How One Plastics Maker Is Pivoting To the Future

Chip Owen has had at least two significant mentors who helped steer him into a manufacturing career, culminating in his purchase of D&M Plastics in Burlington, Illinois, where he is CEO.

Sam Zell was one. The iconic late Chicago-based real estate magnate showed Owen — who for a time was COO of Zell’s Equity Office Properties — how to see around corners, investment-wise. But Owen was more of a linear thinker.

Owen’s father was another mentor, a salesman for manufactured goods. “In order for America to be great, we have to make things,” he would say to Chip.

“And him saying that always kind of stuck with me,” Chip Owen said recently. So, later in his commercial real-estate career, Owen “started looking around for businesses to buy and I happened upon this one and made a deal. And now I’m making things.”

Specifically, D&M is a mid-sized custom-injection molding outfit that has survived the loss of its only profitable customer and the tempest of Covid, now has a diversified customer base and a stable workforce, and is expecting an increase in sales of about 15% to 20% in the next couple of years as Owen’s long-term strategy gains traction.

Here are some lessons that many mid-size manufacturing chiefs could learn from Owen’s experience:

• Look around corners. Owen testified that he doesn’t have Zell’s gift for anticipating the future, but he did it in one important way, and it probably saved his company. One of the first things Owen did upon purchasing D&M from private owners in 2013 was to diversify its client base quickly. At the time, his company made plastic parts for a lancet system supplied by another company to Roche pharmaceuticals: It represented 40% of D&M’s revenues and all of its profits, Owen said.

So Owen was already pounding the pavement seeking new customers when in 2015 Roche sent its lancet manufacturing offshore because its finger-prick technology was being quickly obsoleted. “Revenues dropped a lot and we’ve had to build back,” Owen said. “Health-care devices are still our biggest vertical, but now we’ve got 10 customers and we make a lot more than parts for one system for each of them.”

• Step into the reshoring firehose. Fortunately, the reshoring phenomenon also has benefited D&M, but Owen has pivoted into it strongly rather than waiting for re-domestication of manufacturing to come to his company.

“The customers we’ve done business with had large operations overseas and with the pandemic they made the decision that they didn’t’ want to have that kind of exposure,” Owen said. “We’ve been the beneficiary of that.”

But maximizing benefits to his company, he said, came in part by “leveraging relationships” and performing. “We produce very good parts, and high-quality parts,” he said, “on time and at a competitive price. When you do that and your customers think about reshoring, they look to you at least to provide a quote. We’re always competitive, though not the cheapest. But they know they’re going to get a partner that’s got a lot of integrity.”

• Engage employees. D&M’s employee base is stable, Owen said, and a big reason is that people really seem to like to work there.

He does several things to encourage that kind of thinking. D&M shares its financials with employees at shift meetings every day. The company has a profit-sharing program that, Owen said, is about to pay off significantly for workers after a few years in which D&M was rebuilding its business.

And the company actively solicits ideas from its employees, generating more than 12,000 suggestions over the last nine years at the daily meetings, which are listed immediately on a blackboard, photographed and then considered for implementation.

“I want employees to think like owners,” Owen said, “so I do everything I possibly can to help them to do that.”