ARM EXECUTIVE FORUM HIGHLIGHTS

Omni La Costa Resort and Spa, Carlsbad, California

The ARM Executive Forum is held each spring, bringing together industry executives to learn, share ideas, and network. This year’s in-person forum took place on March 20-22 at the Omni La Costa Resort and Spa in Carlsbad, California. The event drew a good group of molders and suppliers from across North America and neighboring countries. While sunny California did not live up to its reputation, and some of the outdoor events were impacted, those who took the time out of their busy schedules were rewarded by an excellent program, with the highlight being Ram Charan’s presentations. Having someone of Ram’s caliber participate was memorable for all who attended!

Matt Bushman (ARM President) opened the forum with a warm welcome thanked the sponsors including: Roto Polymers, Nova Chemicals, LyondellBasell, Muehlstein, Quantum Polymers, and RotoLoad. These sponsors enabled ARM to bring in some great speakers resulting in a high-quality meeting. There was an especially warm welcome for first time attendees, of which there were many.

Michael Levitt, Breakfast Leadership, jumped right in with his opening remark, “There is a tidal wave of people quitting their jobs”. This situation has been accelerated by the COVID pandemic, when many people in the workforce had the opportunity to work from home, but others did not, and this situation became a dividing factor. Research by Deloitte suggests that at least half of available positions in 2028 will be unfilled. According to Levitt, with challenges come opportunities, and employers need to get innovative.

Levitt pointed out in 2021, 47M people quit their jobs and went to a different job opportunity, perhaps choosing an easier road. The Government recognizes that manufacturing is a key component of the economy and therefore, they will continue to invest and support the sector. Automation can be a factor to eliminate positions and help compensate for a shrinking workforce pool. Employee engagement is another critical factor to ensure healthy productivity. However, engagement has been in decline. Society needs to remind ourselves we are designed to work, to create things, and develop new technology. A challenge that manufacturing has is to not let the “we haven’t been able to do that, or we can’t do that” thinking to get in the way of innovation. Edison was told there’s no way to get electricity into a light. Talk with your team, your people, and your association about new ideas or processes to make their jobs easier and to help grow the business.

On the topic of Cyber Security, Pat Long, Formed Plastics, recounted an event at their company where they were tricked by a bad actor who created a bogus email account that was close to theirs. Now Formed Plastics uses Microsoft 365 and a two-factor authentication plus requires a verbal confirmation with the bank for bank account changes. Alvin Spence, Centro, talked about a ransomware attack on Centro in 2020, which resulted in a $1M ransom request. After working with two cyber security firms who goes into a wide variety of applications, which are manufactured from many different plastics processes. At the end of their useful life, these plastic products may be available for collection, sorting, landfill, energy recovery, or recycling. If the plastic enters the recycling path, then it can be recycled mechanically, chemically, or advanced recycling can be used to bring it back to its virgin state.

Carsten Erkel, Elkamet, began with an overview of the Elkamet company – a 3rd generation family-owned business, founded in 1955, with 1300 employees, 6 sites (3 in Germany, and one in the Czech Republic, US, and China), approximately €200M in sales in 2022, and certified to IATF 16949, ISO 14001, and ISO 50001. Elkamet specializes in extrusions for automobiles, plastic profiles, plastics for lighting, and rotomolding for vehicles.

Expanding on the plastic profiles for the automotive business, Elkamet supplies glass suppliers and are a Tier 1 supplier to VW, Ford, BMW, Honda, Porsche, and Scania. They are also a Tier 2 supplier to Daimler, GM, Fiat, Peugeot, Citroen, Chrysler, Jaguar, Landrover, Tesla, and Nissan. They manufacture a profile that seals between the windshield wiper mounting (cowl grille) and the windshield. Their market share is 40-60%, so there is about a 50% chance your vehicle has an Elkamet product. Another important part of their business is office lighting, where they manufacture profiles for LED lighting. Also, decorative lighting, both exterior negotiated with the attackers, they decided to go to the backup system and rebuild the server. It took courage to make that decision. Adam Covington, Ferry Industries shared about a similar incident whereby a vendor made a full payment and asked for a refund, as a way to get into the system. The company has changed from using one IT person to using a firm. Controls can be expensive but not as expensive as what could happen if attacked.

