Finding a niche business model equals success for moldmaker

Being in the moldmaking business doesn't always mean you have to build new molds. This mold manufacturer found that specializing in repair, thinking outside the box, and going global held the key to his success.

When Scott Phipps founded United Tool & Mold Inc. (UTM) in 1995 in Easley, SC, he had an inkling that he needed to do things differently if he was going to succeed in a crowded supplier market.  He knew from the get-go that "molds are a commodity," he commented in an interview at the Amerimold moldmaking trade show in Rosemont, IL, in April. "I knew by 1999 that we had to change - that we had to develop a new business model - we couldn't just build molds. With all the global competition, I made the decision I wasn't going to fight that battle without some different ammunition."

Phipps, who serves as the company's president, calls his company "disruptive in the marketplace" because UTM is "completely different" than other mold manufacturing companies.  By 2002, Phipps recognized that he was getting too big, too fast. He began investing in better, high-quality equipment, downsizing his employee base and "backing up" his business to a better size and a new business model - one in which UTM would specialize in repairs and engineering changes, not building new molds, as a primary revenue source.

It wasn't an easy move. "I was scared," Phipps admitted. "It was tempting to return to building new tools. I fought the urge to take on new tooling opportunities. I'd do one now and then, but by 2005 everyone else was focusing on new mold builds and competing with China." That year he also bought a larger facility, the 25,000-square-foot building in Duncan that serves as the company's large-mold facility. UTM has the capacity to handle molds weighing up to 125,000 lbs. The company's software includes Catia, UGS, and Pro/Engineer. UTM is also ISO 9001-2008 certified. UTM recently received the Leadtime Leader award in the Large Shop category at Amerimold.

UTM was in the right place at the right time, and Phipps explains that was key to his success. "Being in the South we had access to the European automotive industry, which had their molds built in Germany," says Phipps. "One of our automotive customers wanted a U.S. company to support their German-made tooling. They needed a place for the molds to land when they sent them to the U.S., and it had to be within two hours of their manufacturing facility so that the molds could be inspected, cleaned and prepared for sampling and doing any tuning required, then delivered to the Tier One supplier quickly." 

Once UTM's customers' new molds land in the U.S., whether they are from Germany or Asia, they typically want dozens of engineering changes, "and that's what we do best and where we can add value for the OEMs through the life cycle of the tool. We don't just change steel but we provide solutions," states Phipps. "We basically become our customers' support house for global mold suppliers - including (those in) the U.S.A.," he adds.

To better supply his customers throughout the Southeast, Phipps added 15,000 sf of space, making it a 36,000-sf facility in Duncan, SC. In 2009 he opened a 4500-square-foot facility in Rainbow City, AL., near Gadsden, and it has been expanded to 20,000 sf by this month. Today, UTM employs 70 and provides emergency response services to its customers 24/7, 365 days a year. UTM's fleet of five trucks means the company offers pick-up and delivery services, making good on its motto: Keeping the Plastics Industry Running.

Many times Tier One molders will come to UTM's facilities to work on the tools with UTM's moldmakers. Because the company specializes in repair and engineering changes, UTM is geared for fast turnaround. "Unlike most mold shops that want their machinery full, I want mine empty waiting on the next job," says Phipps. "If a job ties up a machine for a week, I need another machine."

 

Strong alliances and an open mind

Another key to UTM's success is forming alliances with suppliers and other mold companies.  In 1996, Phipps went to Japan with a customer that makes power tools. "I went there with an open mind and what I learned is that they know how to work together to become better suppliers," Phipps says. "If they run into an issue on a mold such as time constraints, they'll phone for help from a peer - even a competitor."

One of UTM's partners is Melco, a Michigan-based texturing supplier that works with UTM at UTM's facility to provide re-texturing on engineering changes or repairs without having to ship the tool to Michigan. That partnership aids in UTM's commitment to fast deliveries on repairs or ECOs.

Phipps still thinks globally and to that end UTM has recently re-purchased Jungwoo-usa, a supplier of molds built offshore. The company's U.S. operation had been a UTM partner; now it will be renamed UTM and provide project management of new mold builds. "That's how we've become global," Phipps comments, "by managing new mold builds, placing mold builds with the best and most competitive companies in the world, and doing all the ECOs and repairs here at UTM." He adds, "This is another example of the flexibility that we discussed earlier.  Working with strong teams around the world makes our people better, and our partners' people better, and allows us to service our customer to the highest standards."

However, he concedes that while he'll quote new tooling anywhere in the world, the key is having the correct type of mold built at the correct type of mold builder.  Shipping costs, as well as the drop in the value of the U.S. dollar, has cut into the money companies could save by having molds built offshore. Phipps concludes, "Being flexible to customer needs is what has made us successful. Our people have the ability to adapt instead of being stuck in 'the way we used to do it' mentality. Being flexible sometimes requires new ammunition."

 

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