Due to cultural shifts and the rise of offshore outsourcing, mold and die makers have to contend with a radically restructured industry. Here’s what it takes to thrive in this new climate:

The domestic die/mold industry is undergoing dramatic change. Globalization is making this traditionally competitive business even tougher. As a result, die and mold makers must rethink both their short-term and long-term strategies. The tooling industry as a whole—which counts die makers and mold makers as its two most prominent groups—is not just experiencing a temporary decline but a complete restructuring with far-reaching implications. The sweeping changes in the industry are reflected in mergers and acquisitions, as well as in new cooperative and collaborative endeavors entered into by small- and medium-sized tool shops.

Adapting to the changing times is imperative for die and mold makers. Tool making has undergone a cultural shift, moving away from being considered a craft demanding high degrees of skill to being increasingly viewed as a commodity—something that anyone can perform with the right technological tool at hand, such as 3D parametric solid modeling, rapid tooling and high-speed machining, etc. As a result, die and mold makers can’t rely on old business models but must instead focus on targeting niche markets and developing specialized products, materials, processes and customer knowledge in order to survive in today’s market. In other words, they must try to compete on value instead of cost.

Adding value is not just a matter of offering more services. “There are many processors who have grown their businesses in recent years by providing additional services such as finishing, decorating, assembly, packaging and inventorying products for their OEM (original equipment manufacturer) customers,” consultant Glenn Beall tells Modern Plastics. “It is, however, becoming increasingly difficult for processors to receive a fair profit for these added services unless they are tied to a specialty. Such a specialty could be an in-house painting line, or a vacuum metalizing or electroplating capability. I would speculate that you could count on one hand the number of U.S.-based injection molding companies who do in-house electroplating.” In short, the key is to combine added services with specialization.

For example, Axilone USA (New York and Connecticut)—a small cosmetics molder—stays competitive by specializing in and offering advanced design services. Last year, the company became one of the few small to mid-sized cosmetics molding firms to start utilizing 3D CAD (computer aided design), which has allowed the molder to provide sophisticated design support to customers. Because product appearance is paramount in the cosmetics market, OEMs are constantly seeking ways to differentiate their wares, and Axilone helps them do just that. “Everyone competing in the market has good quality and service—otherwise they’re out of business,” Eric Bigotte, president of Axilone, tells Injection Molding Magazine. “We compete on price and technical support. Most cosmetic OEMs have downsized their engineering departments by 80% or more, so being able to offer part and tool design is critical for a supplier.”

Traditional strategies no longer suffice because of the rapid spread of offshore outsourcing. Die and mold makers have been heavily reliant on the transportation market (chiefly automotive), but now that the automotive sector is transplanting manufacturing to overseas locations, die and mold makers are reeling, particularly small, family-owned shops with five to 100 workers. Considering that an estimated 60% of stamping dies and 40% of plastic molds are employed directly or indirectly by automakers around the world, it comes as no surprise that offshore outsourcing has taken such a heavy toll on smaller tool shops. In fact, according to several sources, an estimated 150,000 tooling jobs have been lost in North America since 2000 due to offshoring. Additionally, the U.S. injection molding machinery market has shrunk by almost 50% over the last five years.

Indeed, the die and mold industry has experienced tremendous change; it’s no longer simply a craft but a multifaceted business. And to thrive in this intensely competitive environment, die and mold makers must learn to specialize, beef up services, add value to products, and seek niche markets.

Sources:

Tool and Die Makers Must Adapt to Thrive
Jeffrey Rowe
Advanced Manufacturing, March/April 2004
www.advancedmanufacturing.com

Time is Running Out for Trade Molders
Peter Mapleston
Modern Plastics, January 1, 2004
www.modplas.com

Fantastique! Multimaterial Design in 3-D
Michelle Maniscalco
Injection Molding Magazine, February 2004
www.immnet.com

Resources:

F&M (Fabricating and Metalworking) Magazine Online www.cuttingtoolonline.com

Injection Molding Magazine www.immnet.com

Job Shop Technology Online www.jobshoptechnology.com

Manufacturing Center www.manufacturingcenter.com

Plastics Technology Online www.plasticstechnology.com