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March 16, 2009 02:00 AM

Successful firms find much in common

Matt Griswold
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    It's not rocket science.

    Concepts and business practices that can be chalked up to common sense are what separate the winners from the losers in the business world. Plastics manufacturing is no exception.

    The companies surviving today's topsy-turvy economy are in many cases the same ones that survived the previous economic down cycle … and the one before that … and the one before that.

    There are obvious common denominators of successful firms, and the business practices and ideals that brought about success 30 or 40 years ago are often the same ones that keep companies afloat today.

    Constant improvement, product and customer diversity and quality, customer service, strong communication skills and a highly trained workforce, are common answers to the question: What are the traits that have separated the successful businesses from the failing ones?

    Howes Cave, N.Y.-based thermoforming firm Kintz Plastics Inc. was launched in 1976 by President Wynn Kintz and three employees in a 500-square-foot building.

    The key to surviving and thriving? Two things, Kintz said.

    “The customer is king — you can lose sight of that sometimes. We try to remember that when customers make unreasonable demands for delivery and pricing and things like that. We always extend ourselves in that area,” he said. “The other thing is, build a quality product. We may not always be the cheapest guys but we build a quality product and stand behind it.”

    Jim Hammond said his firm is fortunate to have good customers, which can be a huge factor in success or failure. The general manager of El Monte Plastics Inc.'s plant in Ohio City, Ohio, also touted El Monte's debt-free operation.

    “I think that's very, very important,” Hammond said, “and not just in the plastics industry. Every industry should strive for that, and be conscious of the fact that everything that goes up will come down. And go back up. That's what our economy does.”

    The 40-year-old South El Monte, Calif.-based rotomolder does not borrow money to expand or buy anything, he said. “If we do an expansion, we make sure we can pay for it. And we don't bet on the future to pay for it. We pay for it with the past. Then, when the future gets here, whatever that is, we can survive it,” Hammond said.

    Kathleen Saylor, chief executive officer for Rehau Inc.'s North American operations talked about taking a measured, common sense approach in heading up the 30-year-old stateside operations of the Rehau, Germany-based pipe and tubing extruder.

    “How do we stay in the game? Making sure we're focused on the right products,” Saylor said. “We talked about exiting out of the [cross-linked polyethylene] pipe market. We brought that product to market 40 years ago in North America. It wasn't a commodity then. We cycled out of that particular product at the end of last year.”

    Companies have to know when the time is right to make a change.

    “When the products are no longer innovative, we understand that we probably need to cycle out of those markets and focus on new technologies,” she said.

    The firm has formed an entity called Rehau Academy as part of its commitment to train and grow its workforce, Saylor said.

    “We hire people to have careers with us. Nothing about Rehau is short term. We have quite sophisticated training and development programs. And we're ensuring that our employees are receiving this development along the way. We like to have succession plans in place,” she said. While certain external training can assist, the best way for employees to develop in that way is to do it internally.”

    Successful businesses have management teams that are relentless, said Jeff Mengel, a partner with consulting group Plante & Moran PLLC, with offices in Chicago.

    “People who aren't comfortable with where they are, they tend to be very good listeners,” Mengel said.

    Furthermore, successful outfits typically have a strong executive core of five or six people, who are always on the same page and working toward the same goals, Mengel said.

    Failing companies overly emphasize growth— “overly aggressive plans where growth is the focus, the objective, the driver of the company, and not profitability,” he said.

    “Good companies rely on profitability and make sure they're profitable in all they do. Companies that fizzle away will grow for growth's sake and not as a conduit to a more profitable company.”

    Troy Nix, executive director of Indianapolis-based trade group MAPP — Manufacturers Association for Plastics Processors — rattled off some names of successful plastics executives who he felt are doing it right.

    “They have the ability to manage the business. They're making tough decisions when they have to,” he said.

    Both Nix and Mengel talked about the concept of diversity playing an important role in successful companies.

    “Part of listening is the willingness to listen to diverse thoughts and take into consideration how it might impact their business,” Mengel said.

    Nix talked about the importance of customer diversity.

    “The guys that are doing well right now are the ones that had enough forethought to diversify their customer base,” he said. “Guys who have all their eggs in automotive are sucking it down.”

    Quite simply, good companies have good leaders, they said.

    “They're looking at cost center, looking at their people, looking at how they're communicating,” Nix said. “It's just good leadership. Once again, it's not rocket science.”

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