Tooling Corner: Preventing fires, reducing premiums

Editor?s note: Bill Tobin is a plastics processing consultant with WJT Assoc. Bill has traveled widely in the course of his work, both domestically and internationally, and has extensive experience in the care, feeding, and operation of plastics molds.


Profits, by definition, are the difference between gross sales and gross costs. While many processors view costs as being only the direct costs of manufacture, there are significant savings to be had by reducing overhead expenses.

One of the biggest financial hits any molder takes is the cost of insurance. There are several things you can do to lower your premiums: If you are a custom molder, make sure in your quotation and all other paperwork before the actual job begins that the mold you are using is the customer?s property and that he assumes the liability for it.

You?ll need to talk with your attorney about the wording of your contract with your customer. If you?ve been snookered into being paid for the mold as you run it, part of the cost will be the insurance coverage.

Understanding Fire Damage
A fire is a catastrophic event for any molder. Ask any fire department and they?ll tell you the nickname for plastics is Solid Gasoline. And with good cause: Plastic burns rapidly and gives off toxic fumes. There is enough air between accumulated molded parts to set up a condition similar to kindling in a campfire.

However, it isn?t the actual fire that usually hurts molds. What kills a mold is the water from the fire extinguisher system, the foam from the fire department, and the usually acidic soot that condenses onto the steel. If you have copper or its alloys in your mold, slides, rack-and-pinion mechanisms, or (even worse) hot runner systems, you can plan on a very expensive repair bill to get everything back in working order. Hot runner systems, once they have been soaked with water, are usually impossible to dry out completely. The internal wiring nearly always corrodes as well. The entire heating system normally will need to be replaced.

Minimizing the Impact
Segregate molds. Build a separate concrete block store room with a fireproof door for your molds. Molds are all metal. They don?t burn. Do not have a sprinkler system installed in the storeroom. Put signs all over the place and enforce the policy that nothing flammable goes into this room. Do data backups. Contract with a data backup company. One of the biggest problems with a fire is reconstructing your records. While many companies back up their records, these tapes or disks typically remain on the property. When the fire department gets going, your computers will be hosed down, your filing cabinets soaked, and everything in the offices effectively ruined. Consider retaining the services of one of the several companies that have secure servers in old missile silos (no kidding) with secure connections. These companies program your computer to dial into the server sometime in the evening and do a data dump. This makes retrieving your records fairly easy. Segregate your warehouse. This seems dumb but there is a lot of sense to it. Build concrete block walls that segregate your cardboard, raw materials, and finished materials from each other. If there is a fire, this limits the damage. If this seems too expensive, make sure different types of material are separated from each other with wide aisle space. Never let the aisles fill with boxes of finished goods. Do preventive maintenance. A pinhole leak in a hydraulic line can emit a cloud of mist that will ignite into a fireball as soon as it comes in contact with your overheated halogen lights, which operate at 400F and higher. Oil and hot runner systems also don?t get along. If you have a puddle of oil under your machine or in a drip pan, you?ve got the makings of an excellent barbecue. Clean up and paint. Seal the floors and spiff up the plant, paying special attention to the oil-soaked dust icicles hanging from the overhead beams. A firetrap and lost-time injuries usually stem from messiness. Install knockout plates. Since most factories use sheet metal for walls, have knockout plates installed. These are riveted plates in the walls specifically for the fire department to cut through to gain access into your plant. Reaping the Benefits
Having done the preparation, how do you reduce your costs? Most molding shop owners invite the fire marshal in for an inspection. This is fine, but he only represents the administrative part of getting your business permit. This is just the first step. The next step is to call the local fire department and find out which station would be called if there were a fire at your plant. Invite the entire station and everyone up the command chain for a beer and bratwurst dinner/tour. During the tour, provide plans of the plant, lists of where everything is stored, and any other relevant records to whomever is in charge at the fire department. This allows them to have a plan of attack in case there is a fire. Otherwise, they may be obliged to hose everything everywhere. Get the captain to send you a letter thanking you for the tour and confirming that he now has in hand specialized information about what is flammable in your plant and what is not. In addition, if you?re so inclined, you can spend a bundle of money to bring in an accident investigator and get a similar letter saying you?ve done everything you can do to make your plant safe. Now, bring in not just your insurance agent, but the underwriter as well. Armed with your documents and the tour, ask for a reduction in insurance premiums because you are no longer in the same risk pool as your competitors and are therefore entitled to special consideration. Since the insurance company?s exposure to risk on your behalf is now less, you will almost always see many thousands of dollars a year in savings. If There is a Fire?
First, make sure your people are okay. Second, recover your records. Next, go to your business attorney and immediately engage the firm to deal with the insurance company. (Here?s where most molding company owners go wrong. They think they can deal with the insurance companies themselves.) Most molders don?t have very substantial cash reserves. The insurance company will offer a minimal settlement and then just wait, knowing that you?ll probably take the settlement if that?s the only choice other than bankruptcy. To insurance companies, burned machinery requires only rewiring that can be done by a local electrician. This is wrong. Machines should be sent to a machine rebuilder to be checked and fixed. Molds that haven?t been run in a few years have no depreciated value and (in the eyes of the insurance company?s industrial experts) have no value. They are, therefore, worth only their scrap metal value and don?t require repair or refurbishment. This is also wrong. Molds generate income regardless of their tax value. The insurance company should be hearing these facts from the attorney, however, not from the company owner. Your attorney will either handle the negotiations or contract them off to a litigator. The attorney will hire a plastics expert to handle industry-specific issues. The attorney?s expert will be better than the insurance company?s hired generalists. The attorney will handle general business-law issues. Many molders think the goal of an attorney is to run up substantial bills. However, if it costs you $100,000 in legal fees to get a $1 million settlement in 90 days, rather than a $100,000 settlement in two years, the money is well worth it.

Contact Information

WJT Assoc., Louisville, CO
William J. ?Bill? Tobin
(303) 604-9592
[email protected]