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In Praise of “Job Shops”

By: Tony Deligio 9. December 2015

“I hate that term—job shop,” admits Craig Porter, president of custom injection molding PlastiCert, Lewiston, Minn. I spoke with Porter over the course of an interview for an upcoming feature in our January issue highlighting Plastics Technology’s inaugural World-Class Processor survey. PlastiCert made the cut, finishing in the top 20% of entrants based on 11 different metrics, and Porter credits the company’s “job-shop” mentality as a key reason.

 

“We do production runs,” Porter says. “We do a lot of them.” How many? Porter figures they had around 775 work orders in 2014 with an average quantity build of only 3000 pieces. “We’ve done some much smaller than that even,” Porter recalls. Of the roughly 50 different customers his company served in 2014, Porter says only two provided him a forecast to help predict their demand. Everyone else?

 

“The rest all just call up when they need some parts and say, ‘Hey, how soon can I get them?’” Porter says. That means mold changes—lots of them—and a very specialized skill set. “Well we think [being a job shop] is an expertise,” Porter says. “We look it at as a selling point. We are set-up pros—we are experts at taking molds in and out and getting jobs up and going and making parts.”

 

Porter says customers appreciate that agility, whether they think of PlastiCert as a job shop or not. “We’re able to jockey things around and work with due dates, and get things in,” Porter says. “If we have a customer that calls up and says, ‘Hey I need parts now.’ We can probably figure out how to accommodate them.” 

The State of the U.S. Plastics Industry Is Strong

By: Tony Deligio 2. December 2015

Apparent consumption of plastics (shipments + imports – exports), which has grown five years in a row, set a record for a fourth year in a row in the U.S., highlighting a new report on the industry released by SPI. Bill Carteaux, SPI president and CEO, and Michal Taylor, vice president of International Affairs and Trade, reviewed two reports outlining the state of plastics: Global Business Trends and Size and Impact of the U.S. Plastics Industry.

 

As a show of the sector’s strength, plastics apparent consumption grew by more than 6 percent to $298.3 billion. Other highlights:

 

Exports rose more than 3 percent and imports rose nearly 8 percent.

The plastics industry is the third largest manufacturing sector in the U.S., employing 939,855 with facilities in every state

 

Carteaux and Taylor spoke at length regarding the unique cost advantage the U.S. currently enjoys in commodity resins like polyethylene and polypropylene thanks to shale gas. Around 85 percent of polyolefins in North America are derived from natural gas sourced ethane, which is enjoying a sizable cost advantage due to shale exploitation over petroleum-sourced naphtha.

 

“The low cost of natural gas and, to a lesser extent, oil in the U.S. has driven down the cost of doing business here, and made the country more competitive in the production of chemicals and resins,” Carteaux said. (Read more about shale gas driving U.S. investment here from my colleague, Lilli Sherman).

 

Reshoring of work, particularly projects being pushed by Wal-Mart and others for a Made-In-America sourcing, continues to have an impact in plastics. Carteaux told the anecdote of one SPI member’s bid to bring some manufacturing back, also noting how many groundbreakings and expansions he’s attended over the last year.

 

“Ten years ago, this member moved a large project to China, and just recently, moved the business back to U.S. in part because Walmart asked,” Carteaux said. “The interesting thing is that costs are actually lower in the U.S. now than they were in China. In the next 12 months or so, I think we’re going to see more reshoring ramp up.”

 

Other highlights from the reports:

 

Productivity gains in plastics outpaced other manufacturing sectors by 2.2%

Captive plastics producers had the largest share of employment 21.9%

Texas overtook California as the largest employer by number

Indiana is the largest employer by concentration (employees per 1000 non-farm jobs)

The U.S, thanks to resin exports, enjoys a $10.4 billion trade plus

Top export markets (in order): Mexico, Canada, China, Belgium, Brazil

Mold exports grew 10.3%, expanding while machinery, products and resin contracted                    

 

(Pictured: Braskem officials break ground on a new UHMWPE plant in La Porte, Texas.)

