One company’s transformation journey to profitability

Competing with offshore molding and mold manufacturing companies continues to be a struggle for many companies in these industries. But there is a way to compete and win new business, become profitable and grow the business. Thomas Duffey, president and owner of Plastic Components Inc. (PCI) in Germantown, WI, spoke recently to a group attending the American Mold Builders Assn. conference in Las Vegas, and addressed the lingering concerns of the group about offshore molds.
   
Duffey estimates that from the founding of his business in 1989 through 2005, he has purchased 800-900 molds all from the state of Wisconsin, from four or five suppliers. However, between 2004 and 2005, he began losing a lot of business because of tooling costs. “It had become a real disadvantage for us,” he said. “And the differences were so great we couldn’t overcome them.”
   
In 2008, PCI purchased 150 molds from China. “We felt terrible about it,” he commented. However, in 2010, PCI purchased only two molds from China, and 40 from Wisconsin mold suppliers. “The mold makers were getting better and more competitive,” said Duffey. “They improved their performance and got shorter lead times, and closed the huge gap in price—not completely, but if customers had their choice of a $40,000 mold in 8 weeks from a U.S. supplier or a $22,000 mold in 12 weeks from China, the customers chose domestic molds.”
   
Duffey, who spent the early part of his career as a manufacturer’s rep, explained that when he started PCI in 1989 with three presses in 10,000 ft², he determined it would be fully automated. He wrote his plan and started the journey.
   
One of the turning points in PCI’s history was in 2000 when the company was stumbling along, in trouble. He had to sit back and find out what was happening, and he came up with four questions hebelieves every company owner needs to ask himself. First, he did some serious self-reflection or self-assessment. “Am I part of the solution or part of the problem?” he asked himself.
   
Second, he asked himself whether or not he’d hired the right person to manage the business. “Did I hire the wrong person for the wrong reason?” he asked. “Was this a bad decision?”
   
Third, if it was the wrong choice, “was I willing to make the difficult decision that are required to undo the bad decisions? Once you know you’ve made a wrong decision you have to be courageous enough to correct it.”
   
Fourth, he asked, “Am I willing to trust others at the moment of truth and let them do their jobs, and step away from it? Or am I a control freak, and the problem is me?”
   
Once he determined the answers to these questions, he was able to make the decisions required of him, hire good people for the right reasons, step back and let them manage.
   
Duffey has learned some valuable lessons over the past 21 years, and he came up with 10 questions that every company owner should ask themselves in order to be as good as they can be:

1)  Are you emotionally invested in the business? “If not,” said Duffey, “you’ll never be as good as you can be.”
2)  Are you willing to make very difficult decisions? Or are you a procrastinator? “If you can’t make the difficult decisions that need to be made in order to make your business better, you’ll never be as good as you can be.”
3)  Can you still learn new tricks? “If you’re not willing to learn, your organization won’t be willing to learn,” he stated.
4)  Do you have trusted advisors outside the company? “Do you have someone that you can go to with a business problem and say ‘can you help me?’” he said. “Someone to give you new ideas, new ways of looking at things. You spend all your time looking down at tools so that you don’t look up and outside your business for help. You need to develop a network of people that can give you advice when you need it.”
5)  Do you trust the “guys in this room enough to share?” Peer networking is one way to get new ideas about the business and find new solutions to problems.
6)  Do you have a plan? “It doesn’t have to be a grandiose plan—it can be on one page, but it needs to be written down,” Duffey said. “Or do you just come to work and drive home and never think about it? You have to have some idea of what you want to do with the company. You can exist and survive or you can succeed and thrive. Without a plan you’ll never be as good as you can be.”
7)  Do you have a distinct competitive advantage? “Can you verbalize in one sentence what your differentiator is and would your customers agree?” asked Duffey. “Match your expertise to the needs of the market or markets that you serve.”
8)  Do you have a marketing plan and a sales strategy? Or do you “just look for work?” Again, Duffey stressed, “Align what you do best with the needs of the market place. We still get cold calls from mold guys out there just looking for work.”
9)  Do you really know how/why/when you make or lose money? “Are you priced properly? Do you make appropriate profits? Do you know when you’re losing money?” Duffey asked. “We installed a half million dollar IQMS system and we know the gross profit on every part we mold in our plant. You must know where in your organization you’re making money. You’ve got to know where in your organization you’re losing money. You’ve got to know or you’ll never be as good as you can be.”
10)  Do you empower and trust your team? “You can go from mediocre to great, but how good is your team?” Duffey asked. “Are they the right people on the bus and are they in the right seats? At the end of the day the transformation process from where we started to where we all aspire to be depends upon have the right people and infrastructure in place so we [owners] don’t have to be there 65 hours a week. When you can do that you’ve made the transformation.” —Clare Goldsberry