The only constant is change has become a business cliché but it's truer than ever since the harsh recession, according to speakers at the Plastics News Executive Forum.
We can't go back to the way before, said Laurie Harbour, president of Harbour Results Inc., a manufacturing consulting firm in Berkley, Mich.
Harbour was part of a panel that looked at how injection molder Thogus Products Cos. re-engineered itself. Thogus President Matt Hlavin described how the company in Avon Lake, Ohio, dropped its emphasis on the Big Three automakers in the late 1990s, then changed its business model when the economy collapsed in late 2008.
To help revamp the company, Thogus both hired Harbour Results to re-engineer its processes and implemented enterprise resource planning software from IQMS Inc. Randy Flamm, president of IQMS, served as the third speaker on the panel, and described how such tools can tie together all operations of a company.
Harbour said the economic downturn has shaken out companies that could not adapt. Those strong companies that are left are doing all the right things and are the ones that are going to survive and frankly, the ones that are flexible in their business, she said.
Automotive molders must be flexible now, since the U.S. market can swing from the anemic 9 million units in 2009 back to a more normal rate of 15 million.
Based on a Harbour Results benchmarking study from company visits, she listed five common trends for best-in-class manufacturers and five traits shared by those with a cloudy future.
* Define focus and vision, and clearly communicate that to employees.
* Have strong owners and leadership.
* Have discipline and accountability.
* Clearly define capabilities.
* Choose a culture of problem-solving.
* Have a lack of strategic vision.
* Lack strong leadership. Often, the owner is the problem.
* Do too much firefighting and do not have a day-to-day operational plan.
* Lack operational focus and a continuous-improvement culture.
* Do a consistently poor job of inventory management and cash flow.
Long-term thinking is important. We're focusing on the urgent and not the long term, and then we underperform and we can't figure out why, Harbour said.
Hlavin told the Thogus story how in 1997, the company dropped the Big Three. We did not want to be Thogus Savings & Loan, he said. But in the process, Thogus lost 56 percent of its sales.
The family-owned molder had no backup plan to replace that business. That became the job of Hlavin, the grandson of one of founders, who became vice president of sales and marketing. Thogus partnered with resin suppliers to help them develop new materials.
The business started to rebound. Then the bottom fell out with the recession in late 2008. Hlavin became president, as business was off 35-40 percent.
The company developed a mold-transfer strategy, dramatically cut its workforce, and reorganized the company. In a major investment, Thogus last year bought four pieces of Stratasys equipment for rapid prototyping and rapid manufacturing. Thogus also acquired a small biomedical engineering company.
We're not one of 8,000 [molders]. We're a specialty company, and that's created a lot of value with our customers, because they see us as a solution provider, Hlavin said. We're a bolt-on engineering company, not just a processor.
Hlavin also believes in networking. He is president of the Indianapolis-based Manufacturers Association for Plastics Processors.
Copyright 2010 Crain Communications Inc. All Rights Reserved.