Will You Be Ready When Business Rebounds?

I consider myself an optimist by nature. I’m not a wild optimist—at least I don’t think so—so I don’t believe that our industry will return to the halcyon days of the late ’90s any time soon. But I also don’t believe the gloomers and doomers who say that business lost to low-cost nations is gone for good.

We’re already seeing molds that had previously been outsourced to China returning to our shores. Glenn Starkey and Cynthia Kustush of Progressive Components, a major supplier to moldmakers worldwide, wrote a comprehensive article on this subject that appeared in the January issue of our sister publication, MoldMaking Technology.

The folks at Progressive detailed various reasons for this comeback, getting input from moldmakers and OEMs on the front line of this issue. Among them: theft of intellectual property; extreme start-up pains upon mold delivery; greater appreciation that buying molds strictly on price—instead of cost—is not particularly savvy; and poor manufacturing quality.

The Starkey and Kustush article quotes John O’Kelly of PM Mold Co. Inc., a Schaumburg, Ill., molder and moldmaker: “The changed economy and the value of the dollar are why companies are really doing the math now. You have to look at the true costs. I can quote a mold offshore and get it for less, but that is just the beginning of the tooling investment. When you look at the cost of following the tooling, seeing all the cost factors that go into doing that are immense. The trips overseas are very expensive; you have shipping costs. Once the tool is back in the U.S., you aren’t going to ship that tool back to China for repairs or maintenance. If you are molding in China, you have to go over there and make sure the molding company is up to the standards of your customer. Many times they are not.”

Closer to our world of processing, we are starting to see the same kinds of things. Though no one will speak on the record, I have heard from enough people about Wal-Mart bringing back jobs to North American processors to believe it’s true. As I’m writing this, I’ve also learned that California-based Wham-O is once again having Frisbees molded on this side of the ocean. And on p. 22 of this issue, Carl Kirkland discusses how custom molder Rodon Group managed to recoup business that had previously been sourced from China.

Maybe these are all temporary market corrections. Maybe not. But what worries me is whether North American processors are truly ready to take advantage, if and when new opportunities start to emerge.

The other day I was talking to an equipment supplier who told me the standard he uses to determine if a processor is on top of his game: When he walks the shop floor with a client, he counts the number of operators per machine. If there are five or six or more for every machine, he says, then something is surely out of whack. A lot of time, he says, it appears as though something is out of whack.

I realize I have been harping on this subject for the last few months. But I see a glimmer of hope that a business turnaround is beckoning. For North American plastics processors, there can be no doubt that only the strong will survive—the most efficient, the most technically savvy, the ones who don’t just make parts but create value.

Does that sound like you?