When you watch the news today, you might think the world is going in strange directions. This is challenging for all of us.
Over the years, business has learned to deal with globalization and open markets around the world and have designed their strategies around the current demands and challenges. As of 1 – 2 years ago the world began to change in a direction that requires all businesses to adjust their strategies.
This year Independent Can Company is celebrating our 90th year making specialty tins. We are proud to say that we have thrived through the good times and the tough times and today we are working hard adjusting to the current global and local challenges.
In previous articles that I have written I have noted many of the investments and projects we have taken on and I feel very positive about how many of these strategies are now beginning to come to fruition.
Some of the challenges:
- Growth– As a company our focus was never on growth as we knew that if we took care of our customers they would take care of us. Referrals and developing a strong reputation as a reliable supplier has been our guide.
- Several years ago, we found our growth had reached a point where we needed a full ERP (Enterprise Resource Planning system) to help manage the business as long term, talented personnel could not manage the old fashion way with the breadth of the markets and product we now serve.
- In 2018 and early 2019 we suffered from the ERP not providing the data needed to service our customers. Now we have made huge improvements and it is functioning as an asset and not a liability.
- Rebuilding trust and reliability – We disappointed a number of customers on service in the past 18 months. This year, we have many of the tools we need to truly begin to rebuild the quality in service and communications. We are not perfect yet, however, we are on the right track
- The complexity of making specialty tin is enormous, with a mixture of short run custom work, seasonal demand that is unpredictable and a huge array of products.
Tariffs
- This has been the biggest curve ball presented to us since 2008’s recession. A little background:
- Historically we have bought nearly 100% domestic steel. Over the past 10 years the reliability and quality of the domestic mills has become significantly worse, with many quality claims, causing domestic suppliers to be disqualified for supply.
- Domestic deliveries 10 years ago were nearly always on time have now dropped to less than 25% on time.
- The tariffs imposed by the US Government were 25% and when this was done it did not take long for the US Mills to raise their prices to just below the
- overseas pricing.
- The lead time for domestic steel for re-qualification has been much longer than expected, at times 8-10 months depending on the application, consequently returning to locally produced sheets will take a long time.
- We would like to buy all steel domestically as we believe in Made in America and we are a domestic manufacturer. We buy based upon the following criterion: Quality, Service (on time delivery) and Price.
- Market Pricing for cans: The economy has been strong but the pressure on pricing has also been strong: costs have increased and no one will accept higher prices: margins have suffered badly.
Domestic and Global Economies
Due to Nationalistic trends around the world and tariffs imposed to protect home markets, global growth is slowing.
What does this mean to the can industry and steel related industries?
- Steel cost “should” moderate in 2020
- The can companies in the USA have not recovered the higher cost the tariffs imposed, consequently, when steel moderates, can prices will not necessarily follow the downward trend in the near term.
What is Independent Can Company doing?
- We have the finest lithography capability in North America and now we will have more apprenticeships to prepare for the future skills needed.
- We have automation processes being installed in each of our 5 manufacturing plants that will reduce labor cost, speed up throughput and improve quality. Automated Guided Vehicle (AGV’s), Automatic packaging systems, the integration of processes etc.
- Our ERP staff is coming out with new and improved reports daily for data collection that will make our plants more effective.
Plastic Packaging: Finally the world is recognizing that plastic are maybe our most destructive environmental disaster in the past century.As good as plastics are for many applications steel–based packaging could perform equal to or better than plastics and is 100% recyclable without loosing any of its properties.
- Plastics only have a life extension and will end up in a landfill or the oceans and they are not fully recyclable
- Many of the global consumer product companies have committed to significantly reducing the use of plastics and returning to sustainable materials: steel and paper in the next 5-10 years.
I want to thank you for reading this article and please know we are working very hard to be your supplier of choice and earning your respect and your business through Quality, On Time Deliver and Competitive Pricing.
Rick
