Here’s an update to our little chart to memorializing 2020:
Virtual Fall Meeting
I am happy to report that ARM’s first virtual meeting is successfully behind us. As with any untested method, there’s a certain level of anxiety that comes with the territory, and this was no different. While the Forums and Programs committee put together another excellent slate of presentations, the unknown of the unknown weighed heavily on our minds. Would people participate when balancing the meeting with their daily duties? Would the technology work as intended?
The results from the meeting show that 98% of attendees reported that the meeting met or exceeded their expectations. Generally speaking, the technology worked, the presentations were on target and members felt their time was spent in a beneficial way. We also heard that this format exposed more individuals to ARM than previous meetings since meeting attendance did not require travel expenses. This is all great feedback that will be taken into consideration for future meetings.
Another result of moving our meeting online was that our virtual exhibit hall remains open at bit.ly/alltheroto There you can learn about more than 50 exhibitors and watch dozens of new videos from our suppliers, sharing the newest machines, materials, and more.
While this format worked, we also understand that it is difficult, if not impossible to replace face-to-face meetings. Although our next planned face-to-face meeting is Rotoplas 2021, it remains a key objective to host a live meeting once it can be done safely and responsibly.
North American Rotomolding Industry SWOT Analysis
ARM conducted a SWOT analysis of the rotomolding industry for our online Annual Meeting. The goal was to get a baseline for the rotomolding process that rotomolders can use as they implement Industry 4.0 technology. This way we can compare where rotomolding is today with where the rest of the manufacturing world is going.
We sent a freeform text survey asking for feedback. Many of our supplier members also work within other industries with manufacturers who use different plastic processes. Their critical feedback compares rotational molding with other processes.
Strengths
The strengths are in the eye of the beholder. Short runs, low cost tools, and creative parts, are seen as the strengths of rotomolding but the folks on the shop floor don’t necessarily love them.
Survey respondents noted the flexibility of the process, the shapes we can make, the ability for us to change colors, and the ease of tooling are all strengths. Many respondents also mentioned low cost tools, which is definitely true in comparison to other plastic processes, and short runs.
Durable parts are hugely important. There is a lot of talk about plastic being bad. The fact that our products are reusable, can be repurposed, and are durable goods, puts us in a different category than other plastics processes.
Other strengths include low capital needs for entry, and our capability of making very large parts. Some of our members are making incredibly large fluid holding tanks.
So what do our non-molder members say about us? They’re talking not as much about the process itself as they are the industry. Non-members commented on strengths such as the closeness of the industry, networking, and that it is the most cooperative industry to work in. We are unique in that rotomolders are very open and honest with each other. I think that really stems from the entrepreneurial feel that the industry still has. We are a lot of small, agile companies run by passionate business owners.
In the recent Plastics News, where they list the top rotomolders from 2019, the top 20 molders make up about 50% of the market. The other 400 molders in North America make up the remaining 50% or about $3,500,000 of revenue per business. The entrepreneurial spirit also breeds creativity and fosters sharing.
This industry feels a lot like craft beer, the other business that I’m involved with. One of the similarities is market reach. Because rotomolded products are large hollow parts they are difficult to ship very long distances, just like craft beer. That may be one thing that’s playing into this cooperative industry.
Weaknesses
One of the most common weaknesses mentioned is that we have a slow process with a higher cost. This really hits home. A number of years ago, a friend who used rotomolding as a very small part of their business summed up rotomolding as “cheap tools, expensive parts.”
There are material limitations. We do have fewer materials to run than other plastics processes. While there are other materials available, as an industry we choose to run primarily linear polyethylenes.
Labor is one of the Achilles heels of the industry. We have a very manually driven process that requires almost a craftsman, more than a button pusher, to run our presses and perform secondary operations. Attracting labor, finding people who will work hard, and the general availability of labor, are all becoming more of an issue as we compete against people who are frankly automating their business and making the work easier.
Our non-molder members talked about resistance to change, not embracing new resins, and focus on material cost rather than value. From talking to other molders and suppliers, and from being around the industry, I think this is accurate. There is a certain stubbornness associated with entrepreneurs and some molders out there are resisting change.
This can be seen when you’re looking at materials and automation. There are more materials out there than linear polyethylene. However, based on cost and other factors, some people choose not to use them. There are also a lot of people choosing not to use automation so I think there’s some pretty fair criticisms or ideas of what the weaknesses are within the industry.
