Indianapolis — Andreas Reger was named president of plastics processor Pollmann North America Inc. in March 2008.
"I was hired to grow and diversify that company," he said. "By June of 2008, we talked about survival and mass layoffs. Things changed so dramatically."
Reger said after the company survived the Great Recession, he decided to take a look back on how it did it, and how other processors did it, so they could be better prepared for the next downturn.
Reger, who wrote his Ph.D. dissertation on the subject, discussed the issue during the Benchmarking and Best Practices Conferences organized by the Manufacturers Association for Plastics Processors in Indianapolis.
The study was done in conjunction with Plante Moran and aimed to better prepare owners of plastics processors for the next economic downturn or disruptive event.
"Human nature is to be complacent when times are good," he said. "Right now is the time to do it. And quite frankly, you should have done it two years ago.
"Right now, your strategic options are like this," Reger said, stretching his arms out wide. "But if a crisis comes, it will be like this," he said as he put his fingers just an inch apart.
Rager, who is now president and CEO of Dürr Ecoclean Inc., said it's important to develop long-term relationships with banks, including being with more than one institution if possible. He said it's good to know the bank's trigger points.
He said it is important to always be hedging your currency exposure as well, and companies shouldn't rely on expert forecasts.
Reger said it's a good idea to do a product line cost and profitability analysis, and do what you can to diversify your product line and customer base.
And it is important to keep an eye on the M&A market for potential targets. Great deals can be had when the market sinks. Alternatively, it's also important to identify some potential buyers for your own company in case things go sideways really quickly.
Reger said it is important for every company to know and understand its Altman Z-Score, a formula that takes in a number of factors and ultimately shows if the company is in danger of bankruptcy.
Kevin Chase, president of resin distributor Chase Plastics, echoed some of Reger's advice, saying he now conducts proactive negotiations with banks.
"I market test our bank and three to five other banks. It's a rarity that I don't get something out of my bank," Chase said.
He said he treats money like another commodity.
"I thought I was a fiscal conservative in 2008. You should see me now," Chase said.