Crossroads: Crisis or Opportunity: Staying power: Carving niches using technology

Can a molding company choose to be solely a U.S. manufacturer and still be successful? The cost and risks of going global are daunting to many companies, but increasing competitive pressures are causing many to doubt their futures. Some molders however, are discovering that staying home and being successful don’t have to be mutually exclusive. Specific strategies must be employed, and those strategies can take a number of paths, but technology implementation, with the people to carry it out, is a leading candidate.

Almost everyone agrees that commodity molding is vulnerable to global price pressures, and value-added molding is where the security is. Finding a unique market or technology niche is increasingly where the focus lies for successful U.S. molders. Unfortunately, for the majority that’s not the norm.

Jeff Mengel, a partner with Plante & Moran LLP (Southfield, MI), provided insight into today’s molding world with some preliminary data from his 2002 Molders Survey at NPE 2003. “Novelty is the best place to be when it comes to molding,” said Mengel. “Still, very few companies have unique processes to set themselves apart.”

Finding a niche and serving it with unique capabilities doesn’t mean that a company has to be big. It does mean, however, that it has to be very, very good at what it does. IMM has written a number of articles on some unique niches and the success they breed: Donnelley Custom Mfg. is building a name for itself in short-run molding; Kelch Corp. has branded itself as the leader in molding nonautomotive fuel systems components; and M.R. Mold & Engineering has carved itself a niche by gaining expertise in building molds for liquid silicone rubber parts.

Still, the examples that follow show how a strategy specifically focused on technology can provide the defining difference.

Technology Innovations

Technology by itself is not a competitive advantage, because usually it’s available to anyone with sufficient funds to acquire it. Micromolding, inmold labeling, multimolding, and powder injection molding systems can be purchased as easily in Detroit as they can be in Shanghai.

The mere presence of a two-shot, fully automated molding cell in a facility does not immediately and automatically impart to the molder an overwhelming advantage unfound anywhere else in the world. That technology becomes an advantage only if the molder invests in the brainpower and engineering to support it and make it work.

There are several molders who follow this technology-integration pattern, and thrive with it. One such molder is MGS Mfg. Group (see “MGS, Part II: Multishot Molding and Machinery,” p. 89, and June 2003 IMM, p. 72). This company, based in Germantown, WI, not only invests in technology, but also develops proprietary systems to help it meet customer needs. Such systems include rotary platens, multishot stack molds, and micromultimolding injection systems.

In a similar boat is Maca Plastics, in Winchester, OH. Maca, led by CEO Andy Culbertson, comes from another technology angle. As we first reported in August 2002 IMM (p. 74), Maca has moved into the wireless, Web-based world of production monitoring to help it maintain quality parameters.

But, like MGS, Maca developed a proprietary system that makes its system unique. Maca wrote its own software and wrapped it around an off-the-shelf Syscon-PlantStar core. This enterprise planning and control system is integrated into Maca’s accounting module and offers real-time supervisory control and data acquisition (Scada). The goal is to generate data—data that help Maca identify waste and build new and better production efficiencies.

Although The Tech Group calls itself a global company, the company’s heart is its U.S. operations consisting of four plants, and a big concern is keeping these plants growing and employing people. For The Tech Group to sustain its U.S. operations, it takes innovation, creativity, marketing skills, sales strategies, and technical expertise. That means finding a new position in the supply chain that puts it on the leading—not the trailing—edge.

When management at The Tech Group began looking at technologies that could help them grow their U.S. molding operations, they sought something that would provide a lot of value to the customer and encompass engineering, design, and moldmaking expertise, explains Bill Gerard, vice president of engineering.

As the company, headquartered in Scottsdale, AZ, explored options, two-shot molding rose to the top as something that provides customers with a high level of value and reduced overall costs to manufacture. Not just any two-shot application would do, however. The Tech Group looked at a lot of applications and concluded that an ideal niche for two-shot molding would be existing or mature products where the OEM needed a fresh look, better aesthetics, and/or lower costs to manufacture to maintain profit margins. To provide value, it looked for products in which two components are currently being molded separately and then assembled by hand or in a secondary operation.

The Tech Group’s strategy is paying off. The company has built several spin-stack, two-shot molds, each one replacing older conventional molds that molded components individually, which required hand assembly.

