STRATEGIES FOR FUTURE SUCCESS ARPM Embarks on Systematic Review of MO-1 Rubber Handbook ® Turning Data into Gold: The 2025 AI Operations Playbook ® 2025 Market Update: M&A Outlook for Rubber Businesses 2025 / Issue 1 The Official Publication of the Association for Rubber Products Manufacturers
Strengthening Connections and Celebrating Community ARPM’s Vision for 2025 FROM THE DIRECTOR Kaitlyn Triplett, ARPM Welcome to the new year, 2025! ARPM is excited about the many opportunities ahead for our members and the rubber manufacturing community. This year, our focus is on strengthening connections, enhancing training, and supporting the professional growth of everyone in the industry. At the same time, we take a moment to celebrate the dedication of the volunteers and members who make our work possible. A YEAR OF EMBRACING GROWTH ARPM has crafted a robust calendar of events and resources for 2025, designed to address industry needs while fostering collaboration and growth across our membership. NETWORKING OPPORTUNITIES Building strong connections is central to ARPM’s mission. Whether through in-person gatherings or virtual events, our networking opportunities aim to unite members, fostering the exchange of experiences, solutions, and innovations. • 2025 BENCHMARKING AND BEST PRACTICES CONFERENCE: This signature event will highlight how innovation and resilience can shape the future of our industry. Attendees will engage in interactive sessions and build valuable relationships. • 2025 ENVIRONMENTAL, HEALTH, AND SAFETY SUMMIT: This focused event will convene experts and peers to discuss critical EHS topics, share best practices, and explore strategies for fostering safer, more sustainable workplaces. A new feature this year is the Safety Award Winner Plant Tour, hosted by showcasing their world-class safety program. • VIRTUAL PEER NETWORKING SESSIONS: These roundtables continue to provide a convenient platform for discussing critical topics such as workforce development, sustainability, and emerging technologies for various functional area groups. TRAINING AND DEVELOPMENT Supporting our members’ professional growth is a priority, and 2025 will see expanded training offerings to meet the evolving needs of the industry. • ARPM TRAINING ACADEMY: New courses will be introduced to address industry trends, from advanced manufacturing practices to navigating regulatory requirements. • TECHNICAL AND EDUCATIONAL WEBINARS: These sessions will provide valuable insights and practical knowledge to help members tackle industry challenges effectively. • LEADERSHIP DEVELOPMENT WORKSHOPS: Preparing current and future leaders to meet industry challenges emphasizing effective management and decision-making skills for young professionals in manufacturing. GRATITUDE FOR OUR COMMUNITY Our progress as an organization is built on the active participation and contributions of our members, volunteers, and board members. THANK YOU TO OUR VOLUNTEERS Volunteers are the cornerstone of ARPM’s success. From planning events to serving on committees, your efforts ensure that we can deliver meaningful programs and services. Your time and expertise are greatly appreciated. RECOGNITION OF RETIRING BOARD MEMBERS This year, we honor retiring board members Doug Gilg and Jon Meighan, whose leadership and commitment have shaped ARPM’s direction. Your insights and guidance have left a lasting impact, and we are deeply grateful for your service. GRATITUDE TO OUR MEMBERS To all our members, thank you for your continued engagement and trust. Your involvement, whether through attending events, participating in surveys, or utilizing ARPM’s resources, is the foundation of our shared success. LOOKING AHEAD As we step into 2025, ARPM remains dedicated to supporting our members through opportunities to connect, learn, and grow. Together, we will navigate challenges and seize opportunities to ensure a thriving future for the rubber manufacturing industry. Thank you for being part of this community. Here’s to a successful year ahead! WWW.ARPMINC.COM / 01
04 AI & Data Strategy Turning Data into Gold: The 2025 AI Operations Playbook By Derek Moeller 08 Technical Standards ARPM Embarks on Systematic Review of MO-1 Rubber Handbook By Letha Keslar 10 Member Spotlight A Legacy of Resilience: The Journey of Custom Rubber Corp. By ARPM Staff 14 Management Navigating Data Security By Seth Skiles 16 Business Operations A Healthcare “Captive” By Vanessa Salvia 20 PFAS Regulation Update A Year in Review By William Heslip 24 Business Intelligence Building Better Dashboards By Kate Brown 26 Marketing Navigating Marketing Strategies in an Era of Marketplace Shifts By Sara Melefsky 28 State of the Industry 2025 Market Update By Michael Benson and Steve Simone CONTENTS 2025 / Issue 1 features 02 / INSIDE RUBBER / 2025 Issue 1
01 From the Director 09 Member News 32 Calendar 32 Ad Index 04 departments 10 Association for Rubber Products Manufacturers 7321 Shadeland Station Way, Ste 285 Indianapolis, IN 46256 Phone: 317-863-4072 / Fax: 317-913-2445 [email protected] / www.arpminc.com © Copyright 2025 Editor Vanessa Salvia Advertising Sales Dylan Burkhart Design & Layout Jon Cannon For advertising opportunities and deadlines, please contact Dylan Burkhart at 925-487-4667 or [email protected]. ARPM Team Executive Director / Letha Keslar / [email protected] Managing Director / Kaitlyn Triplett / [email protected] Marketing Director / Marcella Kates / [email protected] Analytics Director / Tony Robinson / [email protected] Director of Publications / Susan Denzio / [email protected] Analytics Lead / Andrew Carlsgaard / [email protected] ARPM Officers President James Wideman / MBL (USA) Corporation Vice President Ryan Fleming / Freudenberg-Nok Sealing Technologies Treasurer Donovan Lonsway / BRP Secretary Joe Keglewitsch / Ice Miller LLP Past President Travis Turek / Bruckman Rubber Corporation ARPM Board of Directors Mathew Augustine / Continental ContiTech Rich Balka / Home Rubber Company Bill Bernardo / Ebco, Inc. Kirk Bowman / The Timken Company Charlie Braun / Custom Rubber Corp. Russ Burget / Maplan Rubber Machinery Aaron Clark / Danfoss Power Solutions Joe Colletti / Marsh Bellowfram Randy Dobbs / Sperry & Rice LLC Carl Flieler / Zochem LLC Cedric Glasper / Mechanical Rubber Products Corp. Diya Garware Ibanez / Fulflex, Inc. Jeff Leach / Passaic Rubber Co. Mike Rainey / HBD Industries Inc. Mike Recchio / Zeon Chemicals L.P. Brandon Robards / Ace Extrusion Caitlin Steele / Gates John Stone / The Rubber Group WWW.ARPMINC.COM / 03
