ISSUE 2 2020
COVID-19 SPARKS INDUSTRY UNCERTAINTY Improve Underperforming Sales Accounts n Take Charge of Rising Healthcare Costs n Drive Efficiencies during the 'New Normal' n
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ISSUE 2 2020
8 STRATEGIES Improving Underperforming Accounts: Advice from the Trenches
Association .............................................. 14
18 BENCHMARKING Mold Builders Face Rising Costs: AMBA 2020 Health and Benefits Report
Industry .................................................... 34
Speak Out .................................................. 6
Product ..................................................... 42 Calendar ................................................... 46 Ad Index ................................................... 46
Take Charge of Your Healthcare
22 ADVOCACY COVID-19 Threatens Phase I US-China Deal 24 PREVIEW Amerimold Connects Offers Free Online Event Experience 25 TRAINING The Importance of Training
the american MOLD BUILDER | Issue 2 2020
AMERICAN MOLD BUILDERS ASSOCIATION 7321 Shadeland Station Way, #285 Indianapolis, IN 46256 P: 317.436.3102 • F: 317.913.2445 email@example.com • www.amba.org
26 MANAGEMENT The COVID-19 Effect: Preparing Your Business for a ‘New Normal’
Troy Nix, Executive Director Kym Conis, Managing Director Susan Denzio, Business Manager Rachael Pfenninger, Project Manager
Advising Editor: Kym Conis Advertising/Sales: Susan Denzio
30 OUTLOOK CARES Act Provides Relief to Mold Builders
36 PERSPECTIVES What I ‘Love’ about this COVID-19 Experience
2150 SW Westport Dr., Suite #101 Topeka, KS 66614 P: 785.271.5801
40 SOLUTIONS Information Download: How Mold Builders are Moving Forward During COVID-19
Managing Editor: Dianna Brodine Asst. Editors: Liz Stevens, Nancy Cates Art Director: Becky Arensdorf Graphic Designer: Mikell Burr
45 TECHNOLOGY CNC Machine Utilization: Downtime
Opinions expressed in this publication may or may not reflect the views of the Association and do not necessarily represent official positions or policies of the Association or its members.
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A MESSAGE FROM THE AMBA PRESIDENT
Ayou, your family and your employees are doing well and staying healthy during these trying times.
s I’m writing this letter (on what should have been the last day of our annual conference), I hope
As we are going through this new and ever-changing work environment, we need the AMBA more than ever to help us through these difficult times. As members of AMBA, if we can stand together and make our way through these hard times, we can do anything.
JIM SPERBER AMBA President Master Tool & Mold
Looking back to February, the AMBA hosted its first sales seminar in conjunction with a shop tour of Ultra Polishing. I found the sales seminar useful in finding new techniques and tips, along with advice on selling our open time. I want to thank Casey and Lester at Ultra Polishing for opening their shop and explaining the fine details that goes into polishing our molds. This was something that I guess I overlooked, but not anymore!
March brought a whole new set of challenges with the COVID-19 virus. I would like to thank Troy Nix and the AMBA team, Laurie Harbour from Harbour Results, Alan Rothenbuecher and Johanna Parker from Benesch Law, Omar Nashashibi from The Franklin Partnership and Mike Devereux from Mueller Prost for all their hard work in getting us information and hosting weekly (and often daily) webinars. If you haven’t joined any of these webinars, you are truly missing out on one of the great benefits that come with AMBA membership. Due to the COVID environment, AMBA had to cancel our 2020 annual conference and now is looking forward to the next one, to be held in February 2021. The association will host several upcoming events, including weekly webinars called Today’s Business Operations for continued roundtable discussions. And, on May 27, the AMBA will host a virtual AMBA annual meeting and industry update where finances, membership, corporate governance, strategic direction and an advocacy update will be discussed. I want to comment on the importance of filling out the surveys that are sent out to you from the AMBA. The Franklin Partnership was able to get eight of the 10 items that are very important to moldmakers included in the CARES Act. The Franklin Partnership is watching USTR carefully to keep us informed on trade policies and to make sure that the tariffs we fought so hard for remain in place. In closing, I would like to thank Justin McPhee for his many contributions as a board member and president and for earning the highly coveted honor of being the longest sitting board member in the history of the AMBA. In honor of his service (and once the bars are opened again), I request that all members visit their local tavern and ask for, “the first one on the left.” I also would like to thank Mike Mullholand for his six years of service as a board member and for opening his shop and sharing his best practices with all of us. If you ever have any questions about leaf blowers, Mike is a true expert on them. I am looking forward to the next time we can get together and have face-to-face discussions. Take care, stay safe and healthy, God bless all of you and God bless American mold builders. We are stronger together. n
National President Jim Sperber, Master Tool & Mold
Secretary and Legal Counsel Alan Rothenbuecher, Benesch, Friedlander, Coplan & Aronoff LLP
Immediate Past-President Toby Bral, MSI Mold Builders
Treasurer Tom Barr, TK Mold & Engineering
Vice President Don Dumoulin, Precise Tooling Solutions
BOARD OF DIRECTORS
the american MOLD BUILDER | Issue 2 2020
David Bowers II, JMMS, Inc.
Charles Daniels, Wepco Plastics Mike Devereux, Mueller Prost Greg Eidenberger, Paragon D&E Dan Glass, Strohwig Industries Chad LaMance, United Tool & Mold Andy Peterson, Industrial Molds Group Kenny Skar, Vincent Tool Tyler VanRee, Legacy Precision Molds
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IMPROVING UNDERPERFORMING ACCOUNTS: ADVICE FROM THE TRENCHES
By Liz Stevens, contributing writer, The American Mold Builder
Kis critical to the bottom line of any business, AMBA offered a
nowing that creating and implementing a successful sales strategy
new event centered on the sales process. The AMBA Sales Process Forum was held on February 27, 2020, in Hoffman Estates, Illinois. The forum featured presentations from best-in-class mold builders on sales management strategies, processes and best practices. AMBA members Hillary Coombs, vice president, sales and marketing at Westminster Tool, and Charles Daniels, chief financial officer of Wepco Plastics, Inc., shared strategies for improving underperforming accounts. The American Mold Builder talked with Coombs and Daniels to learn about the insights they discussed at the event.
run plastic injection molding for medical, industrial, aerospace, consumer goods, construction and more. Wepco’s tool room also can provide job shop machined metal parts, custom sinker EDM work, 3D printing services and stereolithography. COMPONENTS OF A ROBUST SALES STRATEGY In the presentation that Coombs and Daniels delivered together, they began with an overview of key sales strategies. For each customer, they explained, it is important to first identify what is of value to the client.
