Plastics News announces Processor of the Year finalists

Detroit — Four companies have become finalists for Plastics News' Processor of the Year Award: Intertech Plastics Inc., MTD Micro Molding, Plastek Industries Inc. and Vital Plastics Inc.

MTD and Plastek were finalists last year. MTD also was a finalist once before, in 2015.

Intertech Plastics and Vital Plastics are newcomers to the finalist circle. All four finalists are custom injection molders, but they are a diverse group.

Intertech runs two plants in Denver: one dedicated to clean room and white room production, the other for industrial. MTD does micromolding of medical parts at its plant in Charlton, Mass. Erie, Pa.-based Plastek molds packaging and other products and makes molds. Vital Plastics serves automotive among other markets from its plant in Baldwin, Wis., and through a large number of home-based assembly workers.

Candidates for Processor of the Year are judged based on seven criteria: financial performance, quality, customer relations, employee relations, environmental performance, industry/public service and technological innovation. Judges are members of the Plastics News​ ​ editorial staff.

Last year's Processor of the Year was Petoskey Plastics Inc., a maker of blown film and plastics recycler based in Petoskey, Mich.

The 2018 winner will be announced at the Plastics News Executive Forum, March 4-6 in Naples, Fla. Before then, Plastics News Editor Don Loepp and senior reporter Bill Bregar, who coordinates the annual award, will visit all four finalist companies.

Here is a look at the finalists, in alphabetical order:

Noel Ginsburg was in college when he dreamed up the company that would become Intertech Plastics, drafting a business plan for a class at the University of Denver. He founded Container Industries in 1980 by buying the assets of a local container molding plant that was closing. The company had just 12 employees and three injection molding machines, turning out pails for the food industry.

Today, Intertech employs 120 at two plants, a half-mile apart, and runs more than 50 injection molding machines with clamping forces from 30-1,500 tons. Sales were about $24 million for 2018.

Ginsburg ran for Colorado governor but ended up dropping out, citing a lack of fundraising needed to be competitive statewide. Ginsburg, whose family is the majority owner of Intertech and who is chairman and CEO, is well-known in the state for spearheading an apprenticeship program called CareerWise Colorado. He was one of the founders of the Colorado I Have a Dream Foundation.

Noel and his wife, Leslie, sponsored the first class of "dreamers" — 42 inner-city children, supporting them through graduation from high school and beyond. Ginsburg also started the Colorado Advanced Manufacturing Alliance.

That shows Intertech is strong on industry and community service. And the judges also gave the company high marks for the other award criteria. In fact, Intertech's core values of employees, community service and education and development hit several of the areas for the Processor of the Year Award.

Executives' hearts are in the right place. Still, it was a challenge to build Intertech. In 2015, the company's largest customer did not pay for its products. Cash was tight, and the company moved into survival mode. Existing customers stayed loyal, though, allowing Intertech and the big customer to part ways.

That was an important part of the transition and restructuring that has made Intertech successful today, officials said in the submission.

Sales took a hit, but gross margin increased. In 2013, a new leadership philosophy, led by Intertech's current president, company veteran Jim Kepler, had been moving the company into a more diversified, engineering-based business doing tight-tolerance molding. Intertech adopted the 4DX process as an organizational foundation. That became a turning point, officials said.

Intertech also bought Image Molding Inc., another Denver molder, that same year to add medical molding.

Customer relations are a strong point. Intertech fosters long-term partnerships based on transparency, trust and customer satisfaction. Customers are encouraged to submit monthly report cards; the frequency helps the company take quick corrective action.

Contacted by Plastics News judges, customers confirmed the molder closely collaborates with them. "Intertech has been huge partners in our success. We wouldn't be where we are without them," one said.

Quality also is solid, as Intertech's award submission included a detailed level of quantification showing improvement. The medical operation reduced defective parts per million by nearly 70 percent since 2016 — way above the goal. Complaints per work order also decreased. And medical molding averaged 85 percent overall equipment efficiency in 2017 — the benchmark level considered world class by the Manufacturers Association for Plastics Processors. When officials started measuring OEE four years earlier, it was just 57 percent.

MAPP gave Intertech an Innovation Award in 2017 for its use of automation that resulted in improved customer satisfaction.

Under the financial performance area, Intertech runs a tight ship. Management controls expenses and communicates financial results to every level in the organization.

"By implementing a robust and detailed budget process, Intertech has a thorough understanding of its business," said Chief Financial Officer Robert Edwards. The company has consistently paid down debt.

