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Editorial: It's the mold, stupid

Jeff Sloan
The politically attentive among you will recognize the roots of the above headline. In its original form ("It's the economy, stupid") it served as mantra and campaign motto for former President Bill Clinton's 1992 presidential run. The goal, of course, was to focus the political discourse of the campaign against President George Bush (the elder) on the then-dismal state of the national economy.

This phrase, or at least the spirit of the phrase, leapt to mind when I got a phone call from John Kacalieff, president of Chris Kaye Plastics, an injection molder based in St. Louis, MO. John was looking for some moldmaking experts to help him assess the value of his molds. Chris Kaye Plastics had recently suffered a fire, one that damaged some 500 tools. John turned to his insurer for the money needed to refurbish the molds. Not surprisingly?as such firms are wont to do?the insurer resisted. "The insurance company wants me to prove that these molds have value," John said. (For the whole story, check out this article.)

For those unfamiliar with the injection molding industry, recognizing the inherent value of a mold is understandably difficult. We are a judge-by-appearance society, and to the uneducated eye of a layperson, a mold is a not-so-glamorous hunk of steel. What's more, while the material costs associated with a mold are substantial, it's the cost of labor, craftsmanship, and skill that makes a tool such a valuable part of the molding process?none of which is apparent to the unwashed public (including insurance agents).

Unfortunately, this societal underappreciation for the mold spills over easily into the injection molding community itself. Such "infections" are most apparent at the purchasing agent level where, thanks to pressure from OEM executives to save money, price (not cost) generally decides which moldmakers win and lose when it comes to awarding jobs. This is, of course, not new, but it's no less frustrating. After all, the mold, however aesthetically challenged, is the heart of the injection molding process; it is the one piece of equipment upon which most other machinery functions and acts.

This ill-informed view of the tool, combined with our ongoing recession in manufacturing, exacerbates the trends already under way: loss of moldmaking jobs overseas; demands for discounts; demands for faster turnaround; and payment delays. This problem is most acutely represented by China, where tariffs make the import of U.S.-made tools prohibitively expensive, and low-cost labor makes molds constructed there impossibly inexpensive.

Prompted by this inequity, the moldmaking industry has asked the International Trade Commission (ITC) to initiate a Section 332?basically a fact-finding exercise to collect data that characterize the state of trade within the moldmaking industry. Once collected (the ITC hearing was held May 21) the data may be used by the government to justify a trade action of some sort to help level the playing field. Such action could include antidumping regulations, countervailing duties, a WTO agreement, a Section 337 (unfair competition), a Section 301 (treaty violations), or nothing.

The governmental attention is nice, and help of some sort would be much appreciated, but whatever the outcome, one can't help but feel that the large, global market forces at work must be met by more than the blunt sword of protectionism. The threat to the U.S. moldmaking industry demands a paradigm shift of its members; preservation of the self and industry are at stake. Big changes are in store and in demand.

But don't take my word for it. Tell us what you think. My e-mail address is below.

[email protected]

P.S. Thanks to a clerical error involving my Palm Pilot, in the April issue on this page I gave you the wrong dates for NPE 2003. The correct dates are June 23-27. Please make a note of it. 

Real-time bar coding puts the cap on waste

Mattec ProTrack software helps Alliance Plastics keep track of every part it ships. The software signals the bar code printer to print labels when the box is filled with the proper number and weight of parts.

Mislabeled part boxes are a costly nightmare for any molder. Imagine what it means for a molder running a billion custom and proprietary protective caps and plugs each year for about 8000 customers worldwide. Alliance Plastics Inc. (Erie, PA) does just that. It has error-proofed labeling by interfacing Mattec's ProTrack software with weigh scales and bar coding printers in its manufacturing cells. Payback reportedly was achieved in nine months.

Molded parts are ejected onto a conveyor under the watchful shot-counting eye of the Mattec machine interface unit, and then transferred to a box resting on a press-side scale. When the proper number of parts and box weights is achieved, the Mattec ProTrack software signals the bar coding systems to print out the label and alerts the operator. All the operator has to do is seal the box and attach the label. One operator can handle 10 presses or more.

The Mattec software provides detailed traceablility data on each label. It produces labels with data files specified by Alliance, indentifying the part numbers, operator, process technician, QC inspector, and the date, time, and shift of production. Part quality and material lot traceability are also provided, as are key molding parameters monitored every cycle, all traced back by unique serial numbers on the labels.

In business since 1967, Alliance Plastics owns and operates two facilities in Erie and oversees the activities of six other factories in North and South America. It makes its own unit-frame molds, and has about 700 active bases and at least 2000 active tools. It runs nylon, PP, and mostly PE on 50 midsize presses from Nissei and Van Dorn Demag, all 24/7. Alliance joined the Bunzl Plastics Group, headquartered in the U.K., in 1987. For the past five years, lean-thinking Alliance has used Mattec's ProHelp production and process monitoring system to error-proof other elements of its operations.

Ron Mensing, manufacturing manager at Alliance, says the bar coding system has become a major factor in controlling the quality and efficiency of production in the company's lean environment.
Contact information

Alliance Plastics Inc.
Erie, PA
Don Ellison
(814) 899-7671

Mattec Corp.
Loveland, OH
(800) 966-1301

Good-bye wood, hello plastic

Molders of industrial pallets and containers might have just gotten a boost in business thanks to new regulations that will affect the import and export of wood pallets and containers. Fears of insect infestation from these wood products are giving some countries the jitters. In fact, the EU is expected to request heat treatment of all solid wood pallets and containers by 2003, according to an article that appeared in a magazine published by the National Wooden Pallet & Container Assn.

Hardwood in exported, mixed softwood/hardwood pallets is no longer subject to the heat treatment requirements of the USDA's Animal & Plant Health Inspection Service (APHIS). However, the APHIS added two treatment methods—fumigation and chemical pressure impregnation—to its official program for U.S. nonmanufactured wood packaging. China and Australia began requiring heat treating in early 2001.

Snider Mold Co. (Mequon, WI) recently shipped a two-cavity pallet mold to a South African company that is concerned about the future of wood pallets. Jim Meinert, director of international marketing at Snider, says that there are many reasons why wood pallets and containers won't be acceptable in the future, including a wood shortage in many countries, fears of insect cross-contamination that might threaten a country's agricultural business, and the environmental issues surrounding recycling.

He adds that Europe is doing the most to eliminate wood pallets and containers, while this trend gains momentum in Mexico and South America. One South African customer fears an eventual worldwide ban on wood pallets and containers and is trying get a jump on the market by moving to plastic pallets.

Reuse, Recycle
Additionally, Meinert says molded plastic pallets and containers last seven to 10 times longer than their wood counterparts and can be sterilized. "If they fail or get old, you grind them up and make more," Meinert says. "They provide a good application for recycled materials as well—particularly HDPE and PET can be recycled into pallets."

This is good news for people like Meinert, who builds molds for the industrial pallet and container market, and for molders like Linpac Materials Handling (Georgetown, KY). James Dobell, president of this molder of containers and totes, says there is a trend toward plastics because of its reusability. Although reusability in materials handling packaging is not new—Europe has been committed to reusable containers for more than 25 years—it is beginning to catch on in the U.S.

There are several reasons for this, including the increased cost of disposal of corrugated cardboard and wood, and "reduced packaging costs through the use of efficiently managed reusable container systems," says Dobell, who also serves as president of the Reusable Pallet & Container Coalition.

Other economic advantages are to be found in replacing wood or cardboard with plastic in these container applications. "A plastic tote costs $5 vs. $1 for a [paperboard] box. A reusable plastic pallet will cost about 2.5 times that of an equivalent wooden pallet. If the right container/pallet is used with appropriate controls, the life cycle of these products will reduce the cost per trip significantly," says Jim Milligan, manager of Food Container Systems for Linpac. He notes that there are fewer than 15 million plastic produce totes in use today, accounting for less than 2 percent of all produce shipments. Plastic totes for beef and chicken number even less, he adds.

If the food packaging industry has been slow to embrace reusable containers, automotive has picked up the slack. Suppliers send parts in collapsible pallets that go directly to the assembly line. When empty they are then returned to the parts supplier for refilling.

"The amount of waste is down 75 percent in these big plants," says Dobell, who adds that in many manufacturing plant environments cardboard is not allowed on the production floor because of contamination. "RPCs [reusable plastic containers] take enormous amounts of packaging costs out of the system."

Dobell says that he feels good about Linpac's business because it makes the world a better place environmentally, and his business better financially. "It takes costs out [of products] and ultimately benefits the consumer. RPCs and reusable pallets are gaining a big share of the marketplace very quickly," he adds.

Meatier Issues
Changes in the meat processing industry are also working to encourage the use of RPCs. Milligan says there are two issues driving the meat side of the business: a lack of trained meat cutters and safety regulations.

"The meat-cutting trade is changing," says Milligan. "[Meat cutters] are being relocated from local stores to centralized meat packaging plants, resulting in reduced costs and improved compliance with USDA regulations."

Also, because meat is processed and placed into actual consumer packages at large processing plants, RPCs are widely used in shipping. "They're not shipping half a cow anymore, but retail-ready packages," says Milligan. "What is driving the meat side is the move to centralize case-ready meat packaging."

Although there is some resistance to plastic pallets and containers by the forest products industry, even the big makers of wooden pallets and containers are looking into plastic as a viable alternative. Richard Elmore, president of Exel Tool & Mold (Seymour, IN), specializes in building large molds and says he's built many pallet and container molds over the past 20 years. Although he hasn't seen an increase in requests for these molds lately, he has been visited by wooden pallet makers exploring the costs of converting to plastic.

However, unlike Linpac's Dobell, he sees the move to reusable shipping containers as more gradual. "The potential for the industry is huge," says Milligan, "but the industry is slow to turn because we're a throwaway society. Packaging costs can be high, but are paid for by the consumer and, therefore, there is little incentive to change."

A large-tonnage press for packaging

Arca Systems, a division of the Swedish packaging group Perstop AB, installed this 4500-metric-ton Mega HC ES Sandretto press in its Nurieux, France facility to mold agricultural containers. Arca and Sandretto partnered to develop and customize a processing system and machine. The machine's 260-mm screw creates 35-kg shots and plasticates material at 600 g/sec. For the injection unit, a 115-liter double-hydraulic injection cylinder is used.

Up in smoke: When your molding facility burns

Fire and sprinkler water caused damage to more than 500 molds at Chris Kaye Plastics. Problems collecting insurance reimbursement has forced the company to pay out of pocket to get the tools running again.
Up in Smoke" was a funny movie. But there's nothing funny about what happened just over a year ago to 53-year-old Chris Kaye Plastics in St. Louis, MO, when fire devastated the molding facility. Inside were more than 500 molds.

The fire knocked out electric service and triggered 150 sprinkler heads. The entire mold storage area was showered with water and covered with dense black smoke, leaving all of the tools coated in black goo. The molds suffered severe corrosion damage. Some 270 molds belong to Chris Kaye, from which it produces a line of proprietary consumer products (hangers, for example) that the company sells to various retailers, including Wal-Mart. Another 250 or so of the tools belong to Chris Kaye's customers.

President and son of the founder, John Kacalieff, thought that having insurance would get the company back up and running. However, when Kacalieff turned in a $1.3 million estimate to refurbish the damaged molds, the insurance company balked. "They offered us $150,000," says a disheartened Kacalieff. To make matters worse, the insurer told him that it won't pay to refurbish any molds owned by Chris Kaye that haven't run parts in 10 years.

"Our survival depends on a reasonable settlement for these molds," says Kacalieff, who has spent hours categorizing molds, assessing damage, and refurbishing at his own expense molds needed to fill current orders—all while trying to convince the insurance company that the molds, even the old ones, have value.

"We've already put [in] from several hundred dollars up to $6000 to get all the corrosion out of the molds for parts we have orders on," says Kacalieff. "Now we have to prove the value of the molds is greater than the cost to restore them."

Expect the Worst
Most custom molders don't keep the molds they own or run for customers in a protected area. Rain Bird's molding plant in Tucson, AZ is an exception. When the company renovated a manufacturing facility there several years ago, it built a fireproof room with a steel door to protect the molds from water and fire damage. This proprietary molder of lawn and garden irrigation systems knows that a fire could devastate the company's product lines, so it took extra precautions in protecting its molds.

Determining both a mold's value and the molder's liability if the mold is owned by a customer is another sticky issue. Bill Tobin of WJT Assoc. (Louisville, CO) is an industry consultant and a frequent contributor to IMM. He says valuation and liability have always been gray areas for molders. "The industry standard is that anything held in consignment is just that," says Tobin. "When the fire department comes in with the hoses and water, who's liable for the damage to molds?"

Rain Bird stores its tools in a fireproof room to prevent damage like this mold suffered in a fire at Chris Kaye Plastics.
Tobin, who often serves as an expert witness in cases involving molds, notes that "anything that is yours, i.e., molds, is an asset with the potential to make money." He suggests that molders produce paperwork such as purchase orders or invoices to prove that the molds were valid tools with which to make money, and that customers say, "Yes, we do require these parts from time to time," even if they haven't purchased parts from the molds for several years.

"It's messy with a fire," says Tobin. "The name of the game for the insurance companies is to delay this as long as possible, but by their delay they'll probably put [the molder] out of business. Of course, that has the potential to increase the loss."

Preserving the family business is foremost in Kacalieff's mind. He recounts that his father started the company in 1949 with a Van Dorn Model 1 molding press that he put in a rented shoe shine parlor and began molding parts. The elder Kacalieff is now 80 years old, and saving the business is paramount to his son.

What Can a Molder Do?
Having enough insurance on molds in your facility is critical to the preservation of your business after a fire. Orv Schnieder, ceo of InsurAmeriCorp in Grand Rapids, MI, specializes in insuring molding and moldmaking businesses. He says that molders should insure their equipment, work in process (inventory, and so forth), and all raw materials.

Also, because most custom molders do not own the molds they use in manufacturing, there is in most cases a clause that covers "molds of others."

"If those are destroyed, there is separate coverage," says Schnieder. "If in fact [Kacalieff] doesn't have this specific clause, the molds should still be covered in his regular contract."

Another helpful strategy is to make sure that the insurance agent or underwriter knows the molder's business. "The underwriter should know the particulars of each company's business, and not just write a standard contract," Schnieder advises.

Kacalieff says that custom molders are between a rock and a hard spot when it comes to storing another company's property. "When you look at it, if you add onto your books another X million dollars as property of others, there goes your insurance premium sky high."

Many of Chris Kaye's customers have insurance on their molds, but he's hesitant to go to them and tell them they have to file a claim. "It puts you in an awkward position to have to go to customers and ask them to file a claim," he says, "but I don't know what else to do. [The insurance company] is telling us it won't pay anything on molds we don't own."

Contact information
Grand Rapids, MI
(616) 942-5300

Managing quality with a learning environment

Editor's note: When Steinwall Inc., a custom molder in Coon Rapids, MN with 20 presses and 49 employees, decided to implement total quality management (TQM) principles in 1984, it quickly discovered that building efficiencies into its materials processing and equipment was the easy part. The hard part was changing, and in the end, educating its employees in order to make the process successful. Maureen Steinwall, the company's president, walks us through TQM implementation at her company and the importance of creating a learning organization.

My injection molding company, Steinwall Inc., approached TQM in 1984 by looking at the issue in three parts: the raw material entering the process, the equipment used in the process, and the people that designed and managed the process. The raw material and equipment were easy to deal with in comparison to the people element. When the raw material was tested, the results indicated that it was either in conformance or not. We put microprocessors on our presses to control the equipment. But when dealing with the people, it was an entirely different story.

When asking a person if he or she was in conformance or not, the answer was invariably "yes." Most people don't like to admit to mistakes or to lacking understanding. Machines and material don't lie. People can. There was no way to put gauges or sensors on a person and receive the accurate information necessary to approach process improvement in the same way as material and equipment. In fact, we're still working on mastering the people element.

I admit it, though—I'm tired, and before I can finish implementing TQM, new manufacturing improvement theories surface. Today we read about lean manufacturing and learning organizations. I struggle with understanding the subtle differences between all these theories—don't they all focus management on removing waste from the manufacturing process? I just want to rest for a while, but our competition won't let us.

Our competitors, such as those in China, have the same raw material and equipment that we do, but their labor costs are possibly up to 50 times less. They have governmental support; we have taxes and regulations. A pure textbook view of this economic situation might suggest that this is an unfair competitive situation that cannot be won by the underdog. However, we are that underdog, and as such, the only thing we can do is figure out how to tap the power in the people process.

A Learning Organization
It appears to me that the theories on creating a learning organization will, in fact, help. They address the people element in process improvement. But, let's face it: We are all pioneers in the process of creating learning organizations. And being a pioneer is tough work. We can either embrace the challenge—forge our way through the unsettled landscape—or we can stand still only to be eaten alive by the competition. I'm choosing to forge on. And here is what I am learning.

Three elements need to be in place within an organization in order for learning to take place: permission, encouragement, and feedback. Permission is granted within the work culture. Management must say it is OK to try something new—to pave a new path. We give this concept lip service by talking about empowering our employees, yet empowerment within a fear-based hierarchical organization is a contradiction. And empowering at times generates waste (another word for mistakes), which is exactly what we don't want to have happen within a lean manufacturing environment. But we'll talk more about mistakes later.

The second element of a learning organization is encouragement—a special type of management style or coaching method. You will know you are making progress toward implementing a learning organization philosophy when you hear managers say things such as, "I know you can do it"; "Just give it your best shot"; or "To help you learn more about this topic, here is a training segment that I would like you to review."

The third element is feedback. Of course, there cannot be feedback on how well someone is progressing toward his or her goal if goal setting never took place. That is why goal-setting is an integral step to take. Where do you want the organization to go and how well are you preparing the team to get there? How will you know when they get there? Where are you now?

These goal-setting questions are important and most organizations might believe they have accomplished this step. I certainly thought I did. But I missed the mark. In a learning organization, everyone must grasp the tough question, "What's in it for me?" All employees must believe in this answer, "The ability to make a difference, to grow and learn, and to feel like I belong." This is not the same as the standard answer: "A paycheck!"

Training is Critical
It was Phil Crosby's book, Quality Is Free, in 1986 that provided the impetus to get the quality movement going full-steam. Customers actually used this philosophy to get their suppliers to reduce price and increase quality. The same is true today. Lean manufacturing and global competition are causing similar pricing challenges. An organization that has created a learning organization will harvest the profits yet to be discovered by controlling the people variable in the process.

Training is a necessary part of creating a learning environment. I view the training function within a learning organization as similar to SPC in a quality organization. It is a very important tool that helps move the organization closer to its competitive goal. Another way to view training is to think of it as a necessary step in the manufacturing process that helps reduce mistakes or waste.

Training should be more than a classroom event. In my experience, very little training or knowledge transfer actually happens in a classroom environment. Training also is more than pouring information into the minds of people to achieve the desired outcome. If training were simply teaching a class, then it would be an expense and probably wouldn't allow the company to harvest much net profit.

Try to look at training from the angle of communicating knowledge. This knowledge can be found in libraries, in trade journals, or in your company's archives. Knowledge is also found by analyzing and documenting the experimentation and mistakes that take place daily within manufacturing environments.

Management's Role
The main focus for management in a learning organization will be to gather information or knowledge (curriculum), archive the knowledge, and design systems for retrieving the knowledge when needed. Allowing people to have easy access to information, processes, procedures, data, research, and stories of what has worked and has not worked is the goal. The curriculum would take the shape of books, computer simulation, multimedia programs, videos, and learning programs via the Web. The bonus with this collection and delivery concept is that it could be classified as a tangible asset. This would be desirable for the accountants who dislike the expense of training. The knowledge would remain a corporate asset, even after people leave the company.

If you have ever attempted to get people to explain how they go about doing their job, you have probably faced huge resistance. Most people believe that job security is found by holding onto information that they have gathered through their experience. They believe that once the company has their knowledge, they become dispensable. Therefore, the trick for management is to remove this fear that is rooted in the corporate culture.

People need to feel safe to speak freely about what they know. They need to be given permission to learn and to speak about their experiences. And if they truly believe they are safe in this learning environment, they will continue to learn. It's up to management to capture this knowledge and have it available for the next person—in essence, we need to stop recreating the wheel. Recreating the wheel is experimental waste that eats away at our productivity improvement. If our productivity goal is to increase by 5000 percent, then recreating the wheel makes no sense. Continuous experimentation is not necessary.

Putting the Process to Work
Let's create a hypothetical scenario using our three elements: permission, encouragement, and feedback. Let's say that permission has been given and it is safe to experiment with a process as long as a good scientific approach is used in planning. The individual(s) begins with the experiment through the encouragement of management, only to learn that it doesn't work as first planned. Naturally, the person(s) experimenting will begin the storytelling process typically referred to as water cooler conversation. They talk about what happened. Everyone listening begins to learn. In this case, they are learning what not to do. This is just as important as learning what to do.

Management needs to capture this story because it has value. If nothing more, the organization paid for the knowledge through funding the experiment, so it owns the knowledge. Passing on the captured knowledge means creating a curriculum that trains future employees on the topic. The curriculum could vary in length. Once created, the newly developed curriculum should be communicated to all who need or want to learn in the easiest way possible. Computers have been known to aid in the archival and communication process, but they don't need to be too fancy. There is no need to buy the most expensive computer and accessories; just ensure their reliability.

Capturing knowledge (i.e., the way to do or not do something) when created, archiving the curriculum, and communicating the curriculum or knowledge as effectively and efficiently as possible results in productivity improvements. If we remain committed to this process, our entire workforce will give us a competitive edge that we will need to survive.

Contact information
Steinwall Inc.
Coon Rapids, MN
Maureen Steinwall
(763) 767-7067
[email protected]

A materials revolution gone unnoticed

Editor's note: Mike Sepe is technical director at Dickten & Masch Mfg., a molder of thermoset and thermoplastic materials in Nashotah, WI. He has provided analytical services to material suppliers, molders, and end users for more than 15 years and writes a bimonthly column for IMM called the The Materials Analyst.

The history of civilization can be told through the development of materials. In fact, the early eras of history bear the names of the materials that were dominant at that time such as Stone Age and Bronze Age. As the fabrication process for each new family of materials came under the control of the appropriate processes, lessons were learned about their unique characteristics and the associated design and performance.

More importantly, control over new materials often brought control over the surrounding world. Those who have read the history of early civilization know that the first cultures that gained a facility in working with iron quickly asserted military if not cultural superiority over those who continued to work with bronze.

More recently, the development of polyethylene in the late 1930s and its initial commercial production in the early 1940s are identified by many as key factors in the outcome of World War II. Prior to that time, the insulation used to shield the wire carrying essential communications and radar transmissions was made of rubber materials that quickly cracked and broke down in outdoor environments. Polyethylene cable sheathing had a longer mean time to failure and provided the Allies with an important strategic advantage and an early example of Information Age superiority. The case can be made that over the course of the war, polyethylene saved more lives of Western forces than uranium did.

Within each era defined by a certain material family, there are watershed moments, events that extend a technology that appears to have reached its limits. The development of phenol-formaldehyde resins by Baekland in the first decade of the 20th century, the creation of nylon and polyester fibers at DuPont in the 1920s and '30s, and the development of Ziegler-Natta catalysts that extended the range of polyethylene properties and turned polypropylene from an adhesive into a useful polymer in the 1950s are such events in the world of plastics. At each turn a creative world seized on the new opportunities offered by the revolutionary materials to manufacture products that were previously unimaginable.

Today the plastics industry is on the verge of a new revolution in materials development. Rumblings of this revolution have been in the background since the mid-1990s and the people close to the fundamental research can probably trace the active work back to the late 1980s. It is a revolution driven again by catalysts. Ironically, these materials are not new; they were known in the 1950s but were thought to be impractical because of their low efficiency. Over an extended period of time, serendipitous discoveries have moved these materials from laboratory curiosities to materials that can drive chemical reactions on a scale required for commercial practicality. As a family, they go by the name metallocene, a chemical term that describes the general chemical structure of these materials.

A New Level of Control
To understand what these catalysts mean to the business of material creation, you must first understand some of the shortcomings of the current technologies. These are shortcomings we have learned to live with, so we may not see them as such, but the reality is that polymerization, like most organic chemistry, has always been a game of probabilities. When a grade of conventional polyethylene or polypropylene is produced, the range of molecular sizes that make up the material may be quite broad. The low molecular weight fraction in such a distribution facilitates flow during processing.

However, it also contributes to reduced impact properties and may be the cause of volatilization that promotes plateout on mold surfaces and produces taste and odor problems in some applications. The presence of a small number of very large chains helps to counter the negative effects of the low molecular weight fraction. But if these become too large they can form gels. These are portions of the polymer matrix that do not soften and flow even though they are heated above their melting point. These are particularly troublesome for thin-walled products. The new catalyst systems allow for the creation of grades where both the low and high molecular weight extremes can be eliminated while still producing the desired properties.

The new level of control can also be exercised over composition. For example, commercial polypropylene is primarily made up of a material that has an isotactic structure. This means that the pendant methyl group in the polypropylene repeating unit appears in the same location throughout the chain. In conventional materials the reality is that something like 80 to 85 percent of the repeating units in the individual chains exhibit this regularity. The other 15 to 20 percent may not be so accommodating, and the strength, stiffness, and heat resistance of the material is reduced to the extent that this structural regularity is lost. These unstructured or atactic groups are not without their uses; they promote melting and flow of the polymer and can improve impact resistance, particularly at low temperatures. But their placement within the individual molecules is irregular and random.

The new catalysts change all that. Structural order can literally be controlled one unit at a time, providing unprecedented control over performance. In the past, the shortcomings produced by the randomness of polymer structure were corrected by the addition of other ingredients. Now the alteration can be accomplished within the molecule. It is a good rule of thumb that any modification made to the inherent structure of a polymer produces a better result in terms of a particular property improvement than if the same change is accomplished with the addition of a second ingredient.

Opening New Doors
Let's review a partial list of the developments made possible by the new catalysts. Polyethylenes can now be made to lower densities and with more predictable property profiles. A polyethylene with controlled side branch placement can produce the same combination of properties that could previously only be achieved with copolymers such as EVA and EEA. In EVA the material becomes softer and more pliable as the vinyl acetate content increases. More vinyl acetate means less thermal stability in the melt and higher density.

The new soft polyethylenes achieve the same properties without these sacrifices. It is now possible to produce polypropylenes that employ varying levels of isotactic, syndiotactic, and atactic structure within each polypropylene chain. This allows for an incredible degree of control over crystallinity and all of the properties that arise from it: strength, stiffness, impact resistance, heat resistance, and melting point, to name a few.

Of course, the advances go beyond the commodity level. New copolymers of ethylene and norbornene, known as cyclic olefin copolymers, are transparent, have thermal and physical properties that can compete with polycarbonate at a much lower density, do not absorb water, and resist polar solvents. Adjusting the comonomer levels moves the glass transition temperature from as low as 80C to as high as 180C, and it can go higher if needed.

Polystyrene can now be made with a semicrystalline structure. The resulting material, with glass reinforcement, has a property profile that competes with thermoplastic polyesters, nylons, and even PPS. It exhibits lower melt viscosity than any of these materials, has excellent electrical properties, and does not absorb moisture. Therefore, no drying is required prior to processing and no degradation can occur due to the presence of moisture either during processing or in field use. These syndiotactic polystyrenes also exhibit less warpage than competitive materials and have densities at the same glass loading that are 10 to 20 percent lower than the traditional engineering materials.

Getting Noticed
With such advances already accomplished and a host of others possible, it would seem natural that these discoveries would be changing the face of the industry, enabling the creation of new products the way new polymer developments have in the past. But for the most part the response from the marketplace has been less than overwhelming. In groups that I address on a regular basis regarding new materials technology, fewer than 5 percent have even heard of most of these developments and far fewer have sampled or implemented them. So what's the problem?

There are two problems, actually. One is the mania over cost reduction or, more precisely, price reduction. If cost reduction were really the focus, a reasoned approach to the manufacturing process would suggest that turning off the dryer, reducing part weight by 15 percent, eliminating or reducing warpage, and cutting cycle time and pressure required for moldfilling would translate to a cost reduction. But qualifying new materials takes a little work—an investment of time, energy, and thought to determine where the best opportunities might lie. Many engineering staffs at OEMs are so decimated by the reengineering craze of the 1990s that there is no one left to work with the processors on such projects. This assumes, of course, that molders are scouting the landscape for such creative solutions in the first place.

The alternative to such an innovative, value-added approach to cost reduction (and, unfortunately, the approach that tends to prevail in most markets) is to simply beat down the supplier of the current material for another 5 percent reduction in cost per pound or seek out a secondary supplier who can compound a reasonable facsimile of the material currently in use. So while researchers work on new polymers that incorporate all the many advantages of unprecedented control over structure and composition, molders and end users are sourcing the next generation in cheap materials.

These materials are based on streams of material that are set aside by the major manufacturers as "wide spec" or they are blends of different materials designed to achieve a particular short-term property profile. When the products made from these materials fail, as they often do after the first two or three successful lots, the cost to pick up the pieces is always much higher than the initial savings. But the pressure of short-term thinking is obviously more than most processors can withstand, and so price cutting replaces innovation as the preferred development path.

The second problem lies with the developers of the materials themselves. Innovation is seldom a welcome thing. Tom Peters jokes about the reception that the person who invented the wheel, a guy he calls George, probably got from his neighbors when he first started to roll it around. The usefulness of the device was probably not immediately obvious when there was only one prototype available. But even when the utility of the invention became apparent, Peters imagines the rest of the community saying, "Look at George, real men carry rocks on their back." In other words, really innovative ideas do not immediately take over the marketplace because the usefulness of the idea has to be articulated by the creator and strengthened by application to things that might not even have been manufacturable before. The inventors of the new polymers have been missing in action in fulfilling this role.

More Than Just a Data Sheet
Part of the reason for this is that the primary means of communicating property information about plastic materials comes in the form of a short-term property sheet, a table of single-point values documenting points of catastrophic failure on specimens of uniform nominal wall that are free of weldlines and employ optimal levels of orientation. With the exception of the heat deflection temperature, which is not a property at all, the measurements are all made at room temperature.

The uselessness of this information is becoming institutionalized in our information age. Material suppliers have always made use of the disclaimer in fine print at the end of these documents, but recently some major suppliers have begun to display the disclaimer prominently in the introduction to the data sheet section of their websites.

At least one supplier brings up the disclaimer in a pop-up window that requires the user to read the verbage disavowing any relationship of the numbers to real-world performance. In order for users to gain access to the data sheets, they must not only read the disclaimer but also must click on an "Agree" icon provided at the bottom. If the user doesn't agree, access will not be granted to the data sheets. In other words, before we let you see our property information you have to agree that it's meaningless. This is tacit admission of the futility associated with generating these numbers in the first place.

In spite of this "emperor has no clothes" scenario, there is very little information provided about materials outside the realm of the data sheet. This is particularly true at the commodity level and very unfortunate for the new technology materials, because their real value does not come through in the data sheets.

There is no way to capture the advantages of a narrow-molecular-weight-distribution HDPE or a cyclic olefin copolymer by resorting to the old, tired formula of tensile strength, flexural modulus, HDT, and notched Izod impact. It requires an intelligent discussion of physical, electrical, and chemical resistance properties as a function of temperature, time, and load. No one doing a cursory search of a large material database is likely to be drawn to these materials by the types of numbers that we tend to use for "performance" assessment.

The second problem that the material suppliers have is that they bought into the "price is everything" philosophy. With billions invested in new technology, they seem unable to leverage the strategic advantage of innovation. Instead, they either try in vain to compete with the second- and third-level compounders on price, or they mothball the technology and pronounce it unmarketable in today's competitive climate.

Going Against History
At risk in all of this is a series of developments in polymer technology that could revolutionize the way materials are made and sold, improve old products, and enable new products. It may mark the first time in recorded history that we have consciously eschewed new breakthrough technology in favor of supposed cost advantage.

Of course, history teaches that there is no winning in turning away from the practice of doing things better. The cultures that mastered the new technologies of advanced materials won the wars and spread their cultures in favor of those that would not or could not change. Imagine in retrospect how ludicrous it would be to have a buyer pass on the new iron tools of 700 BC because the raw material was more expensive or a new furnace that runs at higher temperatures might be required to process it. Or the designer who decided to stay with the old rubber insulation for radar cables in 1941 because the new polyethylene was too costly and required a strange, new machine to coat the wire.

There have been times in history when the lure of high-volume production and the availability of discretionary spending have prodded manufacturers into cheapening their products for short-term gain. By the time the Roman Empire reached its heights it had produced something unique in the ancient world: a substantial middle class. This middle class had extra money to spend, and one of the things that this money was spent on was marble statuary. Previously these statues had been the hallmark of the upper class and they were therefore prized by those with newfound prosperity.

This produced a large increase in demand for the sculptors who worked in the center of Rome's market district. The need for higher production rates meant that products that would normally be too low in quality to sell could be doctored and salvaged for sale to the less discerning middle-class newcomers. Rather than scrapping a statue or working for long hours to repair damaged surfaces, the imperfections in the marble were filled with wax. The wax matched the color of the marble and looked good, but when the statues stood in the hot sun, the wax melted and the imperfections became obvious. Some of the sculptors, rather than surrender to the low-end tactics, distinguished their work by putting signs up in their work areas that read "sin ceres," or, without wax. This phrase is the origin of our word sincere.

The notion of sincerity in materials and manufacturing may seem like soft stuff. But without a commitment to better ways of doing things, there can be little improvement in technology. Materials are a key element of this dynamic. Part of the genius of the early days of the DuPont and General Electric polymer laboratories was that no one knew exactly what the product of their work would be. But the drive for innovation and the need to provide solutions to real-world problems brought forth some of the product names that are the icons of our industry today.

Without innovation, competition devolves into a reliance on the ineptitude of the competition. This is not a sustainable advantage. Metallocenes are the breakthrough of this time; there will be others. Here's hoping that the innovative process will be revived and that the integrity of a company's products still means at least as much as the price of a company's stock. Otherwise, the story of the plastics industry in the 21st century may parallel the story of the steel industry of the 20th century.

Contact information
Dickten & Masch Mfg. Co.
Nashotah, WI
Mike Sepe
(262) 369-5555, ext. 572
[email protected]

Editor's Note: Expanding Horizons

Welcome to the fourth edition of the IMM Almanac, your resource for the products, services, and suppliers to the injection molding industry. Inside you will find several noteworthy sections.

First, IMM asked several industry experts to provide their thoughts and insights about some of today's pressing issues. Look for these topics: the importance of employee training, from Maureen Steinwall, president of molder Steinwall Inc.; developing a marketing strategy, by contributing editor Clare Goldsberry; the future of product and part design, from By Design columnist Glenn Beall; the promising but unheralded development of metallocenes, by Materials Analyst Michael Sepe; moving a mold between a hydraulic and an electric machine, by scientific molding and processing expert John Bozzelli; and, sprinkled throughout, Troubleshooter Bob Hatch's top-10 most common causes of process and operation errors.

You'll also find a listing of resin distributors that includes information on proprietary materials, as well as other materials and suppliers represented.

The bulk of the IMM Almanac is consumed by the Buyer's Guide. This year's version has been expanded and now includes suppliers of products to North America and Europe. We've noted which firms serve one continent or the other exclusively, and unless marked otherwise, companies listed in this guide serve both markets. The Buyer's Guide consists of two basic sections. The first, the Company Listing presents basic company contact information and indicates the categories for which each firm provides products or services.

The second section includes the more detailed categories and which suppliers provide products for each.

This site enables you to search the Almanac by company or keyword, and provides hot links to many suppliers' websites.

Jeff Sloan, Editor

Design: Yesterday, today, and tomorrow

Editor's note: Glenn Beall of Glenn Beall Plastics Ltd. (Libertyville, IL) writes a bimonthly column entitled By Design for IMM.

The U.S. is a great manufacturing country, and the plastics industry is a major part of that activity. It is manufacturing and not the service industries that make this a great country. Manufacturing generates the money to pay the employees who purchase products and services. Employees also pay taxes that finance medical research, running the country, maintaining an army, supporting education, exploring outer space, and all of the other things we enjoy in this country.

Think back for a moment to what this means. In the 1860s, the industrialized northern states out-manufactured the southern states to win the Civil War, end slavery, and keep this country united.

In the 1940s, this country out-manufactured both Germany and Japan to end World War II, rescue Europe, and maintain the freedoms that Americans enjoy today. We simply manufactured more Liberty ships, tanks, and airplanes than Germany and Japan combined. Today we can manufacture more weapons than all of the Mid-Eastern countries combined.

Manufacturing is extremely important to the American way of life, not only in the past but also in the future. Unfortunately, that great manufacturing capability is now being eroded by greed and foreign competition. Most emerging countries have now learned how to mold acceptable plastic parts. Those countries' lower labor rates and standard of living, coupled with the absence of OSHA, Workman's Compensation Insurance, minimum wage laws, ISO certification, and environmental regulations, allow them to assemble these parts into low-cost products.

The U.S.'s open borders and low import duties allow those products to be shipped back into this country and sold at a profit. OEMs have now learned how to use foreign suppliers to increase profits. They don't relish having their products produced so far from their markets, but the lure of increased earnings is overcoming their apprehensions. The decline in America's manufacturing capability is a problem that can no longer be ignored. If we do, our standard of living will decline and there will be no one to build the ships, tanks, and airplanes for the next war.

Design is important to the survival of America's great manufacturing industry. It is a simple fact of life that manufacturing can only produce what engineers design. If the designer does a proper job, manufacturing is efficient and customer acceptance is good. If the design is lacking, costs, quality, and delivery are affected, and sales decline. The way engineers design new plastic parts is also critical to the ongoing success of the injection molding industry. Over the years the way engineers design products has changed. An understanding of where designers came from, how they got to where they are today, and how they will be working tomorrow is important to anyone who depends on designers for their next batch of new projects.

The First Designers
In the beginning a craftsman designed, manufactured, and sold his own products. In order to prosper he had to have intimate knowledge of design, materials, manufacturing, and selling. These craftsmen did not design products that were difficult to produce. The best of these craftsmen eventually spent all of their time producing products. The hunters and gatherers purchased his products and the craftsman bought or bartered what he needed from them. A cottage manufacturing industry developed, and commerce increased. This system worked well and continued to be used until the onset of the Industrial Revolution in the 1750s.

The Industrial Revolution decreed that all workers would specialize in only one activity. The theory was that among the craftsmen some were better at manufacturing than selling. Others excelled at designing products but were only mediocre at producing them. Those that were good at producing products became the manufacturing specialists. The best of the designers concentrated on designing products and eventually became engineers. Those that were better at talking than doing became salesmen and after a while, market researchers. This system persevered until modern times.

The downside for the product design process was that designers no longer personally manufactured what they designed. They had difficulty keeping abreast of the new materials and manufacturing processes that came with the advent of the machine age. They also lost first-hand contact with the customer. They no longer received immediate feedback on what the customer wanted and what he was willing to pay. These two problems still haunt the product design profession today.

Product vs. Part Design
During these first ventures into specialization it was noted that certain individuals had the knowledge, inclination, creativity, and experience to be good product designers. Unfortunately, this combination of attributes rarely resulted in an engineer who was also good at the tedious detailed work required to finalize the design of an individual part. Management's answer to this problem was a division of labor. Design engineers would design products, and draftsmen would finalize the design of the individual parts. The system worked well and it built the industry that we all enjoy today.

It is important to recognize the differences between product design and part design. Product design has to do with creating the product concept that satisfies the needs or desires of the end user. It also entails selecting a suitable plastic material and manufacturing process, assembly, decoration, and a lot of other things.

Part design, on the other hand, has to do with finalizing the design of each individual part in the assembly. This work results in a detailed engineering drawing. Part design is extremely important as it is this drawing that the toolmaker will use to build the cavity to actually form the plastic material into a sellable shape. The molded part cannot be better than the cavity, and the cavity will only be as good as the part drawing.

Today's Designer
For 500 years, designers and drafters have been performing their magic work with a T-square, a drawing board, and later with a slide rule. In the 1980s, the computer industry introduced design software programs that were just barely usable. The computer has now replaced the design engineer's old, reliable slide rule and drawing board. This is as it should be. But the full-court, high-pressure sales hype surrounding computer-aided design (CAD) created another problem. This new technology was pushed onto the design community faster than it was capable or willing to accept it. Most found that CAD took longer and was more difficult to use. CAD also requires a totally different way of thinking.

In the U.S., product design has always been an entry-level job. This was all right, as there were always gray bearded design engineers available to teach these new college graduates what they needed to know. The novices brought with them all of the very latest technology from the university. The old pros learned the applicable new technology from the young engineers and taught the novices the basics they needed to get the job done. Unfortunately, this tried and proven way of finishing off a novice designer's education has recently come to an abrupt end.

A lot of the older plastic product designers, with many years of valuable experience, resisted CAD being forced on them by MBA-type managers who had never designed a plastic part. They were also disturbed by the disasters created by the inexperienced young engineers who did not know how to design except with CAD. To resolve the problem, management labeled the old pros as "nonteam players" and downsized them.

Another serious concern is that design engineers have had 134 years to learn how to design plastic products using their old familiar tools. In the case of CAD, they have had less than 20 years to perfect the software programs and learn how to use these new design tools. This is a very real problem that will not go away just because corporate management doesn't like it.

Reorganizing and downsizing in U.S. corporations have now eliminated many of the old pros. The less costly young engineers are left on their own to continue their education by the laborious process of trial and error. These abandoned, young, inexperienced engineers are designing most of the new plastic products being produced. The cost, quality, and delivery of these products suffer accordingly.

Many U.S. corporations are now managed by MBAs who have no appreciation for the importance of design. Their answer to these new problems is to subcontract their new product design projects to their suppliers. Today, there is more product design being done by suppliers than at any time in the past. As was to be expected, the MBAs demanded that their suppliers use the latest technology and design these parts as electronically transmittable, 3-D, solid model CAD.

The danger in this current trend is that suppliers will never know as much as an OEM about a new product's requirements in its end-use environment. The ultimate outcome of this method of subcontracting product design to suppliers remains to be seen.

The advantage of this new approach is that an experienced injection molder typically knows more about part design than a novice designer. Molders are well qualified to design plastic parts that can be quickly and efficiently molded to high quality standards. Molders and moldmakers also know all of the tricks of the trade for minimizing mold costs and delivery schedules.

Future Design Trends
Understanding the evolution of the product design process is helpful, but injection molders have to be more concerned with what designers will be doing tomorrow. There is a high probability that future injection molded parts will be larger in size and more complex, with even closer tolerances and appearance requirements. Who is going to design these technically challenging parts?

All indications are that in the future OEMs will intensify their efforts to download more work and responsibility onto their suppliers. This cost-cutting process was started by the automotive industry and is now widely practiced. Most injection molders are desperately trying to streamline their operations in order to remain competitive. No one wants to provide their customers with additional free services. This is understandable; however, the design process requires special consideration.

Every company in the global injection molding industry can purchase the same plastic material, mold, molding machine, and ancillary equipment. Aside from variations in the cost of doing business in different countries, there are few things that distinguish one injection molder from the others. The most important difference between molders is how well they manage their equipment, employees, and customers.

Another important difference between molders is the design of the parts they mold. The design of parts is different for every project. All molders know that they are molding some parts that are not designed as well as they could be for low-cost, high-quality molding. Just think about how much better off they would be if all of their parts were properly designed. This situation represents a not-to-be-missed opportunity for injection molders.

A survey conducted by Plante & Moran LLP found that "molders with either design input or design responsibility earned higher gross and net margins than molders manufacturing parts-to-print components." In other words, providing a design service can increase an injection molder's profit margins. Today it is not uncommon to encounter a medium to large molder, and in some cases moldmaker, that has product design engineers on staff.

It will be an unusual injection molder who will know enough about the product requirements and marketplace trends to take responsibility for designing his OEM customer's products. However, in most cases molders are better qualified than their customers at finalizing the design of the individual plastic parts that fit together to produce a product. Over the next few years the MBA managers will figure out that the best results are achieved if the OEM designs the product and leaves the design of the individual parts up to the supplier. They will, in effect, be returning to the tried and proven earlier procedure where the product and part design were performed by different individuals who were experts in their own specialties.

Injection molders who want to capitalize on this opportunity will have the best results if they have input early in the product design phase of the project. Once the design has been finalized and a drawing or database has been prepared, it becomes more difficult for a molder to influence a design. Design engineers are much more willing to consider suggestions while the product is still in the preliminary sketch phase. The modern name that has been applied to this collaboration between an OEM's design engineer and his supplier is "early supplier involvement." This collaboration can result in a win-win situation. 

Strategic marketing is key in tough times

Editor's note: Clare Goldsberry is a contributing editor for IMM and has written several books on sales and marketing strategies, which are available through the IMM Book Club: (800) 655-3330 or

When the going gets tough, the tough go selling! Right? Well, almost right. Before your salespeople hit the road they need a map or, more precisely, a marketing strategy. Never has a marketing strategy been more important to growing sales than in the economic climate we've experienced during the past 18 months. More and more molders recognize that planning is key to sales growth, and to that end more are dedicating resources to marketing and selling.

In a survey conducted by the Mid-America Plastics Partners (MAPP), 67 plastics processors responded that their number one plan of action for 2002 is "rededicating company resources to marketing and selling."

Troy Nix, executive director of MAPP, says, "Processors are planning more aggressive marketing efforts and according to one processor, they are searching for and actively calling on potential customers, and flipping over every new rock."

Comments from MAPP's survey participants included everything from "hired a marketing firm" to "developing a more comprehensive sales network" to "more aggressive marketing."

What is Marketing?
Many, however, do not understand how marketing can be used effectively, or even what marketing means. Marketing creates demand for goods or services. It doesn't matter if you have the best equipment, capabilities, and expertise in the industry if no one knows about them. However, to develop and implement a strategic marketing plan requires some work.

First, what is your goal? For many molders, the goal is to diversify customers and end markets served, attract new customers, promote capabilities and technology, and keep the company name in the forefront of customers' and potential customers' minds.

Molding and moldmaking companies never used to think much about marketing. Most didn't even have salespeople. However, with global competition pressing on the doors of U.S. manufacturers, there's an increased recognition that marketing will be critical to the success of U.S. molders and moldmakers.