Opportunities
Within a SWOT analysis, your strengths and your weaknesses are both internal looking. The opportunities and threats are viewed on a macro level. Some of the opportunities our members mentioned are conversions, automation, new materials, and customer market awareness.
Conversions from metal, concrete, and wood are always discussed as we look for the next big product that is a takeaway from another industry. It gets us thinking creatively: what is the product and how are we going to make it?
When we look at some of the weaknesses and threats, automation resolves many of those issues. As an industry, it’s a real opportunity for us to understand how we will make the most of automation.
At our 2019 Annual Meeting, Toter shared a video of one of their automated machines, where there were 30 – 40 molds on a single machine. Both the molding and trimming operations were being run by a single operator. They accomplished this by leveraging automation.
It’s interesting that our members labeled new materials as an opportunity because one of our weaknesses was material limitations. Our suppliers are telling us there are more materials that we are resistant to use. Determining what types of materials the market needs, and how to bring those to market will be very important in the future.
Only a few respondents mentioned consumer market awareness but it is a very interesting point. Our non-molder members commented that we need to educate the OEMs and designers on what we sell and the durability of our parts. I think these comments speak to expanding market awareness.
Kayaks and coolers are the more popular consumer-facing markets for rotomolding. The premium cooler has done a really good job of promoting the process. Many manufacturers tout the process capability of rotational molding in making an almost indestructible product as why our process is superior to other processes. For an opportunity, how do we leverage that? We now have a group of consumers in the market who understand what rotational molding is and, more importantly, they understand the benefit that it has to create a robust product that they love using. We need to leverage that consumer awareness in the future.
Though it wasn’t mentioned in our survey, I think our relatively small market size, coupled with the ingenuity and creativity of some of our entrepreneurs, could really lead to additional opportunities.
Threats
While there are a lot of external threats that are plaguing rotational molding, we are going to focus on those specific to our process. Obviously we’re not going to mention things like pandemics because what are the odds of that actually happening?
Lower cost and competitive processes were some of the most frequent results. We know there are other plastic processes out there that are becoming more competitive through automation. We’re seeing blow molders who can make larger and more intricate parts. The speed at which 3D printing is coming into the market and expanding is staggering. We’re also seeing competition with injection molding.
The next biggest threat that was mentioned was labor availability and skill. As discussed, we are a very manual process and makes it difficult to find people to do the work that we need. When you do hire people, do they have the skills to be able to perform the work? How many rotomolders are hiring people who have never run a drill before? How many people don’t know the difference between certain tools?
The last threat is environmental. For our industry, people always think of plastics being bad for the environment. You’re not seeing playground equipment and large stock tanks and things of that nature floating in the Pacific. We may not be a part of “Plastic Islands” but we do have microplastics. We do have our resins and our pellets that are washing out of our dumpsters and into the water stream.
There’s absolutely an environmental impact we can have but when we talk about threats, one of the biggest environmental impacts we’re going to have is this emergence of electric engines versus combustion engines. We’re seeing more cars going electric. We’re seeing more components on machinery go from hydraulic to electric. There will probably always be a place for the combustion engine, but as electric motors become more powerful, as battery storage becomes less of an issue, I see this being a real threat to rotational molders, especially considering gasoline tanks, diesel tanks, diesel emission, fluid tanks, hydraulic reservoirs, overflow tanks. That’s a big part of our businesses.
Our non-molder members had interesting feedback about threats to our industry related to rotomolders’ views on tolerances. One of the other really interesting comments made was by a supplier who talked about corporations and holding companies continuing to purchase rotational molding companies, and that the organizations are becoming less entrepreneurial and more corporate. The question or the opportunity we have with that is how do we keep larger corporations engaged? How do we keep larger companies coming to meetings and sharing information, and how can we do that in a way that doesn’t pose a threat to our members?
What’s Next?
I hope you’ll think about the feedback we received on the SWOT survey. What do you agree or disagree with? From your company standpoint, how do you compete? How do you match up against some of the stereotypes of rotomolding that came up? As you take a look at your internal direction for your business, what should you be doing more of, what should you be doing less of? What do you need to do to change the industry? How do you keep growing your businesses in terms of cost, quality, delivery, and ease of doing business?
It’s pretty clear what other industries are doing and I think there’s some legitimate opportunities and threats within our businesses that we need to take very seriously.
In conclusion, I think there’s a lot of great things going on within the market. I think there’s a lot of room to improve. I think there’s a lot of opportunity on the horizon and it’s going to be very interesting in the upcoming years to see how people respond.
Rick Carlsen
ARM President
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