AVON LAKE, OHIO (Sept. 19, 3:30 p.m. ET) — Compounding leader PolyOne Corp. is making progress on the scorecard program it launched last year with its top suppliers.
PolyOne now has its 20 largest materials suppliers — based on dollar amount — enrolled in the program, Tom Kedrowski said in an interview at the firm's headquarters. Kedrowski is the Avon Lake company's senior vice president of supply chain and operations.
“We're trying to be more than a compounder,” he said. The scorecard program “is an opportunity [for our suppliers] to grow their sales profitably, and if we're successful, we'll do the same thing. It's a collaborative effort.”
PolyOne also is moving closer to its goal of having these top suppliers achieve an on-time delivery rate of 95 percent. Currently the group is at 86 percent, but Kedrowski said that number was affected by some unplanned production problems and downtime that resulted from tough economic conditions.
“When you have a shift in the economic picture, whether it's real or perceived, people get nervous and they're not going to order,” he explained. “That affected some of our suppliers.”
PolyOne's top 20 list includes the firm's largest suppliers of resins, pigments and additives. Kedrowski said the firm hopes to expand the scorecard program to include its 50 largest suppliers by the end of 2012.
PolyOne also wants to make the program more electronic and interactive.
Suppliers' reaction to the program — which measures their performance in several categories — has been “mostly positive,” Kedrowski added.
“A lot of our suppliers have come to the table with ideas on how they can meet their goals and perform at the number they're expected to do. We fully expect them to get [to the 95 percent on-time rate] by the end of 2012.”
PolyOne also has made adjustments in other areas of its supply chain. The firm has seen its customers buy in smaller amounts, but more often, Kedrowski said, and PolyOne has had to react.
“Reduction in order sizes can cause inefficiencies and increase logistics costs in the form of shipping costs and the cost of shorter runs, which also can be inefficient,” he said. “We've seen 16-18 months of this [small order] trend, so we don't think it's a short-term reaction. So we've improved our flexibility and increased availability of our materials on different lines.”
“In the past few years we've idled some obsolete capacity, added some new lines and also invested in some [existing] lines. We've reconfigured some plants and are cross-sharing between businesses like performance products and specialty products. It's also had an impact on our distribution business.”
Through the ups and downs of recent years, PolyOne has continued to emphasize the importance of collaboration.
“Some suppliers have grown their business with us because of longtime activity,” Kedrowski said. “That's more important with a specialty company like us”
“You need a solid supply chain, and some customers have grown tremendously with us because of that.”
In the first half of 2011, PolyOne's total corporate sales grew more than 12 percent to almost $1.5 billion vs. the first half of 2010. The firm's profit also doubled to almost $139 million in the same comparison.
Among its business segments, PolyOne's global specialty engineered materials unit led the way with first-half sales growth of more than 18 percent. The firm's resin distribution unit set the pace in operating income with first-half growth of almost 50 percent.