Skip to main content
Sister Publication Links
  • Sustainable Plastics
  • Rubber News
Subscribe
  • Sign Up Free
  • Login
  • Subscribe
  • News
    • Processor News
    • Suppliers
    • More News
    • Digital Edition
    • End Markets
    • Special Reports
    • Newsletters
    • Resin pricing news
    • Videos
    • Injection Molding
    • Blow Molding
    • Film & Sheet
    • Pipe/Profile/Tubing
    • Rotomolding
    • Thermoforming
    • Recycling
    • Machinery
    • Materials
    • Molds/Tooling
    • Product news
    • Design
    • K Show
    • Mergers & Acquisitions
    • Sustainability
    • Public Policy
    • Material Insights Videos
    • Numbers that Matter
    • Automotive
    • Packaging
    • Medical
    • Consumer Products
    • Construction
    • Processor of the Year
    • Best Places to Work
    • Women Breaking the Mold
    • Rising Stars
    • Diversity
    • Most Interesting Social Media Accounts in Plastics
  • Opinion
    • The Plastics Blog
    • Kickstart
    • One Good Resin
    • Pellets and Politics
    • All Things Data
    • Viewpoint
    • From Pillar to Post
    • Perspective
    • Mailbag
    • Fake Plastic Trees
  • Shop Floor
    • Blending
    • Compounding
    • Drying
    • Injection Molding
    • Purging
    • Robotics
    • Size Reduction
    • Structural Foam
    • Tooling
    • Training
  • Events
    • K Show Livestream
    • Plastics News Events
    • Industry Events
    • Injection Molding & Design Expo
    • Livestreams/Webinars
    • Editorial Livestreams
    • Ask the Expert
    • Plastics News Events Library
    • Processor of the Year submissions
    • Plastics News Executive Forum
    • Injection Molding & Design Expo
    • Plastics News Caps & Closures
    • Women Breaking the Mold Networking Forum
    • Plastics in Automotive
    • PN Live: Mergers and Acquisitions
    • Polymer Points Live
    • Numbers that Matter Live
    • Plastics in Politics Live
    • Sustainable Plastics Live
    • Plastics Caps & Closures Library
    • Plastics in Healthcare Library
    • Women Breaking the Mold Networking Forum Library
  • Rankings & Data
    • Injection Molders
    • Blow Molders
    • Film Sheet
    • Thermoformers
    • Pipe Profile Tubing
    • Rotomolders
    • Mold/Toolmakers
    • LSR Processors
    • Recyclers
    • Compounders - List
    • Association - List
    • Plastic Lumber - List
    • All
  • Directory
  • Resin Prices
    • Commodity TPs
    • High Temp TPs
    • ETPs
    • Thermosets
    • Recycled Plastics
    • Historic Commodity Thermoplastics
    • Historic High Temp Thermoplastics
    • Historic Engineering Thermoplastics
    • Historic Thermosets
    • Historic Recycled Plastics
  • Custom
    • Sponsored Content
    • LS Mtron Sponsored Content
    • Conair Sponsored Content
    • KraussMaffei Sponsored Content
    • ENGEL Sponsored Content
    • White Papers
    • Classifieds
    • Place an Ad
    • Sign up for Early Classified
MENU
Breadcrumb
  1. Home
  2. News
June 17, 2022 08:09 AM

Strategies to help molders cope with inflation, supply chain

Don Loepp
Editor
Plastics News Editor
  • Tweet
  • Share
  • Share
  • Email
  • More
    Reprints Print
    IMDpanel-04_i.jpg
    Don Loepp
    From left: Marcella Kates of MAPP; Jeff Ignatowski; Josh Hauser and Megan Tzanoukakis.

    Detroit — North American injection molders are dealing with supply-chain disruptions and rising prices. Learning to pick the right customers is a key to remaining profitable and successful.

    As an example, Josh Hauser, business development manager for Vital Plastics Inc. in Baldwin, Wis. described receiving "canned letters" from customers in response to attempts to pass along a price increase.

    "They want to see your continuous improvement program and all these things that really don't take into account that we know what we're doing," Hauser said.

    He said about 80 percent of Vital Plastics customers are reasonable about price increases, and the company has been separating from the 20 percent that have not.

    "So, if I get the 'canned letter' from one customer, and customer B says, 'We totally understand this, just get this thing finished right away,' well, the other customers don't deserve my time any longer," Hauser said. "We're done playing those games, we do things very well, we treat our people very well."

    The key is that Vital can back it up, showing the data that it is continually improving, meeting quality standards and delivering product on time.

    Hauser was part of a panel on addressing supply-chain issues and the changing role of the molder at the Injection Molding & Design Expo, held May 25-26 in Detroit. Plastics News and AMI were joint organizers of the trade show.

    Jeff Ignatowski, director of sales and marketing at Champion Plastics Inc. in Bloomfield Hills, Mich., said his company's automotive end-market customers have been open to discussions about price increases.