Eugene Tabone, NOVA Chemicals, tackled the subject of advanced recycling of plastics and began with an overview of the life cycle of plastics in general. This helped the audience understand the journey of taking a feedstock material through the cracking process to create the ethylene monomer, which is then used to create polyethylene. Once created, polyethylene then and interior. Products are extrusion blow molded, with some being metalized on the inside. Applications often include bars, restaurants, offices, shops, etc.

As for rotational molding, Elkamet produce many different products for vehicles. For example: hydraulic oil tanks, diesel tanks, gasoline tanks, DEF tanks, water tanks, covers, fenders ducts, and electrical housings. Also, Type IV pressure tanks for CNG and hydrogen applications. Their applications include agriculture equipment, motorcycle fuel tanks out of Nylon 6 and XLPE, truck and bus tanks, flue gas chamber connections, electrical housing, liners, etc. They have many customers, including Caterpillar, JCB, Kubota, JLG, Terex, Volvo, AGCO, John Deere, CNH, Wacker Neuson, and Liebherr.

Conchita Miranda, Miraplatek, talked about her experience traveling to India for the annual STAR conference in January 2023. Miranda shared her knowledge of the South American market. The STAR conference had representatives form 15 different countries and 14 Indian cities, with more than 100 participants. Culturally, India is very different than the US, Canada, Mexico, and Europe. The format of the conference was very similar to ARM’s, with a networking dinner, exhibition hall, gala dinner, 4 workshops, and 18 presentations. Of course, part of the experience when traveling so far is to enjoy some vacation time and there are many ways to do that in India. Some of the benefits of attending the conference included the knowledge gained from the presentations, expansion of supply chain options, and the identification of several Indian products that could be developed and marketed in Mexico. All in all, this was a great experience with some good business growth opportunities.

An HR Panel has been key part of previous Executive Forums, sharing knowledge and providing attendees with ideas and concepts they can take back to their employers. This year was no different, with four extremely knowledgeable HR leaders including: Melissa Derheim and Jori Gilbreath, Advanced Pedestals; Robin Longenbaugh, Reelcraft Industries; and Rhonda Griffin, Centro, Inc.

Melissa talked about the importance of good on-boarding and training. Advanced Pedestals has recently developed a more robust training plan for new hires, by having them spend several days with an engineer who is knowledgeable about the rotational molding process, so that the new associates are more comfortable when they head to the production floor. API also keeps reviewing their training material on a quarterly basis, looking for improvement opportunities. During a new associates 2nd week on the job, they are paired with a trainer. It reduces the stress level for the new employee and gives them time to observe and learn. They call their program “Molding with Confidence”. These changes have helped with their retention metrics and have created more promotional opportunities within departments. API also strives to create a 5-star experience for all employees. This involves a mentorship program and weekly meeting looking for ideas to help create the right environment.

Jori talked about the benefit of a program that identifies team members who go above and beyond or who demonstrate that they care. Associates might be rewarded with a gas card, but it’s the recognition that makes them feel good. Also, finding opportunities to celebrate has been good for morale, for example they had a popcorn day for St Patrick’s Day and gave away some company swag. API also does a lot with the local community and gave an example of sponsoring a movie.

Robin spoke about the importance of earning committed employees and how Reelcraft is the employer of choice in the local area, even though they aren’t the top payer. Be bold and take chances to create programs that are outside of the box. Appreciate people for their skills and talents and if they fit the mission and values. Attendance isn’t an issue now because of the Champions program they have implemented. Their referral bonus program pays $3K. They now have a low turnover rate. Starting pay $17/ hour when they compete with other employers at $21. However, they do offer paid time off, but not during the first 30 days and offer other enhanced benefits to attract employees. Robin made the point never to hire someone who is currently unemployed and to retain good talent, never bring bad talent through the door.

Rhonda talked about how recruitment and retention is better than last year at this time, but still challenging. Centro has implemented the Weekend Option Program (WOP) and has 50 Associates in 4 business units participating to keep some machines running two extra days/week. They earn 90% of what a regular Monday through Friday associate earns, and they can pick up extra hours during the week if they choose to do so. The company is investing in leadership development because front-line leaders are the key to retention. They utilize Franklin Covey’s All Access Pass and are teaching the 7 Habits of Highly Effective People. They have done an engagement survey for 9 years using Kevin Kruse’s Engagement 2.0 method.

