Many converters surveyed in February admitted that the current economic climate had affected their business, with varying levels of slowdowns. Only a few said their business is “doing OK.” What product converters are concentrating on now are the best ways to ride out what is projected to be a challenging year. While many of the strategies for 2009 are somewhat predictable, it’s useful to review them, and then look at some variations.
Solid Customer Relationships
According to Joe Hemmer, wipes sales manager at Athea, a wipes producer and formulator, “Knowing your customers and having strong relationships has a major impact right now.” He pointed out that long-term partnerships that companies have fostered are showing their value this year.
“Customer-partners also understand we are in this business climate together.”
“Customer service is getting thin right now,” said a converting consultant based in the northeastern U.S. “So, follow-up and reliability are still critical to successful business results.” This is no time to leave customers frustrated trying to find answers.
When customer budgets are reduced, converters have to be creative in various ways, often causing fresh views of converting. According to a major national wiper supplier, “A lot of people are looking at the whole supply chain for improvement and cost-cutting.”
Companies are looking at new ways of interacting as part of an improved, streamlined approach. It’s as simple as reducing steps in the process, communication and transportation. Any savings is good right now, according to the supplier.
Raw materials such as fibers and nonwoven roll goods are a major cost for converters. The more highly automated the process, the larger percentage raw materials contribute to the cost so that part of the supply chain is also under scrutiny. As Jan O'Regan of Cotton Incorporated stated, “The world of cotton is not insulated from the world economic slowdown.” The role of this and other raw materials is already showing an impact. She added: “Relatively stable pricing is an indication that the prices have already taken the global economic slowdown into account.” North America, Europe and the more mature regions for applications like wipes and absorbent products remain competitive when their level of automation and technology leads.
Companies who are flexible are likely to ride tough times better. For example, Mark Burgess, president of Top Brass Inc. said, “Many converters do not have equipment flexibility or cannot ‘downsize’ for shorter-smaller production runs.” However, he notes that there are no simple or complete answers. “In our case, having good expertise in specialties across many markets and niches helps considerably,” said Mr. Burgess.
While the converting industry, like many, has seen some layoffs, these companies are generally already lean in terms of personnel. The good aspect of this is that it’s not unusual to find the contact person to be the president, vice president or high-level executive—people who are also very hands-on and can make timely decisions. It helps their customers’ budgets when dealing with streamlined, fast-turnaround converters.
Technology Still A Factor
The converting world is still making product developers and marketers aware that today’s manufacturing entities are part of some very high-tech movements. “There’s a lot more to manufacturing than the plant floor,” said Alex Zacarias of Manufacturing For The Future. “The opportunities and challenges are part of converters’ ongoing agendas but those companies need to do a better job of getting the word out.” The fact that converters are still actively seeking tech-savvy employees and skilled labor is one testament to the level of forward movement in converting, pointed out Mr. Zacarias.
Foremost right now are various mainstream production efficiencies. “This is something we are always doing,” said a wipes converting source, “but now more than ever.”
Innovation Goes On
“Knowing the landscape where new ideas drive innovation,” said Hemmer, “adds to the number of projects we can evaluate.” These projects help for today and in the long term. There are some converters who are rolling up their sleeves looking for new partners where ideas are just coming into the marketplace. Product development partners are not just the same players but are also companies entering wipes niches with new wipes and performance attributes. These companies can come from several areas:
• Current nonwovens product segment developers who are expanding
• New niches for nonwovens wipes and other nonwoven-based items
• Marketers who are in particular niches but now adding nonwovens line extensions
• Marketers expanding into niches that often call for nonwoven products
• Movement from consumer to institutional, industrial and business-to-business areas.
In addition to those new market potentials, tech-savvy converters are evaluating and offering variations ranging from the latest or newly-repurposed nonwovens, additives, packages and other approaches. The way converters work with their product development partners to analyze the possibilities allows them to offer technological advancements and ultimately higher value.
What About Sustainability?
The momentum of the earth-friendly movement has gathered sufficient steam to continue its penetration into nonwoven products. This giant ship will not be turned away in 2009. There will be some delays where investment is intensive. However, the larger issue may be converters and product champions offering meaningful earth-friendly product and packaging attributes since “greenwashing” continues to muddy the landscape. From definitions of green features, to delivery of real impact, the next generation of sustainable products is likely to receive more examination by consumers and others.
Commitment to the Future
“We believe the current tough times are times to retool and train our people,” said Bob McCaffrey of Corydon Converting. “Paying attention to productivity measurements, improving on the results and training the workforce is essential.” Contrary to national headlines about other manufacturing reductions in the U.S., nonwovens converters remain nimble and highly viable.