by Brittany Willes, editor, Plastics Decorating
Plato once said, “Strange times are these in which we live,” – words that ring with an ominous truth given the current climate. These are indeed strange times. As the effects of the coronavirus continue to make themselves known in every facet of society, members of the plastics industry have seen their businesses impacted in ways they could not have imagined.
In early April, Plastics Decorating hosted a webinar where several industry leaders gathered to discuss the ways in which their businesses have been affected by shelter-at-home orders and supply chain interruptions and how they are working to address these challenges.
As the threat of COVID-19 sweeps across the country – and the world – employers have had to take varied steps to ensure the health and safety of their workforce. For many, this has meant getting as many employees as possible set up to work from home. Given that most businesses were not previously set up for such arrangements, the logistics of working remotely had to be solved quickly in order to keep business running as smoothly as possible.
“There was a mad rush to get laptops and systems set up and make sure people had all the basic hardware and structure that you need to run a business remotely,” stated Chris DeMell, medical market manager for ITW Trans Tech. “I work out of the house already, so I’m used to it, but so many of our staff do not. There were many challenges there, not to mention that people aren’t used to working from home.”
Of course, it is not possible for all employees to work from home, given the nature of the industry. Those employees who are needed on shop floors and in facilities are facing their own unique challenges when it comes to staying safe and healthy. “We’ve had to implement multiple shifts and reduce the number of people present during each shift,” said Amdec President Kathy Carmody.
Efforts to reduce direct contact between individuals hasn’t ended there. “We do not allow any vendors or customers inside our building,” said Carmody. “We’ve staggered employees’ lunch and dinner breaks. Areas are clearly marked so that there is six feet between operators and between packers and inspectors. If anyone is feeling ill, we take their temperature and, regardless of the result, they are sent home. We’ve done pretty much everything we can to keep everyone safe.”
Along with social distancing and basic safety precautions like cleaning/disinfecting common areas and surfaces, businesses are also taking steps to keep their employees informed of their rights and responsibilities during this time. “We made sure all of our employees are aware of the Family First Coronavirus Response Act and what their rights are,” said Keith Ekenseair, president of Pad Printing Technologies. “If someone has a family member they need to stay home with, or if an employee themselves were to get infected, they need to know what their rights are as well as what our company’s obligation is to them. In our communications with our employees, we’ve told everyone to stay safe, stay calm and don’t freak out.”
Supply chain interruptions
“We buy our raw materials film stock from overseas, so that was a real challenge when all of this started,” said Eric Steinwachs, director of sales and marketing for CDigital. “We were eventually able to get more shipped in, but because of work stoppages and things like that, it was a pretty good delay before we were able to receive some of the raw materials.”
Like CDigital, many companies have experienced interruptions to their supply chains. Of course, even those who are still able to access their overseas supplies are feeling the strain. “On the other side,” said Steinwachs, “we’ve had customers cancel orders because they haven’t been able to get their products in from China. We print for the promotional products industry, and a lot of those items have been in short supply from China.”
Luckily, some businesses have not been as affected by supply chain interruptions. “We looked at our inks and chemicals and things of that nature and looked at our usage and essentially made sure that we had at least six months of supply of all our key raw materials components,” explained Ekenseair. “In some cases, we’ve gone so far as to facilitate a year’s supply to make sure we’ve got ample production capabilities. We’re constantly monitoring that as we move forward.”
Amdec, likewise, has been able to avoid the worst in supply chain shortages thus far. “We were fortunate in the fact that we already had an ample supply of a lot of what we’re going to need in the future,” said Carmody. “Although there is a limit as to what you can buy chemical-wise, we’re doing good right now. It will hopefully carry us through.”
Budgeting during crisis
Unsurprisingly, the current crisis is having a profound affect on budgets, both in the short and long term. Many businesses are delaying purchases deemed nonessential as they closely monitor the situation. As uncertainty continues to mount regarding the economy and the duration of the crisis, companies are having to reevaluate their end-of-year budgets and even into 2021.
“The biggest concern would be the threat of any type of recession,” said Ekenseair. “I’m hopeful that’s not where we’re headed, and we’ll be able to move forward as planned, but we’re cautiously watching.”
“One of the effects we didn’t anticipate, but are now understanding, is the businesses we were doing business with are having cash flow issues,” Steinwachs affirmed. “They’ve stopped paying. So our accounts receivable has been going up and our late payments have been really growing to where we’re now struggling with cash flow as well.”
“I think we are all facing similar issues,” commented DeMell. “There’s a certain group of customers that business has basically been suspended on. We’re certainly seeing a hit, not only in our consumables market, but on equipment orders as well. Most things are basically on hold. There are certain things we need to do to conduct business, and we absolutely have to spend for those things, but in terms of larger projects and such, things have slowed down.”
“We’re not making any major purchases,” Carmody likewise stated. “We’re monitoring daily what’s going on in the business world, what our vendors are doing and what’s going on with our customers. In the long term we will not be making any major purchases whatsoever. When things get back to normal, our plan is to hit the road running really fast, working longer hours to get everyone back up and running and selling product. It’s just day by day right now.”
While many are understandably fixated on the immediate situation, some thought should be given to how to proceed as things slowly begin to return to normal. One of the few bright spots has been a realization that the old way of doing things is not necessarily the best and will need to be reevaluated.
“Hopefully, this will teach everyone that things need to be made within the US,” said Carmody, who is far from alone in her thinking. Many manufacturers have recently been coming to the same conclusion.
“I’ve seen quite a bit of reshoring of businesses,” DeMell confirmed. “It seems to be quite a trend throughout the country.” When it comes to rebuilding business in the aftermath of COVID-19, DeMell is optimistic that things will eventually stabilize. “What I anticipate happening is a massive influx where a lot of the pent-up demand will be released when this starts diminishing. We’re going to see a lot of projects that have to get done at once. There’s certainly a lot to look at when it comes to preparing for the end of the year as well as starting to build up for next year.”
This article is a summary of information provided during the Plastics Decorating webinar: A Panel Discussion on Working through COVID-19. To listen to the complete webinar, visit www.plasticsdecorating.com/webinars.