Address
phone
directions
We blog only about timely and relevant topics.  The software does not allow rearranging posts, so they are chronological.  You can browse by topic or keywords by scrolling down on the right side.

Brentwood Plastics Blog

PE Resin in the Age of Madmen

Posted by Joel Longstreth on Fri, Jun 09, 2017 @ 11:46 PM

While spring cleaning, we found a cache of 1960's era letters from Union Carbide.  

st-louis-arch-under-construction.jpg  jfk.jpg cigarette-ad-1.jpg mcdonalds.jpg

 

 

wise-guys.jpg

The letters were from big shot execs in the mid-town Manhattan offices.  All were perfectly individually typed with no errors ( whiteout probably did not yet exist ).   While Don Draper was working on ads for mass marketing, the senior execs were incredibly creative by tying in first day of issue stamps to their new resins for the narrow nascent blown film industry.

Of course there were many things nostalgic and laughable - six cent stamps, new applications such as shrink film, juice packaging, frozen food packaging.  Recycling ?  Re-what ?  Linear Low Density was over a decade in the future.  In the First Man on the Moon issue, they bragged about their two billion pounds of capacity.  They went to great lengths to show literally how far their resin would stretch - to the moon and back many times. There is at least 35 billion pounds of PE capacity coming on stream in the US in the next few years.    

In the late 50's the commercial feasibility of blown film was uncertain.  Today there are over 27,000 known blown film shops.

Reminds me of when our founder used to line up his three martini lunches on successive days when he worked for USI Chemicals.

3-martinis.jpg

How times have changed.  

Enjoy the gallery.  ( Click the enlarge.jpg below the slide show for full screen )  Who knows ?  Maybe the collection will appraise at $ 5 at the Antiques Road Show in the year 2100.

 

Read More

Topics: LDPE film, polyethylene film, LDPE resins

Packaging: Leading Economic Indicator

Posted by Joel Longstreth on Tue, May 30, 2017 @ 06:03 PM

Many manufacturers were slow in Q1 of 2017, especially us.  It was difficult to square the booming stock market with what us groundlings were experiencing.

cobwebphone.jpg

The " Trump Bump" was more like the Trump slump.  I asked a friend who is an investment banker about the disparity.  His answer was simple.  He said that the money supply is finding it's level with traders and not capex.

While I'm not in total agreement, it turns out the research found us.

richmond fed.png

Anyone who has lived in packaging has sensed upticks and downturns before they become mainstream news. Back in 2007, we were beginning to wonder if people needed basic cotidien staple items.

The chart bears out what was weird about Q4 of 2016.  During the first week of October, things went quiet after a busy September.  Informal polling indicated the reason was the uncertainty of the election.  The resin companies said they felt the slump back in August.  December which is usually the doldrums was strong as Decembers go.

So what does the current data portend ?  Construction, junk food and staples such as rice are in good shape.  
Other sectors seem to be clawing their way back to normal.  Order quantities are smaller and no lead time. 

It's unlikely that hedge fund managers will ever deign to do research by finding out what's going on in fly-over country.

 

Read More

Topics: economic indicators

The Fine Art of the Sabotage Spec

Posted by Joel Longstreth on Tue, May 30, 2017 @ 04:31 PM

Sabotage specs are written wholesale every day.  Not much is written about why and how to write a sabotage spec.

auctioneer.jpg

The impetus for making a sabotage spec is obvious.  The agendas of supplier and customer are at loggerheads. As soon as an project is developed to the point of solving a problem, purchasing is itching to shop and start the reverse auction.  The path of least resistance is the sucker play - the ostensible need for a spec sheet.  This saves the time and expense of reverse engineering.  
 
Where's the rational incentive to divulge the ingredients and know-how ?
 
card-players-in-the-market-at-ubud-on-bali-bj0ne4.jpg
Two things are often overlooked at this juncture:
 
1.  questioning the premise of the need to know.  If there is no legitimate need to know how any ingredients might affect the customer's plant or product, there is no need to know.  It is naive to believe NDA's will be honored.
 