Westminster Tool, located in Plainfield, Connecticut, has been in business since 1997, when Ray Coombs began manufacturing mold components in his basement. Now expanded to a large facility and with another location in the works in nearby Sterling, Connecticut, Westminster is a complete injection mold builder serving the medical, automotive, aerospace and defense, consumer packaging and industrial markets.
Coombs explained that “value” is quite distinct from “need,” and that value is often a moving target. “What is valuable to the client,” she said, “is different for each customer and sometimes for each order. At the end of the day, we are providing a mold (that is the client’s need). The value that we can provide is what differentiates us from our competitors.” She illustrated value with a comparison. “For some clients, the pertinent value is a really tough tolerance that they have to hit. For other customers, the value might be lead time.”
Wepco Plastics is located to the west of Westminster Tool, in Middlefield, Connecticut. Wepco started out in another basement – that of Wally Parmelee – in the 1980s. Now in a 10,000-squarefoot facility, the company specializes in rapid prototype and short-
Daniels concurred, and offered another example of differing values. “If you are selling based on price, and customers really just care about lead time,” he said, “you will not be able to provide what they need and want.” Both speakers clarified how to capitalize on the highest
the american MOLD BUILDER | Issue 2 2020
value identified for a customer and an order. “Once you understand what is driving the client’s purchasing decisions,” said Daniels, “you can customize your solution.” “When you pitch your quote,” Coombs stressed, “you should cater your wording to focus on the value most important to the customer for this order.” Having evaluated the customer, and the customer’s needs and wants, Daniels and Coombs suggested that the next key sales strategy is setting expectations for the type and quantity of work likely to be proposed, won and ultimately delivered to the client. As Daniels explained, it’s all about communicating and being in sync. “Ensure that you and your customer are on the same page,” he said. “They need to understand your process, including agreeing on how you will communicate, identifying important milestones, setting payment expectations, etc.” He pointed out that failure to set expectations up front could lead to misunderstandings and potentially negative impacts on the relationship. Coombs reiterated the importance of this strategy. “We call this setting the expectation,” she said. “If you don’t know it, how can you meet or exceed it?” Once a working relationship with a customer has commenced, regular reviews of how sales performance is stacking up against one’s initial expectations for a client’s book of business will reveal whether there are any problems to explore and resolve. Coombs offered an example. “You believe a customer should generate $500,000 per year in sales. If, at mid-year, you have only done one quote for them for $250,000 and the customer has a 10% hit rate, it is not likely that you will hit the $500,000 sales target.” Customers that are judged to have become underperforming accounts (more on how to make this determination later) will require their own care and handling. Another crucial element in the sales process is managing relationships with customers, and the first step is to understand the nature of the relationships in a sales setting. “It isn’t really one company buying from another,” explained Daniels. “It is more that people from one company are buying from individuals at another company. Spending time to deepen those relationships is extremely valuable. You want your customers to rely on you as a friend and a partner, not merely as a vendor.” Coombs agreed and took the exploration of relationships a bit further. “This is critical to ensuring transparent and consistent communication,” she said. “And Charles is right: It varies from person to person in a company.” Coombs explained that some of her customers really value dinners and lunches for building professional relationships. “Others,” she said, “are very straight to the point and prefer using detailed emails to communicate.” The bottom line, according to Coombs: “The more you can get on the same page the better. It is just like every relationship – you have to know how to communicate effectively. “
If you are selling based on price, and the customers really just care about lead time, you will not be able to provide what they need and want." – Charles Daniels The final point that Coombs and Daniels emphasized as part of successful sales strategies is for mold builders to see themselves as partners with their customers. Creating and cultivating personal relationships is half of a strategy that is complete when the relationship moves from acquaintance or friendship to real partnership. Becoming a partner requires an investment, and investments can really pay off. “Invest in the success of your customers,” urged Daniels. “Really work to help them achieve their goals. If they view you as a valuable partner, you are more likely to gain loyalty from them.” You can’t fake it ‘til you make it; sincere, thoughtful attention and caring are what’s needed. THE SYMPTOMS OF UNDERPERFORMANCE According to Daniels and Coombs, there is a simple test for identifying an account that is underperforming and, therefore, failing to create sufficient sales opportunities. Either of two scenarios may signal the drop in performance: a decrease in sales when actual business awarded is compared to the potential business projected for the customer, or a drop in sales when the current book of business is compared to the customer’s past history of sales. Coombs gave an example to illustrate that first scenario: a drop in sales versus the sales forecast. “Do you have a prospect who you believe should be generating more sales?” She described a customer with a $20M annual tooling budget, of which a mold builder hopes to capture just $500,000. “Historically, let’s say your hit rate is 10% with this customer,” Coombs suggested, “so you will need to generate $5,000,000 in quoted volume.” If the mold builder sees evidence that it is not on course to reach the target, Coombs offers some important questions for identifying the source of the shortfall. “What is keeping you from getting that small sliver of their business? Do you need to increase your hit rate to reach your goal? Does the customer not see your value?” Daniels offered another way to judge a looming decrease in sales as compared to projected sales for a year. “During the quoting process, a new customer states that it expects to order 5,000 parts per month for the entire year,” he said. “After three months, you notice that it has only ordered 2,000 per month and you don’t have a PO for the future months. It would be important to reach out to this customer.” page 10
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A look at current year sales as compared to a customer’s sales history also might point to a problem to explore. “Review year-over-year sales figures and determine if customers are doing the same level of business that they have done previously,” suggested Daniels. “If the sales are lower than in the past, it is time to investigate why this is happening.”
Daniels and Coombs bank on using honesty, transparency and flexibility to seek remediation opportunities. They stressed that understanding the actual current state of the relationship with the customer may be somewhat time-consuming, but that it will pay dividends.
Coombs offered another illustration. “You anticipate $500,000 per year, but are only at $100,000 in June – when you would normally be at $300,000-plus,” she said. “This is a cue to dig deeper and understand the cause. You could evaluate your quotes: Do you have enough pipeline that you should focus on closing or do you need to generate more business… OR does the customer just not have the work this year?”
