Operational & Organizational Challenges
Research in the public domain shows several notable operational and organizational challenges with PQ Corporation, including (but not limited to) air pollution emissions issues, violations against the company (for various issues, like OSHA problems), mid-range employee satisfaction and pay scale ratings, and issues related to plant expansions and product partnerships. Domino Printing has seen and addressed issues related to labeling and coding, and has done amazing things improving their supply chain functionality, though the company is still earning mid-range employee satisfaction ratings. Very little information was found on US Wire & Cable or its two sister companies, Flexon Industries and Voltec Power & Lighting. Possible operational and organizational challenges may include issues related to the long-term family leadership at the company group, as well as the lack of employees’ ability to post public reviews of the company, and a few problematic Better Business Bureau complaints.
OP Challenge: Air Pollution Emissions Troubles
- In August 2019, the Delaware plant of PQ Corporation was fined $750 K for “nearly six years’ worth of air quality violations” as noted by the Department of Environmental Protection (DEP) in Pennsylvania. The plant was fined for violating at least two provisions of the Pennsylvania Air Pollution Control Act: “emissions limits and failure to submit emissions reports on time.”
- The Delaware plant violations are not the first for the company, which also paid fines in 2015 and 2017 to DEP for similar and additional violations. Additionally, in 2019, the US EPA (Environmental Protection Agency) found violations related to particulate matter limits, as well as Clean Water Act violations.
- The company noted in a recent statement that “it has continued to make progress in the past year to reduce emissions,” and to improve “operating and maintenance practices” related to the violations. Although the hourly emissions limits are still in violation, the company has shown improvement on “12-month rolling total emissions limits,” on the latter of which the company is now showing to be in compliance with federal limits.
OP Challenge: Multiple Violations
- The Violation Tracker counts 22 violation records for PQ Corporation from 2000 to 2018 (data from 2019 was not yet available). These violations include 15 environmental violations, three workplace safety and health violations, two labor relations violations, and two railroad safety violations. From 2016 to 2018, the company was fined for three of the four categories (no labor violations in recent years).
- Belgacem Chariag was announced as Chairman of the Board of Directors at PQ, in addition to his current positions as President and CEO. He stated that among his “highest priorities for PQ are the safety of our employees,” though it isn’t clear what he intends to do to reduce the violations the company has experienced.
ORG Challenge: Mid-Range Employee Ratings
- According to Indeed, PQ Corporation has a 3.6-of-5 star rating from employee reviews. The lowest scores were found in the categories of “job security and advancement,” “management,” and “culture,” each of which earned only 3.2 stars. Employees rank the company at 3.4 stars for “work-life balance,” and 3.6 stars for “pay and benefits.”
- On Kununu, the company has a 3.9-of-5 star rating among employees. For those ranking the company with a low-star rating, the biggest complaints appear to be related to a lack of company culture including issues with gender-based glass ceilings, very little freedom to work independently, and low managerial support.
- The company earned 4-of-5 stars on GlassDoor, which is higher than Indeed’s ratings, but still in the mid-range. Notably, GlassDoor ranks the company as an “engaged employer,” so they are keen to ensure their ratings from employees stay high (or improve). On GlassDoor, potential job candidates rated the company interviews as having “average” difficulty (with a rating of 2.4-of-5). On PayScale, employees gave PQ Corporation a job satisfaction rating of 2-of-5 stars.
- According to a 2018 article, one of the ways PQ Corporation improved employee satisfaction was through an overhaul of their “compensation and performance review system.” Internal research showed the company processes were not effective, so multiple executives (including the president of one of the company’s operations divisions) complete revamped the system. The new system included 360-degree evaluations, different standards for performance assessments, removal of a forced-rank system, increased transparency in compensation practices, increased compensation and performance increases, and changing to hiring systems.
ORG Challenge: Plant Expansions & Product Partnerships
- Multiple plants at the company are expanding; one of these is the Kansas City, KS plant, which is gearing up for a $100 M expansion of the city’s operations facility. The expansion of existing plants provides the opportunity for a variety of issues related to the expansion construction itself, as well as to the increases in the employees and their needs.
- Additionally, the company has partnered with other companies for expansion of their product reach and customer base. One example is the late 2018 alliance with KD Corporation to “extend its North American and European polyolefin catalyst manufacturing capability to Asia.”
- Another partnership expansion, this time with Fitz Chem LLC, is in the works, as well. The companies have been long-time partners and the expansion is taking place in the US (not in the global market), so this particular partnership may not cause many issues, though expansion and growth of all types can cause operational and organizational challenges for any company. Partnerships and expansions of this type come with their own set of issues, including maneuvering in various global regulations, and ensuring that facilities and products meet standards for both the US and the global community.
OP Challenge: Labeling Issues
- Domino has had its own share of labeling issues in the past, like many of its competitors. While some issues related to human error, others related to insufficient technologies used by companies. In the UK alone, poor or problematic food coding labels have “contributed to a 40% rise in food recalls, with three major brands recalling products due to labeling errors in the first few days of June 2019 alone.” Domino noted this as a global issue that spans multiple industries, food labeling, drug labeling, and medical device labeling among them.
