By: Bill Bregar
March 4, 2014
MEADVILLE, PA. — Technology and scientific molding help Tech Molded Plastics Inc. produce small precision parts for automotive, electronics and medical — but the real keys are teamwork and hands-on management at the family-owned molder.
Tech Molded celebrated its 40th year in business in 2013, and today, the company stands out in the crowded plastics and mold making region of Meadville and Erie in northwestern Pennsylvania.
Now Tech Molded Plastics stands out on a larger stage, as winner of Plastics News' Processor of the Year Award. The molder and mold-maker scored high marks from the judges — Plastics News reporters and editors — on all seven criteria, and is especially strong in four of them: financial performance, employee relations, technology and industry and public service.
Tech Molded Plastics won the award over the two other finalists, AMA Plastics Inc. of Riverside, Calif., and Protoplast Inc. of Cobourg, Ontario. All three finalists do custom injection molding.
Plastics News presented Tech Molded Plastics with the Processor of the Year Award and honored all the finalists Feb. 25 at its Executive Forum in Tampa, Fla.
A decade ago, Tech Molded Plastics' business depended on one major customer, but the Hanaway family owners made diversification a priority. Today, even though automotive generates 65 to 70 percent of its sales, Mark Hanaway said the company molds some parts used in a wide range of vehicles. The remaining sales are evenly split between medical and electronics. No one customer accounts for greater than 25 percent of the total; no two combined are greater than 45 percent, he added.
"A lot of the parts we produce are cross-platform, cross-market type parts," Mark Hanaway said. "You're looking at interconnect devices and the complexity of the connector-type parts we produce — the same connectors not only in automobiles, but also in aircraft."
Components molded in Meadville end up in hand-held diagnostics and medical devices like heart defibrillators.
"And we have sensor parts out here that go into sensor housings, which are included in automotive safety. So instead of going to one [original equipment manufacturer], it goes to almost all the OEMs," he said.
The parts are tight-tolerance and tend to be small, since Tech Molded's 32 injection molding machines top out at 440 tons of clamping force. The company runs Nissei and Arburg presses, each one equipped with a Yushin robot. More than half are all-electric machines.
Bill Hanaway, a journeyman toolmaker, and his wife Eva started Tech Molded in a rented garage in 1973 with a couple of used machines for mold trials. Their sons, Scott, Mark and Doug, grew up in the business sweeping floors as teenagers. Now they retain their parents' enthusiasm for plastics.
"It's a passion," said Scott Hanaway, the president and CEO. "You know, we started out building molds. It was like having — dad always referred to it as 'a new baby was born,' you know? To build that mold and see it produce that part, and produce it to print. And now we're building complex things, with automation and packaging and everything that goes along with it. The passion. It's not about, 'Hey I got to get 50 molds out this month,' or 'Sales gotta be this.' We don't run the operation by a strong formal budget. I mean, we use principles. We do keep score. We talk about it on a monthly basis with our employees. But it's still a passion, you know?"
Scott and Doug are both toolmakers. They talk blue-collar, with a twinge of a Pittsburgh accent. Mark went to college, studying business and organizational communications, then went into the banking industry in North Carolina. When their father died in 1998, he decided to return and help run the company. Articulate and a big thinker, Mark handles the marketing and some administrative functions. He's often the one quoted in local newspaper articles. Mark and Doug are vice presidents.
All three credit their parents for their values and direction in life. When he was making molds, Bill Hanaway saw a need for heat treating services in the Meadville area, so he set up an operation, self-taught. Bill and Eva also ran a side business with a backhoe to dig footers and septic systems in the area.
"We grew up in a hands-on family," Mark Hanaway said. Scott notes the "can-do mentality. Let's figure out how to make this work. That's kind of the culture here."
Bill and Eva built a factory in the early 1980s, then expanded into molding. Tech Molded built molds for Plastek Industries Inc., and Bill caught the molding bug from Joseph Prischak, a legend up in Erie.
"They got to know each other, and dad learned more about the plastics industry, and loved the smell of plastics. So we got into molding, and he taught himself how to run a molding press," Scott Hanaway recalled.