Turning Data into Gold: The 2025 AI Operations Playbook Five ways manufacturers are putting generative AI to work today By Derek Moeller It’s a story too many rubber processors are familiar with: A company makes a major investment in enterprise software, with the promise that digitizing a company’s maintenance, manufacturing execution, scheduling, and resource planning systems will yield major benefits in efficiency and profitability. But after thousands of hours invested in implementation, a general frustration often begins to rise in the company’s chief implementers when they realize something—staff aren’t using the system like they’d hoped. For instance, a problem happens with a production line, but there’s no work order for it. A work order is entered, but there’s little to no usable information in it. The system now has production data, but it’s not getting used to make decisions; instead, people are depending on what they heard from someone, or a hunch. The system offers a way to contribute process knowledge, but people don’t put it in. Information on procedures, even if they are in the system, don’t get used. The result is that companies have downtime because a machine doesn’t get fixed fast enough. Scrap is made because people don’t know how to fix a quality problem quickly. And trends in causes of problems don’t get used to address root causes of systemic issues. These issues happen in almost every implementation of a major enterprise software system. The user interface expert Jakob Nielsen, founder of the Nielsen Norman Group, tells us why. In his model, over the last century, software has had two “paradigms,” or models, of how the user has to interact with the computer. The first was batch processing. Think punch cards from the 1960s: A user creates a set of instructions by punching holes in cardstock, using hundreds or thousands of cards for a single program. They would then give this stack to the machine, which read the holes. There was no “using” the computer as we think of it today, no back-and-forth interaction, because a user had to wait their turn for the computer to run their batch. The second paradigm replaced batch processing, and is the one we’re still largely in today. It’s what Nielsen calls “command-based interaction.” A user tells the computer what to do via explicit command and gets a near-instant response. It was a huge advance from batch processing. AI & DATA STRATEGY 04 / INSIDE RUBBER / 2025 Issue 1
AI & DATA STRATEGY Look at how people use computers today. If a user needs to create a work order, there are a set of micro-instructions they have to follow to do it. Click this button, pull down this menu, click that field, and so on. Done in the right order, a work order gets created. But there’s a problem with command-based interaction. It’s the same problem implementers find with adoption of their shiny new software. It requires the user to conform to the very specific expectations of the software. A user doesn’t tell the computer, “make me a work order.” They have to tell it every little micro-command that, done correctly in the right sequence, ultimately results in a work order. And that friction is what causes the adoption gap: The difference between what an enterprise system could do, and what it actually is achieving for a manufacturer, because employees have many work priorities and learning the intricacies of an ERP interface is not the highest. The result is usually an endless and thankless series of reminders to put information in the system, to use the information in the system, and trainings on how to do both, all set against a backdrop of rising staff turnover, labor shortages, and staff who feel they don’t have the time to use the system every time they’re supposed to. THE NEW PARADIGM But according to Nielsen, that’s all changing, because we are now entering the third, newest paradigm: intent-based computing. Whereas command-based interaction requires users to conform to computers, intent-based computing does the opposite: It conforms the computer’s actions to the user’s intents. Users can treat the computer like a person, which can be told the desired outcome, and then it will figure out how to accomplish it, eliminating nearly all the friction of using traditional systems. What makes this possible? Generative AI, and specifically a form of generative AI called Large Language Models (LLMs). Large language models are trained by letting big networks of digital neurons learn by reading billions of words, from books, magazines, newspapers, and the internet, in dozens of languages across the world. Their task to learn is simply to predict words. It’s not obvious that this would result in something resembling intelligence. Predicting the next word someone will say sounds more like a party trick than a sign of general intelligence. But human language has an odd property: Unlike any other natural sound, it has embedded intelligence and reasoning in it. Books teach not just distilled knowledge but the ability to reason about the world. And so when a neural network trains on that text, it’s actually training not just on knowledge, but on how to think— including the ability to reason about people and human intent. HUMAN-LIKE MEMORY Training these models on human language unlocked another new ability—a new kind of memory that’s more human than digital. Humans remember information by grouping facts together conceptually; dogs and cats are closely related in our memory, because even though they’re different words, they’re both pets, animals, furry, and so on. Language models work the same way. They can turn huge amounts of information into clusters of related concepts, using a process called embedding. Instead of demanding keywords that have to exactly match, AI language models can find concepts similar to what a user is looking for. That means that knowledge, which typically is scattered across Sharepoint drives, databases, paper notes, or video, can all be brought together in a memory system that works a lot like people, so that companies can create a centralized intelligent memory that users can easily turn to when they need tribal knowledge for their job. BRINGING IT TOGETHER In 2025 and beyond, companies will adopt both this artificial human-like reasoning ability and human-like memory. It’s happening in five major ways. CENTRALIZED AI MEMORY: By storing all their process, machine, and material knowledge into AI memory, manufacturers can insulate themselves from the knowledge loss associated from technical staff turnover, and better share tribal knowledge across shifts. Internal AI models learn from technical staff, training on photos, speech, and videos, and then use that knowledge to assist the rest of the team. That can eliminate downtime created by not being able to put experts from every technical field on each shift. It also lets companies make their best technicians’ knowledge available to the entire team. DRIVING ACCOUNTABILITY AND INFORMATION SHARING: Manufacturing teams share important information verbally in daily shift meetings and production meetings. But it’s common for action items to get lost, and for information discussed at those meetings to Knowledge, which typically is scattered across Sharepoint drives, databases, paper notes, or video, can all be brought together in a memory system that works a lot like people, so that companies can create a centralized intelligent memory that users can easily turn to when they need tribal knowledge for their job. WWW.ARPMINC.COM / 05