In assessing the current state of the relationships, Daniels suggested going deeper than just reviewing the mold builder-customer relationship. “What is going on in their industry,” he asked, “and what is happening to the global economy?” To Daniels, this is a basic starting point. “You can’t get to anywhere efficiently if you don’t know where you are starting,” he said. “You will use the information on current state to form the base of your remediation plan.”
DIAGNOSING THE CAUSE OF UNDERPERFORMANCE Armed with the figures that reveal underperformance – whether in contrast to expectations or to historical trends – remediation begins with a little more research. Specifically, the research includes talking with the customer to share the concern over lost sales, to ask for more business and inquire as to the reason for decreasing sales, and to probe for whether sales have fallen due to an objection or a condition perceived by the customer (more on objections and conditions later).
“You have to take some time to understand the situation, to get curious about gaps before diving into a solution,” said Coombs. “An example is that – without having communicated with the client – you might jump to a conclusion, such as ‘I have to be cheaper to win more.’ But in fact, the customer might just not have any new business this year or maybe isn’t comfortable with how far you are from the location.” The pair suggested that mold builders can dive in to learn the customer’s entire “pie” of work, and then maintain a relationship to get as many slices of the pie as possible. Or, mold builders might ask for more business as a jumping-off point to learn why they are not getting more of the customer’s work. In terms of diagnosing a problem and moving toward a solution, knowledge is power.
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the american MOLD BUILDER | Issue 2 2020
Coombs and Daniels also pointed out the importance of asking questions to clarify a customer’s objections, but they stressed the importance of knowing the difference between a customer’s objections and a customer’s insurmountable conditions. Here’s how Coombs described the difference. “Let’s say a customer says your mold cost is too high, but you are at the lowest point you can be at without taking a loss on the job,” she said. “If this is an objection, it is something that you may be able to overcome. That is, you are not the most affordable option. As a remedy, you could drop your price, but you don’t want to do that. In the case of an objection like this, you can work to understand if price really is a deal breaker or to see if what you need is to increase your perceived value to help the customer understand what extra value you will provide at your price over the ‘cheaper’ option. “However, if the customer’s rationale is a condition,” she explained, “it is a situation that you cannot overcome. If, for example, the customer’s budget is capped at $150,000 for the tool, your higher price is a deal breaker. There is nothing you can do about it other than finding a way to meet the price by making something quicker/ easier/etc. But there is nothing you can do to change this condition – the customer’s budget ceiling.” Objections can be addressed and
possibly overcome; conditions are what they are, and one’s only option is to bend to meet them. RX FOR AN UNDERPERFORMING SALES CLIENT With facts and knowledge in hand, mold builders are now ready to try out prescriptions that will boost sales – by applying solutionsbased selling techniques.
Molded to Perfection
To Daniels and Coombs, solutions-based selling is simple. “This goes back to being a good partner and establishing the needs of your customer,” said Daniels. “If you understand their challenges, you can then explain how your product and/or service can help to overcome them.” Coombs laid it out in a hypothetical situation. “Let’s take selling a car,” she said. “Generic sales would be, ‘Here’s this brand new red sports car that is the hottest item. You’ll love it.’ Solutions-based selling is asking the driver what is needed – maybe it is a safe, reliable family car – and then finding the features of a car that solve that need for them.” As to advice for creating a solutions-based sales pitch and presenting it to the customer, Daniels and Coombs were equally succinct. “I believe it starts by listening a lot more than talking,” said Daniels. “Many ‘sales pitches’ are focused on the selling company – its product, service, experience or culture. In order to really understand a customer’s problems or challenges, it is more important to ask good questions and really listen to the customer’s answers.” Coombs boiled it down beautifully. “Use your customer’s words,” she began. “Listen. Then take exactly what is needed and connect it to a feature/solution you can provide.” A CASE STUDY OF UNDERPERFORMANCE Hillary Coombs described how she identified an underperforming sales customer at Westminster Tool, and then used the tools in her solutions-based selling toolkit to address the situation and turn it around. “We had one customer that we knew had a lot more potential work and, even though we were quoting, we would rarely win an order,” she said. “Initially, we kept coming back and discussing money. We would drop our prices and still not win the job. I decided to start visiting face-to-face and try to dig deeper. It took about five visits but, eventually, I got to the bottom of it: The company had stronger partnerships and relationships with other mold builders, which made it more comfortable to stay. BINGO – now I had something to work with. I started building relationships, using our company
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culture as a talking point, finding ways to show them we are a partner – not just a supplier – and how we could work together to grow together. Within just six months our hit rate doubled.” Coombs did initial research to learn about the customer’s pie of business and saw that her company was not getting as many slices of the pie as they would like. When price-cutting didn’t change the situation, she invested by making multiple visits to the customer and finally learned the customer’s reason for not awarding Westminster more business. Now with an objection (as opposed to a condition) identified, Coombs set about to overcome the objection by cultivating a stronger relationship that eventually developed into a partnership that benefited Westminster and the customer. TO YOUR CONTINUED SALES HEALTH By taking advantage of the insight shared by Coombs and Daniels, and by implementing techniques like the ones they have generously described, mold builders can enjoy stronger relationships with customers and cultivate partnerships that support the growth of both mold builder and client company. n You need to be sure, you can rely on your supplier. HASCO as pioneer in development of standard components for moldmaking is working with qualified suppliers from Europe and North America, offering a secure supply chain to our customers. Our Promise: - More than 100,000 highest quality standard components - Fast and reliable delivery - Continuous product identification traceability - Certified quality management system to DIN EN ISO 9001
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the american MOLD BUILDER | Issue 2 2020
In February 2020, AMBA launched the Sales Process Forum, an unproven concept that relied on the willingness of member companies to share their sales processes with industry peers. Despite the uncertainty of a new event launch, over-sold attendance put an end to any doubt of the event’s success. The exchange led to many companies sharing similar challenges, validating their own processes and discovering new, implementable ideas. Out of the forum, a new concept emerged – Sales and Marketing Roundtable Discussions. AMBA members can register now for the next session, June 3, 2020, at noon Eastern time. In May, AMBA also will launch a new Emerging Leaders Virtual Ignition Webinar Series, featuring facilitated discussion and speakers every third Thursday of the month. The first session was scheduled for May 21, 2020, at 2PM Eastern time, followed by the “AMBA Annual Meeting – Industry Insights and Updates” webinar at noon Eastern time on May 27, 2020. Currently, the AMBA has three plant tour workshops scheduled for the fall season – an August plant tour workshop at Century Die Co., a September plant tour workshop at Strohwig Industries (exclusive to members of the Emerging Leaders Network) and a November plant tour workshop at Legacy Precision Molds. In light of the current COVID-19 pandemic, check the AMBA Events calendar at amba.org/events for continuing updates and details.
