Automation is a promising path for U.S. injection molders to fend off overseas competition and sustain market growth.
But automation goes way beyond simply bringing robots to the plant floor. Some companies hesitate to put the idea of automation into practice because of uncertainties about market viability, return on investment, workforce management and flexibility.
Officials from several injection molders shared experiences and insights on the hot topic Oct. 18 during the SPI Advanced Automation for Injection Molding seminar, organized by the Washington-based Society of the Plastics Industry Inc. at Plastics Encounter in Charlotte.
Original equipment manufacturers continue to move consumer and packaging work overseas. Even in the medical market - traditionally safe from global pressure - inroads are being made to low-cost regions outside the United States, said Kirk Morrow, engineering vice president at Jarden Plastic Solutions in Greer, S.C.
Still, the medical market seems to be a viable path for North American injection molders. At JPS, medical makes up 40 percent of sales, Morrow said. At Arlington, Vt.-based Mack Molding Co.'s southern division, medical contributes about 20 percent of overall sales, said Ray Burns, division president.
Large parts are another area less likely to move overseas, due to logistics. Burns said making large parts offshore does not translate economically because of shipping expenses, a greater rate of product damage, longer supply lines and lead times and more recurring packaging costs, since returnable packaging is impractical.
Mack's southern division makes low to medium (10,000-100,000 pieces) annual volumes of large parts, such as bumpers for heavy trucks. The company's five OEM clients for its truck sector include VolvoFreightliner, Kenworth and Peterbilt, Burns said. Mack's Volvo VN bumper program makes 120 bumpers a day.
Even for its medical market, Mack manufactures not high-volume disposables but durable products - ``essentially large housings for medical equipment,'' Burns said.
Know the benefits
To offset low-labor-cost advantages of offshore manufacturers and to retain business, including medical, JPS' Morrow said injection molders must rely on automation.
To demonstrate the benefits, Morrow traced the trend in North America back to the 1980s, a decade that featured robots on every machine and clean rooms with assembly cells. Circa 1990, gantry-style robots began to achieve lower costs and lean manufacturing. That generation of robots increases production speeds but can be dedicated to only one machine and work cell for its entire life.
In contrast, six-axis robots, which emerged around 2000, are user-friendly, price-competitive and versatile; they can move 360 degrees and perform quality checks, packing and shipping, Morrow said. He said additional post-molding operational capabilities include vision testing, gauging inspection, multicomponent assembly, decoration, trimming and cutting.
Automation cuts labor costs not only in manufacturing, but in secondary operations and JPS has saved 66 percent in assembling some products, Morrow said. Automation in quality monitoring also reduces human error and leads to higher standards.
That adds up to getting products to market faster, he said.
JPS, the plastics arm of Rye, N.Y.-based Jarden Corp., presented convincing figures: Since automation, the JPS operation's per capita net sales, for each full-time worker, have grown from $179 in 2004 to $213 in 2005, and are expected to reach $219 in 2006, according to Morrow.
Ray Veno, vice president of engineering and technology for custom injection molder Precise Technology Inc., of North Versailles, Pa., said robots have advantages in direct part transfer, product cleanliness, part orientation, part counts and automatic bar-code checking.
In addition to lower direct-labor content, automation tightens manufacturing costs because of longer mold life, uniform cycles, parts-removal validation and reduced scrap, he said.
``We don't necessarily take automation as defensive [to overseas competition],'' Veno said. ``It is an advantage.''
Return on investment
For JPS, automation allows proper margins to be made and keeps the firm financially healthy, Morrow said. But when will better margins pay back investment in automation?
Burns' answer: ``in less than a year.''
Mack's southern division has built a highly automated facility in Inman, S.C., with 40-foot crane clearance that will house four to eight presses, from 2,500-4,400 tons, with automation built around Demag machines. The division also is planning an automation program for its other plant in Statesville, N.C. Burns said the firm will use highly automated facilities in assembly and post-molding phases for transportation customers. In that plant ``we have robots on every press,'' Burns said.
