Strategic Challenges of the Past Decade

The Society of Plastics Engineers, Mold Making & Mold Design Division (SPE—MM & MD Div.) is no different than any other microcosm found within the trade. That is, with the exception that the SPE-MM & MD Div is a slightly broader cross-section made up of an international membership. All of that said, the challenges for our membership remain exactly the same as those of the other primarily U.S.-based organizations; those of the Canadian-based trade unions; and those of the European Union—remaining profitable in business and maintaining market share.

 

Remaining Profitable

The industry in the past 10 years has undergone a rapid technological change. We have seen a greater influx of automated/unattended machining, higher dependence on computer-generated designs and cutter paths and a heightened use of the Internet as a means of moving data from customer to vendor and back. All of this has changed the method of doing business in both speed and expected accuracy. It also has been a key driver in the ability of many moldmaking firms to remain profitable. The ability of these entrepreneurs to acquire, assimilate and profit from these advances set the stage for future growth within the individual companies and the trade in general.

Unattended/automated machining a decade ago was in the teen-years of development. American-based companies were trying to sort out the best method of implementation while their Asian counterparts saw the use of CNC machining centers as a method of increasing up-time and reducing direct labor costs. Some saw the use of these machine tools as a means to open new markets while others remained steadfast in their artisan approach to mold building. Which one was right and which was wrong remains the ongoing question.

In the late 1990s the moldmaking industry saw another technology develop and begin implementation—high speed/high definition machining. From about 1990 until the mid-90s a high speed spindle on a machining center was thought to be ~12,000 rpm. Anything beyond that was considered unthinkable for “conventional” milling machines. The advent of these new machines with spindle speeds of 20,000 to 40,000 rpm opened a whole new realm of manufacturing to the moldmaker.

The average leadtime for the design and manufacture of an injection mold began falling. In the early 1990s deliveries in the 14- to 20-week timeframe for a mold were fairly average. By the end of the century six to eight weeks was more the norm. Today, through the use of these high speed metal eaters, we are seeing deliveries of bridge tooling in as short as seven to 10 working days.

The die sinking EDM saw a surge in use in the late 1980s requiring a high level of skill in designing electrodes, programming cutter paths and utilization of the machine tool. By 1994 many mold shops were acquiring CNC die sinking EDM applying the same concepts that had been learned from the CNC machining center—greater up time with lower direct labor through the use of toolchangers. Some owners saw that this capital could readily be leveraged through the implementation of workcells with full robotics, even to the point of automated inspection on CNC coordinate measuring machines.

With the advent of the hyper or high speed hard mill the designer and programmer had to shift approach in mold manufacture. These new machine tools brought with them the reduction in use of the sinker EDM. This shift allowed the toolmaker to machine the block to near net in a soft state and then in a single setup hard mill the final detail post heat treatment. The improved dimensional accuracy and stability of the cavity geometry were a given, as was the reduced time-to-market. Customers and vendors had to realign their expectations on what the mold would deliver and how fast it would arrive at the delivery dock. Likewise, moldmakers who grew up with a Bridgeport knee-type mill had to shift their mindset from milling, heat treating, grinding and burning to mill, heat treat, mill, ship. This was and is a paradigm shift that requires re-training and skill set development within the workforce.

The use of the Internet continues to be developed in the industry. As recently as the 1980s the use of a fax machine was considered state-of-the-art. Through the 1990s the Internet replaced the fax and is continuing to reshape the means by which business is conducted. Here as with the high speed/high definition machining center, the moldmaker has had to do a mind shift.

The Internet has taken the design room and meeting room from within a single company to around the globe allowing moldmaking companies to further reduce leadtimes. By having round-the-clock services in other parts of the globe a moldmaker is able to gain time—the one thing that there is precious little of—and leverage his equipment investments.

Today design reviews, product reviews and tooling status reporting is being conducted in Web-based meeting spaces. Real-time product models are viewed and discussed with the ease previously handled only in face-to-face meetings. The one-on-one discussions are coming back although in a different form and often with different cultures gathered around telephones and computer screens.

All of these technological advancements have shown an increased demand for investment capital. With that capital came a need for business owners to re-assess their positions within the companies—many of which they had started. The 1990s saw fast credit available to about any business owner with the willingness to lay it on the line and the receivables to match. By the latter portion of the decade the industry saw a staggering market shift with ~30 percent of the moldmaking companies in the U.S. shutting their doors or moving to other areas of metalworking to derive a livelihood. Proper cash flow management continues to drive many companies and is crucial to remaining profitable.

 

Market Share

It would be easy to point our finger at the rapid influx of low-cost Chinese tooling and say this is the biggest issue, or to look to Washington DC and expect that the legislators should have enacted some form of trade protection; however, to blame the Chinese for doing what the U.S. did in the 1950s and 1960s—that is, exploit our single greatest resource Yankee ingenuity—would be wrong. To expect the government to fix the ills of our business is also unacceptable.

Many of us can still remember the concerns of the Japanese influx of tooling and then the Portuguese followed closely by the Korean imports. All of these imports into the U.S. mold building market caused a stir, and yet there are still moldmakers alive and well in the country today.

What the previous influx failed to do was to wake those same mold builders from their field of dreams of “If I build it they will come” and make them develop a market image of their companies. Precious few today have established and maintain a Web-based presence via Internet domains. It is not uncommon to find moldmakers with e-mail addresses still pointing at Yahoo, Hot Mail, AOL or the like. Those same individuals bemoan the fact that the Chinese are “Eating their lunch,” yet for all of their hand wringing and nay saying remain without a strategic marketing plan.

The energy placed in trying to curb the influx of these molds and dies into a market might be better spent in developing a branded image of the company helping to set themselves apart from their competition. It is not in running the competitor down that we gain business—protectionism has never worked and only leads to isolationism—we need to find our niche market and then exploit our talents. The customer will come, but we have to draw a map from their needs to our front door!

 

Summary

Those companies that survived the non-recession of the early 1990s and the recession of the mid to late 1990s are in a unique position … that of being the last ones standing. The market is coming back, but in a new and exciting way. There are new alliances of small companies, international partnerships being formed and new companies are springing up all over the globe. It is not the same marketplace we knew from the 60s to the 90s, but one of new and interesting means of conducting business.

We have the technology and ingenuity as moldmakers around the globe—what we need is to embrace the changes and move forward finding new ways to provide a secure and bright future for our industry.