Braskem La Porte, TX UHMWPE plant

Sneak Peek at Molding 2016

By: Tony Deligio 24. November 2015

Over two-and-a-half days next March, experts from across the injection molding supply chain will gather in New Orleans offerings insights into the latest trends and technologies in this dynamic industry. Molders, material suppliers, equipment manufacturers and more will be there.

 

Primary tracks at Molding 2016 (March 29-31; Westin New Orleans Canal Place) currently include:

 

Establishing/Monitoring/Maintaining Robust Processing

Adding Value Via Automation, Assembly and Packaging

Material Drying/Handling

Tooling

Materials

Emerging Technologies

 

In addition to those, special breakout sessions are in the works specifically for automotive and medical injection molding. In the automotive track, presenters will address liquid color advances, effective automation, the potential for mid-sized all-electrics, preventative purging, and lightweighting batteries via molded conductive plastics, among other issues.

 

On the medical side, presentations will cover running Tritan in multicavity hot runner molds; using ERP software to maintain documentation and certifications; whitewall medical molding; and more.

 

Machine manufacturers (Arburg, Engel, Husky, Milacron, Wittmann Battenfeld, Sumitomo (SHI) Demag) will be on hand, as well as auxiliary suppliers (Conair, Novatec, UnaDyn) and material companies (Eastman Chemical, Covestro, Momentive, PolyOne). Plenty of established molders will be there (Extreme Molding, Henkel, Makuta Technics, Noble Plastics, Nypro, Tessy Plastics) as well as a newer player in Proto Labs.

 

Specific topics currently include:

 

Injection molding design of experiments

Lights out injection molding

LSR Molding

Industry 4.0

Smart packaging

Digital manufacturing

Recycled resin

Automation (collaborative, value added, automation in automotive)

Inspection (3D and predictive)

Induction heating of tools

Multi-component molding

Measuring melt temperature in real time

Automatic temperature control

Predictive maintenance

Liquid color

Process development

LED lighting Applications

 

Columnists from Plastics Technology magazine are also on tap, including:

 

Pete Stoughton

Randy Kerkstra

Suhas Kulkarni

Robert Gattshall

 

Save the date and wait for more updates as we get closer to Molding 2016!

Molding 2015 Conference and Exhibit

“Winning With the Lifecycle Approach”

By: Tony Deligio 17. November 2015

In existence for 155 years, including 47 in plastics, Milacron has seen its business model (along with the industry it serves) change dramatically over the years. Most recently, those changes have included a $285 million initial public offering on June 24. Earlier this month in two investor presentations and a conference call with Plastics Technology, company executives laid out Milacron’s current interests and how those have changed in recent years, with more evolution to come.

 

The big takeaway? Formerly synonymous with “machinery”, the new Milacron will emphasize much more than primary processing equipment and be more present in its customers’ day-to-day business.

 

“We’re winning because our approach is lifecycle,” President and CEO Tom Goeke told analysts in the company’s Nov. 6 third quarter earnings call. “When a customer buys a machine, we’re there until they need to purchase a new one.” Comparing the company to a service-oriented car dealer, Goeke said Milacron’s renewed emphasis on aftermarket parts/service and what it calls consumables (think wear components), not only benefits customers by keeping their machines running with the latest kit, but makes sense financially, giving the supplier more sales opportunities.

 

In a Nov. 9 Baird 2015 Industrial Conference presentation, Milacron said 61% of its sales come from those consumable products—a “high margin recurring revenue stream.” Consumables here include aftermarket, fluids, and melt delivery/control systems, with the remaining 39% of revenue attributable to “equipment systems.”

 

In that same presentation, Milacron noted that while an injection molding machine can have a replacement cycle ranging to 15 to 25 years, items like hot runners, mold bases and other components can require new investments every one to five years due to wholly new projects or wear on existing tools.

