CLINTON, MASS. — In a sense, Nypro Inc.'s first international venture did not begin with a plant in Taiwan 20 years ago. It started with now-President Gordon Lankton's nine-month, $5-a-day motorcycle trip from Germany to Japan in 1956.
Today the legacy of both those ventures can be seen in Nypro's 22 plants worldwide — eight outside the United States — and sales and profit that have climbed annually for a dozen years. Sales now are at $433 million, with $20.9 million in profit, up from $72 million in sales and $1.2 million in profit 10 years ago.
Nypro is Plastics News' 1997 Processor of the Year.
Lankton, who retains ownership of two-thirds of the Clinton, Mass.-based injection molder, has tried to foster an entrepreneurial management style by giving each of its far-flung plants considerable autonomy. For example, each facility has a board of directors made up of employees from other plants.
That structure allows the company to keep a balance between standardizing all its plants so they can serve the company's global customers, while at the same time encouraging innovation developed by each plant, said Clayton Christensen, a Harvard Business School professor who has written two case studies on Nypro and its management.
``Basically what they've done is create an internal marketplace for the technology,'' Christensen said. ``By having interlocking boards and other methods of surfacing the innovations, they get the information out.''
Plants are ranked against other facilities, creating a healthy competition, he said. But the corporate culture also strongly encourages sharing information among plants.
``I've never seen anything like it,'' Christensen said.
``This is the way Nypro has been able to expand around the world,'' Lankton said. ``Otherwise our bureaucracy would be unmanageable.''
The boards are a ready source of knowledge for plant managers, said John Casali, engineering director for Nypro Clinton and general manager of the company's Advanced Technology Center.
Not that the structure is without risks, Lankton said. A particular plant, for example, may not put enough resources into a job sent to it by another plant because the customer may not be as important to it, he said.
Lankton is quick to note that some of the things the company is known for — globalization, its management structure — are borrowed from other sources or developed piecemeal over time.
Having a board at each plant came from seeing how much the firm learned while working through difficult problems with its foreign partners, such as Japanese firms Mitsui and Co. and Sailor Pen Co., and Switzerland's Netstal-Maschinen AG.
And the company's global push, for example, came from simply following customers such as Hewlett Packard and Abbott Laboratories to overseas factories.
But Lankton does credit his post-Army, globe-spanning motorcycle trip with giving him the moxie to begin the global push, when much of the industry was still thinking in terms of small, regional shops. Even today, representatives of many U.S. plastics companies who approach him at industry events know little about overseas investing or the country they want to go to, Lankton said.
Not that Nypro has not had its share of rough spots.
In the mid-1970s, the company's Puerto Rican plants were carrying the company's Clinton facilities, and in the early 1980s, Nypro found itself in debt and close to bankruptcy for a time.
One of its early overseas venture, a wholly owned operation in France, failed miserably.
The company was unprepared for dealing with the French bureaucracy, which insisted on reviewing the company's books before a layoff and then telling the firm which employees could be downsized, based on how sympathetic they were to the government's politics, Lankton said.
That led to the company strongly preferring joint ventures to deal with local questions, and relying on 50-50 partnerships when possible, Lankton said.
The global push is elementary mathematics for Nypro because the emerging markets of China, India, Indonesia, Brazil and Russia make up half the world's work force but have just 8.1 percent of production and trade, he said.
Nypro continues to grow globally and in the United States.
This year the company bought DJ Inc., a Louisville, Ky., injection molder with $81 million in sales, to give it a bigger foothold in automotive and to gain plants in El Paso, Texas, and Kentucky, where Nypro did not have a strong presence, he said. Automotive, however, will not become a priority for Nypro, Lankton said.
The company plans to announce details of a new plant in the Dominican Republic this month, a wholly owned venture to serve the health-care market, Lankton said. And the company recently purchased majority control of a money-losing joint venture in Russia, he said.
Russia has little U.S. investment and its economy has collapsed to half the size of California's. But Lankton told a meeting of his managers recently that the company needs to be there to establish a presence for later, when the country of 150 million people begins to grow again.
``The ultimate market in Russia may not come in my lifetime, or in yours,'' he said.
What sets Nypro apart is its willingness to invest in plants near its customers, said Michael Brown, manager of manufacturing engineering at Abbott Laboratories in Abbott Park, Ill.
``The main reason we use them so much is, we were able to convince them to put a plant down the street from us,'' Brown said. ``I've tried to talk other companies into doing that, but they want years of guaranteed business. We didn't give them that.''
As a result, Nypro has about one-third of the injection molding business for Abbott's medical diagnostics division, Brown said.
The plant still has not made money but it illustrates how Nypro is willing to build an expensive and top-flight facility wherever it goes, said Robert Hoffer, president of Hoffer Plastics Corp. in South Elgin, Ill. Hoffer and Lankton are friends and competitors, and Lankton has given strong financial support to the National Plastics Center & Museum in Leominster, Mass., where Hoffer was board chairman from 1995 to this year.
``The fundamental difference between Gordon and myself is the willingness to go greatly into debt to build your business and make money,'' said Hoffer. ``Gordon is one of those people who works six full days a week. This is his hobby. He nurtures and develops each of those plants to be a reflection of his dream.''
A survey of Nypro's operations turns up many of the buzzwords of management textbooks:
Strict quality control, with 3.4 defects per million and ISO 9000 registration for 12 plants.
Profit sharing that averages 10 weeks' salary a year for most employees.
A company-run training program to combat persistent labor shortages common to the industry.
The Nypro Institute includes certified courses in injection molding and mold design, and partnerships with local colleges that make it possible to beef up skills or earn undergraduate and graduate degrees without leaving the Nypro office.
In customers' ever-increasing expectations of quality, Lankton said, the latest push is for dramatically reduced cycle times, in this case meaning the time from product development to market.
One of Nypro's larger customers, Motorola, is campaigning to reduce its cycle time 90 percent.
And since Motorola is expanding production offshore, the only way Nypro can hope to compete for that business is to be there also, so it can make product changes to accommodate Motorola's hyper development plan, Lankton said.
``Being next to the customer is so significant it outweighs almost everything else,'' he said.
Being next to the customer still requires Lankton to travel quite a bit, with trips to Russia, India and China recently.
Now, however, he brings a more seasoned eye to his journey, the motorcycle has been replaced by the jet and the travel budget is, understandably, a little bigger.