Material Costs: Putting the Customer First in Today'€™s Changing Economic Landscape

Material Costs: Putting the Customer First in Today'€™s Changing Economic Landscape

A Message from Troy Just, President

Now more than ever, the cost of materials is the number one most-challenging-to-control aspect of plastics manufacturing. HTI Plastics works continuously to develop unique cost-saving and cost-cutting strategies to overcome this challenge, while maintaining our dedication to quality. These strategies help us maintain the affordable, competitive pricing our customers have come to rely on.

A number of factors have impacted the cost of materials in recent years. HTI has approached each of these challenges with the goal of safeguarding our customers from rising costs.

Economic Impact Causes Less-Competitive Pricing

In the past, we were able to choose from many more plastic resin suppliers than we can choose from today. The uncertainty of the economy, particularly in the U.S., has resulted in increased consolidation and mergers among material suppliers, resulting in fewer suppliers and less-competitive materials pricing. In response to this unfavorable pricing situation, we have focused on optimizing our buying power by buying in quantity,  negotiating with vendors and assertively seeking out any available price breaks.

Petroleum Prices Affect Resin and Fuel Costs

Fluctuations in petroleum pricing make the cost of raw materials very unpredictable; the cost of a resin can change more than once within the span of a month. Polypropylene resin prices have shown the greatest impact from oil-driven cost increases, rising a full 50% in recent years. HTI has met this challenge by locating comparable alternative resins. However, the high price of petroleum-based fuel also has impacted the cost of resin delivery. At HTI, we streamline shipping costs by deeply researching and identifying the most efficient transport and inventory control strategies.

Although material costs are difficult to predict and control, priority #1 at HTI still is keeping costs down any way we can without sacrificing the quality for which we are so well known. To this end, we have expanded our facility, adding state-of-the-art, high-speed precision machines that increase efficiency and reduce labor costs. In addition, cross-training programs have produced a highly efficient team that makes the most of the resources we use for our customers’ benefit.

With so many value-added solutions in our bag of tricks, we are pleased we can remain an important partner in the continued excellence and success of our valued customers.