    "I think overall, the change has been positive for our customers. You know, for those who have been in the automotive industry, you understand that it's generally been a very regimented culture. And so they've been a lot more accommodating to the supply-chain issues, you know, allowing changes that normally you'd have to go through the various processes, elaborate testing and sampling. ... And part of it might be out of necessity," he said.

    Ignatowski added that companies in the automotive supply chain are learning to do everything possible to meet their delivery schedules.

    Megan Tzanoukakis, vice president of supply chain for Sussex IM Inc. in Sussex, Wis., said her company has "great distribution partners" that have helped the company navigate issues in finding some engineering resins that are in short supply.

    But resins aren't the only product with supply-chain issues — even wooden pallets have been hard to find, she said. So Sussex IM's customers understand the situation.

    "I think they're dealing with the same things, we are within a very uncertain market," Tzanoukakis said. "It's just very uncertain out there. And that's where everyone is, they're trying to understand and predict what's going to happen in the future. And it's just it's very difficult."

    Hauser said Vital Plastics is taking an analytical approach, studying the resins it needs, its suppliers and its customers to forecast the future.

    Ignatowski described a similar strategy: "Our approach has really been being as transparent and upfront as possible, trying to demonstrate to our customers that, you know, yeah, we do have a supply issue. But we're trying A, B, C, D, we're trying everything in our power to resolve it."

    Sometimes molders have to have tough conversations with customers, Tzanoukakis said.

    "It's hard. It really depends on your relationship, right? The better relationships, they understand they're willing to work with you. And what do they want right now? Reliable supply, right, that's what they want. So the ones where you have a good relationship, and they really want their products, it's not that big of a deal," she said.

    For customers that are focused only on price, "it becomes really, really challenging," she said. "But eventually they get there."

    Hauser talked about how molders traditionally have little pricing power, and the result has been that many companies are either not profitable or losing money, according to Manufacturers Association for Plastic Processors (MAPP) benchmarking data.

    "The truth is, we've squeezed enough blood from the turnip," Hauser said. "We're managing the transition the best way we can with the most important customers."

    Ignatowski agreed: "It really is all about relationships that you have with your customers. And part of that is also picking the right customers.

    "You know, we found over the years where we've got the long-term customer relationships, you know, 20, 30 year relationships, those discussions tend to be a lot easier. We've even in the past 12 to 24 months, we've separated, you know, divorced, if you will, with customers, because we didn't have that relationship and they weren't receptive to having what's called just adult conversations about 'We're having issues, but we can solve them together.'"

    Tzanoukakis said that for materials with long lead times, Sussex IM has been working with customers to help with accurate forecasts for the volumes they'll need in the future.

    "For resins that are fire retardant, or anything with glass fill, those have 12-to-25-week lead times. And that's where we've had to go back to our customer and say, 'You need to provide us a forecast.' And then if they don't use all that resin, then we're going to have a conversation about how to pay for that resin. Because we used to hold a lot of that resin for a very long time, but now that a lot of it is two or three times the price it used to be, we can't do that anymore.

    That's promoted "a lot of good conversations" with customers about product lifecycle, she said.

    "Where are we in this lifecycle? Is it going to grow? Is it going down? It has been very helpful, because you can have those open conversation with customers and get more insight into their product and where it's going and where the next generations are," Tzanoukakis said.

    Hauser said some customers have been open to accepting price increases.

    "We've had some interesting feedback that we got from a number of our customers, which was 'What took you guys so long? Why did you wait five years to give us a price increase?

    "We're learning through advisory groups that it's a muscle that you have to exercise, it's inflation, cost of labor, it's all going up every single year, and we're just eating it and those days are over," Hauser said.

    He added that the conversation is changing, Vital is no longer worried about resin, delivery times or quality.

    "We're worried about paying people good wages and having a career that they want for a long period of time, and not leave for the next dollar an hour or the next $200 bonus. It's really about getting people in the door that want to stay and encourage boomerangs who leave to come back. And to weed out the ones that don't fit. That's our supply chain issue, it's labor," Hauser said.

    Tzanoukakis said Sussex IM is winning work as customers reshore some work that was previously done in China.

    "We're seeing, because of the China issues, a resurgence of Made in America, right, which is amazing for everybody in this room. At Sussex we do a lot of molding, but we do value-added automation, assembly, and also fulfillment. So our customers are looking particularly for like a one-stop shop."

    Hauser also talked about the changing mindset of young workers, who may not be as attracted to molders with a "family culture" as older workers.

    "There's nothing wrong with family businesses that have been around for 60 years. But then the young laborer, maybe he came from a broken family, they're not as interested in the family mentality as they are about their time. Time is the most valuable thing to labor right now. It's not pizza parties or free breakfast, it's PTO, it's dress code, it's changing," Hauser said.