2.  is the distinction between a typical property sheet / data sheet and a specification sheet.  The latter is for the protection of the supplier to prevent arbitrary rejections.  A properly crafted spec has a target and range for specific properties.  The supplier has every incentive to keep proprietary how the properties are achieved. If it meets the criteria, the customer buys it.  If not, the out-of-spec materials are returned to the vendor.  In theory anyway.  What usually happens is the full shipment is rejected if part of one pallet is defective.  A typical property sheet is more generic public information.
 
In both cases, the description of raw materials and test methods is key.  It makes total rational sense to throw the competition off the trail with misinformation about raw materials instead of showing one's hand.

Two common tricks which nobody talks about are:

1.  proprietary test methods  Instead of abiding by standard test methods, simply state that your product exceeds with a proprietary test method.  For example, 3M states that their masking tape elongates more than everybody else's with their black box test method.  I witnessed firsthand 3M winning a bid at a higher price from the state of Ohio because no other masking tape had 11% elongation. 

2. fake values   Simply enter values which if met will not work.  This is guaranteed to waste your competition's time and give them a mental hotfoot.  The deck is stacked against the new candidate anyway because line personnel are an openly hostile audience.

Follow these simple tips and you will have a good chance of not getting shopped and putting sand in your competiton's gears

sandgears.jpg

 

Did you know ?  " at loggerheads" is hundreds of years old.  A drink was made by combining rum and milk, then
heated by plunging a heated rod called a logger into the drink.  After a few too many, the logger was often used as a weapon.  The figure of speech connotes unresolvable conflict such as marriage and the middle east.

loggerhedd2.jpg

Read More

Topics: spec sheets, sabotage spec, spec sheet, specification sheet

Buy American / Hire American ? - as if !

Posted by Joel Longstreth on Mon, Jan 23, 2017 @ 06:02 PM

When George W. Bush asked the premier of China what kept the premier up at night, the response was "finding jobs for 25 million people a year."  Products in the mature life-cycle stage are imported everyday to the US at artificially low prices.  Why does the U S government let this happen ?  Why is there no anti-dumping outrage ?

chinaworking.jpgchinaconst.jpgchinese rural workers

In retrospect, Smoot-Hawley was a causative factor of the depression.  Today's supply chain is interdependent and complex, so tariffs aren't the solution for complicated products.  

Simpler items are imported in large volume to the US at bargain-basement prices.  We're seeing a common thread.  The cost of the finished product mostly from China, is at the price of raw material here in the US, even in a capital-intensive industry such as plastics. Before getting into specific examples, let's look at why. 

( Personally, my cynical opinion is the U S government likes cheap goods to show lower inflation rates and lower COLA  )

My guess is it's a combination of factors.  The two biggest advantages for manufacturers in certain countries are currency manipulation and raw material subsidies.  American manufacturers have the disadvantages of higher wages and the not so hidden costs of regulations and taxes.  Ocean freight is cheap.  Inland freight is equal.

Taxes are a factor of production.  Much has been written about the additional burden of regulation and how it puts U S manufacturers at a disadvantage.  

" One of the single biggest areas we should see some immediate relief 
is from some of the regulations that have stifled our industry
and curtailed some of the growth. "

- William Carteaux, CEO of the Plastics Industry Association

Here is a summary:

  Factor of Production   Advantage   Comments
  direct labor   China  plentiful labor compliment but hard to train  
  freight    none  ocean freight is cheap
  regulations   China

fewer restrictions on solvent inks or disposal.  No OSHA.  No EPA, etc.

  taxes   China  
  resin cost   China US is low cost producer, but China gets big subsidies
  currency manipulation   China  
  electricity     ???  
   logistics   U S   China 
  X files factor   U S    

We have swerved into a few cases in our microcosm which just might be indicative of what's going on on a macro-scale.  Here are a few anecdotes:

                                                              Drawstring stock ice bags              

                                                                    drawstring ice bagstock ice bags
One of our customers does not understand why the cost of drawstring ice bags made in China is literally 1/4 the cost of US made.  The resale price of the finished bag is practically the cost of U S - manufactured. That's the resin pellets before being extruded into unprinted rollstock.   With UPS charges, the convenience store pays $0.04 each. American-made bags would cost about $ 0.09.  Let's face it - who wants to pay 6 cents more for a bag of ice ?  The convenience store operator would rather give up two pints of blood. 

