Four finalists named for Processor of the Year Award

Detroit — Four companies — all of them custom injection molders — have been named finalists for Plastics News' Processor of the Year Award: Diversified Plastics Inc., Intertech Plastics Inc., MMI Engineered Solutions Inc. and PTI Engineered Plastics.

Intertech was a finalist last year.

Although all four finalists are injection molders, they are a diverse group.

Diversified Plastics runs a headquarters plant in Brooklyn Park, Minn., a suburb of Minneapolis, and one in Vista, Calif. Intertech has two factories in Denver — one dedicated to clean room and white room production, the other for industrial. MMI operates three plants: at its headquarters in Saline, Mich., in Warren, Mich., and Monterrey, Mexico. PTI is in Macomb, Mich.

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 MTD Micro Molding of Charlton, Mass., which injection molds micro medical parts, including parts that get implanted into the human body.

The 2019 winner will be announced at the upcoming Plastics News Executive Forum, scheduled for Feb. 24-26, 2020, in Naples, Fla. Prior to that, 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:

Diversified Plastics employs about 100 people and runs 31 injection molding machines at its two plants — including a California plant the company gained when it acquired Pacific Plastics Injection Molding in late 2018.

Sales totaled $21 million in 2019, and company officials are projecting 2020 sales of about $23 million. The fiscal year ends Oct. 31. The company is profitable.

Markets include water filtration and medical devices, plus agricultural and off-highway equipment, controllers and automation equipment, material handling, recreational marine and solar energy.

Diversified Plastics is owned by employees through an employee stock ownership plan, and company officials say that gives it an advantage. The ESOP stock price has jumped 72 percent in last three years and revenue per employee went up 12.4 percent.

James Dow founded Diversified in 1977 with 13 employees. Dow planned to retire in 2011, and he met with potential buyers.

"However, he was concerned that the culture of DPI would dramatically change, and the jobs of the long-term employees would be terminated due to consolidation or relocation," the company said in its submission for Processor of the Year. So he created the ESOP. In 2015, DPI won the Company of the Year Award for the Minnesota/Dakota Chapter of the ESOP Association.

CEO Kevin Hogan joined the company in 2017 and started a strategic growth initiative, which was more detailed than Diversified Plastics did before. Dow, who remains involved in the company, tasked Hogan with achieving faster, profitable growth. The strategy includes planning for all departments, identifying what sets the company apart, such as in-house tooling and a push into additive manufacturing, and identifying growth markets like medical devices and filtration.

Management set 10-year targets and one- and three-year goals. In 2019, five new customers netted DPI more than a million dollars of new business.

Diversified Plastics scored high marks in the employee relations criteria. The average tenure of employees is an impressive 12 years — and four of the original employees are still working there.

Diversified holds monthly meetings of the employee-owners. Workers said they appreciate the family environment. Dow, the founder, returns each Christmas season as Santa Claus.

As of the end of 2019, the company had gone three years without a lost-time accident.

Technological innovation is another strong area. In early 2019, Diversified Plastics launched a new unit for additive manufacturing, dubbed the Acceleration Station, for full direct manufacturing work, especially for medical. The molder joined the Carbon Production Network and added three Carbon 3D printers. Officials are also seeking other new technologies in additive manufacturing, in plastics and metals.

Hogan thinks additive manufacturing could grow to be one-third of the firm's business in five years.

Customers contacted by Plastics News judges said DPI is a trusted supplier and partner that takes on specialty products and gives expertise in moldability, uniformity, consistency and materials. One main customer has bought parts from the molder since the company's beginning.

On-time delivery has been 99.3 percent for the past two years.

Diversified Plastics also picked up solid grades for quality, environmental performance and industry and public service. The company hired a new quality director in the fall of 2018, a 30-year veteran of medical devices. That position had been vacant for several years as executives hunted for the right person, Hogan said. Another medical veteran, with 21 years of experience, was named quality manager.

Product acceptance by customers was 99.4 percent last year.

For the environmental area, DPI has earned the Environmental Green Star Award from the Minnesota Pollution Control Agency. And green production makes good business sense: By adding new robotic automation equipment to a job that was producing way too much scrap at $4,000 per month, the company cut waste to nearly zero.

