Not many companies are flexible enough to survive the loss of a single customer that accounts for 90 percent of their business. But by leveraging its engineering, mold-making and custom injection molding capabilities, Tessy Plastics LLC has put itself in a position where an expansion of its plant in Lynchburg could be on the not-so-distant horizon.
Tessy just installed a 60-ton all-electric Sumitomo injection molding machine with a computer numerically controlled Wittmann robot — the fourth robotic electric injection press it has added this year at the 60,000-square-foot plant.
“We have 65 percent utilization on our molding machines. Once that gets to 70-75 percent, we will need to expand,” President Ken Beck said during a reporter's visit to the plant in mid-April, before the 60-ton Sumitomo was added.
“A 30,000-square-foot expansion looks to be inevitable at this rate,” Beck says now.
“We are on 14 acres here and have the ability to double [the size of] the current plant. “Everything is set up for future expansion. We are hopefully looking at an expansion within the next two years,” he said.
Expansion wasn't in Beck's line of sight — or even on the radar screen — in the summer of 2001 when telecommunications manufacturing moved offshore just four years after the plant opened and its contract with LM Ericsson ended.
That loss of business at the Lynchburg plant came at the same time Tessy Plastics LLC's parent firm, Tessy Plastics Corp., found that Xerox Corp. was exiting the ink printer cartridge business. Xerox had accounted for 40 percent of the parent's business in Elbridge, N.Y., where it is based and has manufacturing.
The Elbridge operation survived that loss and now gets more than 50 percent of its business from medical. Likewise, after Ericsson left, Tessy's Lynchburg subsidiary had to reinvent itself, Beck said, and the company has been able to maintain its workforce at around 120 people.
“We were lucky to be financially stable and move to markets that make sense to us,” said Beck, whose older brother Roland is president of the parent firm, which their father and two others founded 38 years ago in Elbridge.
“We used to be 90 percent telecommunications; now it's maybe 3 percent,” said Ken Beck. “We had to develop a strategy to keep the business going [at the Lynchburg plant] with the exodus of Ericsson. Consumer products is now the largest segment.”
The firm gets the other 10 percent of its business from medical.
Among other things, Tessy makes aerospace components; parts for leaf-blower backpacks; housings for string trimmers; parts for air tanks used by firefighters; and housings, heads, nozzles, caps and valves for vacuum cleaners. It also makes components for night-vision systems, handgun grips and casings, insulin pumps and syringes, private radio systems, parts for tire pressure sensors, and internal components for desktop printers.
What has helped Tessy gain a foothold in all those products is the company's unwavering and continued commitment to investments in equipment and tools. “Customers who come to us want American-made tools, high-quality tools and high-quality products,” said Beck.
The Virginia plant has its own toolroom to build molds and make engineering changes. It has vision systems and robotics on many of its machines, develops its own automation in-house and has more than 2,000 active molds.
The plant also has six air-handling systems to keep dirt, dust and contamination out of its molded products. In addition, manufacturing is set up in automated machine cells that let one operator staff more than one line. “We automate as much as possible to get as much labor out as possible,” Beck said. The plant also continually upgrades its manufacturing equipment to improve efficiency. It added a new 120-ton Niigata all-electric injection press in March. Two more came in April — one with clamping power of 120 tons and the other with 200 tons. The 60-ton Sumitomo is the latest addition.
“We had some new business we acquired, our orders increased, we needed to increase our capacity and we wanted to increase our efficiency,” said Beck. The firm has had to operate 10 weekends this year, he said.
“We would prefer not to run on weekends. The machines need maintenance, people like to have a break and we'd rather not have overtime costs.” Running around the clock rings up $30,000 a month in overtime costs, he added.
“So it doesn't take much for a new machine to pay for itself,” said Beck. “If I can get a payback in 18 months, that's a good investment. We improve our efficiency by running 24 hours, five days a week.”
Most of the molding machines the company will buy going forward are likely to be all-electric, even though they are 30 percent more expensive than hydraulic, Beck said.
But he quickly added that the company will keep its hydraulic machines, including one 720-ton machine, because they are more flexible and essential to some types of custom molding.
The addition of the four all-electrics this year is part of its long-standing commitment to buying new equipment to keep increasing efficiency.
“We've added 12 new molding machines in the last five years,” said Beck — even though the total number of molding machines at the plant has remained relatively constant during that time.
Most of the firm's new machines — and about half of its 40 injection presses, ranging from 40-720 tons — are now all-electric.
“They use less energy, are more accurate, and have greater speed,” Beck said. “There is also a big morale and efficiency boost from all-electrics,” he said. “There is a lack of mechanical drain on the tower and chiller and they are less noisy.”
In the same five-year period, the company has also put in more robots and pickers.
“The price of robots has come down,” Beck said. “They are easier to program and dedicate. They are much quicker and more accurate and you can use them on different jobs. We use some to remove parts, others to place inserts, some for picking and others for gating.”
Beck said that despite the overall economic downturn, the company's consumer-products parts business has picked up considerably in the past three years.
“About three years ago when the economy was slowing down, some of our customers were sticking their necks out on new products and that helped us,” said Beck. “We are also doing more and more aerospace work.”
About 20 percent of the sales at the Lynchburg plant are from products it began manufacturing in the past three years, he said.
“I'd like to see more of our growth in the future come from the medical side — medical disposables are what we are after because they continue to have more and more stringent requirements,” said Beck. “But I see the primary part of our growth coming from automotive and consumer products.
“Our niche is high-value, custom-molded technical parts because we have the engineering know-how in part design and can develop a way to automate production for high-volume from the beginning,” Beck said.
Tessy's custom-molding capabilities include gas-assist, insert molding and overmolding. The firm also does laser engraving, in-mold decals and vertical insert molding, and adds scratch-free hard coating for optical lenses. The plant has a dedicated Class 100,000 medical clean room.