                                                    Red and Yellow barricade tapes

barricade tape  

We make heavy metal free red and yellow rollstock, sell it to customers who print, slit and box, often untouched by human hands.  Our customers cannot compete with Chinese goods which contain 1% lead ( contact us if you want to see the test results )  printed slit and boxed at the same price as rollstock.  The imports are not constrained by HMF heavy metal free resins or water-based inks.  American consumers don't care about continual dermal exposure to lead, so everybody's happy.

shower curtains

showcurt.jpg

We have recieved several inquiries from manufacturers of shower curtains in China.  They see the handwriting on the wall.  Chinese labor and electricity are going to approach the costs here at some point.  They are also looking into complying with WalMart's P R ploy - U S made ( the reality is WalMart will only pay 5 to 7% more for American made because that's the maximum upcharge consumers will pay ).  They are incredulous about costs of production here vis-a-vis China.  They go into sticker shock about the price of resin and don't believe us when we go so far as to tell them what EVA resin costs. Everything - resin, ink, labor, electicity, payroll taxes, OSHA, etc. is more here.  Until the factors of production lines cross, they will continue operations in China.

There's no telling how many millions of pounds of plastic these 3 examples add up to, let alone how many U S jobs ( " American carnage" according to Donald Trump ) are at stake.

So there you have it.  Reality is the consumer is conditioned to paying lower prices.

The good news is there is a whole lot of "re-shoring" going on.  It started long before Donald Trump threatened to slap an import tax on companies who move operations outside the U S.  The low prices from China come at a price.  I have talked to many people who are animated when they say they are "through with China ! "  They have paid for the low prices with their sanity.  If they find one of a few suppliers who are not out to rip off the the importer ( with no concern for repeat customers ), the execution is slap-dash and the parts are sloppy.  It's like the X-files.  Nothing is as it seems.

x.jpg

Injection molders are pulling molds wholesale and telling customers to take or leave the domestic price.  To be fair, logistics from the producer to the port have improved.  Not so long ago, you didn't know where your container was until it got scanned in to the ship.  

When it gets to the point that Fox Conn gets serious about migrating operations to the US, somebody is getting frustrated.  

There's plenty of good news to go around these days especially in automotive, about domestic investment in manufacturing.   Who could have imagined that Mike Lindell would invent a pillow and employ 1,500 people in Chaska, MN ?  Then there's other news about labor-intensive industries mostly garments, moving operations to Africa for lowest cost " cut & sew".  

afroshirt.jpgafricans sewingafrica cut & sew

                                     Africa has been called the last frontier for cheap labor.

Can you blame the management of globocorps ?  It's nothing new and it's basic econ.  Factors of production flow to the most favorable environment.  Management has a fiduciary to maximize shareholder return.  Barry Bluestone wrote about it back in 1982 in the book " The De-Industrialization of America".  It's not enough to be profitable.  The profit center which is the least cost producer is going to stay open and get the CAPEX.  The higher cost plants get shuttered.   The Economist says the multinationals may be over the hill.

Since the 2008 downturn, US manufacturers have automated extensively, but there are limits. Consumers are not williing to pay $ 4,500 for a US -made iphone yet.

Trump's persuading Carrier to stay in Indianapolis is a great story, but could whipsaw into the government dictating labor costs.  The most labor-intensive industries would be most affected.  Only time will tell how unwinding trade agreemens will play out. 

In any case, American businessmen just want a level playing field.  Good luck with that.

Read More

Topics: reshoring, buyamerican

Designing for Recycling and Sustainability

Posted by Joel Longstreth on Tue, Jan 10, 2017 @ 03:52 PM

Cradle-to-Cradle, Recyclability, Sustainability and reclamation have historically been low priorities in design considerations.  The biggest obstacle to these goals is dissimilar materials in the same product.  Just as form follows function, selection of raw materials teamed up to do a job is determined by the properties raw materials can deliver.

singlestream.png

Recycle Across America correctly attributes the recycling collapse and crisis to contamination.  