Community and public service activities include food and blood drives, volunteering on the board of the Alzheimer's Foundation, and working with homeless youth and the Down Syndrome Association of Minnesota. Political leaders have visited the factory, including U.S. Sen. Amy Klobuchar, a Democrat running for president.

Diversified Plastics employees are active in industry activism, too, funding a scholarship and serving on the board of Hennepin Technical College.

Vice President Annette Lund is on the board of the Society of Plastics Engineers' special interest group for additive manufacturing. She speaks at a local university several times about women getting into technical fields in manufacturing.

Emily DeSimone, channel marketing manager for Carbon Inc., nominated Diversified Plastics for the award. Carbon makes 3D printers and leases them to manufacturers on a subscription model.

Intertech was founded by Noel Ginsburg as Container Industries in 1980 when he bought the assets of a local molding plant that was closing, to produce pails for the food industry. Now Intertech has become a leader in apprenticeship programs to draw new people to manufacturing.

Ginsburg started the Colorado Advanced Manufacturing Alliance. He led an apprenticeship program called CareerWise, modeled after apprenticeships in Switzerland, by connecting businesses, educators and high school students to give them on-the-job training. It's going statewide in Colorado, and other states are taking a look.

He has led state leaders to Switzerland to learn about apprentice programs.

CareerWise Colorado is now in 14 school districts. And it's not just advanced manufacturing, but also covers education, hospitality, business operations, information technology, financial services and health care.

Ginsburg even ran for Colorado governor in 2018, but he dropped out before the primary election.

And it all started at Intertech, a small molder that now has 130 employees and runs more than 50 injection molding machines with clamping forces from 30-1,500 tons.

Apprentices give Intertech a long-term competitive advantage, President Jim Kepler said.

"Our apprentices have not only allowed us to build a sustainable workforce, but accelerate our ability to implement new ideas, processes and automation at a pace that previously wasn't possible," he said.

Kepler said Intertech partners with the local Eaglecrest High School, which has placed three CareerWise apprentices at the molder. But the company draws apprentices from several different high schools. Eight students were working at Intertech in 2019, and Kepler said the company plans to have 11 apprentices this year.

Kepler said Intertech draws talent from the Eaglecrest robotics team, which the company sponsors. The first apprentice, a robotics team member named Kevin King, came in his junior year and built vision system that uses two cameras.

"Today, Kevin is a full-time automation technician and [we] are paying for his engineering degree," he said.

From the beginning, Ginsburg positioned his company to be both a successful business and an avenue to build a solid community. Ginsburg "didn't start the company to get rich; it was built to make a life," Intertech officials said in their submission for the award.

Intertech, a finalist last year for the Processor of the Year Award, earned the 2018 PN Excellence Award for industry and public service.

Intertech scored high marks in all seven award criteria.

Sales were $25 million in 2019, with projected 2020 sales of $28 million. Intertech runs two plants a half-mile apart — one specializing in medical molding and the other custom molding for industrial and consumer products.

But it hasn't been easy. Sales were $29.4 million in 2015, but Intertech lost money. The largest customer, accounting for about half of sales, was not contributing enough to the bottom line and the molder had little bargaining power to pass on price hikes. They parted ways, and Intertech's sales took a hit. But gross margins increased quickly, and the company has rebuilt sales.

That challenge had promoted a transition that began in 2013. Kepler led the move to make Intertech more diversified and beef up expertise and technology to do tight-tolerance molding. That same year, Intertech bought Image Molding Inc., another Denver molder, to add medical molding.

Today, according to company officials, Intertech is in its strongest financial position ever, with little debt and a capital spending plan. In fact, in 2017 and 2018, the company invested $4 million to buy four all-electric Toyos and 22 new Wittmann robots, plus auxiliary equipment. Last year, Intertech bought seven more all-electric Toyos, spending another $2.4 million. And the investment in automation has reduced the percent of direct labor as a percent of sales.

Employee Relations is by far Intertech's strongest category, according to the judges. The apprentices certainly help — bringing in bright young people eager to make their mark. And all employees benefit from Intertech's core values that include valuing each person and his or her family, promoting education and development and encouraging all employees to volunteer for causes they think are important.