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Benchmarking Compilations AMBA has gathered timely, peer-driven information to help members make the best decisions during the COVID-19 period of uncertainty. Related benchmarking includes the following: Work from Home • COVID-19 Policies and Procedures Policies and Procedures • Work from Home Policies and Procedures • Policies and Procedures When an Employee Tests Positive for COVID-19 Compilation of policies, resources and best practices for working from home during COVID-19.
The AMBA Emerging Leaders Network, alongside the Manufacturers Association for Plastics Processors (MAPP) and the Association for Rubber Products Manufacturers (ARPM) young professional groups, is launching a new workshop series: Virtual Ignition – Lighting Your Path to Leadership. During these monthly workshops, the associations will host a series of speakers, facilitators and exchanges where young professionals and those new to the industry will explore how to lead through an environment of change and uncertainty. By connecting, sharing and learning with one another, these future leaders will establish their “lights” of leadership, empowering them to embrace new opportunities along their own paths and strengthening their ability to light the way for others. All workshops will include live discussions during or after each presentation. To register, visit AMBA.org/Events. BENCHMARKING: HEALTH AND BENEFITS REPORT NOW AVAILABLE For the first time, AMBA has published a stand-alone report solely focused on health and benefits plan details offered by US mold manufacturers. Representing more than 3,000 participating employees, this report includes the following information: • Types of health plans offered • Cost of offering employee benefits • Plans and correlating contributions 2020 • Ancillary benefits AMBA HEALTH AND BENEFITS REPORT • Retirement plans HEALTHCARE AND BENEFITS INFORMATION OFFERED BY MOLD MANUFACTURERS
Cost for the report is $89 for members; $189 for nonmembers. Download the report at https://amba.org/publications/browse/. AMBA COVID-19 ‘HUB’ PROVIDES VALUABLE RESOURCES In face of the changing conditions surrounding COVID-19, AMBA has continued to gather and share pandemicrelated resources, including webinar and roundtable opportunities, benchmarking COVID-19 (Coronavirus) Policies and Procedures compilations, partner offerings and up-todate government resources. Compilation of internal and external communications, outside resources and infectious disease plans submitted by US Manufacturers.
the american MOLD BUILDER | Issue 2 2020
COVID-19 – Continuing Conversations with AMBA Members During the ever-changing landscape of COVID-19, the AMBA identified a growing need to connect its members to discuss emerging business challenges. To facilitate the sharing of challenges, best practices, Policies and Procedures When Employee Tests Positive for solutions and legal resources, the AMBA COVID-19 organized a series of weekly roundtable DRAFT discussions. Visit http://amba.org/events/ for details on upcoming roundtable discussions. Compilation of policies and resources for organizations to deploy if an employee tests positive for COVID-19.
PULSE SURVEYS TAKE TEMPERATURE OF MOLD BUILDING INDUSTRY
AMBA has launched periodic Pulse Surveys to give business leaders insight into the state of the mold building industry during the COVID-19 pandemic. This short, one-minute survey takes the pulse of business operations and asks questions that include the following information: • Operating capacity • Staffing levels • Supply chain issues • Forecasting • Status of PPP loan approval To see the results of these surveys and participate, visit the AMBA COVID-19 Resource Hub at https://amba.org/covid-19-updates-andresources/. LIST OF LOCAL, REGIONAL AND NATIONAL GRANTS NOW AVAILABLE Through its partnership with The Franklin Partnership, AMBA members now can access a comprehensive list of state, regional and national grants and tax incentives that are available. These sources of financial support address a variety of areas, including the following:
• • • • • • • • •
Job readiness and training Workforce development Economic growth (local, regional and national) Competitiveness in international markets Apprenticeship programs STEM activities Public infrastructure Community development Workers re-entering the labor market (i.e., veterans, disabled individuals, etc.)
To download the full list, AMBA members can visit AMBA.org/ resources/. AMBA ANNUAL MEETING GOES VIRTUAL MAY 27, 2020 12-1PM ET
Plastics also was a recipient of the AMBA 2018 Educational Outreach Award. Daniels is active in workforce development, manufacturing industry groups, leadership at his church, town government and is a youth mentor. In 2017, he became a certified management accountant and, in 2018, a certified continuous improvement champion. Daniels is excited to join the AMBA Board of Directors and stated, “I am looking forward to the opportunity to develop new relationships and make an impact on the mold building industry.” Chad LaMance is currently the COO at United Tool and Mold Inc. (UTM) in Liberty, South Carolina, and Rainbow City, Alabama. UTM’s 75 employees focus on repair and engineering changes for the plastics industry. LaMance started at UTM in 1996 as a high school apprentice and was able to grow with UTM through various roles, including CNC operation and programming, engineering and design, and project management. He serves on the page 16
This year, the AMBA Annual Meeting – normally held during the AMBA Conference – will be hosted virtually, giving all AMBA members an opportunity to attend. During the meeting, the state of the AMBA will be covered, including the following information: • AMBA overview: Financials, membership and strategic direction • Update on US/China trade relationship • Current temperature of mold building industry and next steps to recovery
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Charles Daniels has been the CFO of Wepco Plastics (Middlefield, Connecticut), since 2013. His prior experience includes owning a construction company, and leadership roles in large and small companies in a variety of industries, including energy, hospitality and finance. Daniels has a master’s degree in business administration with a concentration in accounting and a bachelor’s degree in hospitality management. In 2017, he was awarded CFO of the Year by the Hartford Business Journal. Wepco