"... the collapse of recycling is primarily due to high contamination levels in the recycling stream.  Contamination cripples the economics of recycling.  The process to remove contamination reduces profitability, driving up the cost of recyclables, thereby preventing many manufacturers from reusing recycled materials. As a result, they continue to deplete finite resources at alarming levels." 

Note how economic sustainability dovetails with environmental sustainability.  The recycling business is tough at best because prices drop when there are more recycled materials are on the market.  There is not enough margin to absorb the additional cost of sorting.

It's not complicated.  The more dissimilar materials are contained in a product, the more difficult it is to
recycle for practical purposes.  If a product contains more than one polymer, it should be labeled a resin identification code ( or RIC for short ) symbol 7.

recycle7.png

Sweden has it down to a fine art.  They claim only 4% of their discards end up in the landfill. 

swedsystem.jpgfunnyswed.jpg

So just make the product out of the same resin.  Simple solution, right ?
Problem: one resin can't deliver all the attributes needed

Often the resolution to a problem is meeting halfway.  This mailing envelope solves the debate over paper or plastic.  Instead of an all polyethylene #4 recyclable envelope, it is made from both polyethylene bubble pack and kraft paper.  

pregis.jpg

Proponents of plastic often ask why cut down a new tree when you can use an old dinosaur ?  The rejoinder is usually "you're still usin' fossil fuels, man".  This brilliant example of an unrecyclable #7 satisfies all demographics.  Proof that it satisfies the demands of the consumer for green products is it's ubiquitous presence in UPS stores.  

A cotidien example of several resins in one product is a soft drink cup with a straw and lid.  It has three different polymers with three different job descriptions:  The stiff and pliable straw is polypropylene, the rigid lid is polystyrene and the paper is coated with low density polyethylene.  One resin is not versatile enough to do all three jobs.

sodacup.png

Here are examples of misuse of a resin identification code:

fox4.jpg

The bag is comprised of about equal parts LDPE #4 and polypropylene #5.  For practical purposes, it is not recyclable.

foxhd2.jpg

In the second example, the bag is ostensibly high density polyethylene #2 HDPE.  The mesh is #5 polypropylene and the film is low density polyethylene #4 LDPE.  I am not ascribing any motives about the errors.  

No telling how many millions of bags were misprinted without the general public taking notice.  Only us resin nerds care.

This is an example of a properly executed resin identification code

70ther-1.jpg

The RIC #7 indicates the use of 2 dissimilar polymers which make it a #7

At Sustpack2016, the common threads of marathon presentations by large companies were source reduction and landfill reduction.  They have all made great initial strides mainly through reduction of corrugated packaging. Just my opinion - it will be more difficult to maintain the same rate of progress after another few years.  Corrugated recycles allright.  It also cuts down trees and uses oodles of fossil fuels.  Chemical runoff is minimal compared to decades ago.  

corrugatedrecy.png

Consumers feel best about recycled content to assuage their irrational conditioned consumer guilt.  Using less, or source reduction, is the most incontrovertible way to go green.  But it's too abstract and not fungible.  

It's an issue for not just the flexible packaging industry.  The green building culture is scrutinizing materials with emphasis on cradle-to-cradle. There are several recent success stories such as the Long Center for performing arts in Austin, TX.

longcenter.jpg

This is not new.  Humans have been recycling construction materials for millenia with an efficiency motive. Construction waste is one of the major contributors to landfill, but that's another conversation.  Here is a great infographic about recycling across the globe and in recent U S history.

Like everybody, the meeting and convention industry is under pressure to show they are going green.  
bins.jpgconstructiongarbage.jpgLVrecycle.jpg

Recently, it has become common practice to place a recycling dumpster next to the dumpster for non-recyclables.  What the convention industry used to pitch is turning out to be a massive trove of raw materials.
Here's the bargain: the recycler gets the cast-offs for free.  His cost of goods is the cost of hauling and sorting.

A big problem for both conventions and builders alike is carpet.  Carpet can have several components which makes it hard to sort.  Despite this obstacle, carpet recycling is catching on.  Cleaning and re-shipping carpet is a major headache for convention contractors ( the people who put up the booths, signage and install the
carpet ).  For example - Freeman the industry leader, has at any given moment 300,000 square yards of carpet in a cook's pot being cleaned and recycled.  The trend is toward nonwoven single-use polypropylene #5 used one time and sent to the recycler.  There will be a tipping point if the price drops to where the cost is less than transport + cleaning + transport again. 

The bad news is that even if products could be made with only one resin, it would not be a solution.  The major obstacle to recycling is indifference from the general public.  Proof is the low recycling rate of water bottles.  They are made from polyethylene terephthalate ( PET ) #1.  PET is the only commodity resin FDA approved for 
food contact and medical after repolymerization.  The recycling rate has dropped to 30.1 %.  More than 1 in 3 water bottles are discarded despite the efforts from giants like Coca Cola to make recycling easy.

Could it possibly be that consumers just aren't that concerned about the environment and only pay lip service ? 

It's more fun to blame and vilify evil corporations.

For more information on the 7 basic commodity resin identification codes, watch this short video.

 

Read More

Topics: plastics recycling,, sustainability, resin identification codes, RIC

Multilayer Packaging Lexicon

Posted by Joel Longstreth on Mon, Dec 12, 2016 @ 05:28 PM

Humans like to communicate in acronyms, abbreviations and inside lingo.   After I set up an appointment for a medical test, I got a call back.  They said I didn't have an oth.  " What's an oth ?"  " An authorization, sir "   Brings to mind the scene in " The Heat"

The flexible packaging business is no exception.  The written descriptions of multilayer packaging structures can be confusing.  Here are some plain explanations of commonly encountered cryptic abbreviations followed by some examples:

/  designates a dividing line between two layers
adh.  short for "adhesive"
BOPP  biaxially oriented polypropylene
COPP  copolymer polypropylene
CPP  cast polypropylene
EAA  ethylene acrylic acid
EVA  or VA  ethylene vinyl acetate ( should specify % of VA copolymer )
EVOH  ethylene vinyl alcohol  natural habitat is in the core layer of coex for barrier
ga.   gauge  one mil = 100 " gauge"  manufacturers chisel thickness, so ".94 ga." is as close to 1 mil as you'll find for PET; 
       "48 ga." is popular in PP

foil   foil
HDPE  High Density Polyethylene
LDPE  Low Density Polyethylene
LLDPE  Linear Low Density Polyethylene
MDPE  Medium Density Polyethylene
METOPP  Metallized Oriented Polypropylene
METPET  Metallized Polyester
NYL    nylon
PA  nylon
PE  polyethylene
PET  polyester ( not to be confused with polyethylene terephthalate which has the same abbreviation )
PPFP  paper poly foil poly
poly  polyethylene
PP  polypropylene
prt   print
PVDC  polyvinylidene dichloride ( a/k/a Saran )
surlyn    Surlyn
tie    tie layer ( always found in coextrustions, never in laminations )
wht  white

Thus, a callout like this:

PE / adh. / METPET/ adh / CPP

would in English mean:  LDPE sealant layer ( the PE layer is always the sealant layer ) laminated to metallized polyester laminated to cast polypropylene.

There are a zillion possible combinations.  If you run into one you can't translate, call us.

Read More

Topics: coextruded film, multilayer film, coextruded, coextruded plastic, laminated films

PE Film Lead Time Factors

Posted by Joel Longstreth on Thu, Dec 08, 2016 @ 05:52 PM

The ship date for custom PE film involves much more than a first-come-first-serve queue.  An extruder who runs their
backlog in this fashion or has a salesman running the backlog is not long for this world.  

The primary consideration in setting up a backlog is minimizing scrap.  Clearly at loggerheads with customer's
urgency.  Keeping peace with all parties is an art.  The scheduler's agenda is to consolidate a sequence of films made out
of the same PE resin as long as possibleto avoid transition scrap.  With resin cost at about 75 cents per pound, every pound
of scrap is really about $ 1.00 lost factoring in labor, electricity and overhead.

A medium scale extruder puts out about 500 pounds an hour.  What would you do ?

It's best practices to have some leeway in ship dates.  We promise our orders for "week of _____ ".  A smart play is to promise
a Thursday ship date.  4 out of 5 chance it will ship early or on the date.  1 in 5 chance it will be a day late and so what ?  only a
day late.