According to Kepler, those values are the key to the company's ongoing success. "In fact, we look for a culture fit when interviewing new hires. It takes priority over skill set," he said.

Jen Lockman, human resources manager, said turnover has been relatively low the last few years, and one-third of Intertech's employees have been with the company for more than nine years.

Intertech uses the 4DX process to help set goals, through WIGS, or "wildly important goals."

For several years, a big one has been to boost an already-strong employee engagement level. Today the company has an 87 percent score for employee engagement, measured through surveys. Lockman said management shares survey results and annual goals with the entire team.

Lockman said in 2018, Intertech more than doubled its training budget to $74,000 and boosted it to $96,000 in 2019. The company is adding IQMS' Shop Floor Data module to its custom molding operation, after using it in the medical plant. Shop Floor Data includes paperless training. Each employee logs into the production machine, then answers a set of questions about the specific work center and product.

That is another step in Intertech's goal of zero defects. The company rebranded in 2019 under the theme "part perfect." In other words, perfect quality performance.

Intertech's operations are full of vision systems and automation. Since 2016, defective parts per million has declined nearly 70 percent in the medical plant — mainly, Kepler said, through a Keyence vision system.

Customers told the judges they appreciate the effort to build long-term partnerships.

"We talk to them all the time from an engineering standpoint and discuss things that are happening," said an official at one customer. "We're in constant communications with them."

Another customer praised Intertech for responding quickly to any issues. "We have other molders but we tend to send the new stuff to Intertech because they're equipped to do it," the customer said.

Technological innovation is a strong point, buoyed by the investments in equipment and good use of all those apprentices. The goal is to standardize equipment and automation in both the medical and custom molding plants.

One example is what Intertech calls the in-mold labeling of the world's smallest-diameter product: a round, cigar-package-style tube that holds a marijuana joint, which taps into Colorado's booming legal cannabis sector. The company uses a Brink IML side-entry robot on a new 150-ton Toyo, backed up with a Keyence vision system.

The IML cannabis packaging also helped Intertech in the environmental performance criteria for the award. Working with resin companies, Intertech is testing compostable and biogradable resins for that sector. The label will also be biodegradable.

But Intertech is also making non-marijuana-related investments to help the "green" revolution… pardon the pun. A smart chilling system with variable-speed power is saving $45,000 a year, with higher throughput. The return on investment is just 1.1 years.

New LED lighting and motion sensors cut about $60,000 a year for the electric bill. ROI: 14 months. And Intertech is moving to all-electric molding machines in both plants.

Intertech was nominated by Scott Walton, chief operating officer of Harbour Results Inc.

Saline, Mich.-based MMI has injection molding and blow molding of automotive parts in plants in Saline, Mich., a new factory in Warren, Mich., and in Monterrey, Mexico. MMI also designs and makes molds in-house.

The company injection molds material handling systems for automotive components and automotive and heavy truck parts like fan shrouds and brake ducts, chassis fairing assemblies, cover panel assemblies, A-pillars and air duct assemblies.

These are big parts and they require big molds and large-tonnage injection molding presses. At its largest operation, the headquarters plant in Saline, MMI runs one blow molding machine and 18 injection molding presses, with clamping forces from 88-2,250 tons. The new 82,000-square-foot Warren plant, which began operations in 2019, has a 1,450-ton press, and two large injection molding machines taken from the Saline plant that are being refurbished to go into the Warren facility. The plant in Mexico, now undergoing a 35,000-square-foot expansion, has a 500-ton press and a 1,500-ton press.

Since 2013, MMI has made major investments in equipment and adding production capacity, adding 11 injection molding machines and a blow molder, and new machining centers for the toolmaking department. MMI also has also added central drying and loading systems.

All that investment and expansion activity — plus a move into 3D printing with a Stratasys Fortus production system — means that MMI has a good story to tell for technological innovation.

In its financial performance, MMI's sales have steadily increased, hitting $42 million in 2019, a 10 percent increase from 2018. For 2020, company officials are projecting sales of $48 million, as MMI is launching a significant amount of new tooling and new business. MMI is profitable.

In their submission, company leaders say they are committed to adding 111 jobs to its current 146 jobs in Michigan.