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advisory board for the local technical schools to help promote the skilled trades. According to LaMance, over the years, he has attended several AMBA events and met a lot of great people, providing a lot of opportunities to learn from experiences of others. “I look forward to joining the AMBA Board to not only continue learning from peers in our industry, but to give back and contribute, where I can, to keep the AMBA moving forward,” said LaMance. “Some of the most valuable resources that we use regularly at UTM are because of connections we have made through the AMBA and the great things they do for our industry.” MEMBERS Tessy Plastics, LLC Donnie Thompson, Project Engineer | 434.385.5700 Tessy Plastics, LLC, is a premier custom injection molder with an in-house mold shop. The company’s capabilities include design and build of multi-cavity injection molds, mold repair, engineering changes and maintenance for injection molds. Tessy Plastics serves the medical, automotive, aerospace, military and consumer products markets and is AS9100, ISO 9001:2015 certified, ITAR compliant and FDA approved. Zero Tolerance, LLC Steve Michon, Owner | 586.630.3032 Zero Tolerance, LLC, is a growing plastic injection mold manufacturer located in Fraser, Michigan, which serves the medical, automotive, consumer products and defense industries. Through the company's continuous investments in leading-edge software and high-performance machinery and tooling, Zero Tolerance's experienced team provides high-precision molds to exact tolerances that are dependable, easy to maintain and interchangeable. Alchemy Precision Leo Rivas, Engineering Manager | 847.829.4631 Alchemy Precision delivers high-quality parts to leading industries including medical, electrical and automotive. This custom shop has a proven history of premium craftsmanship – a legacy that is carried into the next generation. Alchemy Precision deploys state-of-theart technology alongside well-established, traditional machines. This allows the company to produce end-to-end solutions for closetolerance machining including injection, insert and micro molds. PARTNERS Great Lakes Trade Adjustment Assistance Center Scott Phillips, Senior Project Manager | 734.998.6227 Great Lakes Trade Adjustment Assistance Center (GTLAAC), helps small, import-injured manufacturers develop and finance projects designed to improve their global competitiveness. Part of a network of 11 centers facilitating the federally funded TAA for Firms program, GTLAAC serves companies in Ohio, Indiana and Michigan. (Call for referrals to other centers.) Clients receive planning assistance and up to $75,000 in matching funds. n
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MOLD BUILDERS FACE RISING COSTS: AMBA 2020 HEALTH AND BENEFITS REPORT By Rachael Pfenninger, AMBA Project Manager
Aremains steady, mold manufacturers are more strategic than s health care costs continue to rise and employee participation
ever in how they mitigate premium cost and the types of plans and ancillary benefits they offer to employees. With insight provided by AMBA’s 2020 Health and Benefits Report, mold manufacturers have an opportunity to benchmark their costs and plan offerings against those of their industry peers.
2020 AMBA HEALTH AND BENEFITS REPORT
According to reported data in the AMBA 2020 Health and Benefits Report, the majority of respondents (97%) currently offer health insurance. Those that do not offer health insurance indicated they were small manufacturers with under $2.5 million in annual sales revenue and fewer than 20 employees.
While more than half of respondents reported an increase of 5% or less, nearly a quarter of respondents indicated an increase of 16% or more. When looking forward toward 2020, many companies anticipated the same – nearly half of surveyed mold manufacturers reported experiencing or anticipating an increase of 6% or higher. (See Charts 1 and 2.) HEALTHCARE AND BENEFITS INFORMATION OFFERED BY MOLD MANUFACTURERS
According to a recent article published on Manufacturing.Net1, the cause of rising costs is price, not utilization. Not only are there fewer physicians per capita in the US than in other industrialized countries, but there are fewer hospitals available and higher administrative costs. The US also has higher diagnostic and procedure costs – in fact, the US does more MRI and CT scans than any other country. Other contributing factors include the amount the US spends per capita on pharmaceuticals (this number is nearly double what other industrialized countries spend) and the role insurance companies play in US healthcare. Because they have no incentive to reduce their costs, insurance companies simply mark up their prices every year to maintain their profit margin. 18
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PARTICIPATION AND COST From early January to mid-February in 2020, AMBA surveyed 66 US mold manufacturers from 19 states on their offered healthcare plans and benefits. Data in the final report represented more than 3,200 full-time employees, 2,300 of whom are enrolled in their company’s healthcare plan (an average of 73%). Companies between $2.5M and $4.9M reported the average highest participation. Overall, survey respondents reported spending approximately $390,000 annually to offer healthcare and ancillary benefits to their employees – an average of $12,793 per participating employee per year (PEPY). Of the surveyed annual sales ranges, companies under $2.5M incurred the highest cost per employee. These companies reported paying over $13K per participating employee per year. This annual sales range also reported the lowest percentage of participating employees. Trending data also demonstrated that the average healthcare cost per employee rose for companies reporting higher percentages of employees aged 50 or older, while companies with high percentages of employees 30 or younger tended to pay less, on average, per employee. TACTICS TO HELP CONTROL PREMIUMS In order to help mitigate premium cost, some mold builders have implemented strategic offerings. The most commonly reported practices included moving to a high-deductible plan, offering health savings accounts, shifting premiums to employees, offering a Section 125 plan and offering flexible spending accounts. Other tactics employed by respondents included incentive-based wellness programs, gym club reimbursements, offering multiple plan options, reduced employer HSA contributions and moving to a self-funded insurance plan. (See Chart 3.) HEALTH PLANS OFFERED TO EMPLOYEES The most common plan type reported by respondents was a preferred provider organization (PPO) plan, with 54% utilizing this plan type, followed by 45% that offer a high deductible health plan (HDHP). No mold manufacturer reported offering a point of
service (POS) plan. Of the plans that were offered, 76% are fully insured – only 24% of the plans offered are self-insured. Larger organizations are more likely to opt for self-insured plans than smaller manufacturers, with 40% of companies over $20M in revenue utilizing this option. (This is 20% to 40% higher than any other revenue range.) ANCILLARY BENEFITS AND RETIREMENT PROGRAMS In addition to health insurance, many surveyed respondents offered ancillary benefits and retirement programs as well. For instance, 81% and 64% of mold manufacturers offer dental and vision benefits, respectively. Respondents also offered shortterm disability (74%) and long-term disability (57%) benefits. However, while 87% additionally offered employee-specific life insurance, less than half of this survey’s respondents (45%) offered dependent-specific life insurance. In addition to opting to provide health and other medical coverage, approximately nine out of 10 surveyed respondents also offered a retirement plan. The most common plan type offered to employees is a 401(k), which 72% of manufacturers provide. Other retirement programs offered included a SIMPLE IRA (18%) and a Profit-Sharing Plan or SEP (2%).
