Analyst: Tooling shortage should inspire firms to reevaluate their businesses

By Kerri Jansen
Staff Reporter

Published: June 2, 2014 1:16 pm ET
Updated: June 2, 2014 1:19 pm ET

Image By: Plastics News file photo Laurie Harbour

Related to this story

Topics Injection molds, Molds/Tooling
Companies & Associations American Mold Builders Association

MILWAUKEE — With an anticipated tooling shortage on its way in coming years, toolmakers should evaluate their own businesses and look at ways to best prepare for future demand, says Laurie Harbour.

Last fall, her firm Harbour Results Inc. released its vendor tooling study identifying a $6 billion capacity gap between coming demand and current production. Harbour discussed ways toolmakers can maximize capacity at American Mold Builders Association’s annual convention, held May 14-16 in Milwaukee.

According to the study, in 2012 the North American automotive sector spent $9.25 billion on tooling, both plastic molds and dies; by 2018, they’ll need $15.2 billion. Though those numbers — which Harbour considers to be conservative — are for automotive, all industries can anticipate a similar gap, she said.

The number of tools per vehicle grew 20 percent between 2000 and 2013, and automakers expect that to grow another 25 percent by 2020, Harbour said. As the industry ramps up for increased sales and more new vehicles per year, toolmakers will feel increased pressure to produce while the OEMs they supply look to keep their costs down.

Though toolmakers face many external challenges to getting a tool done correctly and on time, about 10 percent of that gap is capacity toolmakers control, she said. One way automakers maximize their efficiency is to define a niche in which they can excel, she said.

“You have to ask yourself, ‘How do I make improvements? What do I do to differentiate myself so that I can survive and thrive in the industry?’” she said.

“Right now, I think companies have to really revisit and say, ‘What industry do I really want to be in and what’s my role in it?’ And find your niche or what your unique market is.”

Specializing in a particular area can improve a business’ hit rate, with less time wasted on quotes that go nowhere, and give OEMs another reason to keep tool production in the U.S. instead of sending it overseas.

Harbour’s team found an average hit rate among automotive tool makers of around 4-5 percent, she said. A company can improve that number by finding out what they can excel in, talking to their customers about what they’re looking for, and developing that area of their business.

“Those companies that have done a really good job carving out their niche and creating partnerships, they actually are seeing a much higher hit rate,” she said.

Another way to improve efficiency is to collect data on the company’s performance, Harbour said. Monitoring data allows a company to seek out wasted time and capacity and solve those problems.

“The biggest thing that we find in shops is rework hours, rework costs, machines that are not running at the uptime that they should be running at … unmanned time, planned hours vs. actual hours — gather that information and data and let the data tell you what needs to be done,” she said.

Though obstacles in the process are unavoidable, tool makers should focus on things they can control to best take advantage of future demand, Harbour said.

“I get that … program delays and completeness of data and unreasonable targets and all of those things have a huge effect on you and you have no control over that,” she said. “But … in terms of how I schedule, how I manage my rework and my quality loops, matching skills and running machines in an unmanned condition, machining programming and setup — all of these things are things you control and allow you to maximize the use of this production as much as you can. Ultimately this is the goal for every tool shop.”


Comments

Analyst: Tooling shortage should inspire firms to reevaluate their businesses

By Kerri Jansen
Staff Reporter

Published: June 2, 2014 1:16 pm ET
Updated: June 2, 2014 1:19 pm ET

Post Your Comments


Back to story


More stories

Spain's ITC Packaging acquires Coveris rigids plant

July 31, 2014 9:59 am ET

International packaging group Coveris Holdings has sold its Spanish business Coveris Rigid Spain, including an injection molding plant, to the...    More

Image

Austrian mold maker seeking North American manufacturing partner

July 25, 2014 1:49 pm ET

An Austrian mold maker is looking for a manufacturing location in North America.    More

Investigation continuing into injury at Windsor mold maker

July 25, 2014 12:57 pm ET

Canadian authorities are investigating an incident in which a worker's foot got caught in a machine at Crest Mold Technology Inc. in Oldcastle,...    More

Image

Tooling Technology has new private equity owner

July 25, 2014 11:55 am ET

New York private equity firm GenNx360 Capital Partners has partnered with management to buy Tooling Technology Holdings LLC, a diversified Ohio-based ...    More

Image

Columbine Plastics moving to new Colorado site

July 25, 2014 11:38 am ET

Custom injection molder Columbine Plastics Corp. plans to move from Boulder, Colo., to the Colorado Technical Center in Louisville, Colo.    More

Market Reports

Pipe, Profile & Tubing Extrusion in North America 2014

U.S. demand for extruded plastics is expected to grow by 3 percent in 2014, with PVC remaining the largest segment.

Plastic pipe will post the strongest gains through 2018, continuing to take market share from competing materials in a range of markets.

Our latest market report provides in-depth analysis of current trends and their financial impact on the pipe, profile and tubing extrusion industry in North America.

Learn more

2014 Injection Molding Industry Report

GROWTH, OPPORTUNITY IN SIGHT FOR INJECTION MOLDERS IN 2014

In the wake of the economic turbulence earlier in this decade, molders today find themselves in much better shape. Molders are gaining a competitive advantage by investing in people, equipment and seeking inroads into new markets on a global scale.

Growth in the injection molding industry is going to be driven by low financing costs and a continued move to reshore some business.

Learn more

Shale Gas Market - Analysis of North American Region

This report highlights the impact of shale-based natural gas on the North American plastics market and features an in-depth analysis of production trends in the United States during 2013 and a forecast for 2014 and beyond.

Learn more

Upcoming Plastics News Events

September 10, 2014 - September 12, 2014Plastics Caps & Closures 2014

January 14, 2015 - January 14, 2015Plastics in Automotive

February 4, 2015 - February 6, 2015Plastics News Executive Forum 2015

More Events