Diversification of Markets, Suppliers Key for SuccessBy Antonio Gozain | Tue, 07/12/2022 - 10:30
Q: What are the main milestones that Alian Plastics has achieved under your leadership?
A: Alian Plastics started on a market diversification plan just before the pandemic, which was beneficial because the automotive industry was hit hard in 2020 and its recovery has been slow. Another achievement was the development of our team’s organizational culture. Companies are made of people so organizational culture can define the success or failure of any company. Through this culture and market diversification, we have achieved healthy sales levels.
Q: How has Alian Plastics’ diversification helped the company during the several production stoppages suffered within the automotive sector?
A: We previously supplied exclusively to automotive companies. While Alian Plastics continues to support premium brands, such as Audi, BMW, Tesla and Fiat Ducato, we have also diversified into the heating, ventilation and air conditioning (HVAC), toys, gardening and heavy-duty sectors. We are providing quotes to companies in many other industries this year as a result of the nearshoring boom that is benefiting Mexico and the development of local suppliers.
Q: What are the main challenges when diversifying your market?
A: The first challenge is to have the right technical expertise related to this type of industry, which requires the right talent to deliver quality products on time. Then, we must understand the product. The automotive industry is highly demanding in terms of quality and delivery. This has opened doors to other sectors because companies trust our quality. For example, while producing plastic for toys, we must be careful with the materials we inject because children usually place toys in their mouths. We have additional certifications guaranteeing that the products we manufacture are made with the proper materials.
Q: What are the main keys for success for Alian Plastics?
A: It is essential to be open and embrace change. At Alian Plastics, we know that we might have to change procedures from one day to the next. We must adapt to microeconomic, macroeconomic and major industry changes.
While talent and human capital remain important, the operation depends on procedures rather than on the human factor. If people create good procedures for others to follow, the operation can continue with new talent, as long as it is capable and trained.
Q: What are the trends that Alian Plastics has detected within the automotive sector and what are its main challenges in keeping up with production?
A: Changes in the automotive industry have opened up opportunities for Alian Plastics, mainly to serve the EV market. We provide components for Tesla’s Model 3 and we just won a program for the Model Y, which will be manufactured in San Antonio, Texas. EVs, and vehicles in general, are turning to plastics and aluminum as the ideal lightweighting materials.
During the pandemic, there was not enough human capital to produce the raw materials we required, so we ran out of components for our resin extractors. The plastic injection market is seeing a large boom but resin extractors remain the same and their capacity to produce has decreased. Some days are better than others as suppliers may run out of raw materials at any time. There is constant tension and uncertainty.
Q: What strategies has Alian Plastics implemented to secure supplies in this difficult environment?
A: Internally, we increased our purchase orders to have more inventory available. Previously, the lead time was four to eight weeks depending on the resin but now suppliers are asking for a lead time of 24 to 28 weeks.
Most of the components we produce, such as those for Audi, BMW and Tesla, use directed resins. We can find additional suppliers to produce those specific resins. Diversification remains key, not only regarding different markets and industries but also with suppliers. Doing this can save companies not only in the present situation but also in the future.
Q: How is Alian Plastics investing in new processes, technologies and machinery to improve operations?
A: Quality and timely delivery are at our core. Talent is behind our success in both areas but people require tools to work with. Alian Plastics has invested in measurement tools for its metrology laboratory, 3D arms to scan parts and an Industry 4.0 system that detects problems in real time and sends alerts immediately. Our entire staff is alerted when a machine stops. They immediately know the reason for the stoppage and the person responsible for fixing it. In addition to addressing the problem and allowing operations to continue, the system has inadvertently created a healthy competition within the team. No one wants to receive an alert that a machine has stopped due to lack of maintenance or material. This technological approach has helped us a great deal.
Q: How does Alian Plastics work to make the most of its technological tools?
A: The best result is obtained by taking into account the opinion of the user, whether it is the operator, metrologist, quality manager or maintenance manager. They are the ones who enrich these tools. If we do not listen to their needs as we listen to those of our customers, we cannot get the most from our investment in those tools.
Q: In your last Expert Contributor piece for MBN, you talked about sacrifice as the fourth “S” in the formula for success. How are you working to fulfill all four S’s?
A: Success involves a cultural change within the organization based on self-confidence, speed, simplicity and sacrifice. Self-confidence is crucial to perform well. Speed is also important considering the current environment. Simplicity is essential as it enables fast reactions.
Sacrifice is the fourth “S.” Sometimes it involves working twice as hard because a colleague has COVID-19 and you have to support the operation. This double work takes away your personal time. Often, it is necessary to follow up on a product at 3 a.m. because the entire operation depends on it. With sacrifice as the fourth “S,” companies are ready to succeed.
Alian Plastics is a Tier 2 supplier for the automotive industry specialized in high-tonnage plastic injection and services to optimize production capacities. It has worked with several OEM programs, including Audi, Tesla, BMW, Mercedes, Fiat Ducato, Cadillac, Paccar and Nissan.