“We’re not just combining two pieces into one, but we’re doing it faster than the two separate pieces were being molded prior to this, using good engineering and moldmaking techniques such as conformal cooling,” Gerard says.

In one instance, the company dramatically reduced the cycle of a combination compression molded/injection molded mating part from nearly 2 minutes (in two processes). Now, a two-shot, spin-stack mold runs a 10-second cycle for both parts in a 16x16 mold, molding the thermoplastic substrate first and the TPE over it, resulting in a new look to a mature product and reduced costs to the OEM.

Moldmaking: Beyond the Mold

Moldmakers have long sought to differentiate themselves by adding conventional molding services to add customer value. But many of those are now seeking even greater differentiation—and growth—by adding unique molding services. As reported in the August 2003 issue (p. 18), PM Mold Co. (Schaumburg, IL) recently added to its capabilities in the company’s molding services to build on what co-owner Olav Bradley sees as “growth niches.” The company installed an 1100-ton injection molding press from Van Dorn Demag, one of the largest presses in the Chicago area.

PM also sees a good future in two-shot molding, and has added capabilities in this area, including a Krauss-Maffei, 125-ton multimaterial molding press with 5-oz first shot and 2.7-oz second shot capability.

Making the investment in these presses was a big decision for Bradley, but PM’s customer base began demanding that business. “It’s a matter of meeting the customer requirements to keep the business, so that’s what we do,” says Bradley.

Turnkey Tactics

Perhaps Hollis Woolridge, VP of SimRidge Technologies (New Braunfels, TX), which has three molding facilities and has experienced firsthand the rise and fall of the U.S. computer business (one of SimRidge’s primary markets), says it best: “Every war fought demonstrates that technology is the big advantage in combat. However, much of our battle technology is rapidly becoming widespread in the world, which further undermines our loss of manufacturing capability.”

Here it’s pointed out again that achieving a solid bottom line isn’t just about technology, which is obviously necessary to be competitive, successful, and profitable. It’s also about the people who can use the technology—who can make it happen.

Dyna-Plast bills itself as a product development company. Although the Ramsey, MN company has 18 presses, the company’s emphasis is on product development, engineering, and process validation for OEMs and custom molders. This focus has given Dyna-Plast a unique competitive edge.

President Ray Schenk says the company’s strategy is to align with people who value this service. “We’re actively involved with the product design and have input at that level,” explains Schenk. “We can avoid the delays downstream that often occur as a result of poor design. Additionally, this familiarity [with the product] in the design phase carries over to moldbuilding, molding, pilot launch, assembly, and, finally, building production tooling.”

Production tooling is built by Dynamic Engineering, a sister company to Dyna-Plast. When production tooling is ready, Dyna-Plast performs the qualification runs and process validation, prepares the quality files and mold information, and then transfers this information and knowledge to a production molder that has robots, secondary operations, packaging, and whatever else is needed to meet that molder’s customer requirements.

Dyna-Plast brings the production molder onsite to share the process, review the quality files, go through the process history, and “make the transfer of knowledge from us as the product development people and moldmakers to the production molders to help them do their job better,” says Schenk.

Schenk notes that the product development cycle is a different animal. “The OEM generally doesn’t want to put development costs into the price of the parts,” he says. “Many times when dealing strictly with the custom molder, the customers think they should get [product development] for free, because they’re giving you the molding. We provide a good transfer package, and offer true collaboration with the production molder, not just cooperation.”

In one instance, the OEM insisted that the production molder use Dyna-Plast for its product development, moldbuilding, and process validation phases to ensure the successful launch of the product. The production molder was happy to do this.

Schenk points out that many custom molders don’t like the pace of the product development cycle because it can often delay payment on molds, particularly if the cost of the molds is tied into the production parts.

“Some molders dislike the phases of process validation, approvals, and preproduction quality issues because it delays their payment,” Schenk says. “It’s the best of both worlds; the production molder can provide the lowest piece part price because the cost of product development and the tooling is separate from production molding.”

Dyna-Plast employs all the cutting-edge technology including MoldFlow, 3-D solid modeling, CAM software, and new equipment found in most successful molding and moldmaking companies today. “The technology we’re employing is nothing special,” Schenk adds, “but the attitude and commitment of our people—that’s what’s special. It’s driving the stake in the ground and finding a way to get there.”