The start of 2019 carries with it several uncertainties from 2018: for example, the instability of the global supply chain caused by the United States’ trade war with China, and volatile oil prices brought about partly by ongoing situations within Venezuela and the Middle East. Despite efforts by the federal government to alleviate some of the negative effects of these events, many small and medium-sized businesses must continue seeking new ways to adapt to an unstable global market.
Here we outline these causes of uncertainty and how they impact businesses like UP&R:
Volatile Oil Prices
Oil prices have fluctuated dramatically over the last 12 months, disrupting supply chains for manufacturers that rely on this resource. For example, between mid-September and late November 2018, oil prices dropped from approximately $74 per gallon to just $50 per gallon in a span of six weeks. This creates a frustrating situation for oil consumers, who in turn have a more difficult job ascertaining when to purchase oil and how much of it.
Forbes recentlydescribed two key factors that may have caused this latest drop in oil prices:
Uncertainty in Future Price Outlook
Oil traders base their pricing as much on their perceptions of the oil market’s direction as they do on the oil’s value itself. If traders expect an increase in oil supply, they quickly lower their prices to undercut their competitors. Similarly, if oil traders have reason to believe demand will rise or oil supply will fall, they raise their prices accordingly.
In late 2018, a boom of American shale oil production coincided with an increase in Arabian drilling to counteract an unexpected thaw in sanctions imposed on Iran. This created fears of an oil supply glut, as American, Arabian, and Russian companies stepped up production to prevent their market share from going to Iranian producers. While quick decisions like these are impossible to fully predict, it’s important to monitor the political situation surrounding the oil trade (as well as other commodities markets that make up a particular supply chain) to best anticipate when to procure.
Slow-Changing Supply and Demand
Other markets can balance out changes in supply and demand fairly quickly. For example, the cotton industry can easily account for changes in demand because it’s based on an organic substance that’s relatively quick to produce. If cotton’s in high demand, farmers can simply plant more of it and expect to see the positive effects within the upcoming seasons.
The same cannot be said for oil suppliers. Oil is a more finite resource, and it can take over 10 years to develop new wells. Only very large price changes can rebalance the supply and demand for oil. For this reason, it’s harder for the supply of oil to adapt to changes in the market, which ironically makes its pricing more volatile. If oil traders anticipate that they may need to sit on vast stocks of oil while demand is low, they’ll price it more cheaply to move as much of it as possible. For this reason, it’s also important to monitor changes in the oil market so that you can buy oil when nobody else is.
How This Affects Us
Because UP&R products consist mainly of oil-based compounds, we’ve had to shake up our strategies to account for worldwide fluctuations. We take extra care to monitor the latest fluctuations in the oil market. Oil prices directly impact our ability to provide cost-efficient rubber products. Therefore, recent volatility in the oil market means that small- and medium-sized businesses have to devote more resources – one notably being the amount of time invested – to monitoring developing situations instead of focusing on their products and branding.
The Trade War With China
In early June, the Trump Administration imposed tariffs on over 5,700 products that the United States regularly imports from China. Although intended to bolster United States production, these tariffs perplexed American manufacturers who rely on Chinese-made parts. This latest round of tariffs particularly affected UP&R because Chinese manufacturers create many of the rubber and polymer components that we turn into finished products. UP&R is diligently working to protect its margins in a this time of trade war uncertainties.
Although the long-term effects of the trade war are yet to be seen, in the short term, many small- and medium-sized businesses have had to raise prices in response to price changes in their supply chain. While most of these price changes don’t affect consumer-oriented products, they have driven up costs particularly in the automotive and medical manufacturing fields. These industries rely heavily on rubber- and plastic-based products to build gaskets, seals, brake pads, and tires (for automotive applications) and extruded plastic tubing and device housings (for medical equipment). UP&R also has been forced to raise its prices as this industry operates on rzor thin margins, and any increased must be calculated into the selling price.
Quality Rubber Solutions at UP&R
Despite an uncertain trade climate and the roller coaster ride of determining when to buy oil, we at UP&R seek to provide the same high-caliber products and services that our customers have come to expect. We’re confident that we can weather this storm of economic factors without affecting our clients’ bottom line.
If you would like to learn more about our work or quality rubber and polymer solutions, contact us today.
As UP&R rings in the new year, we would like to highlight some of our achievements from 2018. We’ll also present the exciting opportunities we’re anticipating for 2019 and beyond.
