From Plasticstoday
Clare Goldsberry
Published: December 19th, 2013
The global mold manufacturing industry is generally healthy, having come back nearly to prerecession levels in many parts of the United States and Europe. However, there are several stressors that continue to apply pressure to the industry.
The industry continues to be fragmented and consisting primarily of small, privately-owned enterprises. The fall-out of mold shops during the 2008-2010 recession removed many of the weaker companies that did not have the financial wherewithal to weather the storm. That wasn't a bad thing, however, as it reduced the pressure on the larger shops with higher levels of technical capabilities whose utilization and profitability were being threatened not
only by Chinese mold companies but by the smaller, local competitors who often bid jobs at less-than- profitable prices.
With the competitive threat from Chinese companies lessening over the past few years as costs increased (wages, raw materials, and shipping in particular), and with the smaller competitors gone from the landscape, those mid-sized and larger companies appear to be gaining ground with new business opportunities and increasing backlogs. In fact, from what we're hearing at industry trade shows and anecdotally from various companies, OEMs are willing to pay more to get their molds built in a shorter amount of time. While price remains important, lead time has jumped ahead of price as a priority in some cases.
The skills gap
The lack of skilled employees-known as the 'skills gap' is also putting pressure on mold manufacturers. Much of the tribal knowledge of the older employees is being lost as they retire. Younger workers do not have the advantage of working with experienced moldmakers for several years to gain that knowledge. That has led to a renewed emphasis on apprenticeship programs, and greater involvement of individual moldmaking companies with local community colleges and universities and trade schools to reestablish manufacturing skills programs for the metalworking trades.
However, with that said, moldmaking technology has evolved to a point where there is a significant reduction in the number of man-hours it takes to build a mold. High-speed machining, robotic automation and the development of multi-machine work cells run by a single machinist/operator mean that the average mold shop is able to reduce the number of employees it takes to meet mold build requirements with shorter lead times.
With the advancements in machine tool and automation technology come the need for employees that can provide automation integration, and in-house maintenance and repair of the machine tools. As mold companies become larger to handle more business and meet lead time demands, it takes more management skills as well. One job in high demand currently is program/project managers who can provide scheduling, customer communication, information dissemination, and ensure the timeliness of the project's completion.
Many mold manufacturing companies are providing value add services such as prototyping of the part through various 3D additive manufacturing processes or with a single-cavity "pilot" mold to provide re-design and engineering opportunities prior to the multi-cavity mold build; material flow analysis as part of the mold/part design phase; mold tryouts that often include process validation and qualification in accordance with FDA requirements (for medical devices and products); and the integration of automation for large molding cells.
Pressure from OEMs
There is also the pressure from OEMs that many mold suppliers face, in particular from the automotive industry which is leaning on all its suppliers to increase capacity and manpower in order to reduce lead times and eliminate bottlenecks in the supply chain as the numbers of vehicles produced begins to ramp up in 2013 and 2014.
Mold suppliers are feeling the pressure of increased responsibility from their OEM customers for the quality of the parts the molds make, not only at the molding level but throughout the life of the product. Medical device OEMs being subject to class action lawsuits for defective products that cause physical harm to patients, might soon take a lesson from some of the automotive OEMs who are making their suppliers liable for defective parts that result in vehicle recalls, even if the parts are made to OEM specifications.
This kind of cradle-to-grave responsibility-that used to be just the purview of the OEM-is sure to add to the cost of doing business with many of these OEMs who are becoming more dependent upon mold suppliers for engineering expertise and design assistance. With more value-added services comes greater responsibility.
Consolidation
Consolidation has altered the landscape somewhat over the past few years. Mergers and acquisitions among some of the larger mold companies have created a few "mega-shops" in the mold manufacturing industry. There have also been some acquisitions of mold manufacturing companies that want expanded capabilities such as Husky Injection Molding Systems acquisition of KTW,
a European mold manufacturer known for its large, multi-cavity molds for the packaging market. In a few instances, OEMs have purchased mold companies in a reversal of a trend that had them divesting of moldmaking and molding just two decades ago.
Mold manufacturing will continue to see shifts and changes, as the industry strives to keep pace with the OEMs and molders that make up their customer base. They will continue to add value where it makes sense, and provide more services to increase business opportunities. Molds are complex, costly manufacturing machines in their own right and the industry needs the human skills, experience and expertise; the improving technology, and the increasing ability to be financially stable enough to meet demands of global customers.
