Those looking for the future of high-end plastic molding in Asia might want to study inside an unassuming factory in the industrial city of Taichung. The company one of the largest mobile phone handset makers in the world is focusing on new technology and automation to keep ahead in the ultracompetitive mobile communications industry.
Taiwan-based Green Point, which became part of American contract manufacturer Jabil Circuit Inc. in 2007, has a massive manufacturing presence: 775 injection molding machines and 23,000 employees, with much of that presence in mainland China.
But it doesn't see the low-cost Asian model as its future.
On the contrary, Jabil Green Point invested in significant automation of the mold-making operation at its Taichung headquarters. The move cut lead times on rapid-production molds from one month to one week, and the company is trying to push that down to three days.
Its research staff is working on projects such as blending ceramics and plastics to make an injection moldable material that combines the beauty and acoustic properties of ceramics with the manufacturing flexibility and strength of polymers.
During a March tour of the Taichung factory, the facility's top executive, Hwai H. Chiang, showed off how the company attacked bottlenecks in its mold-making operation by installing a Fanuc robot to automate eight electrical discharge machining stations, increasing capacity by 30 percent and reducing staffing requirements by 40 percent.
The company needs to find ways to speed up its manufacturing to meet the ever-shorter product life cycles of mobile phones, while at the same preserving some of its cost advantages in Asia, he said.
We want to focus on innovation, Chiang said, adding that the goal is to offer this at Asian tool prices, and still be able to deliver German-quality tools at the Japanese speed.
Chiang said Jabil invested a couple hundred million U.S. dollars in Green Point operations during the financial crisis, including a boost of its spending on research and development. (Some of its success in that endeavor came from lucky timing, he said, as Jabil issued bonds shortly before credit markets froze up in the crisis.)
Being part of the much larger Jabil and its 85,000 employees has given Green Point resources to make investments simultaneously that it would have had to do in several phases before, said Chiang, who was general manager of Green Point before the acquisition and is now senior vice president in charge of Jabil's mobility sector, which generates about 20 percent of Jabil's revenues.
The upgrades are helping to transform Green Point. The automation in the toolroom, for example, means the company can now churn out molds capable of making 5,000 sample handsets for a new design in a matter of days.
Using robots and other automation is standardizing its manufacturing and reducing errors, said Roger Lin, Taiwan operations manager in the company's tooling division.
Automation is needed to help the firm keep pace. Now, Chiang said, most of Green Point's sales come from mobile phones, but over the next four or five years, much more revenue will come from casings for mobile Internet devices such as smart phones and netbook computers.
We will evolve in the mobile phone space into supporting the mobile Internet, he said. That is where we will be focusing our activity.
To make that change, the company is buying more Japanese-made electric presses and upgrading its press size to more than 300 tons, from the average 200 tons it has had to accommodate larger and larger casings.
As part of that, the firm was showing a finely polished, laptop-sized mold to demonstrate that it has the ability to create a phone-quality finish for a computer case, Chiang said: That is to position ourselves to enter the netbook era.
Chiang's comments about the importance of mobile Internet echo another Taiwanese company, computer maker Acer, which this year became the world's second-biggest maker of personal computers, displacing Dell but still trailing Hewlett Packard.
Acer CEO Gianfranco Lianci told Bloomberg BusinessWeek magazine in March that amid rapid change in the computer industry, to become No. 1, we need to continue to focus on mobile the smart phone is just the beginning of the story.
Chiang believes that trends like Internet-based cloud computing will continue to slim down computers, make them cheaper and make mobility even more important: When you start to go into cloud computing you do not need the hard disk, or the memory. You just need the display.
For Green Point, the changes require a wide array of technologies and materials.
While the firm grew up as a plastic molder, it now thinks of itself more as a materials processor and structural packaging company, albeit with the package being handsets, smart phones or other devices, Chiang said.
The company has many plastics and metal processing and decoration technologies, and claims it has the world's largest capacity for non-conductive vacuum metalization, which gives plastic handsets a metalized look.
Jabil Green Point has also designed its own injection presses for multicomponent molding licensing and adding to technology from Germany's Novapax Maschinenbau GmbH and said it has taken processes developed by others, like Dow Chemical's Exo technology, to mix plastics with metals, woods and fabrics, and helped bring them to mass production.
We have the spectrum of basic processing in-house, under one roof, which gives us a huge advantage because we can take any process and combine it in a unique look for the customer, very, very quickly, Chiang said.
Company executives stress the importance of moving forward on new technology. Up in one corner of its Taichung complex, for example, the firm is commercializing ceramic injection molding, a tricky and expensive process.
There, researchers mix proprietary blends of ceramic powder compound from Germany and Japan with 20 percent plastic, looking for the right performance.
The plastic gives it properties that work in a molding machine, but then the polymers burn off, leaving a part that is lightweight and looks like ceramics, but unlike traditional ceramics, is strong and shatterproof. (Researchers invited a visitor to drop a ceramic handset above his head and watch it bounce like a piece of plastic, undamaged.)
It's a technology used in some very high-end products, and is not unique to Green Point. Nokia, for example, has used ceramic molding in some of its Vertu luxury mobile phones, which can retail for US$8,000 or more.
Research is a crucial part of the company's business model, said Chiang, who has a Ph.D. in manufacturing from Cornell University in Ithaca, N.Y., and has held positions in research at Greenpoint and Singapore's Gintic Institute of Manufacturing Technology.
He declined to discuss the company's R&D spending in detail, and now that Green Point is part of Jabil, it does not disclose earnings information. But Chiang said the company boosted spending on salaries in its research department during the downturn and continues to focus there.
Given the fast pace of change among its customers, that's a necessity. The company has to anticipate where its industry is headed, following consumer trends and technophile debates about whether the future belongs to smartphones, ever-smaller laptops, tablet computers like the Apple Ipad or something not yet seen.
The most difficult part is to see what is coming, and to make the decisions to focus your priority on the top five items, Chiang said.
That's the most difficult decision to make in R&D.
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