AI & DATA STRATEGY not reach those who need to know it. Operations teams are using AI to listen to and summarize shift meetings, capture action items, and automatically email reports to keep everyone informed. USING DATA: For years, the technology industry promoted “Big Data” as a tool to drive efficiency. Unfortunately, gathering large volumes of production data often doesn’t result in actionable insights or analysis; instead, it gathers digital dust in databases. Generative AI models act as junior data analysts. A company builds a data lake of the important data they’ve collected and trains an AI on it. Then, the AI analyzes it in seconds, uncovering trends in scrap, throughput, and downtime reasons, all without any canned reports. The language models can even analyze the data to highlight notable trends. TRAINING: Preparing new team members, and keeping existing staff current with their training, absorbs huge amounts of time from process engineers, management, and the most skilled technical staff, both for creating training material and delivering it. With increased turnover, it’s also frustrating when newly trained employees leave. The psychologist Benjamin Bloom studied different formats of training at the University of Chicago, and in 1984 released a study that found that one-on-one tutorial learning, where each student had a dedicated tutor, increased average performance from the 50th to the 97th percentile. That means that today, manufacturers are leaving huge amounts of staff performance on the table, simply because the productivity returns to one-on-one tutorial training are very high. It is not practical to dedicate a permanent job skills tutor to every employee. But, AI can make this possible, by preparing training plans and content, designing knowledge quizzes, and then giving direct, personalized, and continuous feedback to help team members master their skills. New AI capabilities such as voice-to-voice even allows the AI to have a natural, human-like back and forth conversation to tutor employees in the specific production processes and products at a manufacturer’s plant. DRIVING SYSTEM USAGE: AI is increasingly able to use complex ERP systems on behalf of users, which results in major gains in adoption. Instead of trying to get users to put work orders in, for example, they can verbally tell their AI assistant to do it. If they need to know what materials to stage for an upcoming job, they can just ask their AI, which will pull it from the ERP system. Or if a manufacturer receives purchase orders from customers, AI can review these, extract the necessary information, and put a draft sales order into the system. Generative AI is causing major changes in manufacturers’ digital strategy. To unlock the potential of digital systems, we shouldn’t ask humans to conform to the demands of computers. Instead, we can use AI to conform to the needs of our people. DEREK MOELLER is the co-founder and president of CognitionWorks, a company that provides generative AI transformation for the manufacturing industry using SprocketAI, its AI tribal knowledge and analytics platform. Prior to founding CognitionWorks, he was the president and owner of an injection molding and extrusion company, and before that the founder of a medical media company. He studied economics at Northwestern University. 06 / INSIDE RUBBER / 2025 Issue 1
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ARPM Embarks on Systematic Review of MO-1 Rubber Handbook By Letha Keslar, ARPM Executive Director The Association for Rubber Products Manufacturers (ARPM) has launched a comprehensive review and revision of its MO-1: Rubber Handbook, reaffirming its commitment to fostering clarity and precision in the rubber manufacturing industry. This systematic evaluation aims to ensure the handbook remains a vital resource for engineers, manufacturers, and customers navigating the complexities of rubber part design and production. NEW ADDITIONS FOR ENHANCED GUIDANCE For this issue of the handbook, ARPM is introducing new sections that expand its value and relevance. A section detailing calendared product tolerances (ISO 3302-1: 2014) will provide precise guidelines for manufacturing accuracy, aligning with international standards. Additionally, a material selection section will assist users in making informed decisions about the most suitable rubber compounds for specific applications. These additions are designed to address critical gaps in existing resources and to further strengthen the handbook’s utility. ADDRESSING THE NEED FOR A “UNIVERSAL LANGUAGE” For years, the MO-1: Rubber Handbook has provided a “universal language” that bridges the gap between design engineers and manufacturers. Historically, specifying requirements for rubber parts has been a challenge due to the nuanced performance, tolerance, and service characteristics inherent to the material. While material designation systems like ASTM D-2000 and SAE J-200 have addressed the need for standardized rubber material specifications, significant work remains in defining engineering and quality conformance requirements. The handbook continues to evolve as the industry’s definitive guide for expressing these requirements in a clear and actionable manner. COMPREHENSIVE AND SPECIALIZED APPROACH ARPM’s MO-1: Rubber Handbook meticulously addresses the unique manufacturing techniques, capabilities, and limitations of various rubber processes, including molded, extruded, lathe-cut, and cellular (expanded and sponge) products. Each chapter includes tailored charts, symbols, and definitions to aid engineers and TECHNICAL STANDARDS manufacturers in aligning expectations and minimizing misunderstandings. The eighth edition of the handbook also introduced recommendations for implementing total quality programs, emphasizing the goal of achieving zero defects in response to original equipment manufacturers’ (OEMs) rigorous standards. Recognizing the diversity of customer needs, it offers flexible approaches to quality assurance, empowering producers to adopt only the necessary recommendations. SUPPORTING INDUSTRY EXCELLENCE As part of its ongoing efforts, ARPM has incorporated dual-unit tables using both U.S. customary and metric systems, aligning with International Organization for Standardization (ISO) guidelines. This ensures the handbook’s relevance to a global audience. ARPM also offers complementary resources, such as the ARPM Online Training and Certification Program, designed to train operators in injection molding, compression/transfer molding, extrusion, and material mixing. This program includes a self- contained curriculum, helping organizations cultivate skilled workforces capable of meeting today’s demanding production standards. STRENGTHENING INDUSTRY COLLABORATION Formed in 2010 from a split with the Rubber Manufacturers Association (RMA), ARPM now represents more than 100 member companies across the rubber manufacturing spectrum. The organization continues to play a pivotal role in uniting the industry through networking, continuous improvement initiatives, and best-practice development. With the systematic review of the MO-1: Rubber Handbook ARPM aims to ensure its members—and the broader rubber industry— have access to the tools and standards necessary to enhance communication, performance, and profitability. For more information on the handbook or ARPM’s training resources, visit www.arpminc.com or contact the ARPM office at (317) 863-4072. 08 / INSIDE RUBBER / 2025 Issue 1
2025 HUMAN RESOURCES FORUM ARPM is hosting the annual Human Resources Forum March 12 and 13. Join human resource professionals and senior executives at this unique virtual event designed by manufacturing industry HR professionals. Presentations and discussions will cover current benchmarks, best practices, current challenges, and opportunities for peer networking. Registration is open at www.arpminc.com/events. Not able to attend the event on those days? Register for the event and you will receive access to all recordings and event materials! TRAINING ACADEMY: 2025 OPPORTUNITIES ARPM is excited to share that we will have both in-person and virtual opportunities available through the ARPM Training Academy in 2025! In-Person Opportunities • Advanced Rubber Product Manufacturing Technologies Training will be held March 3–5, 2025, in Chicago, Illinois. This three-day course will focus on the elimination of variation associated with the initial design of the rubber article and rubber compound, through the control of the compound’s consistency and manufacturing process. This course will be a mixture of lectures and hands-on demonstrations. • Product Liability Training, a brand-new course, will be offered May 6–8, 2025, in Indianapolis, Indiana. Equip yourself with the essential knowledge to navigate the complex world of product liability with this comprehensive course. Designed for manufacturing professionals, this training provides practical insights and strategies to address potential risks, ensure regulatory compliance, and respond effectively in the event of an incident. • Seals Product Design and Manufacturing will take place July 14–18, 2025, in Indianapolis, Indiana. This one-week intensive course provides comprehensive and consistent training in rubber science, product seal design (for static and dynamic sealings), and producibility. Virtual Opportunities • ARPM has a Virtual Learning Management System which now hosts all courses that provide learners with the introductory, core information that they need to understand the basics of each primary discipline of the rubber manufacturing industry. These courses are FREE for members. • ARPM has partnered with Thayer Leadership for the Building Leaders of Character training program. This immersive experience is led by general officers and faculty who reveal their leadership lessons learned from West Point and the U.S. Army. Attendees will engage in academy sessions and interactive experiences including applied academic classroom modules, interactive experiential sessions, mentoring with expert faculty, and inspirational speakers. The next session will be held in the spring 2025. BOARD MEMBERS ARPM is excited to welcome Mathew Augustine (Continental) and Charlie Braun (Custom Rubber) to the Board of Directors! Their experience and leadership will be a great addition to the Board. ARPM would like to extend their gratitude to Jon Meighan and Doug Gilg, who have completed their term on the ARPM Board of Directors. ARPM is grateful for their service and time dedicated to the association! MEMBER NEWS AT A GLANCE EVENTS ON THE HORIZON March 3–5: Advanced Rubber Product Manufacturing Technologies Training (Chicago, Illinois) March 12–13: Human Resources Forum (Virtual) May 6–8: Product Liability Training (Indianapolis, Indiana) July 14–18: Seals Product Design and Manufacturing Training (Indianapolis, Indiana) Register for these events and see a list of all upcoming events on our website at www.arpminc.com/events WWW.ARPMINC.COM / 09
MEMBER SPOTLIGHT Corp. Charlie Braun, President, Design Engineer Custom Rubber Corp. www.customrubbercorp.com A Legacy of Resilience: The Journey of Custom Rubber Corp. In the bustling industrial hub of Cleveland, Ohio, Custom Rubber Corp. has stood as a symbol of adaptability and commitment to manufacturing since its inception in the 1950s. Founded by two entrepreneurial brothers, the company has seen its fair share of transformations— changing hands multiple times before being acquired by the family of its current president, Charlie Braun. Under Braun’s leadership, the company has navigated industry upheavals, economic uncertainties, and the evolving demands of modern manufacturing, all while staying true to its roots. FROM FAMILY PURCHASE TO INDUSTRY LEADERSHIP In 1980, Braun’s parents purchased Custom Rubber Corp., taking a leap into the rubber industry despite having no prior experience. For Braun, who was just 10 years old at the time, the business quickly became a defining part of his life. “I was always taking things apart, trying to figure out how they worked, and sometimes even putting them back together,” Braun recalls with a chuckle. This innate curiosity for mechanics and manufacturing foreshadowed his future in the family business. While Braun eventually joined Custom Rubber Corp. full-time in 2000, it wasn’t a direct path. After earning a bachelor’s degree in fine arts from Harvard University and an MBA from Case Western Reserve University, he gained valuable experience in various industries, including plastic injection molding and enterprise resource planning (ERP) consulting at Ernst & Young. These roles provided him with diverse perspectives and skills, which he brought back to the company. “My father and I agreed that it was important for me to work elsewhere first,” Braun explains. “Those experiences made me realize I wanted to work in manufacturing— to make actual products, not just offer services.” By ARPM Staff 10 / INSIDE RUBBER / 2025 Issue 1