Beginning in 2017, the molder put operating budgets into its IQMS ERP system. That allows real-time measuring and reporting. Edwards cites a "laser focus on the timely measurement and reporting of results."

Intertech also scored well in employee relations. More than a third of the company's 120 employees have been with the company for more than nine years.

The 4DX process helps set goals and foster organizational change. That includes the "wildly important goal" (WIG) of employee engagement and development. In fact, Intertech more than doubled its training budget in 2018, to $74,000. Training includes on-site visits by scientific molding expert John Bozzelli and participation in RJG's Master Molder program and Paulson training.

Training records are managed through the IQMS system. Each job description has a specific training plan.

Another WIG: holding management retreats to set five-year plans.

Intertech gave lots of specific details about its environmental performance. Updated lighting and motion sensors saved $60,000 a year, sporting a 14-month return on investment. Moving to all-electric molding machines also has cut the electric bill.

A new plantwide Thermal Care chiller saved $45,000 a year, paying for itself in a little more than one year.

The chiller and all-electric presses are part of a major investment in technology in 2017 and 2018, as Intertech spent $4 million on equipment, including 14 all-electric Toyo injection presses with clamping forces from 55-750 tons, 22 Wittmann robots and other automation and part handling systems at both plants.

The technology cuts labor costs and boosts quality, as does Keyence vision inspection systems.

The investment saved $1.2 million in direct labor costs. And since 2015-2016, direct labor costs have declined 27.2 percent as a percent of sales.

Laurie Harbour, a consultant who is president and CEO of Harbour Results Inc., nominated Intertech Plastics for the Processor of the Year Award.

MTD is a major player in the demanding business of micromolding parts so small you need a microscope to see the detailed features. Molded in clean rooms, these are special medical parts — about 90 percent of MTD's parts get implanted into the body, and of those, 80 percent are bioabsorbable.

"MTD is the only molding company solely dedicated to micro and medical, with a unique specialty in bioabsorbable micro injection molding," company officials wrote in the submission for Processor of the Year.

Markets include sports medicine, reconstructive surgery, drug delivery and cardiology. Minimally invasive surgery is driving growth for micromolded parts.

When you're molding parts this tiny — and critically important for medical uses — you have to control every step of the process. MTD does that by making its own molds, tightly controlling the handling of super-costly material and tiny parts, inspection and packaging, and expertise in polymer science. Controlling inherent viscosity loss is a key. Making micomolding repeatable is a major challenge.

So it's no surprise that MTD scored well on quality. The cost of non-quality has come way down since 2011, even exceeding the aggressive goal of less than a half-percent for 2018 as of the time MTD sent in the submission. The largest product line, a bioasborable implantable item, has had zero customer returns out of more than 18.7 million parts.

Over the past seven years, MTD has averaged only about 2.3 returns per year.

MTD takes on plenty of tough jobs. Half of MTD's new projects are "rescues" — of that, 20 percent are parts that other molders failed on, and 30 percent are parts nobody else would even attempt.

Customers had good things to say. One maker of bioabsorbable surgery products said another molder couldn't mold it after several years, so it went to MTD. Another medical customer said a lot of molders looked at the complicated part, but none submitted a bid. MTD officials invested money so it could successfully make the part, the customer said.

On-time delivery is 95 percent.

MTD's history began in 1972, when Richard Tully founded a mold maker for tiny molds, appropriately named Miniature Tool & Die Inc. The company began molding small medical parts in 1988.

Then in 1999, Boston Scientific approached Miniature Tool to make a mold for what was, at the time, the world's smallest plastic part. MTD Micro Molding was born.

Richard Tully retired in 2008 and his son, Dennis Tully, bought him out and became owner and president. Gary Hulecki, as executive vice president, now handles day-to-day operations.

In addition to customer relations and quality, MTD also got high marks for financial performance, employee relations, industry and public service and technology.

MTD generated sales of $8.5 million, keeping up a string of strong years, and that generated a four-year growth rate of 47 percent.

The company will build a 12,000-square-foot addition onto its plant in Charlton, Mass. Groundbreaking has been pushed back to spring of 2019 because of design revisions and construction delays.

It's not easy to find skilled employees, especially at a micromolder. MTD, which employs 36 people, looks for candidates who like tough challenges every day, and it offers them incentives. The expansion this year will house tooling operations and material storage, plus a fitness center. MTD has a 401(k) match. To announce the profit-sharing amount, MTD executives serve a steak dinner to employees. They also enjoy a lobster picnic. No hot dogs and hamburgers here: MTD is in Massachusetts, after all.

