Resin Broker/Reclaimer Uses Internet To Match Up Buyers & Sellers.

* Dale Schiff, president of Exchange Plastics Corp., has been with the Akron, Ohio, firm for 17 of its 27 years as a broker of industrial plastics scrap. In just the last five years, Exchange Plastics has grown into a major reclaimer as well, taking more control over the plastic it sells. Five years ago, 90% of the company's sales came from brokering plastic, 10% from grinding and hand separating of parts. Now the ratio is 60% brokering, 40% value-added reclaim.

Exchange Plastics specializes in gently grinding polycarbonate, PC/ABS, and acrylics. Its grinders are modified to run as much as 60% slower than normal to avoid adding heat history to high-value resins that degrade easily.

Sales are expected to reach $17 million this year, up from $10 million last year, with most of the growth on the reclaim side. Reclaim has grown into a separate entity, American Plastics Inc., based in the Akron head office and occupying leased grinding and storage space in Indiana and Louisiana, plus warehouses in Massachusetts, South Carolina, Texas, and Illinois. "We carry 2.5 million to 3 million lb of inventory at any one time," Schiff notes. What allows Exchange Plastics to handle so much more volume is its new information-management system, which matches buyers and sellers within half an hour in many cases. Just last year, such matchmaking took 24 hours.

Multi-level network

The transformation of Exchange Plastics' business mix from brokering to owning much of what it sells happened largely because of its three-tiered data-management system, installed three years ago and upgraded last year. Schiff is the architect of the system, which sells materials both on and off the internet from a single materials database that combines brokered materials and the company's value-added reclaim.

Exchange Plastics' information system guides sales both on and off the Web. When a customer calls and needs resin, the system immediately matches that opportunity with the nearest available material in Exchange Plastics' database, taking into account cost, shipping distance, and the customer's quality requirements. If quality specs are tight, Exchange Plastics will ship its own material or possibly require the brokered material to be tested first. "The non-Web system notifies our sales representative that he has a material match, often within half an hour of the customer signaling a need for plastic," Schiff explains. "The on-Web system notifies the customer directly," he adds.

The system has three levels. First is simple e-mail, which links Exchange Plastics' 11 sales representatives around the country. Level two is a password-protected internet website, exchangeplastics.com, where registered processors can post their materials needs and review their account data. "Only processors are allowed on this site," Schiff says. "It's a secure place for processors to contact us and for us to contact processors. It isn't a broker daisy chain where anybody can get in."

The third level is the system's newest feature, available only to Exchange Plastics' sales agents: It lets them post offers to buy and to sell on the website the moment they come in throughout the day and gives instant matchups. Previously, offers piled up and were manually entered at the end of the day Supply and demand didn't get matched until the following day.

"Even state-of-the-art information management has limitations," Schiff cautions. "You can get the right information to the right party at the right time, but a lot of polymer websites do that and still have failed. At the end of the day, selling plastic is about relationships with customers." In most cases, when Exchange Plastics' computer matches material to a customer's need, a salesperson steps in to complete the transaction.

On the reclaim side, American Plastics works closely with processors that supply scrap on long-term contracts. American Plastics pays these processors a fee for the scrap, which ranges from pennies per pound to two-thirds of the cost of prime. American Plastics supplies its scrap suppliers with leased trailers and collects the containers when full. Company representatives visit these plants to instruct operators on how to handle their reclaim and keep it clean and separated so as to get the maximum value from it.