Doug Callahan, president, CEO and owner, joined MMI as president and chief operating officer in 2012, when sales were about $11 million. In 2015, he bought the company after growing sales to $25 million.

MMI made the 2019 Inc. 5000 list of the fastest-growing privately held companies in the United States.

Before buying MMI, Callahan was vice president of engineering at Miniature Precision Components Inc., which won the Processor of the Year Award in 2004. He has an undergraduate degree from Lawrence Technological University in mechanical engineering and a master's degree from Lawrence Tech in global business operations. And Callahan is a lawyer, earning his law degree from the University of Detroit Mercy in 2007.

MMI is packed with management talent, including Chief Financial Officer Paul Larson, who has a background at Fortune 500 companies; Jane Clawson-Palfi, the director of operations who has more than 20 years of automotive experience; the quality manager, Wayne Jones, a Lean Six Sigma black belt with more than 30 years of experience in lean manufacturing, quality and process; and Ed Chappel, director of human resources, who has more than 20 years of experience in that field.

MMI was self-nominated for Processor of the Year by Cassie Kilpatrick, its corporate recruiter. That's a new position at the company, signaling the importance of drawing young people to the industry. She is traveling to colleges and technical schools to boost MMI's internship program. The company had operator interns but expanded in 2019 to include purchasing, engineering, finance, information technology and human resources.

MMI scored the highest marks in the employee relations criteria. Management has worked hard to make MMI an "employer of choice" and develop a career path for advancement. Employees have seven "tracks" in leadership, warehouse and technical track, with several job categories in each track.

New hires have a 30-day onboarding session of training.

MMI spent $100,000 on training in 2019. The company gives tuition reimbursement. Chappel said one employee, a sales engineer who works in business development, is enrolled in the executive MBA program at Michigan State University.

The MMI submission for the award included a lot of employee success stories. Abdiel Rodriquez became a temporary worker in late 2017. He had recently moved to Michigan from Puerto Rico and was learning English. Rodriquez became a press operator and began asking lots of "how and why" questions and took very detailed notes, studying them at night. He worked his way up through several jobs to become an inventory analyst today.

MMI employees get RJG and Routsis training — often with the help state grants for the company. And the Michigan Manufacturing Technology Center helps by providing training for ISO audits, Lean Six Sigma green belts and supervisory skills. MMI has six new green belts and plans to send more people through that process.

The company has expanded its wellness program through a committee of employees that plans events such as a 5K run and "win-by-losing" contests against other companies.

On the benefits side, MMI has a 401(k) match and holds on-site classes for employees on investments, financial planning and goal setting.

The Six Sigma belt holders helped MMI score well in the quality criteria. Last year, the company added a quality lead position to help out the quality manager, an important job given new programs in the pipeline.

Customers include Navistar International Corp., Paccar Inc. and Fiat Chrysler Automotive NV, among others. In 2019, the company shipped more than 6 million parts to 500-plus locations around the world. MMI won the Navistar Black Diamond Award in 2017 because the molder is in the top 2 percent of the Navistar's supplier base.

At one customer, a representative praised MMI for quickly responding to any problems.

"The overall quality of their work is exceptional. They send representatives to their plants to respond to the issues. They send representatives to the plants to review the process prior to the launch of a new product," the official said, adding: "They go beyond the call."

MMI also got good marks from the judges in the areas of environmental performance and industry and public service. In the environmental criteria, the company has added LED lighting in factories in Saline and Warren, as well as making big steps to improve recycling over the years.

Community service includes volunteer work to combat diabetes and the American Cancer Society. Employees donate their work breaks to pack toiletries for the homeless. MMI last year held its first annual company fundraiser, to support the Huron Valley Humane Society.

The close working relationship with college internships leads MMI's industry involvement efforts.

Mark Rathbone, a mold maker, founded a prototyping house in 1984 called Proto-Tech Industries. He changed the name to PTI Engineered Plastics to reflect the company's evolution to a turnkey plastics company with an in-house tool room. In 2010, PTI launched PTI Design, specializing in product innovation and development.

PTI still specializes in molding and assemblies for low-volume, complex parts and doing prototyping at its plant in Macomb.

