs are there. The question is: “Who will supply those needs?”
As an industry, we must be willing to face those things we do not do well. Education of our own is a tremendous weakness. Are your employees well-trained on the processing equipment they operate? The science of molding has certainly advanced over the past few years. You can be a better processor with training, and better processing equals more profit.
However, I believe our main weakness is in not working together as an industry. We each have our areas of expertise, be it resins, processing or original equipment manufacturing. Proces-sors must know how to process the resin, realizing how the machine and screw design affects that process. There are many variables in this science — and it is a science. That is why I am advocating it will take the combination of knowledge and the willingness to work together with that knowledge, on all fronts, to remain a strong and viable U.S. industry.
This is the most exciting aspect of the plastic industry's SWOT. New and improved resins and uses for these resins are being discovered every day. We are definitely not in a stagnant industry. However, on a more inward note, I believe a greater opportunity for strengthening our industry lies within the industry itself.
I submit that the way to compete against foreign competition is more efficient processing achieved through cooperation throughout our industry. How does cutting seconds off cycle time affect your bottom line? Would decreasing your scrap rate add to your profits? When you process at a lower cost, you can pass those savings onto your customers and end users. Those savings represent competition to foreign molders.
There are many facets to a molding operation. For the sake of my argument, I am addressing four segments: the original machine manufacturer, the resin supplier, the screw and barrel supplier, and the processor.
Being a screw and barrel supplier, we see many opportunities for better molding operations if the different segments of our industry would work together. A “meeting of the minds” can improve a process. Knowing the properties of a resin contributes to the design of a screw. The screw design has an effect on how the process is run. The machinery OEM knows its machine's running parameters. Each part affects another part. At Westland Corp., we have proven examples of such cooperative efforts yielding the desired end results.
In summary, the plastics industry in the United States has many strengths and opportunities. However, more can be done to overcome our weaknesses and threats, especially the threat of jobs (and the dollars to be made from them) going to overseas companies. The key is efficiency and cooperation. We need to utilize the expertise of all plastics industry companies. At this point, no one should go it alone in the effort to compete. It will take communitywide and industrywide efforts.
Most processes could be improved by combining the collective efforts of individuals experienced in every aspect of a process, i.e., tooling, processing, screw and barrel design, resins, etc. The important thing is to start now. Many times a company does not realize it is not as efficient as it needs to be until the job is lost. Our industry needs to be proactive!
Every processor needs to ask questions of its suppliers. If your supplier will not cooperate or doesn't have the time, get another supplier. Not one person or segment of our industry knows it all. We need each other not only to survive, but to prosper. Out of this cooperation will come efficiency. That efficiency will produce jobs, profits and security for us all.
Dave Larson is president of Wichita, Kan.-based Westland Corp.