With automation raising efficiency, the division has added two 3,800-ton and one 1,100-ton Demags during the past year.
Precise's Veno confirmed the payout cycle needs to be less than a year. ``If it's more than two years, the investment probably is not wise,'' he said.
The payout can be significant, according to Veno, who gave an example of a 40-pound part where the materials cost 65 cents a pound per 1,000 pieces. Without robotics, a 12-second cycle and one operator with an hourly wage of $13.50, there is roughly 4 percent scrap and 8,266,000 pieces of production capacity annually, Veno said. With automation, the cycle time is 2 seconds, labor is cut in half and the scrap rate falls to 2 percent, Veno said.
On the balance sheet, that means a boost of 2,016,000 pieces in net capacity and $150,760 in savings a year, he said.
Flexibility is key in the debate on technology investment: how to reconfigure and reuse automation equipment purchased for specific customer orders and avoid one-time or one-use scenarios.
Precise claims it has achieved quick changeovers and maximized the productivity of its robots. About 35 percent of 400 injection presses in 15 plants have some sort of automation, the company said, contributing to an annual sales growth of 12 percent.
Unlike old-fashioned robots, automation systems today are multifunctional, reprogrammable materials-handling devices, Veno said. They are adaptable to a range of applications.
Articulated robots are the most flexible with respect to axis of motion in a ``work envelope,'' he said. Off-line robots, specifically, have more-complex assembly capabilities and greater system flexibility, performing tasks like insert molding. On-line robots - or robots located at the press - perform part removal, labeling, pad printing, silk screening, ultrasonic welding and carton loading, he said.
Robots are really ``primary material handlers'' not auxiliary equipment, Veno said. They are complicated to specify and buy and require trained staff to operate and to leverage their capabilities. Robotic flexibility includes factors such as envelope, drive type, payload, speed, operator interface, programmability and quick-changeover features. Flexible equipment, to a large extent, can be retooled in software while the main system continues to run, for faster redeployment. He said retooling flexible equipment can cost a fraction of a completely new system.
Lower capital costs and depreciation are competitive advantages, he pointed out.
The need to be flexible applies not only to a firm's robotics but also to the firm itself, Veno said. ``Implementation is more important than equipment,'' he said. A surprisingly high number of end users, about 75 percent, miss the potential savings of 30-60 percent of robotics. Companies need to have multiyear automation plans and track results to ensure effectiveness, he said.
After closing a highly automated plant in Swedesboro, N.J., Veno said, Precise moved six presses to its Newark, Del., plant, where electricity is cheaper. ``We retooled the product from single-face to stack mold, and therefore increased the output and cut the costs,'' he said. ``We no longer needed a plant there.'' The redeployed machines make baby-wipe containers.
Automation naturally is associated with cutting jobs and employee resistance. However, JSP, Mack and Precise all said they have retained full-time employee head counts by growing business. So rather than resisting change, employees realize robots are making their companies more competitive and their jobs safer.
``People feel more secure when they see the plant get more automated,'' Precise's Veno said.
Automation also makes workplaces less physically strenuous and much safer, the firms said. JSP has been able to train and compensate technical personnel better by eliminating lower-paid, manual-labor positions, allowing for better upward movement. Veno said automation brings employees more job satisfaction and less supervising.
Automation cannot replace all the labor work. Burns said Mack maintains a percentage of temporary workers to protect full-time jobs.
``For larger parts, automation is used to take parts out of the press and move to the assembly [area]. Once it is in the assembly area, we still need manual labor,'' he said.
Product volume also needs to be considered, he added. ``Investments on automation are justified on the basis of payback - that's all about volume,'' Burns said. While automation makes sense for more than 100,000 pieces a year, he said, low-volume programs are not worth the investment.
Neither can shorter life-cycle products afford the opportunities to get the proper payback, according to Veno. ``Automation can only get so flexible - there are limits,'' he said.