Social Enterprise Sees Its Workforce as a Competitive Advantage
MDI’s announcement in September that it was expanding its product line to include corrugated polypropylene marks the latest evolution of the company, which over the last 23 years has gradually expanded its packaging business. It started with the U.S. Postal Service (over 90 million corrugated plastic polyethylene tubs delivered over that period, including over 5 million tubs in 2015), and more recently, the provider has made its mark in the private sector.
An Untapped Labor Force
MDI (Minnesota Diversified Industries) was founded in 1964 as a social enterprise to provide jobs for people with disabilities. It is a mission that is still at the heart of MDI’s activities. About 260 of its 521 employees have a documented disability, which Peter McDermott, CEO of MDI, sees as a competitive advantage. He calls the opportunity to employ – people with disabilities an untapped labor force. McDermott, a financial and industrial development executive from the private sector, took the reins of MDI in 2008.
“If you look at the labor shortage, especially in manufacturing, this is a talent pool that when provided with the right training and support can be very successful,” McDermott stressed. “Employment is half of what it is for non-disabled. Around 90% of people with disabilities can work productively, and we are proof of that.” When visitors walk onto the plant floor, he said that they are hard pressed to discern who has a disability and who does not, because productivity is maintained by all employees. Workers with disabilities achieve typically at least 70 to 80% productivity, ranging up to 110% versus the overall workforce.
When it comes to sales generation, however, being a social enterprise plays second fiddle to the overall value proposition. “It’s not relevant to customers,” McDermott said. “They buy because of the quality and pricing. It is more of an add-on that we employ –people with disabilities, although it does resonate with some people. At the end of the day, customers want excellent customer service, the best price, and they want the quality, and they want it on time.”
“We have been putting a lot of effort into growing the commercial side of the business,” explained Barb Majerus, MDI’s Vice President of Sales & Business Development. “Our vision is to create as many job opportunities as possible.” The organization identified the polypropylene packaging segment as a growing niche that they had been missing, despite having the skill set to go after it. MDI hopes that polypropylene packaging sales will translate into a $20 million sales boost over the next ten years. MDI is on track to generate $36 million in sales for 2016.
“There are some applications where polypropylene is frankly the better fit,” Majerus said.
“We have a strong engineering and sales support structure that we can do high volume as well as small volume production,” Majerus offered. “We can do standard as well as custom configurations.” MDI’s flexibility, she said, “makes us a little bit unique.” The organization’s range of services includes kitting and packaging services, as well as a range of other packaging options and accessories required by customers.
Benefits of Corrugated Polypropylene
Corrugated plastic, particularly polypropylene, can deliver an extremely low cost per trip in an efficient reuse system where containers are typically used hundreds if not thousands of times. “Your ROI is going to be very good,” McDermott said.
Polypropylene packaging is extremely durable, providing “living hinges” that will stand up to being opened and closed hundreds of times. Also, superior stiffness and impact resistance make it attractive for demanding applications, as well as for use in partitions and dividers. Other attributes such as being non-absorptive and dust-free are helping it to make inroads for single trip packaging in applications such as the pharmaceutical sector, where these characteristics help it meet FDA regulations. As well, twin-wall, polypropylene packaging can be combined with protective foam to deliver superior protection for electronics, medical devices and high-value, fragile products.
At the other end of the scale, Majerus noted, corrugated polypropylene stacks up extremely well in many applications versus injection molded products unless the customer has a vast order to justify the considerable expense of upfront tooling costs, or that alternately, the optimal container is already a catalog item.
Two Bottom Lines
While the foundation of MDI’s business was the Postal Service, McDermott explained, over last 7 or 8 years, it has gained many Fortune 100 and Fortune 1000 customers. Their client list includes many recognized names from the food, agriculture, manufacturing and logistics sectors. Ultimately, he stated, MDI has two bottom lines – cash flow and employment.
By expanding its product mix to include such offerings as foam, kitting and now corrugated polypropylene, MDI is striving to “move up the value chain” for its customers. “We are investing in facilities, equipment, training, new products and new markets,” Majerus concluded. “That is an exciting space to be, for a social enterprise looking to create new jobs.”
For more information, visit https://www.mdi.org.