THE CHALLENGE OF CHANGE Custom Rubber Corp. has faced its share of challenges over the decades, but none as disruptive as the COVID-19 pandemic. The global crisis caused unprecedented demand spikes for certain products, resulting in one customer comprising the majority of the company’s business. When demand normalized, the client brought manufacturing in-house, creating a significant revenue gap for Custom Rubber Corp. “It was a pretty stressful time, trying to find new business to replace that,” Braun admits. The pandemic also introduced broader challenges, including supply chain disruptions and shifting customer needs. Yet, through perseverance and strategic adaptation, the company secured new clients in diverse sectors such as plumbing, wastewater treatment, defense, and telecommunications. “I’m happy to report that we’ve turned the corner,” Braun says. “2025 is shaping up to be a very solid year for us.” The company’s current operations include a 65,000-square-foot facility near downtown Cleveland, employing around 65 people across three shifts. With annual sales between $10 million and $15 million, Custom Rubber Corp. continues to demonstrate resilience in the face of fluctuating market demands. ADAPTING TO A POSTPANDEMIC LANDSCAPE The aftermath of the pandemic has brought new complexities, which Braun refers to as “the post-pandemic inventory reckoning.” During COVID-19, supply shortages led customers to over-order, creating significant backlogs. When the boom ended, businesses found themselves with months—or even over a year’s— worth of inventory, leading to prolonged purchasing freezes. “Various customers essentially turned the spigot off for extended periods,” Braun explains. “It’s been a roller coaster ride, but we’re finding stability again.” By diversifying its customer base and focusing on industries with steady demand, Custom Rubber Corp. has positioned itself to weather these fluctuations. Braun’s approach highlights the importance of adaptability in maintaining long-term success. The team at work at Custom Rubber Corp. Custom Rubber Corp. equipment. MEMBER SPOTLIGHT » Custom Rubber Corp. has faced its share of challenges over the decades, but none as disruptive as the COVID-19 pandemic. The global crisis caused unprecedented demand spikes for certain products, resulting in one customer comprising the majority of the company’s business. When demand normalized, the client brought manufacturing in-house, creating a significant revenue gap for Custom Rubber Corp. WWW.ARPMINC.COM / 11
LEADERSHIP BEYOND THE COMPANY In addition to steering Custom Rubber Corp., Braun has played a pivotal role in advancing the rubber industry. As a founding member of the Association for Rubber Products Manufacturers (ARPM), Braun has championed collaboration and knowledge-sharing among manufacturers. The organization was born out of a need to provide a dedicated platform for non-tire rubber manufacturers, who often felt overshadowed within the Rubber Manufacturers Association (RMA). “At a certain point, it became obvious that we needed our own professional organization,” Braun says. Together with industry leaders Regan McHale of Eagle Elastomer and Bernard Grégoire of Hamilton Kent, Braun helped establish ARPM. The group enlisted Troy Nix, a seasoned association manager, to direct the organization. “It’s been a really fun ride,” Braun reflects. “Since First Resource has taken over management, ARPM has done amazing things.” ARPM offers members invaluable resources, including benchmarking surveys, economic forecasts tailored to the rubber industry, and networking opportunities. Braun emphasizes the long-term value of these connections. “Many of our new customer referrals come from industry relationships,” he notes. “Networking pays dividends over time.” EMBRACING INNOVATION AND EXPERTISE Custom Rubber Corp.’s success is rooted in its commitment to innovation and continuous improvement. The company leverages benchmarking tools and economic insights provided by ARPM to stay ahead of industry trends. During the pandemic, these resources proved especially critical in navigating uncertainty. “Understanding what professional prognosticators are saying is important,” Braun says. “The uncertainty isn’t going away, so staying informed is key.” Beyond data and forecasting, Braun values the intellectual stimulation that comes with leading a manufacturing business. “If I get bored with paperwork, I can walk the shop floor,” he says. “There’s always something new to learn and solve.” LOOKING TO THE FUTURE As Custom Rubber Corp. approaches its 75th anniversary, the company remains committed to growth and diversification. By serving a wide array of industries and leveraging decades of expertise, it is well-positioned to thrive in an ever-changing market. “Manufacturing is challenging but rewarding,” Braun reflects. “We’ve faced tough times, but we’ve also built a strong foundation for the future.” With Braun at the helm, Custom Rubber Corp. continues to uphold its legacy of resilience and innovation—a true testament to the enduring spirit of American manufacturing. MEMBER SPOTLIGHT Custom Rubber Corp. offers molded rubber handle grips. Custom Rubber Corp. offers rubber to metal bonding. Custom Rubber Corp. offers custom molded colored rubber. » Many of our new customer referrals come from industry relationships. Networking pays dividends over time. » Charlie Braun, President, Design Engineer 12 / INSIDE RUBBER / 2025 Issue 1
