Our Story
Necessity, the saying goes, is the mother of invention.
If that’s true, then it’s fair to say it’s also the parent of Resin Technology, Inc. (RTi). Because it was out of necessity that co-founders Garland Strong and Bill Bowie gave birth to an idea: there is nothing more important to a processor than the cost of resin. Nothing.
Here’s how that inspiration became the cornerstone of a company that today is saving millions of dollars for businesses across the country.
In the BeginningGarland and Bill founded RTi after working together for years at one of the largest injection molders in the country. A company, that in Garland’s words, he almost “destroyed” due to his inattention of resin.
Garland was CEO of the company and in the beginning it was very profitable, with a 20% annual revenue growth and an average EBT of 14%. Then things changed. A large competitor entered the market and copied the company’s main product line which accounted for 60% of its revenue and 70% of its earnings.
That wasn’t the worst part. It went to market with a 25% lower cost and soon the big orders from the big box retailers began tapering off. The game had suddenly changed.
The widely-held belief at the time was that the lower prices were just a marketing move to squeeze out competition. Prices would stay low until the opposition dropped out and then they’d rise to “normal” levels. The competitor had to increase prices at some point, everyone reasoned. No one could sell that low and remain profitable.
Garland was off his game. He hadn’t yet discovered the missing link: resin.
The Light Bulb MomentHe had done everything a good CEO could do by conducting an exhaustive review of the entire company and its business model. Garland looked at manufacturing, marketing and the product mix. No answers. What could he do to save the company?
That’s when the purchasing manager knocked on his office door.
He relayed a conversation he’d just had with one of his resin suppliers. The supplier told him that their big competitor had the reputation of being one of the best buyers in the industry. Heck, they were doing things most processing companies had never dreamed of. They were focused on resin -- knew the technology of it – it was the driving force of their business.
Eureka!
Garland thought to himself, “Resin? How did I miss that?” It was, after all, the largest expense at the injection molding company, accounting for 50% of its cost. He dug in and decided to learn all he could about the single thing that could make or break the company.
He focused on resin and how it was being bought. The purchasing manager, he discovered, was charged with buying everything. In fact, he was so busy buying everything that he couldn’t concentrate on a single thing. That had to change. Other changes were needed, too.
Garland found out that every year the company purchased resin through a bidding process and awarded 90% of its business to one supplier. Big mistake. But, it wasn’t really the purchasing manager’s fault. He was responsible for all company procurement and resin just wasn’t part of the strategic business plan. It was only a financial forecast.
The First Step down a Long RoadThe purchasing manager needed help. The company needed help. It was time to bring in reinforcements. Garland sought out and hired a Resin Expert from one of the largest resin buyers in the country who would later become his business partner: Bill Bowie. Bill knew resin markets and technology and Garland put him on the executive staff reporting directly to him.
The existing purchasing manager still had his job buying everything else, but for the first time in the company’s history it had an employee whose sole focus was resin. Bill grabbed hold of the reins.
Garland told Bill that the company had to lower resin costs to survive. It wasn’t going to be easy, he said. The company had spent decades building a high-quality product and brand and it wasn’t going to destroy that model. Garland wanted to have his cake and eat it too. Bill’s job was to serve it up.
Bill was given broad authority to work across all areas of the company. He began by conducting a thorough review of the entire line, through marketing, engineering and manufacturing. Meetings were held with the molders on the floor. He explained the company was in a fight for its life and that he wanted tests to try and qualify more resin. Bill was looking for a balance between the best price and operational ease. It was the best thing the company had ever done.
Finance was next on the strategy implementation. He presented a case for increasing resin storage capacity and he succeeded. Silos were added so the company could take advantage of timely buys.
Now, resin was truly incorporated into the entire strategic business plan. Things were heading in the right direction.
Getting Back on TrackOther cost-saving discoveries were made along the way.
Over-engineered resins were found in many of the company products and they were replaced with resins more appropriate for the product lines. Resin specs were redefined by product and in doing so, more resins were qualified and more suppliers were added. The opportunities for savings increased dramatically.
Product quality improved. So did revenue.
Suppliers jumped on the bandwagon when they realized the company had a Resin Manager solely focused on improving competitiveness. When they learned the company was seriously looking at every resin and every supplier, prices were lowered. A little at first, then more as their purchasing leverage improved.
The results?
The company became stronger and much more competitive. In the 18 months since Bill and Garland joined forces, the company was actually able to acquire the competitor that had caused so much concern. The company’s EBT soared from a low of 0.4% to 19% and resin costs were finally under control.
A Lesson for TodayCould this scenario happen now?
It’s played out every day at processors around the world. The only difference is that today’s environment is even tougher. There are fewer suppliers. Energy prices are more volatile. Thanks to consolidation, suppliers are stronger today than ever before.
That’s why resin has to be treated as much more than simply a cost item. It touches the entire organization and requires – demands – focus. As Garland and Bill learned, performance is determined by how well you buy versus the market and your competition. It is not judged by how well you perform against your company’s budget.
This lesson is the foundation of RTi – an organization focused entirely on resin. Nothing else.
RTi works exclusively with resin processors providing resin buyers with the real pricing, market intelligence and strategic direction to improve profitability. It utilizes more than five billion pounds of real-time pricing benchmarks and more than 200 years combined resin experience to give manufacturers a competitive advantage in a constantly changing market. It’s been helping resin processors operate more profitably since 1998.
It took a brush with disaster to ignite a spark of brilliance. A brilliant idea that today is saving processors thousands of dollars by becoming ResinSmart™.
