FLORENCE, KY. - Officials at Krauss-Maffei Corp. want to shed the company's image of selling injection molding machines only to specialty manufacturers such as compact disc, medical and automotive molders. The company will continue to serve those key markets, of course. But Krauss-Maffei has added a new target: custom injection molders.
Selling machines to custom molders may not sound like a revolution, but it has changed how business is done in Florence, home of the U.S. unit of Krauss-Maffei AG. U.S. customers have perceived the German company as rigid - not the place to go for a deal.
``We're going to get as creative and as aggressive as other companies out there,'' said Michael J. Santa, executive vice president of the injection molding division.
The goal is simple: Move more machines.
``What we decided to do is generate more volume in terms of units sold, and the best way of doing that is to focus on the market that buys the most volume, and that's the custom molding market,'' Santa said.
The changes started in 1994. In the past, specialty molders accounted for about 80 percent of Krauss-Maffei injection presses, and only 20 percent came from custom molders. Now only about 35 percent of the company's business comes from specialty machines.
Krauss-Maffei expected to sell more than 80 machines in 1994,with sales of $20 million. In a typical year, 55-65 of the Munich, Germany-made injection presses are shipped out of Florence. Clamping forces range from 40-4,400 tons.
More custom molding sales helped boost unit volume, Santa said. But 1994 was a good year for specialty presses, including thermoset molding machines.
In an November interview, Santa, a 12-year veteran of plastics machinery sales, outlined a four-point strategy for reaching custom molders:
For quicker delivery, ship machines from inventory rather than order them from Germany.
Work with outside lenders to set up creative financing pack-ages.
Accept trade-ins from buyers of new machines, working with used-machinery dealers. In the past, companies had to get rid of their own used machines.
Boost local service and support, with offices in Chicago and Oakdale, N.Y.
Krauss-Maffei also has decided to stop using outside sales agencies and distributors.
``We're able to control our costs by taking a direct-distribution approach,'' Santa said.
Also helping the German company are higher prices for Japanese machines thanks to the strong yen.
And the German company enjoys greater buying power of machine components because of its size. Krauss-Maffei owns injection press makers Netstal-Maschinen AG of Switzerland and Billion SA of France. And Krauss itself is owned by Mannesmann AG, parent company of Mannesmann Demag AG, which owns German press maker Mannesmann Demag Kunststoff-technik and Van Dorn Demag Corp. of Strongsville, Ohio.
The rapid globalization of the plastics machinery industry could mean U.S. manufacturing for Krauss-Maffei - someday. Company officials built the Florence facility in 1986 with an eye toward making injection presses there. Right now, the building is used to stock spare parts and presses shipped from Germany.
The building is big enough - 105,000-square-feet - and is equipped with heavy-duty cranes. Technicians assemble about 30 percent of an average Krauss-Maffei extruder in Florence. They assemble the company's reaction injection molding machines sold domestically.
Will injection molding ma-chines be next?
``Right now our plans call for evaluating that on an annual basis,'' he said, adding that it could happen in three to four years.
``As our unit volume goes up, and if it goes in accordance with our projections, we will reach a unit volume point at which it becomes financially feasible for us to do some assembly or, to some degree, some manufacturing here,'' he said.