It's also best practices to have a few dummy orders in the backlog to both act as a cushion for breakdowns and allow for opportunities.
If an order comes in with a ship date 3 to 4 weeks out for a resin running today, it makes common sense to tail it in to
avoid setup scrap instead of running it as a stand-alone 3 weeks from now. 

Distant secondary considerations are width and thickness changes ( there's the central theme of avoiding scrap again ) followed by pigmentation.  
Cleaning out after colors is time consuming and messy.  The line must be shut down, purged, what is called the screen pack / breaker plate must be changed.
The ordeal is followed by an expensive, frustrating waiting game while the remnants of the color clear out. 

Back in the day, we had a shrewd customer who went out of his way to pay his bills every Saturday.  A check for all invoices in the week would show up like clockwork on Monday morning.  Why ?  To tempt the film extruder to deviate from fundamental priorities.

Of course, there are justifiable exceptions but they are few.  Re-work of returned or defective product or doing an occasional favor for a good customer who is out of film and shut down.  

So now you know why:

Coextruded films have such extended lead times

shrink films have such a wide variation in MD / TD shrink ratios
( the order goes on the machine that needs work )

pigmented films have longer lead times

Are you wondering where is our proof that first-in-first-out doesn't work ?  That's easy.  The outfit we sold out to in 1984 ran orders in the sequence received.
It took them about 3 years to declare bankruptcy.

 

Read More

Topics: LDPE film, poly film, polyethylene film

PE Film Industry Consolidation ?

Posted by Joel Longstreth on Thu, Sep 15, 2016 @ 12:35 PM

Like any industry which matures, there is first a dynamic growth curve followed by the inevitable consolidation wave.  The blown PE film business is both consolidating and contracting.

fisheating.jpg
By the 1920's, there was a proliferation of automobile manufacturers in the thousands.  Aerospace didn't have
thousands of airplane manufacturers, but maybe hundreds.  An early map of the Kimberley mine was complex
with stakes by numerous colorful characters.  Where are they now ?  

Back in the 1950's, the commercial viability of blown PE film was uncertain.  Before our founder Joe Longstreth
established Brentwood Plastics in 1961, he sold PE resin by setting up companies from scratch to make LDPE film and take away market share from old fashioned true cellophane.  

Cut to present day.  The number of PE film outfits worldwide is certainly in the thousands.  "Turn-Key" film lines are ubiquitous.  Back in the early days, we bought the components separately and made some of the parts ourselves.  My grandfather designed a surface winder for narrow width tubing from scratch which is still in service.

In the US, the consolidation phase has been going on for decades at every strata.  The largest instituional trash can liner manufacturer is actually an amalgamation of formerly regional players.  You can't argue with the success of Sigma group's strategy of expansion by acquisition of financially distressed extruders.  By contrast, the largest manufacturer of private-label trash bags is Poly-America who has grown dramatically mostly by organic growth. 

Berry Plastics' mega merger with AEP is the latest chapter in consolidation of companies with roots going back to the 1970's.  Armin Kaufman, founder of Armin Films sold out to Tyco who unloaded their film maker portfolio to Berry in 2005. Berry merged with another large bankrupt player who had gone bankrupt in 2009 - Pliant.  

Where is Armin Kaufman now ?  In Hillside, NJ where he founded Hillside Plastics with the proceeds from the Tyco sale in direct competition.

To take stock, we compiled a list of US operations which include polyethylene blown film extrusion with apologies to anyone we overlooked ( call us if you want to be included ).  There was no clear trend.  A lot of old names were gone either due to buyouts or going out of business ( this is a capital-intensive business; the tripling of resin cost since the mid 90's has weeded out players with inadequate working capital ).  Many have vertically integrated blown film in their operations.  Some niche players were unchanged, some have developed into giants. Next Generation films is an extreme example.

We have been there / done that selling out thing back in 1984, probably not going back there for a while.  We believe there is enough demand for an old school, handcrafted monolayer operation.

Read More

Topics: pe film

Developing Custom Plastic Films

Posted by Joel Longstreth on Tue, Sep 06, 2016 @ 03:35 PM

Product development is a rough, bumpy ride with no certain outcome.