Throw in summer yoga classes, gift cards for getting an annual physical and "MTD Bucks" for new employees to buy merchandise and clothes. MTD's award submission included employee testimonials that make it clear these are not standard factory jobs. One said, "I like that each day varies at MTD. There is always something new happening, and those challenges are what drives us to keep progressing."

MTD recently hired Patrick Haney to the new position of research and development engineer. His main focus is developing new prototype equipment and investigating the behavior of polymers used in medical micromolding.

Haney has plenty of talented employees and high-tech equipment to work with.

MTD regularly invests in technology. You can't find standard off-the-shelf equipment for molding micro parts and making the molds. In 2018, MTD bought a Mitsubishi electrical discharge machine that uses a wire smaller than 50 microns in diameter. Tully said the MX600 EDM is the first of its kind to be used in North America.

The micromolder also bought two new Sodick injection molding machines in 2018: one a vertical press, the other horizontal. MTD's first six-axis robot is working with the horizontal Sodick in a manufacturing cell.

MTD has in-house additive manufacturing technology.

Even though MTD isn't a big company, the micromolder plays a big role in small-town Charlton. MTD sponsors Red Cross blood drives, is a drop-off location for Toys for Tots and sponsors the local high school robotics team. MTD also gave a plant tour to Penn State Erie students to help them understand micromolding.

MTD makes donations to local organizations, including the local police and fire departments, the Cystic Fibrosis Foundation and local churches.

On the industry side, the company sends employees to trade shows and events and is an exhibitor. An MTD expert will give a presentation at the Society of Plastics Engineers' 2019 Antec conference in Detroit this March.

The MTD sales teams travel to medical device companies to give "lunch-and-learns," where they explain micromolding.

Lindsay Mann, MTD's director of marketing, nominated her company for the award.

The major packaging molder, which employs about 800 in its headquarters city of Erie, Pa., and 1,700 total, with other plants in Mexico, Brazil and England, had a humble start.

Joseph Prischak was a young mold maker at Penn Erie, when he asked for a nickel more an hour. The company refused, so in 1956, he started his own company, Triangle Tool. The rest is Erie, and plastics industry, history.

Tooling remains an important part of Plastek's operations, as the company has continuously maintained an apprenticeship program. Plastek pumps around $2 million each year into new automated mold making cells.

After Prischak started his mold company, Plastek Industries followed in 1971, doing molding and assembly. The company built a plant in Mansfield, England in 1999, then added a plant in Brazil. Plastek picked up a second Brazilian factory last year when it purchased a packaging company.

In 2010, Plastek bought the closed-down former Rexam Packaging plant in Hamlet, N.C., and reopened it, reducing transportation cost to customers.

The Mexican plant opened in 2015.

Then in 2017, Plastek bought the assets of a closed Coveris factory in Anderson, S.C., and moved some of its injection molding machines to other factories.

Today, Plastek has grown into a packaging powerhouse with about $300 million in sales. Company officials do not give out financial information, but they said sales have been increasing. The strong dollar and currency swings have impacted sales for the global business.

Prischak retired in 2002, although he remains chairman and comes into work several days a week. Ten years after his "retirement," he started a new company, Ha-VACo Technologies Inc., to make plastic components for the heating, ventilating and air conditioning industry.

Prischak turned day-to-day operations over to his sons. Dennis is president and CEO. Daniel is vice president of manufacturing. Douglas is vice president of global tooling and engineering. Donald, who nominated Plastek for Processor of the Year, is vice president of sales.

Plastics News judges gave Plastek good grades for several criteria, including technology, industry and public service, employee relations, customer relations and quality.

Personal care accounts for about half of Plastek's sales, as many of its 350-plus injection molding machines crank out thin-wall parts from high-cavitation molds, like stick-deodorant components, lip-balm cases, caps and cosmetic cases — running many of them through high-speed, automated work cells. Other markets include food and beverage packaging, home care, industrial, medical and tooling. Many of the customers are big multinational consumer product makers, including Procter & Gamble Co., Revlon Inc. and Unilever.

The company runs more than 35 automated assembly machines.

Company officials say the processor is vertically integrated. That means Plastek can do it all, from research and development, mold making, advanced manufacturing, automated assembly and decorating and other secondary processes. A lifetime warranty on molds gives free mold maintenance on tooling the company designs and runs, including many stack molds and multishot molds.

