Molding a profit with low-volume jobs

Conventional wisdom says that if you want to make money as an injection molder you need to churn out a ton of good parts. There's safety in numbers. The more you produce, the better your profit margin. There may have been a time when that conventional wisdom was true. But today, low-volume molding is not only feasible, it's profitable.

Take Bob Morris, for example. In 1982, he was the head of manufacturing engineering for ITT at one of its California-based aerospace plants. He was looking, in vain, for a material to make a valve seat for a missile application. After about 30 tests of varieties of steel and aluminum, someone brought him a sample of polyetheretherketone. It worked like a charm. The problem: ITT needed only 50 parts at first, eventually 200 a month. ITT called each one on a list of 1500 custom molders; none was willing to work with polyetheretherketone for only 200 parts a month.

So, knowing less than nothing about injection molding, and not knowing what he wasn't supposed to do, he called up Engel and together they developed a press capable of handling the high temperatures required by engineering materials such as polyetheretherketone. ITT installed the press and started molding the valve seats itself. Within a few years, Morris says, he was getting as many as 15 unsolicited calls a month from others who needed short runs using an engineering resin. Not one to ignore a business opportunity when it hits him in the head, Morris left his job at ITT, and in 1991, he and his wife set up RAM Inc. in Cisco, TX, a bona fide, profitable, low-volume molder.

How does he do it? Morris calls it unconventional molding, and it requires that you abandon almost every preconceived notion you have about marketing, customer service, design, tooling, and molding. A typical run for RAM, says Morris, is about 100 parts per month. Sometimes RAM will push the envelope and press 2000 or 3000 parts. Maybe. But that's the way it should be. "The parts we mold have very low margins," Morris says.

The Morris low-volume philosophy basically revolves around this statement: "Everybody thinks that if you make a mold, it needs to be able to run 200,000 parts. That's just not true." About 70 percent of RAM's customers produce equipment for the aerospace industry. They often need only a few hundred parts a month and are looking for less expensive alternatives to metal hogouts and composite layup materials; parts include impellers, fins, bushings, fairings, seal plates, and housings.

Though engineering resin is not cheap by injection molding standards, by aerospace industry standards it's quite reasonable. Morris says he and his staff sit down with each customer to determine how injection molding can meet its needs.

Typically you design the part, create models, cut P-20 steel, and mold the parts. Says Morris: "Our mold designers are taught to take the easiest way out." What's the easiest, most effective, and least expensive way to give a customer 100 parts a month? It means cutting soft steel or aluminum instead of P-20; it means using composite or epoxy tooling if possible; it means using lost core; it means using handheld inserts to mold undercuts; it means machining parts when necessary. Tactics that might be considered inefficient on long runs are standard practice at RAM. "What we try to do is split the difference and be creative," says Morris. "We're willing to try anything for our customer."

Morris says he makes his money up front on moldmaking services. But that's usually one time. Beyond that, money comes from charges for machine setup. RAM has five Engels, coming in at 12, 60, 175, 250, and 750 tons. For each customer, RAM calculates how many parts will be needed for the year. RAM then does a cost analysis to determine whether it's cheaper to run a year's worth of parts at once, effectively storing the raw material as parts and ship them as needed, or to mold the parts on demand.

Because the runs are so short, Morris acknowledges that his presses are often idle. He has 35 employees, most of whom are designers and toolmakers. Processing is almost secondary. "We're nearly more of a moldmaking shop than a processing shop," he says. RAM makes about 60 molds a year, and Morris says that as long as his customers have planes, he'll be molding parts. He's even started molding parts whose design is more than 10 years old, parts that no one thought would be needed again.

Despite the fact that aerospace has been RAM's bread and butter for several years, Morris says he is trying to diversify somewhat to be less reliant on one industry. "We chose two niches," he says, "short run and high temperature. We like to work with the nasty materials."