 

On the existing equipment front, the company sited large installed bases of machines (40,000) and hot runner systems (140,000) as potential sources of ongoing aftermarket business. Looking forward, Milacron forecast 7.1% CAGR in processing equipment, with the total to rise from $25.3 billion in 2014 to $31.1 billion in 2017. Business here would be fueled by upgrades in emerging regions and replacement of aging fleets in developed markets. The global hot runner market was pegged to grow at 8% CAGR, rising from $2.1 billion in 2014 to $2.6 billion in 2017.

 

In the earnings call, executives referenced several bright spots, including an expanded hot runner plant in India and a “very successful” Fakuma, where the company presented as “one Milacron” for the first time in Europe, with close to 1000 leads booked at the Friedrichshafen event.

 

On the technology side, testing continues on its coinjection molded answer to tin cans for food packaging, the Klear Kan, with collaboration ongoing with select prospects, up to and including focus groups with consumers.  

 

The company noted that it has sold three of its new PET preform systems, which launched at NPE, with the first being shipped and two more being manufactured. In automotive, Milacron executives talked up interest in a four-component machine for applications like taillights, which require multiple materials/colors.

 

On a geographic basis, the executives did describe a slow down in Asia in general, and China in particular. Overall the region was a wash with increased business in Singapore, Vietnam and South Korea largely offsetting contraction in China.

 

In North America, Milacron has seen what the executives called a general slow down, with strength in automotive, appliance, housewares, and custom molding ongoing, but weakness in construction. North America still constitutes a slim majority of Milacron’s business (52% of revenue), with Asia (22%) and Europe (21%) accounting for next biggest chunks. By end market, automotive (23%) and packaging (21%), dominate.

 

Goeke told Plastics Technology that the company spends around $20 million/year in R&D, and at the Baird event, a long-term goal of generating more than 20% of revenue from new products was stated, laying out the potential for a win-win for Milacron and its customers.

 

“At the end of the day, our customers are trying to make higher quality parts at a lower price,” Goeke said, “so everything we can do with precision of the part, is a benefit to them.”

Pictured: Milacron's Fakuma booth, image courtesy Milacron

Milacron Fakuma 2015

Injection Molder Shows How Plastics, Sustainability Can Go Together

By: Tony Deligio 4. November 2015

Of late, if a governor, or any legislator, is talking about plastics, it’s more likely than not to be in the context of a ban or fee, but on October 27, custom injection molder Hoffer Plastics was recognized with an Illinois Governor’s Sustainability Award for its eco-minded efforts, joining companies like Abbott Labs, Caterpillar, and Silgan Containers.

 

Established in 1987, the Illinois Governor's Sustainability Award recognizes private and public Illinois organizations that have implemented outstanding and innovative sustainable techniques or technologies, demonstrating a commitment to sustaining environmental, social and economic health. Per the Awards’ website:

 

Governor's Sustainability Award winners are an elite group of committed leaders reducing environmental impact and contributing to the growth of a more sustainable Illinois economy. By prioritizing sustainability throughout their operations, programs, technology, products and company culture, they serve as a model within their industry and community.

 

Approaching Zero Landfill
Hoffer’s efforts towards sustainability are certainly award worthy. Going back to 2007, when the third-generation family-owned company in South Elgin, Ill. published its first Sustainability Report, Hoffer has been committed to greener operations. Among the highlights in its 2015 award-winning submission:

 

By 2010, after initiating a facility wide 100% recycling program in 2007, less than 1% of the 24 million lbs. of the resin used in manufacturing ended up in landfill.

 

In 2012, the facility’s old lighting was replaced with high efficiency fluorescent lighting, generating annual savings of approximately 1.7 million kilowatt hours of electricity and 1200 metric tons of carbon dioxide.

 

In 2014, it implemented a high cycle water treatment program, saving an estimated 1.2 million gallons of water, annually.

 

Going forward, Hoffer’s sustainability goals for the year 2020 include a 50% reduction in overall water usage and a further 20% reduction in energy consumption per unit of production. 

Hoffer Plastics 2015 Illinois Governor Sustainability Award




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