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Navigating Data Security What manufacturers need to know about cyber protection By Seth Skiles MANAGEMENT The manufacturing sector faces unprecedented challenges in protecting sensitive data, with recent statistics and data breaches painting a sobering picture. According to IBM Security’s Cost of a Data Breach Report 2023, companies now face an average cost of $4.5 million per breach—an all-time high that should grab every executive’s attention. ESSENTIAL FIRST STEPS IN DATA PROTECTION For manufacturers, creating an effective data protection strategy starts with two fundamental components: a breach avoidance plan and a breach response plan. The avoidance plan requires companies to first develop what security professionals call a “data map.” This is a comprehensive inventory of sensitive information and its location within your systems. This critical first step enables companies to determine which laws apply to their operations and to implement appropriate technical safeguards to protect sensitive data. Hackers regularly breach even the most up-to-date security measures so companies should also have a response plan in place for securing data, stopping the breach, and managing communications to affected individuals and other stakeholders. Just as important as making a plan is establishing a person responsible for implementing it. Companies should designate an experienced executive, typically a CIO or CTO, to oversee data security efforts and manage the response to a data breach. UNDERSTANDING THE STAKES The financial impact of a data breach can be far reaching. Lost business expenses alone averaged $1.3 million in 2023, encompassing everything from operational disruptions to customer losses and reputational damage. Companies may also be on the hook for millions of dollars in legal costs. Companies face potential class action lawsuits under state data breach and consumer privacy laws. In addition, multiple regulatory agencies—including the FTC, FDA, SEC, and state attorneys general—can initiate enforcement actions with steep financial penalties. State attorneys general have been particularly aggressive in pursuing data breach cases, as evidenced by investigations into major corporations like Target, Home Depot, JPMorgan Chase, and Zappos.com. 14 / INSIDE RUBBER / 2025 Issue 1
COMMUNICATION STRATEGY IS KEY When a breach occurs, how a company communicates can significantly impact the outcome. Aside from the technical aspects, a well-structured response team should include public relations experts to manage external communications. This team needs to coordinate messaging across all stakeholder groups, from customers and vendors to employees and regulators. The most successful response strategies prioritize transparency while maintaining appropriate legal safeguards. Companies should avoid the common pitfalls of attempting to hide breaches or issuing unhelpful “no comment” responses which often backfire and damage customer-facing relationships. Instead, organizations should prepare comprehensive communication plans that include addressing customer service responses and monitoring media coverage. THE ROLE OF CYBER INSURANCE As most general liability policies exclude cyber attacks, companies must carefully evaluate their need for specialized cybersecurity coverage. These policies can transfer some financial risk to insurers to cover expenses like legal counsel, breach investigations, notification costs, and other costs. Cybersecurity insurance also typically provides access to crucial expertise, including forensic specialists and regulatory compliance experts to aid with crisis management and recovery efforts. However, cyber insurance comes with significant considerations. Premiums can be substantial, particularly for companies deemed high-risk. Coverage often includes important limitations, potentially excluding costs like business interruption or litigation damages. Some policies may deny coverage based on employee negligence or inadequate security protocols. For manufacturers weighing this decision, insurance brokers can provide valuable guidance in evaluating coverage options and determining appropriate levels of protection based on specific risk profiles, which will vary from manufacturer to manufacturer. LOOKING FORWARD As digital systems become increasingly central to manufacturing operations, the importance of robust data security measures only grows with time. Success requires a balanced approach: understand what sensitive data you have, implement comprehensive security measures, prepare detailed response plans, and maintain clear MANAGEMENT Success requires a balanced approach: understand what sensitive data you have, implement comprehensive security measures, prepare detailed response plans, and maintain clear communication protocols. While the challenge may seem daunting, taking these strategic steps can significantly reduce risk while maintaining operational efficiency and stakeholder trust. communication protocols. While the challenge may seem daunting, taking these strategic steps can significantly reduce risk while maintaining operational efficiency and stakeholder trust. SETH SKILES is the founder and managing attorney at IO Law, www.iolaw.io, where he advises startups and global brands on commercial transactions, regulatory strategy, data privacy, and dispute resolution. With experience as Deputy General Counsel at Heineken USA and senior legal roles at Compass and Blue Apron, Seth brings a deep understanding of corporate operations and innovation. Seth combines big-firm expertise with the cost-efficiency of a boutique practice to help clients navigate complex legal challenges. WWW.ARPMINC.COM / 15
A Healthcare “Captive” A recap of healthcare funding strategies presentation By Vanessa Salvia BUSINESS OPERATIONS Recently, ARPM held its 2024 Finance Forum for members, which included a presentation on healthcare funding strategies. Attendees were exposed to the concepts for funding healthcare, the most common funding options and how they differ, as well as the process for transition and how the transition can be beneficial through transparency and financial control. STATE OF THE MARKET Healthcare costs continue to rise annually at rates that are unsustainable for most businesses offering employee benefits. Over the last decade, employers have seen coverages rise between 5% and 7% per year due to inflation, prescription drug price hikes, and increased expenditures. This is particularly true in the small- to mid-sized market, where yearly costs have increased anywhere from 10% to 12%. Some employers have reported double-digit renewal increases as high as 45%. Healthcare is continually one of the top three largest expenses for any business. And despite this peak expense, many business owners don’t have a strategy for handling the costs and the annual increases that occur. Some might have a broker or consultant who can assist with the renewal process, although sometimes the employer has to trust that the broker is competent enough to make the best decision for the company versus the broker’s livelihood. When costs aren’t manageable, employers typically either switch carriers or start to dilute coverage, both of which significantly affect 59% of manufacturers cite rising healthcare costs as a significant challenge. 16 / INSIDE RUBBER / 2025 Issue 1
