Supply Chain High on Agenda for TLMI Annual Meeting 2022
Lori Campbell, president of The Label Printers, called the TLMI Annual Meeting 2022 to order on the morning of October 17 at the Arizona Grand Resort & Spa in Phoenix, Arizona, after a lively day of pre-show networking, including the TLMI Board of Directors meeting, Annual Meeting Golf Tournament and evening reception that were held on October 16.
While members were still very excited about meeting live and in-person, their mood became more somber as the educational program kicked off with a supply chain update and panel discussion. The session was moderated by Corey Reardon of AWA, and panelists were Michael Keaney of Flexcon, Catherine Heckman of Bostik, Dan Galovic of Innovia Films, Tina Hart of Avery Dennison, and Jeff Morris of Mitsubishi Chemical America.
Heckman was refreshingly frank — advising the packaging printers and converters in the audience not to expect a sunny fourth quarter in 2022 despite some bright spots, such as the availability of overprint varnishes.
Keaney explained that the challenges have shifted, and throughput and capacity aren’t often the current issues. For example, he noted, the converting and printing industries and their suppliers are competing with employers who have the flexibility to give employees an attractive pay rate and work schedules that give those employees more work/life balance. This is resulting in ongoing problems with headcounts in operations.
Galovic had some good news for the audience — clearly stating that there will be ample polypropylene supply in North America. “We’ll have two more plants in 2022 with Alberta Canada – Heartland Polymers and Exxon Mobile in Texas,” he reported. “People are sitting on inventory right now. From a raw materials standpoint for PP, we’re definitely in good shape. Importation routes are getting smoother. Local freight is getter better, even though it’s still high.”
Because of this, Galovic noted there’s an opportunity for converters to move to white biaxially oriented PP as a replacement for paper, which still is experiencing supply shortages.
Hart also encouraged the converters and printers to continue to look at alternative stocks to paper. She specifically called out the need to look at alternative liners, material reduction, and inventory and job volume management to mitigate some of the challenges presenting from inflation and supply chain shortages.
She noted that it will take a while to see the benefits of recent investments to increase the paper supply. Inflation will also continue to plague the packaging and label papers marketplace.
Morris reported strong demand from label converters for PP to either replace or supplement paper already exists, and Mitsubishi Chemical America had sold-out capacity since its first financial calendar quarter in 2020. The upside of the supply constraints is that increased demand has compelled Mitsubishi to increase investment in the businesses that serve the label and packaging printing and converting markets.
The audience chimed in by noting that not all supply chain challenges were in regard to purchasing more materials. Several converters noted that in anticipation of future shortages, these package printers had stockpiled materials, which are now aging out. The package printers urged supplier members to give updated guidance on how far they could push the use of aging inventory and what exactly were the repercussions regarding quality and efficiency at different stages of stock that typically would be considered expired.