ADDITIONAL PROGRAMS OFFERED Respondents also were given the opportunity to share other benefits provided to employees. By far, the most common additional offering Chart 3 named was tuition reimbursement, which 65% of mold manufacturers currently offer. This benefit was followed by profit sharing (39%), flex time (24%), company loans (17%) and employee assistance programs (11%). n
1. McCann, David. (2019, Nov 4). Companies Move to Limit Employees’ Health Costs. CFO.com. Retrieved from https://www.cfo.com/health-benefits/2019/11/companies-moveto-limit-employees-health-costs/
To purchase a copy of the complete AMBA 2020 Health and Benefits Report, visit amba.org/publications/. www.americanmoldbuilder.com | AMBA.org
TAKE CHARGE OF YOUR HEALTHCARE By Rachael Pfenninger and Susan Denzio, AMBA
Athe horizon, research shows that there is a growing movement to s healthcare costs continue to rise, and no relief appears to be on
minimize premium costs by designing a healthcare program that is carefully cultivated to meet the particular needs of an organization1. In many cases, there are opportunities for mold manufacturers to follow suit. However, it is important that business owners and HR professionals understand what questions are most important to ask in order to assess the condition of their current healthcare plans and better manage those plans moving forward. ASK YOUR BROKER 1. What is our Per Employee Per Year cost? More specifically, what is our Per Employee Per Month (PEPM) cost? Understanding the per employee cost per year – and, more importantly, the cost per employee per month – is necessary for benchmarking and managing your healthcare costs from year to year. 2. Can that cost be broken down in the following categories? • Claims PEPM o Medical o Rx • Administrative costs PEPM • For Self-funded organizations: Premium PEPM
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Understanding the cost breakdown between claims (medical and drugs) and the administrative costs provides a better overall view of the plan. By identifying and reviewing these buckets of spend, a business has a better view of the plan utilization. Higher utilization results in lower healthcare costs, because to a healthcare provider, this signifies better preventive maintenance. By asking for the data, employers have a vehicle through which to locate possible improvements or changes to the spend, which can impact the performance of their plan in a positive manner. 3. How did age demographics affect our health insurance risk rating and costs? Both population growth and an aging population are drivers of health insurance prices. As people get older, insurance becomes more expensive, and an aging demographic typically requires more care than a younger one. Diving deeper into employee demographics will allow a business to identify how and/or if these factors are impacting the renewal rate. 4. What are the three primary drivers of our health benefit costs? Knowledge is power. Identifying what items are driving the costs provides insight to better manage those areas and make decisions based on that data.
DIG DEEPER WITH YOUR BROKER: MORE QUESTIONS TO ASK The following questions will bring additional clarity to better manage your healthcare plan: 1. Do we have any data on the price of our most common services utilized? • How can we affect this? 2. Can you break down the pricing for our three highest cost claimants? • What can we do to affect this? 3. What is our Rx PEPM? 4. What is our average cost per script? 5. Can you identify our top three prescription spend categories? 6. Can you identify our top three high-cost prescriptions? Tracking prescription data provides the knowledge needed to better manage resources for the best pricing. ONE SOLUTION – A HEALTHCARE STRATEGY BASED ON DATA Healthcare ranks among the top three concerns of every business owner and yet, few apply a businesslike strategy (five-year plan) to their healthcare plan. There is no easy, one-size-fits-all solution for
health benefits. The challenges, pitfalls and options are broad and diverse. Therefore, the AMBA, under the First Resource umbrella, has been working diligently on a healthcare solution that affords the ability to leverage the size of an aggregate group while maintaining individual choice. First Resource has created a solution that is based on the same principles used to successfully run members’ businesses – it understands how and where bottom-line dollars are being spent and makes those expenditure decisions based on data. This healthcare solution is simple: Control the money, engage employees and attack high-cost medical and prescription services, while allowing members the flexibility to implement a risk-management strategy that best meets their needs. For more information on this healthcare strategy, email email@example.com. n REFERENCES
1. Collins, Michael. (2019, Jan 28). Manufacturers Face Rising Healthcare Costs. Manufacturing.Net. Retrieved from https://www.manufacturing.net/labor/blog/13249190/ manufacturers-face-rising-healthcare-costs
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COVID-19 THREATENS PHASE I US-CHINA DEAL By Omar Nashashibi, The Franklin Partnership, LLC
IChina, Beijing negotiators asked their counterparts in Washington n December 2019, just as the coronavirus had begun to emerge in
to include a force majeure provision in the US-China Phase I agreement that President Trump went on to sign in January 2020.
The language – “in the event that a natural disaster or other unforeseeable event” – allowing either party to exit the agreement is not only about what did China know and when did they know it? It also has implications for trade and the agreement President Trump signed, committing China to purchase $200 billion of US goods and services over the next two years, including $77 billion from US manufacturers. Will China live up to its part of the deal or use this provision as a reason to back out? April 14, 2020, marked the two-month anniversary of the entry into force of the US-China Phase I trade deal, and recent Chinese trade data shows imports into China for the first quarter of this year fell by 2.9% over 2019. Even once Chinese demand picks up, US exporters will face challenges shipping the amount of goods specified in the agreement as parts of the US begin to reopen. The two sides set timelines for milestones on subjects from the easing of agricultural restrictions to purchasing schedules. However, China missed the March 27 deadline to provide a detailed action plan on its intellectual property commitments, and Beijing has not taken steps in addressing forced technology transfer or enforcing a crackdown on IP theft. Some of the challenges China faces are that many of the needed reforms require legislative or regulatory changes at a time when limitations on government officials congregating remain in place. China has taken some steps to increase purchases of American goods, largely by excluding some US products from tariffs the government imposed in retaliation to President Trump’s 301 tariffs on Chinese imports. 22
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These steps clearly are not enough for President Trump, who in April expressed his frustration and threatened to, himself, back out of the deal. The political climate in the US also may decide the fate of the Phase I agreement as much as COVID-19. The Trump 2020 campaign recently created a video criticizing former Vice President Biden for being too soft on China, while the president began publicly placing the blame on Beijing for not acting sooner on COVID-19. Sources in Washington indicate that the White House is exploring ways to incentivize manufacturers to reshore business from China to the US. On behalf of the American Mold Builders Association, we are working with the White House and Congress on how to develop policies that strengthen manufacturing in America. AMBA submitted a list of ten recommendations to the policymakers drafting the CARES Act, securing eight – including several tax provisions. The government is limited in the type of preferential treatment it may give US manufacturers for fear of violating domestic and international subsidy rules. For example, Washington State provided aerospace giant Boeing with more than $1 billion in tax credits in recent years, leading to a trade war with the European Union. One proposal under consideration is a 100% expensing for companies that bring back to the US the manufacture of PPE, drugs or other critical infrastructure from China. Another topic of discussion is lowering the corporate tax rate for certain manufacturers; however, again, this raises concern over illegal subsidies targeting specific industries. Regardless of the approach, the AMBA strongly supports the goal of bringing the supply chains for critical infrastructure back to the US. We have been in contact with the White House about different ways to promote the US supply chain and connect American businesses with medical device manufacturers.