Those who attended this year’s Executive Forum had an opportunity to listen to a world-renowned business consultant when inflation is affecting the whole value chain and they will pass the price to the next person, and to the next person, and to the next person. Absolute focus on AR. If you’re giving discounts, have absolute focus on them. The worst scenario is high discounts and long pays.

Global Business Advisor Ram Charan (www.ram-charan.com) spoke to the group. In the past 40 years, Ram has authored, consulted, and worked with many of the top CEOs, Boards, and companies throughout the world including the likes of Toyota, GE, and Bank of America, to name a few. Ram is highly educated, earning his degree in India, then MBA and doctorate degrees from Harvard Business School, where he graduated with high distinction and was a Baker Scholar, and served on the faculties of Harvard Business School and Northwestern University before pursuing consulting full-time. Ram has also authored more than 30 books, with several of them being best sellers. Ram was brilliantly introduced by JP Engelbrecht from Fibertech Plastics. JP was a huge fan of Ram’s work and was absolutely thrilled to introduce him and make everyone aware of Ram’s career achievements.

Ram gave a very impactful start to his initial talk on stagflation, asking the audience if anyone knew who the 7 human beings are that run the world?

• Inventory flow – if you are buying some commodity, ask yourself how much cash I can use to hoard these items. If China controls it, keep a close eye on these items.

• Debt – No one should take the risk of high debt. The situation we find ourselves in won’t be resolved for a minimum of 4 years. We enjoyed a period of fantastic growth…but it’s gone. We are now going to have to pay for those sins.

3. Plan for your cost increases over a minimum of a 3-year period. Look at it every 6 months, looking 3 years ahead and look at the accumulator and what that does to the cash flow. Ask how am I going to recoup that increase? Cutting costs will not be sufficient.

1. Jay Powell, Chairman of Fed Reserve (who controls interest rates)

2. President Xi Jinping (China)

3. Crown Prince of Saudi Arabia (oil)

4. Ayatollah of Iran

5. President Putin

6. President Biden

7. Most likely to be the President of Turkey

All expect Powell and Biden are dictators and autocratic. Ram said people ask him all the time how long inflation will last. While Ram did not specifically answer that question, he made the following recommendations as to how business owners should be managing their business.

1. Manage your company for cash, not earnings per share, because inflation eats cash. Know daily what your inflow and outflow of cash is. Know what goes out and what comes in, and it better be a positive cash flow.

2. Cash traps:

• Account receivables – be very tough on them because

4. Plan your price increase now. Get ahead of the curve. Tough and not easy. To retain your customer, what is the value of your reliability and services provided, e.g. delivery, reliability, quality…it is high. Get your customer commitment through the reliability of service and product innovation if possible.

5. Look at your capital expenditures. Many were designed with 0% interest rates. Now we’re at 5%, and heading to 6%, and it could go higher. The Chairman of Fed is focused on bringing inflation down to 2-3%. To do that he has to create a deep recession. Even then he doesn’t control the price of energy, the price of food, and the price of materials. Look at doing business model simulations. If the Federal Reserve rate went up to 6% what would that mean for us? Make your speculation and ask yourself if that took place, what am I prepared to do. Sports and entertainment do rehearsals, why not in business? Get your team together Ram says, if that is to happen, what will we do? Interest rates are going up and they are shrinking the money supply. We’re going to spend more money on defense and infrastructure. Nobody thought interest rates would increase from 2% to 5% in one year, and that changed the whole thing. Talk to the bankers about what you’re doing. It looks negative… and it is. There is growth in infrastructure though, but they’re not exempted. If hardship comes, give the #1 priority to cash. If you must cut your capital expenditures, do it. Very hard to take the overhead out. Cash is king.

After a short break, Ram then moved into his 2nd topic of the day, which was Execution. He started this section talking about 15 billionaires, with no education, and focused on the simple question of “how do you make money in this business”? Does it use more cash than necessary? Is your gross margin good, bad, or indifferent? Do you spend money on R&D? Do you do annual improvements? Do you have the right employees? Do you remove employees that don’t belong here? Is your money-making model better than your competitions?

Look at Apple’s market share. They always target 40% gross margin. Steve Jobs picked the number. He had to have a product that demanded that margin. He went to see Hewlett Packard and saw some opportunities. Engineering must demonstrate they can get a high margin by product, customer, and by differentiation.