BUSINESS OPERATIONS the employees since they have to switch providers and care in many cases, leaving them feeling less secure and comfortable. FULLY INSURED VS. SELF-INSURED PLANS The two main funding options for businesses when it comes to providing coverage to employees are fully insured or self-insured plans. In a self-insured plan, the employer assumes at least some of the financial risk of providing healthcare benefits, whereas under a fully insured plan, employers pay a fixed premium to a third-party commercial insurance carrier that covers the medical claims. The fully insured plan is the traditional insurance model in which employers purchase a policy from an insurance company. While this is considered convenient, it is often less flexible and more prone to premium increases to match external factors. HEALTH BENEFITS FUNDING BASICS WWW.ARPMINC.COM / 17
BUSINESS OPERATIONS WHAT IS A GROUP CAPTIVE? A GROUP CAPTIVE INSURANCE ARRANGEMENT IS A TYPE OF SELF-INSURANCE IN WHICH A GROUP OF EMPLOYERS POOL THEIR RESOURCES TO BETTER ABSORB UNFORESEEN EMPLOYEE HEALTHCARE COSTS (I.E., LARGE CLAIMS). Advantages: How to Stabilize cost over time Group of likeminded employers Potential for Group Distribution Employers have historically been underwritten in some capacity regarding rates, which were generally based on the demographics of a group. Initially, the fully insured market assessed where members were living at the time and rated costs based on that community. Eventually, the fully insured market took insurance and healthcare delivery and merged it into one monthly sum—prepaid healthcare— which removed the transparency on premium rates. Partially self-funded plans divvy the cost up into three different spending “buckets”: approximately 10% for administrative costs (broker, pharmacy benefit manager, etc.), about 20% for premium costs, and the remainder for claims. Some believe the partially self-funded model is better, in part because it is more transparent, and it affords the plan sponsor more control over the company’s healthcare spend. Under a partially self-funded plan, every month there are two fixed expenses: administrative costs and claims. If any of that money is unused, it rolls over to the expenses for the following month (which is capped annually). For example, if $1 million was allocated for claims and the claims spend is only $800,000, the remaining money stays in the claims account and can be used for future claims. Annual caps for individuals (specific deductible) and for the group as a whole (aggregate deductible), are put in place to minimize the employer’s risk. HOW TO TRANSITION Transitioning to a partially self-funded plan starts when an interested employer submits a request for proposal. After an assessment of the current plan’s carrier and risk exposure, a proposal review will be completed. Upon delivering the proposal, ARPM leadership, together with the First Resource team and Captive Solutions & Options, developed a healthcare captive, CAPTIV8, which offers access to unique programs including centers of excellence, pharmacy cost containment, and more. Participants see cost savings through better controls and access to data, allowing members to make more educated health insurance decisions and create long-term strategies. 18 / INSIDE RUBBER / 2025 Issue 1
BUSINESS OPERATIONS if the plan model and the pricing are a good fit, the new plan will be implemented with a third-party administrator (TPA). Additionally, the TPA will work with the employer to manage the new plan and processes that will accompany the changes through the transition. WHAT IS A GROUP CAPTIVE? A captive is a funding platform that facilitates multiple selffunded employers who aggregate a majority of the premium for one sole purpose—to be utilized by its members, specifically during bad times. Essentially, a captive serves as an additional buffer between the traditional insurance company and the employer. If the captive funds need to be used for participating member claims, because member premiums are supporting other members’ needs, the captive doesn’t need to recoup the premium as aggressively at renewal. Through the sharing of captive funds (premiums), members are insulated from market factors and the pricing of commercial insurance. CAPTIV8 ARPM leadership, together with the First Resource team and Captive Solutions & Options, developed a healthcare captive, CAPTIV8, which offers access to unique programs including centers of excellence, pharmacy cost containment, and more. Participants see cost savings through better controls and access to data, allowing members to make more educated health insurance decisions and create long-term strategies. No long-term commitment is required. To find out more about CAPTIV8, visit https:/arpminc.com/captiv8/ or contact Susan Denzio at [email protected]. Are you ready to TAKE CONTROL of one of your company's largest expenses? ARPM in combatting members' rising insurance costs with tailored strategies that positively impact both your employees and your company. Visit arpminc.com/captiv8 to learn more. Introducing CAPTIV8, health insurance strategies created for rubber manufacturers. WWW.ARPMINC.COM / 19
PFAS Regulation Update A Year in Review By William Heslip, Regulatory Compliance Stewardship Manager If you’ve been paying attention to regulations affecting the rubber industry, you’re no stranger to the spotlight currently on PFAS, or per- and polyfluoroalkyl substances. These “forever chemicals” are infamous for their resistance to degradation, potential health risks, and widespread presence—even in the most remote corners of the globe. In recent years, regulatory bodies worldwide have accelerated efforts to control, restrict, and, in some cases, ban PFAS entirely. The rapid evolution of these regulations sharply juxtaposes the unchanging nature of the chemicals they target. Let’s explore the whirlwind of PFAS regulatory updates from the past year and consider what might lie ahead. U.S. LEADING THE CHARGE The United States continues to lead global efforts in PFAS regulation, with developments at both federal and state levels. EPA REPORTING REQUIREMENTS In October 2023, the EPA introduced reporting requirements under TSCA Section 8(a)(7). The requirement mandates that any person who has manufactured or imported PFAS, including articles containing PFAS, in any year between 2011 and 2022, must report certain information regarding that PFAS to the EPA. The purpose of this requirement is to allow EPA to gather as much information on PFAS as possible, to inform later rulemaking. EPA knows that PFAS is used often, and very