Back-to-the-Drawing-Board-350.jpg 

It's always a bracketing process which requires many iterations no matter how methodical the approach.
Sir James Dyson thrives on failure.  His vacuum cleaner has been through 5,126 versions.  Well tested products often result in recalls.  

burningphone.jpg

What replaces a bad idea ?  A better one, of course.  De Havillands' culture was that if something
didn't look right, it probably wasn't right.  The reason airplane windows are rounded is that the Comet broke up in flight because the square windows cracked in the corners.


comet.jpg

Thomas Edison famously went through 940 filament candidates before he hit on tungsten.  In retrospect
he was more alchemistic than methodical.   Failures did not discourage him.  Instead, he viewed 
failures as data about what did not work.

edisonlitebulb.jpgalchemist.jpg

Today's short attention span is not conducive to perseverance.  By the third iteration, many prospective customers figure we are guessing and dismiss us as incompetent after we are unsuccessful at solving a problem nobody else has been able to solve.  Group think kicks in when the big boss gets the super compressed zip file executive thumbnail version.  Plastic film is a lot simpler than molding, so we rarely need more than three attempts and there are no molds.  

Unlike automotive, our customer's plant is the proving ground and beta test site.

walldeath.jpg

We can't run tests at our facility before presenting a version. With each failed iteration, our credibility erodes.

Suppliers who initially appear discouraging or negative are often the best to work with in the long haul.  These seasoned veterans already know what will work and what won't.  Contrast this approach with a company whose positive-minded sales rep makes promises the company can't deliver.  Like so many things in life, it's not complicated entering relationships; it's extricating oneself which is difficult.  In injection molding, molds are the ties that bind.  Sadly, the empty promises often lead to ugly lawsuits.

It's intuitive that the more complex the problem, more perseverance and revisions are required.   After nearly sixty years, you might think launches would be old hat for rocket scientists.  Everybody except NASA has not given up.  Elon Musk said the last disaster was Space-X's most complex undertaking.

rocketlaunch.jpg

" Design creep" is a plot twist which always sends the process into overtime.  Design creep is introduced in two ways.  Most often, it's after the first or second iteration despite our efforts to capture all the performance parameters up front ( see contact us tab ).  

                                             "Oh, we forgot to tell you we need the film to ______________ ".
For example, we just found out that a film needs to unroll easily after being stored in a desert warehouse all summer.  After the third iteration.  Had this requirement been disclosed in the beginning, we could have saved a lot of time, money and plastic.  Design creep is also introduced when marketing gets into the act and imposes new features often without thinking through the ramifications.  The scary bit is this is America; one must always be thinking of how one could get sued despite best intentions.

It's important to know if the project is ready for prime time.  In the words of one of my former bosses, " you need to be realistic about whether you are in the development stage or in the commercial phase."  Disasters often occur with wishful thinking when on the cusp of going from development to commercial.  And in the words of another of my former bosses, " there's only one thing worse than not having a product - it's having a product that's not fully baked." 

Much has been written about inventions, the tenuous path to commercialization and accidental discoveries. What we do is relatively simple.  If you want us to solve a problem for you, just tell us what you want.  The long form on the contact us page is not best practice for capturing leads.  In lieu of finding out the performance parameters over the course of literally months, we are trying to capture all the performance parameters up front.

 

Read More

Topics: custom PE film, custom LDPE film

PE Film Make / Buy Decision

Posted by Joel Longstreth on Mon, Aug 08, 2016 @ 03:51 PM

It's cliche but true - when milk is cheap, why buy a cow ?  Peter Drucker said it is better to integrate upstream than downstream.  The case for vertical integration play involves payback analysis and other factors.  Henry Ford made his own power mainly because he was fed up with dirty intermittent power.  I can relate.

The often overlooked lynchpin of a successful captive film operation is making it a stand-alone P & L.  

secondmoneyarrows.jpg

Many companies opt to buy film even though they consume enough film to feed a grass roots film plant.
Procter and Gamble Clopay have had a symbiotic relationship for generations.  When P & G puts up a diaper operation, a Clopay embossed film plant will pop up in close proximity.  It's only one item.  