Under customer relations, Plastek designed a childproof closure for Arm & Hammer laundry pods, made by Church & Dwight Co. Inc. The part won innovation awards at Plastics News' Plastics Caps & Closures conference, as well as the EastPack trade show.

That backs up Plastek's tagline: Where Innovation Matters! The six members of a research and design team have more than 176 years of combined experience in plastics, design and consumer products. Plastek holds hundreds of patents.

Innovations include the oval deodorant stick, child-resistant and temper-evident closures, living hinges, packaging to handle metered doses of liquids and powders and hospital feeding tubes and baby formula scoops, manufactured in a white room.

Unilever has awarded Plastek a Partner to Win honor four times, in 2011, 2013, 2015 and 2017. Plastek has worked with Unilever for decades, and its experts have identified many opportunities to improve competitiveness through product design, manufacturing and cost-reduction product improvements. The Unilever awards have recognized value creation, capacity and capability building, sustainability and business integration.

When you run at very high speeds, quality is a given. Plastek molds more than 11 billion parts a year and does more than 2 billion assemblies. Officials claim to have fewer than 11 defective parts per million. Helping make it happen are vision systems, water flow meters, in-house resin testing and a pressure-decay system that can measure molds for pin holes of less than 0.010-inch in diameter.

On-time delivery is nearly 100 percent, the company said in its submission.

Even with highly automated systems, employees have to be on their game to mold that many parts. Plastek offers some unusual perks, especially its 13-year-old program, Wellness Works. Two full-time nurses have on-site health clinics that are free to all employees and their families. A doctor comes in a few days a week.

Other wellness benefits include prostate screening for men over 50, mammograms, an annual health fair, healthy cooking classes and on-site fitness rooms. Employees also join a local fitness club, with most of the cost covered by Plastek. Employees who complete the program can cut more than $1,900 off their family health insurance premiums.

Plastek offers free dental and vision coverage. A 95-member team coordinates the three-year-old Safety Works program. And employees can earn a $950 incentive bonus, per division, if they meet goals measured by labor efficiency, scrap percent and safety.

Plastek stands out for industry and public service. It starts with Joe Prischak, one of the local plastics leaders who pushed for the plastics engineering technology program at Penn State Erie that became one of the nation's top programs. Prischak also founded a similar program in a community college in Hamlet for employees at the North Carolina plant. And he even started a program in his home family's home country of Slovakia.

Joe and his wife, Isabelle, created a $2 million endowment for help employees and their families pay for college.

Joe Prischak set up the Africa 6000 foundation to build water wells and irrigation projects in Africa, helping end waterborne illnesses. To date, the effort has drilled 67 wells.

A​ custom injection molder and assembly contractor, Vital Plastics is a unique company that in many ways is a throwback to the early days of the plastics industry when people assembled parts at home to make extra money.

It all started when the company was founded in 1994 by Joe Ahlm, an executive with ITW, the big maker of fasteners. ITW was looking to outsource some work, and Ahlm started a small assembly shop on the side. When his father, who ran the company day to day, passed away a few years later, Ahlm came in to run Vital. He was joined by Terry Townsend, who he worked with at ITW. They also had a silent partner.

By 1996, the three men owned Vital Plastics. The assembly operation was doing well, so they began injection molding. After 10 years of steady expansions, the silent partner got out. George Hauser, a local banker, helped refinance the company, for ownership by Townsend and Ahlm.

From the start, the founders used garages of home-based businesses for assembly operations.

"It is this garage-shop style logic that has allowed Vital Plastics to serve a previously underserved portion of the automotive market," the company wrote in its award submission.

Sales should add up to about $18 million by the time everything is counted for 2018, a record year, Chief Financial Officer Matthew Fish said. Vital Plastics employs more than 300 people, including about 140 in-house and anywhere from 150-170 homeworkers. The company runs 57 injection molding presses, ranging in clamping force from 33-400 tons, at two molding and assembly facilities, totaling 70,000 square feet.

Markets include automotive, appliance, office, consumer goods, construction, industrial and medical. Automotive accounts for about three-fourths of total sales, and officials want to continue diversifying the business.

In the early days, Hauser said, Vital had placed machinery in garages of its employees. But the company has since consolidated machinery at its factory. Today, homeworkers do hand-assembly, sometimes using jigs and fixtures.

