Whether you have an infant that needs, well - cleaned up - or you just like to see lean-and-mean mass production, anyone can appreciate Precise Technology Inc.'s factory in Swedesboro.
Day and night, seven days a week, 10 Krauss-Maffei injection presses pump out thin-wall, polypropylene Pampers and Luvs baby-wipe containers for Procter & Gamble Co. That's all they make in the 4-year-old Swedesboro plant, dubbed Precise IML, for in-mold labeling.
From IML to assembly and through a vision-system inspection station, the wipe boxes flow in a steady stream to an automated, robotic packaging station. Just one employee driving a forklift loads filled shipping containers into trucks.
The plant ships four or five truckloads a day to P&G's baby-wipe factory just 90 minutes away.
No human hands need to touch the product at the highly automated plant, complete with presses custom-colored in ``Precise teal.''
Direct labor measures only about 3 percent of sales at Precise IML, vs. 10-12 percent on average at Precise's other plants.
Precise's level of efficiency, a strong link to customers with dedicated plants, and innovative employee programs helped the company become co-winner of Plastics News' 2002 Processor of the Year Award.
In August, Precise made major news when it doubled its size by purchasing LLS Corp./Courtesy Corp. at a bankruptcy auction. Courtesy itself won PN's Processor of the Year Award in 1998, before its ownership changed and the market soured.
Precise tied with Scottsdale, Ariz.-based Tech Group Inc. for this year's award. Both companies injection mold disposable, highly engineered items for customers that make medical and consumer products.
Another thing the co-winners share is John Weeks. The industry veteran was a Tech Group executive before he was picked by Mentmore Holdings Co. to run Precise in 1990. Before Tech, he worked at Nypro Inc., the 1997 Processor of the Year award winner.
Back when Weeks joined Precise, the firm was a small custom molder with $18 million in sales and negative cash flow. After drawing on his industry contacts to hire top technical people and improve things, Weeks made a big move in 1996, when Precise bought Tredegar Molded Products.
``Tredegar was three times our size when we acquired them. So it was really a case of a small fish eating the big fish,'' Weeks said during a Jan. 3 interview at Precise headquarters in North Versailles, Pa., just north of Pittsburgh.
Then in 2000, Precise went global, acquiring Phaff BV, a Dutch injection molder specializing in in-mold labeling and high-speed decorating. A few months later, Precise itself changed hands, as Mentmore sold the firm to Code Hennessy & Simmons LLC, an equity investment firm in Chicago.
Code Hennessy gave management an ownership stake, and provided money to invest and expand the company. With the Courtesy deal, Precise's sales nearly doubled overnight, to $290 million in 2002, from about $148 million the year before. The combined company now runs upwards of 450 injection molding presses at 15 plants and employs about 2,200.
Precise officials are calling Courtesy an ``acquisition based on strengths.'' Indeed, Courtesy brings strong technology and a major presence in medical and health-care markets, as well as food and beverage. Precise was top-heavy on consumer and personal-care products before the deal, generating nearly three-quarters of its business from those markets. After buying Courtesy, that fell to 49 percent, followed by 23 percent for health care and 19 percent from food and beverage. Mold making accounts for the remaining 9 percent.
Weeks said Courtesy was hurt by a combination of factors, but remains a strong operation. He refused to characterize Courtesy as a ``turnaround'' project.
``We're not looking at it as a turnaround. We're looking to restore it to the level of quality and financial performance that it was at when it was sold, and enhance Precise's and Courtesy's market position by getting the leverage of greater sales,'' he said.
Precise picked up Courtesy from bankruptcy court for $130 million, and it did not inherit any of the liabilities of the Buffalo Grove, Ill., molder. The price was a fraction of the $353 million that Dallas investment firm Hicks Must Tate & Furst Inc. paid when it bought Courtesy in 1999 from founders Walter Kreiseder and Gerald Sommers. Hicks Muse blamed lost customers, delays on new programs, the recession, a change in the management team and shareholder litigation for Courtesy's problems.
Weeks said Precise knows how to snap things back into shape.
``When we took over Precise in 1990, that was a turnaround,'' Weeks said. ``They were making 10 percent gross margin. In 1996, when we bought Tredegar, they were making 10 percent gross margin. So we took the whole thing up to 20-plus percent, the low 20s, which is good for a molder in this country. Well, Courtesy is right around 20 now. Obviously, they used to be much higher.''
Kim Koning, vice president of continuous improvement, said an integration team is working over the next 18-24 months to join the two companies. He said Courtesy has a solid reputation for technology.
``They're doing some very complex automated systems, for medical assembly especially,'' he said.
Even given its ``acquisition based on strengths'' billing, the deal has come with some pain. Precise leaders moved quickly to slash excess mold-making capacity, announcing in November they would cut 150 jobs and close four plants, including Precise Massie, a major mold-making operation in St. Petersburg, Fla. Massie will be consolidated with the big Courtesy mold plant in Buffalo Grove.
``That was the toughest call we've made,'' Weeks said. But company officials feel that the Illinois operations, and a mold shop at the North Versailles headquarters, ``will meet our needs for next three to five years.''
Despite the layoffs, Precise won high marks for employee relations. Under the quarterly bonus plan, workers get a variable number of hours of pay based on meeting pre-determined goals that measure each plant's cost of goods sold, including material, scrap, labor costs and overhead.
