What a list of challenges: Customers who don't want to – or can't – pay more for labels, rising energy costs, rising demands for service, competition from low-ballers, competition from other continents, restricted availability of cash. Oh, and the upward acceleration of materials costs. This means pressure from upstream and pressure from below, which translates into something painful having to do with profit margins.
The presidents of five narrow web converting companies spent some time recently contemplating the challenges they face in an economy that remains unstable – "sputtering," to borrow a word from John McDermott of Label World. They put fingers to keyboards to share those thoughts with us in our Mid-Year Economic Report. And while they look sharply at the challenges, they also a reflect on opportunities that can mitigate the pressure and even improve business conditions.
There is one opportunity to reduce costs that is overlooked by a good many business owners. At a recent conference that I attended, a speaker showed a list of subjects that today's converters, by necessity, must consider. One of the topics was controlling costs. Another was implementing environmentally sound practices. The latter, I thought, should not be listed separately from cost controls. Implemented and managed diligently and correctly, environmental best practices will reduce expenses. Just talk with the managers of the 25 or more companies that have been certified under TLMI's LIFE program. They have made changes to lower waste in production, energy consumption and management practices, not just in pursuit of a cleaner environment but also a happier bottom line.
FINAT, the label association based in Europe, is beginning to pay much closer attention to environmental concerns, and it is the declaration of its new president, Kurt Walker, that "sustainability is high on the FINAT agenda." In our economic report, Walker looks askance at a bad practice that permeates every industrial sector:"Another concern is the whole greenwashing practice in our current economy. Many industries and individual companies pretend to being/becoming sustainable, but I believe we all still have a long way to go." Indeed, we do. TLMI Chairman Art Yerecic sees positive change on the horizon. "Our industry is gaining traction in key areas like liner and waste recycling," he says.
It baffles me why many companies have not begun to study the means to becoming green. The same with Lean practices, which have been shown – over and over – to improve a company's financial standing and much, much more. State governments have money to give away to train employees in these strategies and tactics. I'm not making this up. Lots of companies in our industry have taken advantage of it. Maybe those who haven't are too busy trying to figure out how to battle rising costs.
Jack Kenny, Editor