Initially, the company was an automotive molder, as that sector accounted for 75 percent of business in the mid-1990s. Then management moved to diversify PTI into medical molding, so that medical now accounts for 53 percent of sales. Automotive is 33 percent. Other markets include defense/aerospace and commercial.

PTI employs 365 people in a 160,000-square-foot plant that has 4,000 square feet of Class 8 clean room space and 5,000 square feet of controlled environment operations. Both areas offer assembly and packaging services.

The company generated $50 million in sales during 2018 and runs 54 injection molding machines, in clamping forces up to 750 tons. Sales climbed from $40 million in 2014 to mid-$40 million in 2015 and 2016, then reached $50 million in each of 2017 and 2018.

PTI is profitable, and executives say they try to serve a diverse mix and customers to achieve steady earnings each year.

Throughout its submission for the Processor of the Year Award, PTI Engineered Plastics did a good job of explaining the company's history and how it evolved over the years. The company provided charts spelling out its measurement of the manufacturing.

In the area of technological innovation, PTI is working toward the interconnected world of Industry 4.0. Last year, the company added 12 Arburg injection molding machines equipped with the ALS host computer system.

Also, 34 of the company's injection presses are eDart-capable, using RJG's in-mold sensors.

PTI also invests in automation, including multiple robots working in tandem on the same work cells. In one example, robots do insert molding, degating and assembly, then run quality checks of every part. And the automation is flexible to run on different parts.

"This allows us to use this automated cell across five product lines with minimal changes," officials wrote in the award report.

PTI has three collaborative robots. One does multiple tasks in the assembly department, such as thermal insertion and push-pin installation. Another is used in molding. The third cobot is in the PTI Technical Academy for training.

The company runs a metrology lab and is adding a color lab for customer use.

Turning to customer relations, PTI said its top 10 customers have been with the molder for more than 20 years. PTI works to gain new customers by exhibiting at a half-dozen trade shows a year.

Contacted by the Plastics News judges, customers said PTI is a responsive supplier. Tooling expertise is an important part of their relationship with PTI — providing a fast turnaround and therefore faster time to market.

Another customer also said PTI is an on-time supplier.

A tight hold on quality makes it happen. PTI closely monitors production metrics and benchmarks industry standards.

The customer lot acceptance rate has been consistently over 95 percent. The average number of days of open validations — where the quality engineering area validates new jobs are done right — has fallen dramatically. And the cost of quality, a measure of both internal and external defects, has been cut in half since 2014.

PTI officials said the company was among the first of all U.S. businesses to achieve certification in ISO 13485:2016 for medical quality management systems and IATF 16949:2015 for automotive quality systems. And PTI is now among a very small group certified to MedCred, a process certification audit for medical devices.

The Detroit Free Press named PTI one of the top 100 midsize workplaces in 2019 — the sixth time PTI has made that list. That is proof of solid worker relations, since it's based solely on an employee survey. One quarter of all employees have worked there for more than 10 years.

PTI promotes from within and pays for job-related education. Employees get a paid day off to take an annual physical.

The company recently started a program of "stop and notify," where workers can stop production and notify a supervisor of problems. PTI rewards the employee with a gift card and a certificate that is displayed in the plant.

And PTI is active in the community. To help interest young people in manufacturing, in 2014 PTI launched the PTI Technical Academy, a four-week program for Macomb County High School students in grades 10 through 12. They learn about mold making, injection molding and product design. The company sponsors the local robotics team.

PTI is active in Manufacturing Day, local blood drives and Relay 4 Life events.

The company scored very good grades for its environmental performance. Employees joined an effort to clean up the Clinton River, helping to remove 2.7 tons of garbage. Over the last decade, PTI's paper consumption declined by 21 percent year — enough to save an estimated 2,080 trees.

Investing in a closed-loop water system with in-house water treatment means that PTI cut water consumption by 40 percent, or 80,500 gallons. For the last three years, the company has invested about $60,000 in lighting upgrades, including automatic shutoff.

And even waste oil and lubricants get recycled. By working with the local electric supplier, PTI sends that to a local farm to heat its barns through a 99 percent fuel and waste-efficient furnace.

Peggy Whitaker, PTI's marketing and communication specialist, nominated her company for the award.