So, what are the drivers to meet the goals? Again, we need to keep it simple. Some of these billionaires have a huge amount of common sense and tenacity. They focus on things like new product development, simplification of new products, and collaboration. Ram talked about Jeff Bezos, when he went into the book business, his margin was set at 20%. Then, he expanded the business model, and you can now buy anything from Amazon… its margin is now 40%.

Ram then talked about the need to identify critical operating tasks (C.O.T.s). He gave the example of Elon Musk and electric vehicles and how early on he understood the criticality of the battery. He wanted a car with this kind of profit, this kind of price point, with this kind of flexibility. He has the highest operating margin for EV’s today @ 17%. He said he will cut the cost of the vehicle by 50%. An EV is a computer on wheels. He knows how to have the integration of the hardware with the software.

Ram then talked specifically on the topic of one of his books –Execution. Ram pointed out his five rules for execution as follows:

1. Accountability should be clear and transparent. What will be delivered by when. No ambiguity. Shared responsibility is not clear. There should be no job in a company where accountability is not clear and transparent.

2. Right people in the right jobs. This is true since humanity began and it’s the one that is violated the most. Be clear this year, identify three things that need to be delivered. Does this person’s talents make them be able to deliver it or not? Picking the right people is the most important thing you can do. You will make mistakes….no one has a 100% batting average! Make the changes needed. If there’s a mismatch, consider restructuring the job. The person may have the right values and other right things, but their ability to do the job may be lousy. Preserve the talent, as it is easier to restructure a job than change the talent or personality of a human being.

3. The Rule of Three (KPIs). Focus 2/3 of your energy on 3 most important things. Pick them carefully and make them transparent. Avoid a single measure of success. GE didn’t put cash on the CEO’s KPI’s until the shareholders forced it. Design them and focus, focus, focus. Choose 3 KPI’s for this year, and you can change them for next year.

4. Monitoring and make it transparent. Give everyone visibility that needs to see. Get the dashboards in front of everyone who are authorized to see them.

5. Follow through! This is the primary reason many managers and leaders fail. People hate to follow through, but you must do this. Every time you meet with someone, at the end of the meeting – what are you going to do, what am I going to do, and when will we meet next. Ram gave an example that one employer said if you’re falling behind, come to headquarters and we’ll get you more resources to help you get it done. We won’t fire you unless it’s an ethical issue. We may fire you at the end of the year, but we’ll keep you employed now and get the resources needed to get it done.

Ram concluded these thoughts on execution with the comment that business is one of the professions you don’t need a degree for and that you can learn from your peers and the school of hard knocks!

On the second day of education sessions, Adam Covington, Ferry Industries, introduced Robin Longenbaugh, Reelcraft. Robin shared her experiences regarding how to foster committed talent. She said, “Today on Indeed, 70% of the postings have the company’s mission and values in their postings and that all companies in your local area are competing for the same talent.” Approximately 85% of Reelcraft’s employees are front-line workers. They view having committed workers as a two-way street. This has led to the development of what they call their “Champions” program, which demonstrates their commitment to the higher performing employees.

Robin pointed out that Reelcraft is owned by Madison, and they make hose reels and extension cords. Reelcraft runs their business on the 80/20 principle, in that 20% of the people deliver 80% of the production. Reelcraft decided to invest more heavily in these key people, by making them Champions. Champions can be nominated by their peers, based on how well they match to the values: grit, integrity, and commitment to excellence. Typically, employees that fit in this group demonstrate a combination of being highly competent and align strongly with their culture. Champions get paid $3 more per hour. They also have an event when they get inaugurated into the Champions program. Their families are present at this event and part of the ceremony includes sharing why they have been selected for the program.

It’s a proud moment for the associate and their families. Before this program turnover was a significant problem, and with the local market being very competitive it was difficult to fill positions. Now, there is much more of a family atmosphere, with reduced turnover, increased pride, and increased sales, greater than 20% year-over-year.

Corey Claussen, Custom Rotomolding, recognized how ARM has helped to create collaboration opportunities. He related this to how Custom Rotomolding (CRM) and Pentas (located in The Netherlands) developed a relationship in 2014. There were many similarities between the companies; both family-owned, roughly the same size, similar number of employees, and close in growth. The partnership came about as they had a mutual customer in CLAAS, an OEM, and both companies were supporting that customer on different continents. The customer wanted localization of the products, and this created a unique opportunity. Alignment of the companies has resulted in a better experience for the OEM.

