Always the Student

Published: May 31, 2005, By Yolanda Simonsis, Associate Publisher/Editor

Editorial

Just when I think I’ve got a grip, albeit a loose one, on something in this industry, the technology or economic circumstances or political environment or key people or whatever makes a giant leap of change. Sometimes the direction of change is not forward, though, which makes life in the converting industry very interesting.

As we look back on our industry over the last few decades, many of us with even short tenure can remember the early to mid-’90s and recall how "easy" it was (by comparison to today) to strategize for the future. There were many companies out there that updated their five-, maybe even ten-year plans annually. Now probably the only company with a ten-year plan is Wal-Mart, which, I suppose, will be the entrenched "polygopoly" of the world by 2015.

Even five-year plans are difficult to craft these days. Planning for the future remains extremely important, but it has become more complicated because of the rapid pace of technology. At a Black Clawson Symposium held in Syracuse, NY, May 16–18 (see this month’s Converting Industry News), I learned there are quantum leaps in improvement every 18 months, especially in drives and motors. Obviously, this affects equipment design in a major way.

Imagine being the converter that’s upgraded plant equipment with new drives and motors (not an inexpensive undertaking), only to find 18 months later that everything has been replaced with newer, better, faster technology.

How do you plan for these expenses and still remain competitive?

Add to this dilemma the fact that US converters must face the trump card played by emerging nations with endless cheap labor, and you must conclude those nations definitely have the edge when competing in globalized markets.

As I’ve gone from trade show press conference to technical conference to association meeting to vendor conference, I’ve noted that everyone finds it easy to diagnose the disease, but no one seems to have a cure.

At first glance, I oh so naively saw "globalization" as just another buzzword to come and eventually go like others, only to be replaced by another buzzword. As for the rapid pace of technology, I never connected it to globalization. They were separate. Boy, was I wrong. As Harry Challendar, VP of business development for Black Clawson (Fulton, NY), said at the firm’s recent symposium, "The genie’s out of the bottle, and there’s no turning back! It is a global market." And technology combined with good management techniques will either save or kill our competitive stature against emerging nations.

While this analysis may be nothing new, it was refreshing to learn from Black Clawson as an equipment vendor—with equipment sales in international locales representing about 50% of its sales volume in 2003—how its customers can be more successful on both home soil and foreign shores. The connection or the missing link I’ve been searching for over the last year or so finally materialized for me at the symposium. The light went on in my thick head: Apply new technology in the form of either new or upgraded equipment, if you can. At the very least, by employing lean manufacturing techniques at every point in your administrative and manufacturing process, you will achieve the yields to which you’re entitled using available equipment and systems.

Another curative approach introduced at the symposium suggested setting up shop in some capacity within an emerging market. I guess it’s the old philosophy: If you can’t beat ’em, join em.

Challender offered some valuable advice for consideration before taking this option: Look at local governmental regulations, duties, and tariffs; determine the local market stability; determine the political stability of the market (someone could come into political power and not be so friendly!); and determine the consistency of supply of local raw materials and energy resources. Whatever you do, remember this: Do NOT assume you can take a duplicate of your current line and simply transplant it into an emerging market. Governmental safety regulations may require design changes, and building practices may not meet demands of the equipment.

The path seems rocky, but the direction—at least for this student—is a little clearer.

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