The president has, as of this writing, signed into law four major bills to address COVID-19. The first, known as Phase 1, provided funding for testing and vaccines, and the second, the Families First Coronavirus Relief Act, expanded Paid Sick Leave and the Family Medical Leave Act. Phase 3, the CARES Act, served as the first economic stabilization measure that created the $349 billion Paycheck Protection Program Loan (PPP), which subsequently ran out of funds in just 13 days. In April, Congress had to pass another stabilization bill with $310 billion for the PPP, which they knew â&#x20AC;&#x201C; even as they voted on the measure â&#x20AC;&#x201C; would not last more than a few days. In the first PPP tranche, 108,000 manufacturers received more than $40 billion of loans designed to help businesses keep employees on the payroll. The overwhelming demand indicates small businesses across the country continue to struggle under COVID-19. Members of the US House and Senate likely will move yet another COVID-19 bill, already having allocated $3 trillion in new spending over a 60-day period. The question remains whether the economy needs another stabilization bill or is ready for an economic stimulus measure. Sources indicate lawmakers likely will pass the next COVID-19 legislation by Memorial Day, with many expecting the bill to lean more toward stabilization.
that USTR had previously lifted for 12 months. This was an important victory for AMBA members, and the lobbying effort in Washington, DC, continues. While much of Washington and the country focuses on COVID-19, the AMBA has kept its focus on making sure US importers do not convince the government to again lift the tariffs on plastic injection molds from China. Especially as the White House considers incentives to reshore manufacturing, AMBA is lobbying to make sure policymakers in the White House and on Capitol Hill understand the importance of mold builders in the US supply chain. Having lobbied in Washington for more than 20 years across four separate presidents, we all too often see certain parties take advantage of a crisis and quietly take an action that could hurt US manufacturers. While we must all focus on battling COVID-19 and the immediate threats faced, the AMBA continues to work in Washington on policies to protect mold builders and grow manufacturing in America. n Omar Nashashibi is a founding partner at The Franklin Partnership, LLC, a bipartisan government relations and lobbying firm retained by the American Mold Builders Association in Washington, DC.
While the White House is eager to restart the economy with tax incentives to reshore manufacturing, it is unclear whether such provisions would make their way into the legislation now under discussion, which likely will include more support for individuals, and possibly small businesses. A senior House Democrat recently told us he expects not only a Phase 5 bill, but possibly a Phase 6 and Phase 7, even as he raised concern over costs. The anti-China sentiment emerging as a potent component of the 2020 race for the White House may help to put pressure on lawmakers to include a provision related to onshoring more manufacturing to the US. Former Vice President Biden also is increasing his attacks on President Trump over his comments supportive of China in the early days of the pandemic. Behind the scenes, the Office of the US Trade Representative continues to grant exclusions for US importers from paying the 25% tariffs on Chinese manufactured goods. The Trump administration recently granted the eleventh round of exclusion for 177 products under List 3, which imposes $200 billion of tariffs on Chinese imports. Much of the exclusions focused on products from fruit and vegetable seeds to industrial chemicals, rubber hoses and tires to automotive rear-view mirrors. These exclusions are valid through August 7, 2020. The AMBA succeeded in lobbying the Trump administration in 2019 to reinstate the 25% tariffs on Chinese plastic injection molds www.americanmoldbuilder.com | AMBA.org
AMERIMOLD CONNECTS OFFERS FREE ONLINE EVENT EXPERIENCE S2020 now is Amerimold Connects.
hifting gears after an in-person event was ruled out, Amerimold
This free, remote event experience will be held online from June 9 through 13. Recognizing that events are an important resource for those looking to stay informed, educated and current on emerging technology trends, Amerimold Connects offers these necessary business tools in an environment that works for current industry conditions. The online event is being planned to offer the following: • Virtual exhibitor showrooms, hosted by molders, moldmakers, software suppliers and part makers • An online forum to directly connect exhibitors and attendees, moderated by industry experts • Free education sessions and product demonstrations • Interactive networking experiences Amerimold Connects will provide a virtual marketplace for attendees and exhibitors in an online format. Exhibitors will have online showrooms that feature brochures, white papers, product releases, videos and more. Attendees will be able to visit each booth with an easy-to-use online interface, interacting with exhibitors using features such as one-to-one chat and virtual business cards.
Free educational sessions, presented by industry experts, will cover supply chain management, tooling procurement, data management, additive manufacturing, mentorship, trade policy and efficiency improvement best practices. The schedule will feature a mixture of pre-recorded and live content, giving each attendee a wide range of material for business improvement. Amerimold Connects also will feature the announcement of the 2020 Leadtime Leader Award winner. Registration for Amerimold Connects is currently open. Event registration and details are available at www.amerimoldexpo.com. n
FROM THE MANAGING EDITOR: The mold building industry may be sticking close to home right now, thanks to COVID-19, but the need for training and education continues. Amerimold Connects is only one opportunity to ensure your team is up to speed on the latest technology, production tips and safety measures. First, check out offerings from the American Mold Builders Association (www.amba.org/events). Then, reach out to your supplier and equipment partners to see if they are offering online training sessions or educational webinars. And, if you’ve had your eye on a new software or material type, now is the perfect time to ask for a demonstration or sample. Don’t sit idle – now is the time to position your team and yourself for what comes next. 24
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THE IMPORTANCE OF TRAINING By Andy Routsis, president, Routsis Training
The best manufacturers have a workforce that has an in-depth understanding of many factors, including machinery, tooling, materials, documentation, equipment, quality, 5S and housekeeping, as well as industry best practices. On-the-job learning, at best, provides behavioral training to help maintain the status quo. Your employees need the knowledge, skills and understanding necessary to help bring your company to the next level. To keep your entire workforce up to speed and up to date, your company needs an efficient training plan that delivers knowledge, skills development and hands-on instruction. STRUCTURED EMPLOYEE DEVELOPMENT PLAN The most successful companies have in place structured, ongoing, in-house training plans that help develop needed talent from within. This development plan also should be used to teach new hires the varied skills needed to keep your company running, as well as the critical information and skills to help it improve into the future. A structured plan involves the following elements: • effective training materials • skills-development exercises • focused hands-on mentoring • relevant testing The focus in developing a structured training plan is to first determine the knowledge, skills and capabilities needed for each job title and then locate materials that will help you meet these goals over the long term. Determine the long-term goals and objectives for each job title – not only to keep the production floor running, but also what is needed from everyone for your company to get to the next level. CREATE A CULTURE OF CONTINUOUS IMPROVEMENT Continuous improvement is an ongoing process. What worked at your company 10 or 20 years ago will not meet your current customers’ needs. The same will be true five or 10 years into the future. Your workforce must be prepared for the new machinery, equipment, materials, documentation, procedures and technology that will inevitably be introduced in the future. For example, if your employees have a real in-depth understanding of what is actually involved in making good product, then they can effectively leverage a new piece of technology in a way that someone who just knows how to run the machine cannot. The focus should be on your employees developing an evidence portfolio of their knowledge and skills capabilities that grows each year.