essential in some applications, so they do not want to move too brazenly and initiate a rule without having a good idea of the consequences. The sheer amount and scope of information being requested though, brought much criticism and pushback from affected industries. On September 5, 2023, a little relief was given, as EPA issued a direct final rule delaying the start of the reporting submission period and deadline. In an announcement on the EPA website, the department stated “In March 2024, the Fiscal Year (FY) 2024 program area budget that includes EPA’s TSCA program was reduced by $5 million compared to what was enacted in the FY 2023 budget, and the agency needed to make difficult choices to ensure that it would be able to continue its work to protect human health and the environment from the risks presented by toxic chemicals. As a result of competing priorities, many of which related to meeting statutory deadlines, EPA’s TSCA program significantly reduced its IT (information technology) operating budget in FY 2024 to prevent overspending of resources, which resulted in less funding for the contractual support EPA relies on for much of its IT efforts. The budget reductions stopped ongoing software development and negatively impacted operations, and maintenance activities associated with both CDX (Central Data Exchange) and TSCA CBI- (confidential business information-) based applications, which are critical to the Agency’s TSCA data collections, including for this rule. As a result, the agency software application that will collect the PFAS data will not be ready by the original November 2024 reporting period opening date and it will thus be impossible for submitters to begin to submit data on that date.” INDUSTRY 20 / INSIDE RUBBER / 2025 Issue 1
Thus, originally set to begin on November 12, the submission period has been moved to July 11, 2026. A welcomed time extension for those still struggling to gather the immense amount of data required under the rule. STATE-LEVEL ACTION Moving our attention to the States, there is a lot to keep track of, though I won’t be going into detail for every bill that was passed. No state was able to pass any full ban or phase out legislation for PFAS in 2024. While each state has passed its own unique legislation, many of the requirements for reporting and restricting PFAS share significant similarities. Of the states that did pass restrictions, all of them were targeting specific uses and products, with most bills focusing on cleaning products, apparel, textile articles, firefighting products, carpets and rugs, upholstered furniture, juvenile products, and fabric treatments. For more information, you can see each state’s passed PFAS bills: Colorado (SB 81), Vermont (SB 25), New Hampshire (HB 1649), Rhode Island (HB 7356), and Connecticut (SB 292). Minnesota was one of the states which, in 2023, passed a bill that would eventually ban the sale of products containing intentionally added PFAS in the state. For now, the state remains steadfast in its intent to not alter its PFAS bill, known as Amara’s Law, and continue full ahead with the ban. At the end of that same year, the state promulgated two Requests for Comments, or RFCs, on the law, which focused on the ins and outs of the reporting, how to define and implement the currently unavoidable use exemptions, and the fees covered in the law. After receiving more than 500 pages worth of comments on both rules, the state pollution control agency, which is in charge of implementing the law, is now planning to combine these rules “to ensure that the fee process is directly a part of the reporting system being created for products with intentionally-added PFAS.” The agency is hoping to get help from the public in answering questions such as “How should the MPCA (Minnesota Pollution Control Agency) balance public availability of data and trade secrecy as part of the reporting requirements?” “Are there specific portions of the reporting process that should not be defined through guidance or the development of an application form?” and “Should the agency consider a per-PFAS or PFAS amount fee?” CANADA’S NEW REPORTING MANDATES The U.S. isn’t the only country with reporting requirements either. On July 27, 2023, Canada joined the PFAS regulatory effort, with Environment and Climate Change Canada (ECCC) publishing a notice requiring companies to report on their manufacture, import, and use of PFAS substances within Canada. Similar to the EPA TSCA 8(a)(7) requirements in the intent and type of information being requested, the ECCC PFAS reporting requirement does have some key differences. For starters, the ECCC did include a list of 312 PFAS substances, with CAS numbers, that are in scope of the requirement, as opposed to the chemical structure definition used by the EPA. Additionally, the scope is limited to PFAS activities that took place only in the 2023 calendar year. A much smaller timeline compared to the EPA’s 10-year lookback. Both of these differences place much less burden on the reporting persons, though I still wouldn’t underestimate the time it will take to gather the data. The information is all due to the ECCC by January 29, 2025, so those who determine they must report have much less time to gather the required information. This deadline is quickly approaching, so if you are in scope, you will want to start your data gathering immediately. THE EU: A COMPREHENSIVE PROPOSAL Finally let’s take a look at the EU and their proposed PFAS ban. For those unfamiliar, in February 2023, ECHA published a proposal to ban PFAS within the EU. The proposal was authored and submitted by five national authorities: the Netherlands, Germany, Sweden, Norway, and Denmark. The proposal was followed by a six-month consultation, in which the public could submit comments on the proposal, and submit they did. In the six-month consultation phase, ECHA received nearly 6,000 scientific and technical comments, highlighting the complex socio-economic impacts of INDUSTRY In recent years, regulatory bodies worldwide have accelerated efforts to control, restrict, and, in some cases, ban PFAS entirely. The rapid evolution of these regulations sharply juxtaposes the unchanging nature of the chemicals they target. Perfluorooctanoic acid (PFOA) (top) and perfluorooctanesulfonic acid (PFOS) (bottom), perhaps the two best-known PFAS, aren’t made intentionally in the U.S. anymore. But they are the most widespread pollutants of concern from this chemical class, at least so far. F FF FF F F F3C F F F F F O OH F FF FF FF F F FF FF F F3C O O OH S WWW.ARPMINC.COM / 21
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