The computer sector was taking off, fueling demand for connectors. Tech Molded has become an expert in running high-temperature, glass-filled materials such as fluoropolymers, polyphylene sulfide, nylon and liquid crystal polymers. Resin conveying is done from gaylords, reflecting the wide variety of materials. Chilled water and other utilities run overhead.
The company developed skills at making hot runner molds for those specialized parts, using several major component suppliers, such as Gunther, Ewikon, Polyshot and Husky. (One large-volume part running right now on a multi-cavity mold in Meadville is a washer-shaped nylon component that goes into a universal joint in the drivetrain of a car).
As Tech Molded grew, it built the factory building that now houses the headquarters in the mid-1990s. Then, in 2011, the company doubled its size by purchasing a building next door, an investment of more than $1.5 million for the building and improvements. A corridor connects the buildings.
The mortgage for that last expansion is almost paid off. Most of the time, the Hanaways fund bricks-and-mortar additions and new machinery from cash flow. The company carries very little debt. That pay-as-you-go mentality also goes back to their parents. Scott Hanaway remembers how as a kid, when he wanted to buy a 10-speed bike, his father took him to the bank where Scott took out a loan. He paid it back from his paper route.
"And we've pretty much cash-flowed most of the equipment investments," Scott said.
The conservative approach to debt has paid off, leading to what the Hanaways said is 20 straight years of profitability and freeing the owners to make moves during economic downturns, when terms for equipment and construction are more favorable.
The company invested in the recession, by expanding its manufacturing space and boosting training.
"During the downturn we didn't release people like a lot of companies did," Mark said. "We then invested in their training. We had them here working on systems, working on lean and efficiency aspects of the organization."
Tech Molded reorganized the toolroom, and invested money in new metalworking equipment. That was less disruptive because business had slowed.
Tech Molded had 2013 sales of $17.7 million in 2013. That's a 10 percent decline from 2012, reflecting the loss of one customer. But it's still twice as much as the recession year of 2009.
Tech Molded scored its highest marks in the award judging for employee relations. The company employs 120 people. Ninety of them work in plastics molding — including eight certified RJG Master Molders, a very high concentration, enough so that every shift has at least one Master Molder.
The 30 toolmakers each go through a certified apprenticeship, bringing a strong level of expertise. The company employs another six tool designers. Mold making has been a strength since the company's early days.
But all plastics employees get the chance to add more skills, by progressing through four "operational training requirement classifications," more commonly called a career skill ladder. New hires go through a 30-day mentoring program, then must pass classroom courses and on-the-job training fundamentals. They move to Class C semiskilled status with 520 hours of classroom instruction and shop-floor training. Class B, a skilled employee, undergoes 1,040 hours, or six months' worth, including classroom workshops, plant experience and four certification requirements, and mentoring a newly hired employee.
A dedicated training room holds about 40 people at a time. It's tied directly into production.
Each move up includes higher pay.
"It means compensation increases. It means that your awareness of the world around you in this operation grows tremendously," Mark Hanaway said.
Class A employees are the experts. Reaching this designation takes a year, or at least 2,080 hours, and proven ability in such skills as leadership, continuous improvement, quality and blueprint reading.
Mark Hanaway said the career ladder is important for building a crop of new skilled people to replace others who move up, or retire.
"Succession is not just for ownership. It includes every position within our organization," he said.
And the people who get to Class A have a good understanding of the entire scope of business, such as the cost of manufacturing a part, and how the quality department and toolroom tie in to the whole operation. They become much more valuable to Tech Molded, and have the versatility to move to many different positions.
Mark Hanaway said it's like a degree in manufacturing. "By the time they get to that top level … they're not thinking about a one-day activity. They're thinking about how we make it work, and how we make it sustainable."
Once a month, management meets with all employees, on all three shifts, to go over strategy, sales and new business, quality and scrap rates, financial performance and other major items.
Walking around the plant, it's clear that Tech Molded is a family owned business. Management and hourly employees work hard, but they joke around. The Hanaways certainly aren't chained to their desks.
"It falls back to the direction from when mom and dad started the company. Those principles of: You're on the floor, you're involved. You're engaged," Mark said. I think each of our people have that sense of ownership of their function and their role. Not such as a venture-capital environment, where it's all about bottom-line dollars."
Mark said the emphasis is providing value to customers and building an educated, trained workforce.
"I think Scott has been excellent at driving that philosophy all the way through. If you look at the culture, it's not so formal that you can't sit down with any individual and come up with a solution," he said.
And it's a safe place, having gone 10 years with no days lost for injuries. The last injury was when an employee walked over a pallet on the floor and twisted her foot. Without that, it would stretch to 20 years, according to the owners.
Quality goal: Perfection
Molding precise parts requires a vigorous quality effort. Tech Molded Plastics has been ISO and QS certified since 1997. And a detailed program management system carries jobs through from customer launch to design, production and shipping.
A computer terminal stands next to every molding machine. A click of a mouse allows technicians and operators to scroll through different screens, to view detailed information about all aspects of a part, including work instructions, mold information and history, any quality alerts and even the final design reviews.
All departments are tied together through an Intouch production monitoring system that connects into Tech's enterprise resource planning system, which helps with everything from machine scheduling to packaging. Tech developed a project lifetime quality management tool linking everybody for all phases of mold design and build, sampling records, manufacturing and shipping. Fiber optics join the whole thing together. The company has cut its scrap in half, down to about 2 percent of sales.
The end result is the quality bottom line: zero external parts per million shipped out, for several years. Any mistakes get caught.
When the application needs it, Tech Molded's toolmakers build RJG's eDart system of pressure transducers into the mold. Tech Molded also uses post-gate sensors.
It all pays off. Annual customer surveys show Tech Molded's performance level has increased the past six years, exceeding 100 percent satisfaction. Four key areas of strength are pricing, on-time delivery, customer service and fast quote response time. Giving a response to requests for quotes within 24 hours is standard operating procedure at Tech Molded.
Even though Meadville has well-known heritage of plastics and machining, local companies are facing the nationwide issue of luring young people. They take the challenge seriously at Tech Molded Plastics, hosting frequent tours and working with local colleges like Penn State Behrend, Grove City College and Allegheny College. In mid-2013, the molder hosted a group of MBA students from Penn State's Smeal College of Business, and teamed with them to prepare a consulting report as a school project.
For more action, Tech sponsors Meadville High School's entry in a battling robot competition, called RoboBots. John Evans, a design engineer, helps the students design and build the technological beast warriors.
The company sponsors the requisite local sports teams. But young local brains get a workout, too, as Tech Molded helps organize summer camps for material science and engineering.
And Tech strongly supports local business and education facilities like the Precision Manufacturing Institute in Meadville, and the Manufacturer & Business Association, which runs a conference center in Erie.
The Hanaways aren't afraid to comment — in public fashion — on local and national issues, such as challenges facing U.S. mold makers.
Last year, Tech filed a complaint with the state utilities commission about intermittent power outages that hit the Meadville area. The company also published a white paper from results of a survey, showing what traits original equipment manufacturers value from their suppliers.
Tech Molded Plastics is solid on the technology side. The plant is clean and orderly. Everything is labeled and well-organized. Conveyors are staged and ready to go for specific jobs.
Some jobs run at high speeds, such as 16-cavity and 32-cavity molds on six-second cycles. Helping to balance multi-cavity mold filling is the MeltFlipper melt rotation technology from Beaumont Technologies Inc. in Erie.
The production monitoring system records key variables for every shot produced.
Tech Molded Plastics also organizes workcells to do complex assembly — run by employees and in some cases, fully automatically via bowl feeders and robots. One example: a 350-ton all-electric Arburg molds a flat part for a printed circuit board. A Multilift robot removes the parts and puts them a fixture for cooling, arranged for cavity separation.
Tech Molded also co-developed automation equipment for a three-component aerospace assembly that increased the output from 50,000 every ten days to 100,000 every two days. Product quality improved four-fold.
Family ownership gives some important advantages. Scott Hanaway explains: "We keep that customer happy… You try to tell your people, we got short-term decisions, we got long-term decisions. You got to balance those so that we're in this for the long run. We often use the fable that this is the golden goose — so you got to take care of the goose, so it keeps making the egg.
"And we have a principle. We put money back into the business. As owners, we don't suck out