Focus: IMMCMining industrial markets

Although medical/orthodontic and automotive markets account for most of the existing business out there today, Mike Stucky says these markets actually add up to only half of the potential MIM mother lode. He says the other half remains largely ignored and untapped.

It’s estimated that the annual North American market for contract MIM manufacturers is $100 million to $125 million. It’s about the same for captive MIM manufacturers, taking the total up to about $225 million today.

It could be much bigger.

Stucky is the technical director at Hawk MIM (Solon, OH), a custom MIM business unit of Hawk Precision Components Group. He calls any application that isn’t automotive or medical/orthodontic, “industrial.”

Hawk MIM has enjoyed success in mining industrial markets, as shown in the case study snapshots presented in this report. How successful? Industrial applications helped the company grow its business by a whopping 40% last year. It expects to grow another 40% this year.

Even if the parts quoted fit MIM’s key requirements for geometry, volume, and materials, Stucky says there are three key reasons why custom metal molders who want to work the industrial products quarry have their work cut out for them:

1. Industrial products customers are unaware of MIM.
2. If they are aware, they lack confidence in MIM.
3. MIM pricing makes their products noncompetitive.

Prospecting the Market

Aerospace, locks, sports and recreation, lawn and garden, electronics, telecom, hand tools, firearms, defense—Stucky lists several industrial markets jam-packed with potential “killer apps” for MIM. First, though, he says you’ve got to understand industrial customers and what they need, especially when it comes to materials, quality, and economic requirements.

For example, satisfying telecom customers may involve use of magnetic or controlled-expansion alloys. Part tolerance requirements are high, production volumes are unpredictable, and molders will more than likely encounter short product lives—two to five years, tops.

Conversely, aerospace usually involves high-temperature alloys that must meet crucial performance properties. Extremely tight-tolerance manufacturing is commonplace. Volumes are low in aerospace, typically 1000 to 15,000, but product lives can be more than 10 years.

Nevertheless, Stucky says MIM can unearth commercial success in industrial markets under the same five conditions that bring success in medical/orthodontic and automotive:

1. When the part’s geometry can’t be produced by less expensive methods, such as stamping, screw machining, and powder metallurgy.
2. When part volumes are high enough to amortize the tooling.
3. When part performance requires higher-temperature alloys than materials used in diecasting, TXM, and plastic injection molding.
4. When the fully assembled end product is economically viable.
5. When the customer is comfortable with the MIM process.

Manufacturing Confidence

“The key is finding or, more importantly, creating a customer with positive MIM experience,” says Stucky. “MIM must deliver significantly lower costs to the customer, or 90% of the time the customer will choose a technology with a lower perceived risk.”

He says most industrial applications are sourced as heavily machined castings, extrusions, or stampings that would be easy-to-run, economical MIM parts.

“In these cases MIM actually is the lower-risk option, but it fails to win the job,” he says. “If a potential customer does not have confidence in MIM, then a path must be laid out to develop that confidence.”

Nuggets of Advice

A good way to increase confidence is to take on a low-volume/low-risk job. Once confidence in MIM is established, Stucky says it’s easier to land high-volume jobs.

“The key is to know the customer and the total potential sales with that customer,” says Stucky.

Another good plan is to offer your services to a low-volume customer. Small-capacity end users might be unaware that they have applications that can benefit from MIM. And any one of them might have a wealth of possible MIM jobs.

According to Stucky, the quality requirements in the industrial marketplace may not be as stringent as in automotive or medical, which allows a MIM molder to make reasonably good profit margins.

“MIM can often deliver significantly lower costs to the customer, which will make their products better able to compete in the marketplace. It’s a win-win solution.”

Excavate Efficiencies

If MIM molders want to prolong their penetration of the potentially lucrative industrial product market sector, Stucky recommends they do the following: