Acquiring, Adjusting Growth in Moldmaking

Opportunity is everywhere, but you must have your eyes and ears open to capitalize on it. For example, acquisitions throughout the moldmaking industry have picked up the last few years, and to some, that might be a bit unsettling, but it’s not all bad news. Taking a closer look and having some candid conversations reveals some opportunities this mergers and acquisitions (M&A) activity has presented to our community:

• The investment community has learned the importance of mold builders in the manufacturing supply chain.
• Educated new ownership has done their homework and knows the value of investing in the right technology and equipment to keep businesses healthy.
• Many baby-boomer-owned businesses must transition, and changing hands will help move that shop into the next decade and save jobs.
• Private equity-owned businesses tend to provide employees with better healthcare, a 401K, etc., that many smaller shops cannot afford.
• Combining forces opens the doors to more and new business with added capabilities and sites.
• Consolidation opportunities can build powerful service networks with multiple sites capable of servicing customers with different skill sets and areas of expertise, improving the reliability of supply chains worldwide.

Let’s break down this last bullet item as an example. That statement not only applies to M&A activity but also to shops who monitor trends (in this case, trends accelerated by COVID-19) and capitalize on the opportunities they present, which may force them—whether they are looking to sell or not—to change their business model.

Many shops are looking at moldmaking differently today and acknowledge that it might be time to adjust how they see and run their businesses. Let’s face it: things are changing—the industry has moved from moldmaking to mold manufacturing to advanced manufacturing. But remember, with change comes opportunity.

So, how do you see your business, and what opportunities are you prepared to take advantage of this year?

For example, I’ve heard that some mold builders turn away work from customers because they don’t want to change their business model to accommodate quick turnaround jobs, which entails considering advanced technologies such as additive manufacturing (AM) or artificial intelligence. This is a missed opportunity. The key to growing into advanced manufacturing is building a relationship with the OEM to secure commitment, and then feel confident enough to invest in new technology that could open up a whole new line of business—in this case, quick turnaround work.

Another example is learning to use AM/3D printing technologies or services to make your molds better. Perhaps the future of AM for you doesn’t entail being a shop that makes one million parts; maybe it’s being a shop that is part of an OEM solution by making 100,000 parts or producing additive tooling. It’s about becoming a part of the decentralized manufacturing supply chain brought on by COVID-19 and reshoring.

So, how do you see your business, and what opportunities are you prepared to take advantage of this year?