Large or small, molders and moldmakers need to think about how they will promote themselves in a crowded, competitive market, how to differentiate themselves from the competition, and how to use those differences to find a niche. Nypro Inc. is a sizable molder that serves multiple markets, staying diversified in the services it offers so that it can thrive in a global marketplace. But you don't have to be a Nypro to survive.

For example, Plastic Molding Technology Inc. (Seymour, CT and El Paso, TX) has developed an expertise in advanced insert molding capabilities to help its customers in electronics, medical, automotive, and consumer appliance markets reduce costs.

Precision insert molding, says PMT CEO Charles Sholtis, is an innovative process technology that enhances product functionality, reliability, and economy. "Depending upon the design need, stampings, screw-machined parts, four slide parts, coils, and even microchips can be encapsulated with plastic," Sholtis says. "Component integration is achieved by combining the high-volume processing advantages of plastics with the mechanical and conductive properties of metals."

Almost every molding or moldmaking company develops a niche over the course of its business life, whether it's a capability niche, an expertise niche, a market niche, or a specific customer niche. Finding your niche—what it is you do best—and then promoting that niche to customers who value what you provide are the optimum ways to grow your business.

Being Global vs. Going Global
Marketing to global OEMs requires being global in some form. That could mean having a facility located close to OEM customers' facilities or forming strategic partnerships with a molding or moldmaking company in specific locations from which to serve OEM customers. It's a fact of life: Being global often means going global.

Bob Alvarez, vp of application engineering at United Plastics Group (UPG), explains that being a supplier in today's marketplace means molders must be low-cost, global, and multidisciplined in manufacturing, engineering, and procurement. That's a huge bite to swallow for many molders. But without these, Alvarez says, "Plastics companies today can't service the needs of the multinational OEMs. We're not in the manufacturing industry, we're in the service and consumption industries."

The prime objective of OEMs today, says Alvarez, is fourfold: Be first to market, be the highest quality, have the lowest price, and have global capabilities. "The molder is an extension of the OEM," says Alvarez. "We're not just providing a service, but a relationship."

That relationship often requires molders to go where the OEM needs them. To that end, UPG is closing four of its 12 U.S. plants and moving that manufacturing to China and Mexico.

Not that every molder needs to open a plant in China or Mexico. But, as Alvarez puts it, "You don't have to own all your manufacturing and technology, but you'd better know where to find it."

Molders marketing themselves to global OEMs need to know what it will take to serve these OEMs and be willing to make the investment and take the risk.

Marketing to Contract Manufacturers
For almost a decade now contract manufacturers, and more specifically electronic contract manufacturers, have been extending their reach into molding. This vertical integration of capabilities has given these companies something that molding companies don't have: the ability to make, assemble, package, and ship products anywhere in the world from almost anywhere in the world. For a while the big players like Flextronics, Celestica, Solectron, and Jabil kept getting bigger. But Flextronics' plan to acquire more molding companies was put on hold during 2001 because it discovered—as custom molding companies already know—that when things slow down, like they did in the electronics sector last year, the presses stand idle.

That leaves molders with an excellent marketing opportunity. However, knowing how to turn opportunity into profitable new business is the challenge. Being competitive is key. UPG's Alvarez says that "80 percent of injection molding companies cannot compete with plants in the U.S. because they're not lean and mean."

Being able to service contract manufacturers, which have many of their plants in places like Asia and Eastern Europe, is another challenge. Alvarez notes that full-service status requires molders to have a knowledgeable and centralized engineering and procurement department that functions 24/7. When a plant in Asia needs something, the U.S. molder had better be ready to answer that call.

Also, to service a contract manufacturer requires knowing your niche. Offer the contract manufacturer something that company doesn't have the capability to do, or something the molder can do more efficiently. The name of the game is low cost to manufacture and high productivity. That's why companies jump from one country to another in search of the lowest-cost labor. If U.S. molders can figure out a way to do it better, faster, and cheaper, then even the CMs can do the math on that one.

As Alvarez notes, "Ask yourself, 'What do I bring to the deal as a core competency vs. my partner's strengths?'" Molders need to focus on those core areas and become better than anyone else, and then market those strengths to the CM.

Contract manufacturing, says Alvarez, will continue to dominate the landscape of manufacturing. All the profit is in value-add.

Molders, to be successful, need to find ways to be in the contract manufacturing business at their own level, or learn how to play with the big CMs in a low-cost niche.

New Opportunities
Almost every market segment offers new opportunities for molders, but these don't come knocking at the door. It usually requires molders to keep abreast of changing technologies in various market segments to capitalize on these opportunities. For example, the electronics sector has undergone numerous paradigm shifts over the past decade.

Jack Dispenza of Lucent Technologies/Bell Labs' design and engineering center of excellence notes that market changes forced a new business model for most electronics companies. One major change is in product cycles. "Electronics businesses were cyclical and cycles tended to rise and fall over a few years," he says. "Now it's months."

There is also the global slowdown in the electronics markets and the downsizing, spin-offs, inventory write-offs, and outsourcing of many manufacturing capabilities. Today's telecommunications and electronics markets are "doing some soul searching and getting back to fundamentals—revenues, profits, and careful future planning," he says.

How does that impact opportunities for moldmakers and molders? Dispenza says that there's more collaboration on design at the concept stage with moldmakers. Product development is concurrent, with candidate vendors chosen early. "Sometimes we'll [start working with] a moldmaker before the design is done," he says. "Numerical analysis and simulation help us bring products to maturity faster, and there's more effective utilization of internal and external resources."

New opportunities exist in the medical industry, but like the telecommunications and electronics industries, changes are taking place that affect custom molders serving this segment. Rocky Morrison of American Technical Molding painted a revealing picture of the medical molding industry at the recent IMM Management Conference. To be a medical molder requires a higher level of training and adherence to good manufacturing practices (GMPs). "Most do not do enough training to be a medical molding facility," says Morrison, "and the GMPs make it difficult for the smaller custom molder to compete."

However, one way to get a foot in the door of the medical industry is research and development. R&D can be a business for moldmakers and molders, notes Morrison. "Custom molders tend to give the R&D away and make it up in the molded parts," he says. "But you have to realize that 90 percent of R&D projects never become a reality."

Medical molding is a business that is moving steadily toward contract manufacturing, similar to what is taking place in the electronics industry. That means being more than just a molder of medical parts, as value-adds increasingly become a critical component of servicing the big medical OEMs.

Finding these new opportunities demands that molders and moldmakers mine these industry segments and understand the changes that drive these new business models. They then must develop strategic plans to meet these changing requirements. What industry segments are you best able to service given your company's expertise and equipment capabilities? How can you respond to the challenges of concurrent engineering, new product design assistance, global manufacturing, and supply chain management?

Marketing strategies today go far beyond just finding customers, beyond just promoting your company with a brochure and facilities listing.