Custom flexible packaging has more moving parts.  There are good reasons to buy PE film on the outside:
1.  Lead time     Using multiple extruders increases the likelyhood of finding a line which needs work.  The New York tri-state area is the best example in the US.

2.  Painless rejection   Rejecting film which comes from an outside source does not generate the acrimony resulting from an internal rejection.  Gotta keep the prima donna pressmen happy, right ?  Finding another film source is easy.  Finding a reliable pressman is not.  If you don't reject film outright, specious claims are a time-tested means to shaving a few cents off raw matierial costs.  The extruder would rather take a discount than see the film show up on his dock.

3.  Cash flow and turns   Most bag makers do not understand the concept of borrowing to pay invoices timely.   Line of credit ?   What's that ?   It's simpler to buy from multiple sources and string out your accounts payable.  If you do hit your credit limit, buy from a different extruder.  

Buying resin is more complex.  
You have to:
forecast 90 days rolling
wait sometimes five weeks for the railcar to show up
pay bills timely
provide quarterly financial statements to the resin companies

If you're on the wrong side of the market, every penny you're off =  $ 2,000.   Film prices drop shortly after CDI comes out.  Whatever is in the silos gets devalued.  Why bother ?   It's much less risky to order film for each job.

4.  Lowest cost   Overcapacity in blown film is a time-honored tradition.  Don't just keep your supplier honest.  Constant reverse auctions give new definition to keeping a supplier honest.

One of our successful alumni - Dave Frecka, founder of Next Generation Films - is betting big on yet another expansion literally the size of two homesteads.  He's betting that his customers will not make their own film.

Flexible packaging converters see making film as much simpler than their complicated processes which involve inks, plates, solvent recovery, adhesives, people, bag and pouch making.  They visit a blown film plant, see an operator sitting down reading a book or taking a smoke break.  The operator is sitting down because he's exhausted from all hell breaking loose over the last two hours.

In theory making blown film is a simple, continuous process.  If it was really difficult and complex, there would not be over 27,000 known blown film shops on the planet. The truth is making blown film is an art despite what equipment manufacturers proffer as "turn-key" lines.  There is a learning curve. 

Let's look at how seemed to be a good idea at the time that led to a salvage play.

The same schedulers who won't schedule a print job until the plates and film are both present hate to wait for film.  The reason the printer has to wait is that a properly run film backlog prioritizes minimal scrap. When the backlog is set up on a first-in-first-out basis or disrupted by the printing plant manager who succumbs to an ultimatum from the cutomer who has threatened to cancel ( sticking the converter with the cost of the film and plates ), excessive transition scrap is the result.   Scrap factors which are not captured in the in the justification for going vertical are transition scrap, internally rejected film, startup and shutdown scrap.  The boffins pick up on the higher than projected cost of goods sold first.  Until the day of accounting reckoning arrives, it's a myopic free-for-all.  Everybody feels good about percieved free film, controlling their destiny and not getting ripped off by their film supplier.

Of course, there are many successful vertically integrated operations.  If the end product has ample gross margin, allocation of the cost burden is moot.  I'm not making this up - many lucrative operations have an internal transfer cost of a penny over resin.   

A blown film operation is capital intensive with inherent high operating leverage.  It makes or loses money incrementally on either side of break-even.  When volume falls short of the break-even, the "prisoner's dilemma" follows.  Running at a loss is better than shutting the line down.  The penultimate desperate phase is scrambling for cheap work to maintain cash flow.  Over the years, I have been to many industrial funerals known as auctions.    We get notifications of liquidations every 6 weeks or so.  We hear from leasing companies who ask if we are interested in lines they have "carved out" of a converting operation.  When the line was first up and running, there was a party atmosphere - " whooopee !  free film !  on demand ! "

So if you are contemplating making your own film either financed or with a few extra millions of extra cash, our advice is to be sure you have:

1.  sales to feed the fixed cost beast
2.  lots working capital and a line of credit
3.  a strong plant manager
4.  commitment to a 24 / 7 operation

Read More

Topics: LDPE film, PEfilm

Plastics in-depth and insights

 

Subscribe by Email

Browse by Tag