From the partnership came sharing of knowledge, information, and technology. For example, Pentas uses robots to run machines and dump powder. Best practices were shared, along with processing knowledge and some product designs were worked on collaboratively. This resulted in a unique fuel tank design that OEM had given a goal of 30% capacity increase along with a 30% shot weigh reduction, while maintaining functional requirements. This was achieved through the inclusion of micro-ribs and both companies now manufacture that tank.

Another benefit has been the sharing of supply chain vendors and component information, which in turn strengthens the network and reduces risk. The companies talk regularly, even sharing financial information, resulting in a close partner and general business philosophy alignment. Corey highlighted that Pentas was Supplier of the Year for CLAAS in 2018, and because the partnership was so strong, Corey was part of that event.

Daven Claerbout, Dutchland Plastics, wrapped up with an open discussion on the many takeaways from the Executive Forum:

• Read Ram Charan’s book Execution (Amazon book and audible).

• Enjoyed the economic update. Cash is king!

• Ram’s presentation was phenomenal and biggest impact they’ve ever had regarding economics.

• Great job Adam and Anna for identifying and selecting Ram.

• Robin and her outlook on creating committed talent along with the entire HR presentation panel was excellent.

• The way you treat people is critical.

• Signing bonus switching to referral bonus is a takeaway.

• It’s not just your management team being nice, you need programs in place to reward, provide opportunity for advancement, etc. It’s beyond kind words.

• It’s important to understand the top 3 reasons employees join your business, but also it would be good to ask for the top 3 reasons for things they don’t like or what they would do if they owned the business. Focus on the #1 reason to improve.

• Cyber Security – It’s critical to stay current with how to protect your business from cyber attacks.

• Use the Microsoft authenticator app rather than two-factor authentication. Pay attention to the e-mail addresses coming in. If your company isn’t sending out test e-mails, get it going. One company uses NINJIO subscription program – 2-minute training and test at the end. Same as KnowBe4 program.

• International collaboration – all three gave unique business perspectives. Carsten, Corey, and Conchita did a nice job sharing how their companies have benefitted from international collaboration. In 2024, ARM is planning on co-hosting an event in Italy with the Italian Association, which will provide some opportunities to visit molders and potentially create future business partnerships.

• There aren’t a lot of places where you can sit next to competitors and have the opportunity to grow deep friendships like you can as a member of ARM. It’s a unique organization.

Mark your calendar now for the next ARM Conference, which will take place in Kansas City September 26-30, 2023 (go to rotomolding.org).

ARMO — the world’s international leading rotational conference — is returning in 2023 and RotoWorld® is very happy to be the media partner for this key event. Each edition typically takes place in a different host country and in 2023 the conference is taking place in Poznań, Poland, 10-12 September.

The Affiliation of Rotational Moulding Organisations (ARMO), which is an international group of organisations that provide services to the rotational moulding industry, runs the ARMO event. ARMO 2023 is being jointly organised by Rotopol (Poland) and the British Plastics Federation (BPF).

The event will take place over three days and will feature numerous presentations, a large exhibition area and an industry dinner. An entertainment package for spouses and partners is also being offered. Some sponsorship and exhibition opportunities are still available if you are quick.

ARMO 2023 follows the huge success of the previous edition, which was held in Hamburg in 2018 and had 567 attendees and 52 exhibitors. It is the first time that the event has taken place in Poland.

What is on at ARMO 2023?

The theme of ARMO 2023 is ‘sustainable rotational moulding’ and it will be an essential networking opportunity for rotational moulders. Suppliers and manufacturers will attend from across the globe, looking for new business contacts and to discover the latest innovations in rotational moulding technology.

Presentations include:

• Sustainability-related Research & Development in Rotational Moulding — Mark Kearns, Queens University Belfast

• Sustainability in the Graphics Industry: Thoughts and Opportunities — Konstantia Asteriadou, Lysis Technologies

• Data Driven and 4.0 Technologies in Rotomoulding — John Potargetn, AMS Belgium

• Where the Energy Goes in Rotomoulding — Gareth McDowell, 493k

• Development of an Optimised Recycled/virgin Polypropylene (PP) Blend for Rotational Moulding Industries

— Matrix Polymers

• Change or be Changed — What is Your Strategy?

— Ronny Ervik, Norner AS

• The Current Work in Polymer Processing Laboratory at Poznań University of Technology — Professor Mateusz Barczewski, Poznań University