With all the consolidation taking place in the plastics industry these days, is there still room for the little players? As small, entrepreneur-owned molding companies disappear from the landscape to be replaced by the large, multiplant conglomerates, there are two groups that stand to lose out.
One is the entrepreneur molder with fewer than five presses, who dreams of catching on with big-name original equipment manufacturers.
As recently as 10 years ago, small molders could start out getting one or two jobs from a company like IBM or Hewlett-Packard, attach themselves tothe company and grow their business. There are several large molders today that started out that way.
Chances are that won't happen in today's environment. Large OEMs do not want to do business with the little players anymore. Small molders don't have the depth of talent, equipment, balance sheet, supplier clout or services required by Fortune 500 customers.
Many molders say the magic number for being around in the year 2000 is $100 million in annual sales.
Anything less, and a molder will struggle to compete.
``There will always be a role for the small molders,'' said one molder. ``But the big guys will crowd out the little guys in serving large customers.''
The other group hurt by all this consolidation is the small OEM or individual who needs a few hundred to a few thousand parts. These customers gravitate to smaller molders for the personal attention, and seldom are they turned away because the job is not big enough. These customers now have a tough time finding molders to take their work.
One small molding company, after being acquired by a large corporation, weeded out 100 ``marginal'' customers-those with work that didn't fit the parent firm's focus or offer large enough volumes to make them profitable.
That leaves a lot of customers running around trying to find a new molder.
I would like to believe there is still room for smaller, entrepreneurial companies, but those in the industry have their doubts. As one molder put it, ``We knew several years ago that to be successful, you have to be big enough to be important to both your customers and your suppliers.''
In the jungle of manufacturing, it's really all about survival of the strongest.
Goldsberry is a Plastics News correspondent based in Phoenix.