In the November 1999 issue of IMM (p. 13) we ran a story about the Logistics Factor, a calculation that attempts to quantify the logistical complexity of a molding operation.
Your Logistics Factor is easy to determine; just multiply the quantities for the following in a facility: presses, molds, materials, colors, and customers. Generally, the higher the Factor, the more complex and potentially difficult to manage the molding operation is. Every additional color, mold, press, and material can not only add to the bottom line, but detract from it as well. Anything in excess can tax your managerial resources to the point of inefficiency.
To put the Logistics Factor in perspective, we asked readers to send us their calculations for a side-by-side comparison. What we got in response was a list of custom and captive molders serving most of the major markets and running a wide variety of materials, colors, and molds for as few as two customers and as many as 400.
Thanks to this variation, the Logistics Factors that resulted proved equally diverse (see table). A quick study of the numbers behind the calculations reveals some thought-provoking points to ponder.
One thing leaps out right away. The size of a molder's Logistics Factor appears to be greatly and most dramatically affected by the number of molds, materials, and colors run at the facility. These three categories exhibit the greatest variation from highest to lowest, and molders with the highest Logistics Factors have these in spades.
In fact, molders with Factors greater than 1 billion average 371 molds, 202 materials, 92 colors, and 79 customers. And while the number of presses is a factor, none has more than 50, and as a group they average 27 presses, not an extraordinary figure.
At the other end of the spectrum are molders with Factors of less than 1 million. Although smaller by comparison (averaging 15 presses and 11 customers), they also exhibit some of the smallest totals for molds, materials, and colors, averaging 59, 15, and six, respectively.
What these numbers don't tell you is at what point income or profit start to erode. One thing, though, is certain; it requires more effort, equipment, and manpower to operate a molding plant that's juggling molds, materials, and colors that each number in the hundreds, compared to a plant with smaller variables.
What's the solution? Sid Rains, president of IMM Performance Products, and developer of the Logistics Factor, says molders with high Factors should consider dividing operations into smaller virtual plants. Make smaller, more manageable molding centers out of a large, unwieldy operation.