A. Roland Thomas, president and chief executive officer of Moldflow Corp. of Wayland, Mass., is an ardent believer in automation and the tying together of software controls on a factory floor.
The rise of his mold-simulation software firm - a dominant player in that niche for plastics molders - mirrors a similar increase in automated systems for many of his customers. It led Moldflow to expand its offerings in 2000 and launch a production monitoring system that ties software to equipment.
The Australia-born Thomas has been a Moldflow director since 1989. He was named to the top executive post in June 2002 after serving as vice president of research and development.
Thomas shared his thoughts on the impact automation is having on injection molders and what the future holds both for processors and for Moldflow.
Q: How has automation affected Moldflow's direction? How important is it to your direction?
A: We've been around for a long period serving this industry. We actually began our business with a system to solve molding problems and optimize manufacturing and production.
But the complexity of the industry has been one of our largest challenges. Designers of parts have had a disconnect from manufacturing and from different areas of the plant. There have been islands of automation. All are different and aren't very well interconnected. Each point of design must be able to be executed on the manufacturing floor. Systems have to add value in stages independently but operate together.
A big change [since 1997] for us was creating some technology to imbed fairly deeply in the design world. The second was a change in the behavior of customers, who used these tools in problem solving with a mold to improve manufacturing.
Q: How well has the molding industry embraced factory-floor software automation as a part of its daily life? Is enough being done in that area by molders?
A: They're either going one of two directions, forward or backward - if they're not taking any actions to improve the situation.
A consolidating customer base has had some effect, especially here in North America. The number of independent molders has been declining over more than a decade. And while it's probably not very satisfying for the people being consolidated, it's healthy in the long term.
A fewer number of large companies is better placed to make strategic investments in becoming more efficient than smaller, less capitalized businesses. While painful in the short term, consolidation can provide a better structural bedrock to stand on.
But capital expenditures for software have been severely affected recently. You could see the enterprise software area affected by the pullback in capital spending. It's a cyclical thing, not an underlying problem in the economy, and it has been steadily returning.
We see [the downturn] right now as a rough patch as opposed to an entire industry that's listing. Some companies are doing better. The ones deciding to attack problems head-on and take an aggressive fighting position seem to be in the best shape.
One of the key elements of that strategy might be a little trite. But companies need to develop a mind-set of continuous efficiency improvements. But as you do that, you have to be able to continually manage your business that way. You can't manage what you can't control, and you can't control what you can't measure. It all goes back to continuous control, to identifying bottlenecks and causes and taking action and then doing it all again.
I don't see efficiency improvements as a project. It has to be a way of thinking and a process that the company falls into. I don't think there's a magic efficiency pill. Companies have to do this continually.
Q: How far along is the industry in automating operations? What are the roadblocks?
A: If you don't start now, you take the risk of being too late. You should do something about this already. Look at what's been done globally. Europe probably started the process [of automation] a little earlier. They are embracing these sorts of [software] tools in Europe and are ahead of us.
But in North America, we have the unbelievable ability to change quickly. It should not be a long-term impediment for a company that hasn't started the process.
A number of people look at automation with some level of fear, wondering whether automation may reduce the workforce. That hasn't been our experience. Companies investing in these systems have been able to produce more with what they have instead of producing the same amount.
I also sympathize with the feeling of smaller companies that cannot afford that type of investment. But if they're looking at long-term viability, how can they not do it?
Q: How do you see processors in North America faring? Are there new threats to their livelihood?
A: It's a little brutal. If you don't want to be one of the companies that is consolidated, I don't see an alternative to automation.
Asia will be slower to move to automation systems, because it has the advantage of lower-cost labor. They can throw people at a problem without throwing cost at it. But that's a temporary situation. If you start to look forward, labor cost will continue to go up for [Asian] countries. It's inevitable that labor costs will rise and the standard of living will increase. For instance, it's not a cheap place to do business in Korea right now. Standard-of-living advances are an inevitable occurrence.
Ultimately, another inevitability is that Asian companies will increase their investment in the same set of technology tools that we use here. The fastest-growing market for Moldflow products right now is China. It's coming off a smaller base, but molds made in China are trying to compete more with business here.
Q: Where is Moldflow headed with products and growth?
A: The connection between the design community and manufacturing people is still in its infancy. We have a long way to go to bridge the two. A lot of molding equipment is in need of a system to connect with design.
The trend in customers is to do a lot more molding within one facility. Service and process capabilities need to be integrated into one factory system that allows you to manage and run a whole factory. That is why we've made some of the acquisitions we have, to get to this level.
Some independent systems are being developed with the ability to share hardware in a way the front office shares hardware.
In a front office, you have [personal computers] talking to other PCs. You don't have the same infrastructure in a factory. A cornerstone of an operating system is to offer a common platform with multiple applications and multiple systems. Our view is to centralize the manufacturing world, instead of having 10 different types of [software] systems on manufacturing equipment.
We have begun this process of shared application. It's now in a middle step. We have alliances with other [equipment suppliers] to do this, and we expect to continue down this path.