Led by the automotive, computer and electronics sectors, processors have assumed a multitude of new responsibilities and now routinely perform many tasks previously handled by the OEMs they serve.
Their duties range from front-end product design and engineering to decorating and assembly, right through to full-blown project management and end-product packaging and distribution.
As a result, some processors are creating new departments to oversee the purchase of such subcomponents as motors and circuit boards, reorganizing plants into manufacturing cells to expedite press-side product assembly, and buying or partnering with companies they used to (and perhaps still do) consider competitors.
Nypro Inc. has seen such significant changes that in the past year it added the words ``and related manufacturing solutions'' to its mission statement about aiming to be the best in the world in precision molding.
``Early on, we were proactive, suggesting we could provide full services,'' said Randall S. Barko, corporate vice president of marketing and sales for the Clinton, Mass.-based injection molder and contract manufacturer.
In fact, a decade ago Nypro often was willing to handle more than many original equipment manufacturers were willing to outsource. But today there is little that OEMs are not willing to outsource — and the added responsibilities can yield unexpected benefits.
For example, Nypro transferred its technique for robotic spray-shielding of cell-phone enclosures in its Irish plant to China when it started up a molding facility there. The firm then parlayed that technology into spray painting, which eventually led it into laser-etching for auto parts.
Barko said Nypro in the past two years has added an entirely new element by hiring half-a-dozen ``sourcing engineers,'' who are selected largely on their understanding of various nonplastic subcomponents Nypro now has to buy, assemble and install.
Stuart Benton, who in August stepped down as chairman and chief executive officer of Trend Technologies Inc., started to see processors take on more responsibility about five years ago.
``It was customer pressure — they drove this,'' admits Benton, who steered Trend's strategic direction after two New York investor groups teamed up to buy the former Trend Plastics Inc. and Tool-Tech Corp. in March 1997. Benton, 58, retains a seat on the board and a substantial ownership stake in the San Jose, Calif.-based maker of electronic equipment enclosures and related components.
``Before we bought Trend, Sun Microsystems, Apple Computer and Dell Computer were among the first [OEMs] who told plastics processors to put plastic and metal together. Then they wanted you to add the cabling and speakers. Then test the electrical continuity and the speaker systems.''
Trend listened and responded. In December 1997, the company bought Illinois metal stamper Cam Fran Tool Co. Inc.
Trend's newest plant — built in Round Rock, Texas, to serve nearby Dell — contains integrated plastic molding, sheet-metal and assembly operations to make computer enclosures. Now it is even starting to install power supplies and floppy-disk drives. Several other molders of plastic computer enclosures also are teaming with metal stampers.
The biggest challenge? ``Program management to tie together multiple plastics, metal and electrical parts. That's one of the toughest things we've had to learn,'' Benton said. Trend even hired someone from Apple Computer Corp. to run its new program management unit.
Richard Wambold, executive vice president of giant thermoformer and film extruder Tenneco Packaging, summarizes today's thrust as: ``Logistics, logistics and more logistics. [You're] constantly trying to figure out a way to squeeze costs out of that side of the supply chain, whether it's by purchasing another product on the outside and combining it on your truck, or putting in a local warehouse, if you don't have one,'' to shorten delivery lead times.
Assuming such responsibilities ratchets up the need for sophisticated — and costly — resource-management software systems. Lake Forest, Ill.-based Tenneco Packaging, for example, is in the third year of what Wambold called a megamillion-dollar project to install and implement a corporatewide business software system.
``We were aware [of what was involved] and I'm pleased we did it, but it's still a millstone around your neck.''
Some caution that companies must take care when deciding how to broaden their mission. ``Pick your horses and those are the ones you ride. You need to choose your strategy carefully,'' notes George Votis, 37-year-old, New York-based chairman and chief executive officer of Moll Industries Inc., an acquisitive plastics injection and blow molder that has sales of more than $415 million and offers a broad range of value-added services.
``It's easy to start as a plastics molder and become a big assembler,'' he said in a recent telephone interview. ``As a company,'' he warned, ``you better be clear about what you are.''
La Vergne, Tenn.-based Moll's portfolio includes everything from design, engineering and various types of molding, to automated assembly and secondary operations such as the ability to insert bristles into toothbrushes.
Mike Chastain, vice president of operations for custom molder SPM Inc.'s southwest region, said that in the past four years, SPM's Anaheim headquarters facility alone has added plasma-etch vacuum deposition, two-shot and thin-wall molding, in-line laser degation, clean-room multicolor screen pad-printing, applique in-mold decorating and highly automated assembly.
The 12-plant firm — whose British parent, Coats Viyella plc, agreed Feb. 17 to sell it to a U.K. venture-capital firm as part of a larger deal — also now offers global tooling management and supply-chain program management.
``You can't possibly have this caliber of best-in-class people in all your plants,'' Chastain said. As a result, SPM has chosen to perform certain value-added operations in strategically located plants around the world, closest to the customers that need them most.
Perhaps nowhere has the push to shoulder more responsibility been more pronounced than in the automotive market, where suppliers like Grand Rapids, Mich., injection molder ADAC Plastics Inc. have been heading down that road for a decade or so.
``It was an internal vision that [President Ken Hungerford] had, and we conveyed it to the OEMs,'' said Jim Teets, vice president and managing director of ADAC's door components division. ``We were a shoot-and-ship molder originally ... but in the last four to six years, the black-box concept has really taken hold.'' By that he was referring to the automakers' penchant for providing suppliers with basic data, clay samples and rough ideas on style and size, and then leaving it to those suppliers to come up with a workable, affordable product or system design.
The name ADAC actually is an acronym drawn from names of the founder's wife and three children, but Teets said that they joke within the company that it stands for something else, something that symbolizes today's business climate for all plastics processors: ``Another Day, Another Change.''
