Kortec Inc. is taking itself out of its own manufacturing steps.
The manufacturer of multilayer coinjection systems for PET preforms is altering its business model and will no longer assemble and test machines at its own facility before shipping the equipment to customers.
Instead, it will do all of the setup and tests at its customers' sites - saving both time and money.
The market has learned it can trust Ipswich, Mass.-based Kortec's capability to produce the equipment used to make multilayer bottles for soda, juice, beer and other liquids, according to Raj Rao, managing director of Kortec Asia Ltd. Customers no longer are demanding that they see the equipment run before they install it themselves, he said.
``When we first began, our initial system was 48 cavities,'' Rao said in a June 20 interview at NPE 2006 in Chicago. ``Now we've successfully run machines with up to 144 cavities. We have proved our technology.''
Now, he said, customers want to speed delivery and save on freight costs. Skipping the setup and testing at Kortec could shave four to six weeks from the delivery time. Customers also can spare the expense of sending employees to Massachusetts for training, instead doing all training on-site.
Many of Kortec's customers are repeat buyers and do not need the same level of training they once did, said Miles Carey, director of sales for Kortec Europe Ltd.
Customers already had been seeking direct delivery, with 75 percent of sales in the past 18 months going right to final production sites.
Kortec also is reducing its own costs and infrastructure requirements, since it will no longer need the 10 machine bays it had in Ipswich for setup and testing of customers' equipment. Instead the company plans to create a new technology center.