- Domino has succeeded in addressing these issues through an automated coding and labeling process that has unlocked “productivity and efficiency gains” that have contributed to improving their bottom line and helping them mitigate “the risk of avoidable human error.” They provide instruction and insights to other companies wishing to automate their own processes.
OP Challenge: Coding Issues
- In any coding / labeling environment, a company has five major pain points: “errors and poor code quality,” “frequent downtime for maintenance/ink changeovers,” “extended downtime due to product changeover,” “limited production due to printer performance,” and high factory floor temperatures leading to a 33% drop in coding capacity.
- To combat these issues, Domino created a new Beverage Can Coding System, which can “withstand the heat and humidity of canning factory floors.” The new system has a “near zero-maintenance profile” so that uptime is maximized, and the laser coders do not require inks or fluids, which help reduce “consumable changes and cleaning regimes.” The system also facilitates auto-adjustments for varying can sizes, and comes with an optional chiller to meet temperature best practices.
OPS Challenge: Supply Chain Issues
- Domino sources their parts from more than 200 suppliers all over the globe, and this type of massive undertaking takes a lot of operations practices to work smoothly. The company’s supply chain network is “designed to maximize quality and drive down lead times” through best practices in factory operations and the optimization of a wide and distributed supply chain.
- The company’s supply chain process utilizes a collaborative model – connecting engineers to technicians to suppliers et al – all the way to the executive-level employees. It’s this high level of hands-on multi-touch engagement that Domino states is the key to their strategies. Domino won a Supply Chain Excellence Award in 2017 because their processes are so refined and successful.
ORG Challenge: Mid-Range Employee Ratings
- GlassDoor shows that this company has a 3.7-of-5 stars rating from employees, with only 69% stating they’d recommend the company to a friend. Notably, however, despite this mid-range rating, the company is listed as being an “engaged employer,” so it’s clear they’re interested in what their employees are saying about them. Some of the biggest complaints relate to improper and poor management, executives disregarding major concerns as well as strong ideas, a lack of diversity, and a lack of proof that employees are valued.
- Additional analysis from Indeed shows that the company scores the lowest on “management” (2.5 stars), followed by “job security and advancement” (2.7 stars), “work-life balance” (2.8 stars), “pay and benefits” (2.9 stars), and “culture” (3 stars).
- Payscale shows that their employee job satisfaction ratings are 3-of-5 stars. Their highest ratings come from their Facebook page, which shows a 4.4-of-5 rating.
- One of the initiatives they’ve implemented to improve employee satisfaction ratings is a new Wellness Programme, as well as publishing various posts on how their employees are their biggest asset (like on Facebook).
- US Wire and Cable Corporation includes three companies – the namesake company, Flexon Industries, and Voltec Power & Lighting. This report focused on all three companies to provide the most well-rounded response possible.
- Notably, very little information was found in the public domain on these companies’ processes (organizational or operational), nor was information found on how they’ve addressed issues they’ve encountered. This may be due to the first OP challenge pointed out below, or it may be due to other unrelated issues (like a lack of press put out by the company). Because of this, it was difficult to determine any operational or organizational challenges faced by the company, or determine any initiatives they’ve put into place to address those issues.
OP Possible Challenge: Combined Family-Led Companies
- US Wire & Cable has been around for almost 30 years, led for the majority of that time by its founder, Alex Folkman (and the founder’s family in the business). In recent years, other family members have continued the tradition of helming the company, with Joseph Folkman serving as Chairman of the Board. The president, Warren Swindlehurst, has been with the company for over 20 years, and the new CEO, David Rauch, was previously with Flexon Industries before that company merged with US Wire & Cable; Flexon has been around for more than 60 years.
- Voltec Power & Lighting, the third company in the triad, has been around since 2001, and merged into the other companies to form the triad in 2016. Each of these company divisions handles different aspects of the parent company’s business, though each is steered by long-time members of the founding families or by employees who’ve been with the company for an extended number of years.
- Notably, this type of ongoing family legacy at a company has been shown to stagnate innovation and lead to issues in growth, though this company does not seem to have faced those challenges in recent years. That said, they may have merged with the other companies to address issues within their supply chain, or to augment their global market reach, or to increase their manufacturing and production capabilities (or a combination of those plus other factors).
ORG Possible Challenge: No Public Employee Ratings (All Brand Companies)
- No Indeed, GlassDoor, or other employee rating site included profiles for US Wire & Cable (under any combination of names/spellings for the company), for Flexon Industries, or for Voltec Power & Lighting. Because of this, it is clear that the company does not wish to allow employees to publicly score their performance, which is an identified issue that the company does not seem to be addressing.
ORG Possible Challenge: Poor or Nonexistent BBB Ratings
- Flexon Industries’ Better Business Bureau (BBB) profile shows six complaints over the past three years – four of which related to the company’s garden hose that has a lifetime guarantee. It appears that the hose does not meet advertised standards and that the company has been reluctant to follow through with the lifetime replacement guarantees. One other reported complaint related to advertising and sales, with the sixth qualifying as a “problem with a product or service.” Since three of these complaints were resolved in the past 12 months, it’s clear that the company hopes to improve their BBB rating, though this doesn’t seem to be a big priority (based on the simplicity of the complaints).