An Overview of 2018 at UP&R
2018 was another successful and productive year for us at UP&R. We attended a number of industry trade shows, including AAPEX/SEMA, The Precast Show, the Mid America Trucking Show, and the American Concrete Pipe Association (ACPA) Annual Convention.
We used these shows as opportunities to network with customers and industry peers, as well as to gain insights about the technological advances happening in the automotive, precast, rubber, and trucking industries. Attending these events enables us to be informed about the latest industrial trends so that we can continue innovating for our customers’ success.
One of our biggest highlights from 2018 was our acquisition of Gasko Fabricated Products, which solidified our position as one of the leading American non-mixing polymer fabricators. To date, we’ve made five acquisitions, and this was our third within four years. This acquisition brings a host of benefits for both UP&R and our valued customers, including enhanced production capabilities and increased product volumes.
Finally, our signature GOLDLINE® and other Made in USA tarp straps continued to achieve record-breaking success. The GOLDLINE® straps are the most recognizable tarp strap brand in the US, valued by customers for their strength and durability in all weather conditions.
Looking Ahead to 2019 at UP&R
Since 2005, UP&R has been consistently growing. As a result of the valuable tools and experience we’ve gained along the way, we’re expecting to break further barriers in terms of growth in 2019 and beyond. UP&R has a lot of exciting developments in the works for next year, and we’re looking forward to sharing them with you soon.
We appreciate each and every one of our customers, and we will continue to maintain the high standards of quality and service that we’ve exhibited.
To stay updated on the latest happenings at UP&R, connect with us on our Twitter and LinkedIn, or check out our blog.
June is National Safety Month. Taking a look at the numbers, compared to 2015 there has been an almost 8 percent increase in total fatal injuries per year as of 2016, which saw 5,190 deaths. That same year also saw 849 falls, slips or trips, which was up by 49 incidents from 2015. Observed annually, National Safety Month focuses on reducing leading causes of injury and death at work.
June serves as a time to raise awareness about important safety issues to ultimately help reduce preventable injuries and deaths. Each week in June this year, the National Safety Council will focus on a different safety topic.
National Safety Month Weekly Topics
The safety topics of the month are broken out as follows:
Week 1: Emergency Preparedness. This week will have a focus on being prepared for accidents and emergencies, including tornado prep plans and employee training on First Aid and CPR.
Week 2: Wellness. This week focuses on 360-wellness of employees, including anyone affected by the opioid crisis or by sleep disorders.
Week 3: Falls. The third week will shine a light on how to prevent falls in the workplace. It will touch on topics like cleaning up spills and hazards immediately and how these behaviors can help reduce the yearly incident count.
Week 4: Driving. The final week of National Safety Month talks about driving and related hazards, especially for those who drive for a living. After all, seat belts saved almost 15,000 lives in 2016. It addresses tips like avoiding cell phone use and making sure to get enough rest to prevent drowsy driving.
While National Safety Month is observed every June, the NSC provides information, pamphlets, and posters for workplace safety year round. Maintaining a focus on safety during all months of the year is critical to avoiding incidents and improving workplace safety.
Contact us to find out more about National Safety Month and make sure to partake in the weekly topics with your employees for improved safety overall.
To continue following industry topics, find UPR on Twitter and LinkedIn. Our blog is accessible for more on transportation and cargo control market, construction and pipe manufacturers market, automotive OE supply chain (Tier II and Tier III), general industrial markets, and company updates.
Industry shows are a great way to interact with potential clients and business partners. In November, Universal Polymer & Rubber attended both the AAPEX and SEMA 2015 automotive industry shows in Las Vegas, Nevada. Both of these shows were well attended by almost the entire automotive industry.
The AAPEX 2015 show at the Sands Expo featured over 2,200 automotive aftermarket manufacturers and suppliers, who set up booths and displays to showcase their products and services to over 39,000 targeted buyers. The SEMA show at the Las Vegas Convention Center drew more than 60,000 domestic and international buyers who were there to see over 2,000 exhibitors.
The shows brought together a wide variety of companies from OEMs, to single car garages, to tire manufacturers, parts manufacturers and up fitters. The scope of the shows was daunting, with multiple indoor halls as well as outside display areas and demo areas. One of the largest areas was the new products showcase, where new and featured products were on display. Even between the buildings there were areas set up for car displays, car testing, and engine testing areas. All size companies were represented, with small companies setting up their booths right next to the largest companies in the automotive industry.