    RECOMMENDED FOR YOU
    Bank failures complicate the picture for the US economy
    Letter
    to the
    Editor

    Do you have an opinion about this story? Do you have some thoughts you'd like to share with our readers? Plastics News would love to hear from you. Email your letter to Editor at [email protected]

    Most Popular
    1
    Redline buys Georgia-based Quality Holdings
    2
    Mattress maker Purple continues fight against takeover
    3
    Ineos workers in Ohio on strike
    4
    Redline's ‘outrageous cultural behaviors' retain top employees
    5
    Material Insights: Polypropylene production — both virgin and recycled — in the spotlight
    SIGN UP FOR OUR FREE NEWSLETTERS
    EMAIL ADDRESS

    Please enter a valid email address.

    Please enter your email address.

    Please verify captcha.

    Please select at least one newsletter to subscribe.

    Get our newsletters

    Staying current is easy with Plastics News delivered straight to your inbox, free of charge.

    Subscribe today

    Subscribe to Plastics News

    Subscribe now
    Connect with Us
    • LinkedIn
    • Facebook
    • Twitter
    • Instagram

    Plastics News covers the business of the global plastics industry. We report news, gather data and deliver timely information that provides our readers with a competitive advantage.

    Contact Us

    1155 Gratiot Avenue
    Detroit MI 48207-2997

    Customer Service:
    877-320-1723

    Resources
    • About
    • Staff
    • Editorial Calendar
    • Media Kit
    • Data Store
    • Digital Edition
    • Custom Content
    • People
    • Contact
    • Careers
    • Sitemap
    Related Crain Publications
    • Sustainable Plastics
    • Rubber News
    • Tire Business
    • Urethanes Technology
    Legal
    • Terms and Conditions
    • Privacy Policy
    • Privacy Request
    Copyright © 1996-2023. Crain Communications, Inc. All Rights Reserved.
    • News
      • Processor News
        • Injection Molding
        • Blow Molding
        • Film & Sheet
        • Pipe/Profile/Tubing
        • Rotomolding
        • Thermoforming
        • Recycling
      • Suppliers
        • Machinery
        • Materials
        • Molds/Tooling
        • Product news
        • Design
      • More News
        • K Show
        • Mergers & Acquisitions
        • Sustainability
        • Public Policy
        • Material Insights Videos
        • Numbers that Matter
      • Digital Edition
      • End Markets
        • Automotive
        • Packaging
        • Medical
        • Consumer Products
        • Construction
      • Special Reports
        • Processor of the Year
        • Best Places to Work
        • Women Breaking the Mold
        • Rising Stars
        • Diversity
        • Most Interesting Social Media Accounts in Plastics
      • Newsletters
      • Resin pricing news
      • Videos
    • Opinion
      • The Plastics Blog
      • Kickstart
      • One Good Resin
      • Pellets and Politics
      • All Things Data
      • Viewpoint
      • From Pillar to Post
      • Perspective
      • Mailbag
      • Fake Plastic Trees
    • Shop Floor
      • Blending
      • Compounding
      • Drying
      • Injection Molding
      • Purging
      • Robotics
      • Size Reduction
      • Structural Foam
      • Tooling
      • Training
    • Events
      • K Show Livestream
      • Plastics News Events
        • Plastics News Executive Forum
        • Injection Molding & Design Expo
        • Plastics News Caps & Closures
        • Women Breaking the Mold Networking Forum
        • Plastics in Automotive
      • Industry Events
      • Injection Molding & Design Expo
      • Livestreams/Webinars
        • PN Live: Mergers and Acquisitions
      • Editorial Livestreams
        • Polymer Points Live
        • Numbers that Matter Live
        • Plastics in Politics Live
        • Sustainable Plastics Live
      • Ask the Expert
      • Plastics News Events Library
        • Plastics Caps & Closures Library
        • Plastics in Healthcare Library
        • Women Breaking the Mold Networking Forum Library
      • Processor of the Year submissions
    • Rankings & Data
      • Injection Molders
      • Blow Molders
      • Film Sheet
      • Thermoformers
      • Pipe Profile Tubing
      • Rotomolders
      • Mold/Toolmakers
      • LSR Processors
      • Recyclers
      • Compounders - List
      • Association - List
      • Plastic Lumber - List
      • All
    • Directory
    • Resin Prices
      • Commodity TPs
        • Historic Commodity Thermoplastics
      • High Temp TPs
        • Historic High Temp Thermoplastics
      • ETPs
        • Historic Engineering Thermoplastics
      • Thermosets
        • Historic Thermosets
      • Recycled Plastics
        • Historic Recycled Plastics
    • Custom
      • Sponsored Content
      • LS Mtron Sponsored Content
      • Conair Sponsored Content
      • KraussMaffei Sponsored Content
      • ENGEL Sponsored Content
      • White Papers
      • Classifieds
        • Place an Ad
        • Sign up for Early Classified