Fish said that sometimes Vital has homeworkers to do hand-assembly while the company sets up automated systems and end-of-arm tooling to later bring the job in-house.

Ahlm died of pancreatic cancer in 2011, at age 54. Hauser once again refinanced the acquisition, through his estate. Then Hauser joined the company as its current president. Townsend still owns Vital Plastics.

Hauser hired Fish, an accountant, as chief financial officer and administrative services manager. Fish had experience setting up an IQMS ERP system for Phillips Plastics Corp. for several plants of the big Wisconsin-based custom molder, and he did the same at Vital Plastics.

Hauser and Fish have maintained the company's conservative fiscal practices, even as sales have grown, rebounding after the Great Recession. Decisions are data-driven. IQMS covers many functions, such as payroll, tooling maintenance schedules and work orders.

After years of growth, management takes some time to absorb the new business before tackling more growth, Hauser said. That means the company carries little debt and has a strong balance sheet. Management also focuses on cost containment, reducing scrap and increasing throughput.

Vital Plastics scored high in customer relations. On-time delivery is 98 percent, as the company shipped 745 million parts in 2017. Lead times are short.

Customers, who were contacted by the judges, praised the company. A longtime customer that has visited Vital Plastics' operations many times says the company is professional and handles any problems quickly.

"In general, my experience with Vital has been very, very good," he said.

For another customer, the molder helped it launch a new product, offering high quality and delivery. Customers said communication is good.

In the technology category, Vital Plastics has spent more than $4 million over the past four years in new injection molding machines and auxiliary equipment, such as robots, grinders and dryers. The company used operating money to pay for three-quarters of the investment, with just $1 million going to new long-term debt.

The company runs Toyo and Sumitomo injection molding machines but in recent years has standardized on all-electric Toshibas.

Vital Plastics was nominated for Processor of the Year by five people: Henry Yi, president of HS Mold Ltd.; Mike Brusseau, owner or Link Supply Chain Solutions; Wayne Langer, vice president of Harrington Langer & Associates; Ian Anderson, senior supply chain analyst at Anderson Corp.; and Kelli Caldwell, president of Simply Staffing.

Employee relations is where Vital Plastics really shines, with both in-house staff and homeworkers.

Vital Plastics likes to promote from within. Its award submission included a chart showing individual employees who have advanced at the company.

All shop-floor people must take Paulson training. State education grants have helped pay for RJG training, resulting in one Master Molder and several other people who have gone through various stages of RJG.

Vital added two quality engineers in 2018, hiring individuals experienced in plastics.

The company tries hard to maintain good communication with employees. A seven-member employee advisory committee, called Vital Force, acts as a liaison between employees and management. Supervisors and managers are required to do quarterly check-in meetings with every employee, and they have annual performance reviews.

Vital Plastics has become self-insured. The molder is joining with two other local companies and a school district to build a health care clinic, expected to open in July.

The company also offers a profit-sharing bonus.

The attention to detail has paid off with longevity: 54 people have worked at Vital Plastics more than five years, 33 for 10 to 20 years, and 12 for more than 20 years.

The home-based employees set Vital Plastics apart. Although they are paid on a piecework basis, Hauser said they are employees — the company pays withholding taxes, its portion of Social Security and, if necessary, adjusts their pay to reflect minimum wage. They don't get benefits.

Home assembly workers must visit Vital Plastics once a week. They go through a drive-through door to drop off assembled parts and pick up new jobs. Typically, they are stay-at-home parents, college students, the elderly, people with disabilities and people who want to supplement their other full-time income.

Even the Amish. "We actually had a horse and buggy go through," Fish said.

Some drive up to 100 miles to make their weekly deliveries. Vital has been operating a drive-through for more than 20 years.

Hauser explains how it works: "We've got a schedule and a drive-through. They pull in. It's enclosed, and we shut the garage door. They open up their trunk, put the parts on a cart. We have inspectors do a quick check. At the same time, somebody has prepared pre-staged travel ticket for next week's work."

As Vital Plastics wrote in the award submission: "This innovative approach to tap a workforce that is typically unavailable has helped Vital Plastics serve a niche in the plastics injection molding industry for clients who need injection molding assembly operations for parts that do not justify large investments in automation equipment."

Fish said the ERP system schedules home assembly employees and generates individual work orders and assembly instructions. It's an unconventional workforce of people who might have trouble finding work outside of the home.

"We think we've actually done the community a service," Fish said.