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Licensed to MIM

May 7, 2000

2 Min Read
Licensed to MIM

MIM is a capital- and intelligence-intensive field. The profit margins and growth potential can be tremendous, but the cost and know-how required to get into custom MIM molding is daunting. The president of one startup says he has found an extremely effective means of quickly getting in, up, and running—licensing.

Michael D. Klinginsmith is president of newcomer Net Shape Technologies (NST—Solon, OH). Klinginsmith and his partners only signed their licensing agreement in September 1999, and will have their first full manufacturing cell operational by the end of 2000. Yet, first-year production already is nearly sold out. NST is a licensee of MIM custom molder Thermat Precision Technology Inc. (Corry, PA).

Klinginsmith, no newcomer to startups, has spent a large portion of his career starting up and managing operations for others. Both he and Jay Schabel, NST’s vp, are well-schooled in lean manufacturing disciplines.

In 1998 Klinginsmith was investigating MIM as a means of producing a part for his former employer, giving him the chance to tour most major MIM operations. Impressed with MIM’s potential, he and some friends began looking into starting their own MIM molding firm. After performing an exhaustive due-diligence, they decided to license their way in.

Creating Better Competitors
"We saw problems, particularly in the capital investment required to make feedstocks, the technology to hold tolerances long-term, and training, but we neither found any reliable ‘How-To’ books, nor any industry organizations where we could find help," Klinginsmith says. "We found in Thermat the best template for what we wanted," Klinginsmith explains.

Thomas J. Roche, Thermat’s chairman, says NST is Thermat’s third licensee. NST’s license, the terms of which were not disclosed, covers Thermat’s patented parts manufacturing technology using Thermat’s feedstocks with rights reserved for NST possibly to compound the feedstocks at a later date. Thermat also provides thorough cross-functional training.

Each NST manufacturing cell will have four 100-ton presses, one batch debinder, and one continuous furnace. There is room for three such cells in NST’s ISO-compliant 27,000-sq-ft plant. Tools will be outsourced. As at Thermat, secondaries will be avoided. "The name of the company is ‘Net Shape,’ remember?" Klinginsmith jokes.

NST plans to specialize mostly in molding stainless steels for markets generally overlooked by MIM molders, like industrial components. Still, it may eventually compete with Thermat. That prospect hardly troubles Roche. "The MIM industry has to get bigger and better. I think we would all be better off with stronger competitors to help raise the bar."

Editor’s note: For more information about Thermat, see "Speeding a New Industry to Market," July 1998 IMM, pp. 82-86, or search IMM’s Editorial Library/Article Archive at www.immnet.com.

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