The Things We Make Define Us - How Will Rotomolders Be Defined When Fuel Tops $5.00/Gallon?
by Robert Dunne
I looked out the window at the parking lot of our building yesterday and a Cadillac commercial from more than 20 years ago popped into my head as if I'd just watched it yesterday. The ad featured an executive turning out the lights and leaving a Class A office building after a tough day at work. Tired yet proud, he confidently walked alone to the parking lot to find his Cadillac, the last car remaining in a very large, very empty lot. Symbolizing his hard work and dedication, this superbly engineered and carefully built luxury car served as a reward for his commitment and perseverance. It marked a level of achievement. He'd made it. That I haven't been able to wipe this commercial from my psyche like a song that refuses to leave one's memory documents the impact of such effective advertising. And if executives at General Motors hadn't squandered the Cadillac and its considerable amount of brand equity then I might be driving one today. While values like hard work and dedication continue to anchor Ford-150 truck commercials, they have been replaced in the latest luxury car commercials by technology and fuel efficiency - a concept that hadn't even entered the consciousness of luxury car buyers 20 years ago. At a time when gasoline prices hovered around $1.00/gallon, gas mileage certainly had no place in the Cadillac commercial.
Today, as the prices of gas and diesel fuel threaten to eclipse $4.00 /gallon and approach $5.00/gallon, even many of the most well-to-do car buyers are fixating on - or at least considering - the cost of fuel in their purchase decisions. As rotomolding executives, those of us who pay comparable attention to rising fuel prices and their impact on every facet of our businesses from product design, materials, production and freight to internal energy costs and the costs our staffers must bear just to commute to work are likely to survive and prosper. Those of us who pay attention to the growing interest in environmental issues among our customers' end users stand to do even better. It's not uncommon to see a Prius in the same driveway as a Mercedes though few would label it as beautiful or as luxurious, and that Mercedes is more and more likely to feature a hybrid engine. It is in this climate of carbon footprints, sustainability, technology and rising costs for fuel, food and materials that we need to address how and what we design, manufacture and send to the marketplace.
Product Design and Development
If and when fuel tops the $5.00/gallon threshold, it's likely that the cost of freight has also jumped accordingly. This cost may be minimized most effectively at the design stage by considering the following:
Right-size - in products and parts where there is flexibility in determining the sizes and footprints, consider using dimensions that maximize space during transportation. Material handling containers, totes and bins, for example, may be designed to cube out trailers and box trucks. Given the number of potential trips per reusable container, using the right size returns savings throughout the supply chain for years to come.
Meet UPS/FedEx Specs - consider designing products and parts (and redesigning existing products!) based on the weight limitations and dimensional requirements of UPS or FedEx. In addition to offering less costly transport compared to freight for you and your customer, transport via UPS or FedEx vans also offers greater fuel efficiency and reduced emissions than freight. Further, when the products or parts are to be resold direct to the consumer, such designs are far easier to inventory and sell.
Stack and Nest - consider designing products and parts to stack and/or nest to boost their density during storage and transportation for more efficient use of space, ultimately permitting the movement of more goods per trip or per tank of fuel. Most rotomolders are well versed in designing containers and tanks that stack and nest but applying the concept to other areas such as custom parts offers prime opportunities for savings.
Ribit - consider using strategically placed ribs for designed-in rigidity and load bearing support without requiring the extra weight of wood, metal and other reinforcements. While ribs may complicate stacking and nesting, skilled product designers know that incorporating them from the outset helps ensure their successful implementation without compromising other design aspirations.
Integrate - cut weight to cut freight by replacing metal fasteners with wholly integrated designs. This capability remains one of rotomolding's key advantages versus other processes. Consider that eliminating components from the design also eliminates costs for sourcing, warehousing and assembling the product or part and simplifies the molding process. In cases where complex products are designed as sub-assemblies and transported to several facilities for assembly before their final assembly step for sale to the end user, a clever design may eliminate the need for one or many of these trips, if not all of them, speeding delivery to the customer.
Sourcing and Purchasing
Although we are subject to the ups and downs of operating in a global economy, rotational molders often enjoy some insulation due to the inherent challenges in transporting large products and parts over great distances. As such, rotomolders will be increasingly and disproportionately hampered geographically as fuel prices rise. Yet there are several opportunities to minimize both the cost of transportation and its environmental impact by focusing on where materials and components are sourced and how often they are ordered. Consider these, for example:
Consolidate - when metal and other components are to be specified, consider sourcing them from a single, local supplier and ordering in the largest quantity feasible to reduce the number and distance of deliveries required and capitalize on available price breaks for buying in quantity. In cases where metal components are to be installed for final assembly at the customer's facility, a dealer's shop, retail floor or anywhere else other than your plant, consider consolidating them into the same shipment as the rotationally molded part or parts.
Railfan - consider ordering material in large quantities delivered by railcar rather than by the Gaylord, which requires delivery by truck. While material costs most certainly have soared if diesel and gasoline have reached $5.00/gallon, the quantity discount will become increasingly essential to maintaining profitability.
The Things We Make. Make Us.
Executives at General Motors allowed complacency to corrupt the company's success and miss the chance to maintain Cadillac as the premium luxury brand. Government officials allowed poor public policies to drive our manufacturing base overseas. But our emotional connection to the automobile remains unshakable, as evidenced by the reaction to Chrysler's Super Bowl commercial for the 2011 Jeep Grand Cherokee (see it at YouTube.com) and its tagline, "The Things We Make, Make Us." I'd go further to suggest the things we make define us. Now, we simply need to make do managing higher and higher costs. So why wait to cut freight until the cost of fuel tops $5.00/gallon? Think about implementing some of these cost control ideas today and start saving now while putting yourself in a stronger position to manage the rising costs and associated volatility.
If you can offer even more ideas for success in a higher cost environment, please send them Bob Dunne at rdunne1@usa.net or see www.Rotomolding.com/bobdunne.shtml. Meese Orbitron Dunne Co. is the first rotomolder in North America to invest in the Leonardo system. Its parent company, Tingue, Saddle Brook, New Jersey, has a history of bold moves since 1902 that include pioneering the use of plastics for rotomolding laundry and material handling products.
|