Both shows were very productive events, and allowed us to learn about the latest technology available, and the new trends that are growing in the automotive industry. As sales and production numbers are going up in North America, it was great to be at events that show where the future of the automotive industry is heading.
In 2016, we will be attending more industry and trade shows. First up in the beginning of March, we will be at The Precast Show 2016 in Nashville, Tennessee at Booth # 374. At the end of the month we will be attending the Mid-America Trucking Show in Louisville, Kentucky. For the most up-to date information on shows we will be at in 2016 be sure to follow us on Twitter and LinkedIn.
American manufacturing is most definitely back in a big way—and it’s also definitely one of the most competitive and innovative manufacturing industries in the world. In order to remain competitive, American companies must continuously improve and focus on bettering their operations and products on a minute-to-minute basis.
This extreme focus on continuous improvement is something we take very seriously, and very personally. We realize the level of trust our clients put in us, and we’ll never sit back and rest on past success. We know that no matter how good a business is, there’s always room for improvement, and in order to continue to improve internally and remain profitable, this method must be implemented, maintained, and tracked throughout every aspect of the business.
We do this in a number of ways. One of them is through benchmarking, a practice that goes hand-in-hand with our continuous improvement efforts. Just as coaches of successful sports teams look at what other teams are doing effectively, and then use those principles and practices, we, as a manufacturer, do the same.
We often find the best use of benchmarking is by looking at our customers, for whom we have great respect. We will visit customers’ manufacturing facilities and see how they perform certain operations, picking and choosing what’s successful and relevant to our own facilities.
One customer of ours, a Tier 1 supplier, demonstrated an innovative inventory storage system, showing what was last produced and what stock was oldest. We subsequently implemented the same method with great success.
Another Tier 1 client of ours was holding daily meetings to track action items—now we use the same practice in our Advanced Product Quality Planning (APQP).
Using benchmarking along with our other practices in continuous improvement allows us to achieve across-the-board progress, while setting a baseline and tracking our growth along the way. While not every change occurs overnight, but rather is a constant work in progress with consistent forward momentum, it all leads to noticeable success.
At Universal Polymer and Rubber, we are guardedly optimistic about the upcoming New Year. As the company surveys the business landscape for 2014, there are definitely some positive macro-economic trends that point to continued business and growth.
In particular, automotive production is trending upward to a likely production level of 16.5 million. This is great news for our rubber molding and rubber and plastics extrusion operations.
Another trend we are seeing is in new housing starts. Although still at historically low levels, each year over the past several there has been a trend upward. An increase in the construction of new homes is important for our company with our pipe gasket products. New housing requires additional infrastructure for the new and improving neighborhoods where the new homes are being built. This is all good news for the coming year.
In addition, this increase in construction as well as automotive production means that there will be more hauling of large products to and from factories. These require strong strapping equipment to keep products stable during transportation. We see an increase demand for our rubber strapping products such as our tarp straps and rubber tie downs. Moving into the New Year, the company will also continue to look at strategic acquisitions in the Northeast Ohio area.
It is always important to be optimistic for a new calendar year. We remain so and look forward to reporting on our successes throughout 2014. Happy New Year!
A few weeks back we achieved TS16949 Certification from the Automotive Industry Action Group (AIAG). This certification is a standard recognized the world over. Here’s how AIAG defines it:
The goal of this technical specification is to develop a quality management system that provides for continual improvement, emphasizing defect prevention and reduction of variation and waste with in the supply chain.
Earning the certification meant going through a rigorous 4 day audit. If you’d walked into UP&R in the days and weeks leading up to the audit, you’d have been treated to an atmosphere akin to lawyers preparing for an important case. That preparation didn’t find us inventing new processes, but rather getting all of our notes in order. At any moment, we had to be ready for an auditor to ask us to produce our training matrix, or point to a worker and ask about their training record.
Though this is an automotive certification, the standards required benefit all of UP&R’s customers. In order to become TS19649 certified, we had to prove that we have a thorough predictive and preventative maintenance program in place in order to ensure minimal downtime. And as we mentioned, we had to provide detailed documentation of our training program. A comprehensive training program guarantees that all of our employees are working in an optimal manner.
Taken together, the TS16949 Certification is evidence of our commitment to being an efficient business, and providing the very best for our customers. We’re proud to have achieved this certification, and we’re excited to carry out the last stipulation: working towards continual improvement, so that we are always providing the best service possible.