If a plant meets its goals, each employee gets an average bonus of 18 hours of pay. Information is posted clearly at each plant, so everybody knows how they measure up against the other plants.
It's a motivator.
``I know we had at least two plants last year that got over 110 hours worth of pay, so you're almost earning three extra weeks of pay on a yearly basis,'' Koning said.
The bonus program covers all Precise plants except for its headquarters in North Versailles, the company's only factory covered by a union contract.
Top executives and company directors visit each plant for the bonus meetings. Production shuts down, said Jeffrey Reinius, human resources coordinator for the baby-wipe container plant in Swedesboro.
The program also builds loyalty. More than 40 percent of Precise's full-time workers each have more than 10 years of service.
Local plants use the quarterly bonus meetings as an opportunity to hold classes on issues such as quality and safety. For example, Frank Wienszak, maintenance group leader in Swedesboro, taught co-workers how to read blueprints and use measurement tools. The 50-year-old Wienszak, whose first exposure to plastics came when he joined Precise three years ago, said management ``didn't blink an eyelash'' about spending $5,000 to send him to outside training.
Company leaders promote safety. For example, Precise's plant in West Lafayette, Ind., has been certified under the Occupational Safety and Health Administration's Voluntary Protection Plan. That earned the plant the highest rating, a Star award, from the Indiana Department of Labor. Also, by the end of this year Precise will have implemented the DuPont Safety Training Observation Program in all plants.
As another employee benefit, each plant also has a computer kiosk, so employees can jump online to look up job-related information, from benefits to vacation days, right at work.
Precise's motto of ``Molding Quality Relationships'' is more than business-speak. Customers contacted by Plastics News judges praised Precise's work on reducing costs and solving difficult molding problems.
Those customers view Precise as their plastics authority. Precise developed technical seminars to introduce customers, suppliers and even new employees to the basics of injection molding and mold making. The seminars became so popular that Gillette Co., P&G, Abbott Laboratories Inc. and Clorox Co. had Precise create customized sessions given at their facilities throughout the world.
The average length of a relationship between Precise and a customer is more than 20 years, the company said.
A big part of that success is the strategy that Weeks calls ``customer-aligned production,'' or CAP. Precise IML in Swedesboro is one of several plants that showcase CAP, doing large-volume molding and assembly in a plant fully dedicated to one customer.
At another CAP operation, Precise molds packaging trays for Gillette razors in Holden, Mass. The plastics factory became, in effect, a satellite Gillette plant during the development of the Mach 3, the three-blade razor introduced in 1998. Employees were sworn to secrecy, and they painted over windows and installed security cameras. The plant molds an insert tray and then sputter coats it in-line to give it a chrome-like finish. Gillette rewarded Precise Holden with molding work for its newest women's razor, the Venus.
In 2000, Precise took over a molding facility inside a Playtex Products Inc. plant that makes the Diaper Genie in Streetsboro, Ohio.
Not every Precise plant is a strict CAP operation. The headquarters factory near Pittsburgh, for example, resembles a traditional custom molding operation, as presses kick out parts for tape dispensers and air fresheners into boxes. The plant also makes some medical parts.
But a showcase of the plant - proof-set coin cases for the U.S. Mint - does have CAP-like full automation and cellular production.
The cases, which must be optically perfect, are molded in a six-by-six cavity stack mold on a 385-ton Netstal press. A robot removes the top and bottom halves and places the cases on a conveyor. They march down through a wrapping machine before being loaded into boxes.
In the past few years, Precise has invested more than $6 million into another plant, Precise Delaware in Newark, to set up long-running jobs for customers. During a December tour, laundry detergent bottle caps poured out of four 440-ton Husky presses that the firm added last summer. On two-by-24 stack molds, the machines mold caps for Unilever NV laundry detergents like Wisk, Surf and All, and Snuggle fabric softener.
Unilever moved the cap molding from two suppliers to Precise, which helped lower costs by reducing wall thicknesses and building molds with higher cavitation. Plant manager Rusty Brooks said a color change on the detergent caps takes five or 10 minutes.
Nearby, plastic tampon applicators rain down from massive two-by-64 stack molds on three Netstal presses, after being pulled out of the special mold by a robot.
In a separate molding area, Precise has done dedicated molding for P&G since 1999. Machines there mold boxes for facial wipes under the brands Noxema, Olay and Total Effects.
Precise has shipped the empty boxes to P&G, but Brooks said that in January, Precise Delaware was scheduled to add 28 employees and set up a total pack-out operation, putting the wipes inside the freshly molded boxes.
``We'll do the whole thing, from molding to point-of-purchasing,'' Brooks said.
Delaware was the original CAP plant. Precise established the factory in 1994 to mold baby-wipe containers for Scott Paper Co.
Scott merged with Kimberly Clark Corp. in 1995, and the following year sold Scott's baby wipes business to Procter & Gamble.
Precise and P&G worked together to redesign a new version, with a two-part hinged lid. After picking in-mold labeling, Precise officials decided to open a new location nearby in southern New Jersey, and create what they say is the largest U.S. IML plant.
``We decided not to overwhelm this plant with new technology, or try to retrofit these machines - just start out fresh with new technology,'' Brooks said at the Delaware factory.
The result is on display in Swedesboro, mecca of the molded baby-wipe box.