KEEP THE FOCUS ON QUALITY ASSURANCE Hundreds of free troubleshooting charts and guides are available online, yet bad product still gets to the customer. The truth is, most manufacturers put too much training emphasis on traditional troubleshooting because they do not actually know what makes good product. Technicians usually spend a large percentage of their time moving from one unreliable process to another, while the quality team tries to stop any bad product from getting to the customer. This is known as quality control. A key aspect of getting better is constantly striving to provide better quality assurance for your customers every day on every production run. If a manufacturer truly understands and properly documents what makes good product, then the goal of production is to repeat those conditions every time. Scientific troubleshooting is just the process of creating a standard – or returning the process back to the standard – by determining what is preventing you from making good product and then fixing the issues. MONITORING AND MAINTAINING YOUR TRAINING A successful in-house training program should develop and increase the knowledge, skills and capabilities of your workforce. This increased capability will improve their ability to perform their job functions and better prepare them to handle future improvements in procedures, documentation, part handling and technology. Track improvements using metrics, including the following: • scrap rate and/or customer returns • unscheduled downtime • troubleshooting time • efficiency and productivity The key in choosing metrics is to select data with at least six months of history so the impact of the training initiative can be measured effectively. n Reprinted with permission from Plastics Business, Issue 2, 2020, (www.plasticsbusinessmag.com). Andy Routsis is president and a master trainer for Routsis Training. Over the last 30 years, Routsis Training has developed the largest, most upto-date online plastics training library in the world on scientific molding. The training materials in this library range from beginner to advanced and explain in detail the plastics industry’s best practices. His company specializes in ongoing training systems and on-site training. For more information and a free Gap Analysis Test, visit firstname.lastname@example.org or https://www.traininteractive.com/gap/. www.americanmoldbuilder.com | AMBA.org
THE COVID-19 EFFECT: PREPARING YOUR BUSINESS FOR A ‘NEW NORMAL’ by Laurie Harbour, president and CEO, Harbour Results
Tmanufacturer is going to come out of this crisis intact. The industry
he COVID-19 pandemic has made one thing clear: Not every
has experienced a significant impact, causing ripples throughout the supply chain. And, if a business went into 2020 in a weakened state, it’s really going to show on the backside of this year. Ramping back up will certainly be a major challenge for the industry. Nearly all companies will be slowly restarting operations – first for OEMs and then suppliers. In North America, most manufacturers began operations in May with limited or staggered shifts and other safety precautions in place. While this ultimately is a step in the right direction, the reality is the industry still is facing serious headwinds as restrictions on public life remain in effect and will continue for some time. In fact, the marketplace will not return to normal until a COVID-19 vaccine is in place, which clearly will not occur in the near future. For now, the key questions we face are “What is the business going to look like when operations resume?” and “What do we need to do to better prepare the company for success?” CHALLENGES FACING MANUFACTURERS Companies will face a number of challenges as a result of this crisis. To start, a global recession is here. A recession to this extent is something we have not experienced in recent times – and, frankly, we
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don’t have a clear picture of how quickly the economy will rebound or if we can expect future recessions in the next two to five years. Additionally, looking at most industries – automotive, recreational vehicles, aerospace, etc. – we can expect a 50% to 60% drop in production for the remainder of the year. As ramp-up activities proceed, suppliers also can expect business inconsistencies due to products and launches being modified or even canceled while others become a priority. Also, raw materials and supplies may be in short supply. In the end, companies with good supplier relationships will likely have an advantage as the supply chain opens up. Internally, reengaging a workforce safely could be difficult and costly. Additional resources to ensure safety standards are in place will be needed, and it is highly likely many employees will be nervous or unwilling to return until the pandemic is better under control. In fact, those who are close to or at retirement age may decide not to return at all – or they might decide to stay longer because of the impact on their 401(k). And finally, cash. It has been a continuing edict since this crisis started: Conserve your cash. Doing so will continue to be a challenge for manufacturers. Cash will be required to operate and meet customer demands, so companies need to be conservative because there is no clear picture as to how long the ramp-up will be or – even worse – if there could be a second wave of the virus forcing future shutdowns.
Those who applied and received the Paycheck Protection Program loan should not become complacent and instead work to ensure those funds are used strategically and not just for labor forgiveness. PREPARING YOUR BUSINESS One of the most critical factors to a company’s long-term outlook is the response of leadership, and this situation is going to challenge leaders now more than ever. As we transition to a different phase of the crisis – reopening – leadership must focus on several aspects. Align with Customer Demand
Companies must have ongoing communication with their customers so that business operations align with supplier demands. Shops need to expect and prepare for variability and change, ensuring operations are flexible and conservative so as not to burn cash. For example, when looking at bringing back your workforce, understand what number is needed to achieve required utilization, remembering that you can flex up or down within a revenue range with limited additional resources.
Companies must have ongoing communication with their customers so that business operations align with supplier demands. Shops need to expect and prepare for variability and change, ensuring operations are flexible and conservative so as not to burn cash." Drive Operational Efficiency
Continuous improvement always should be a foundational element at shops, but in today’s crisis, looking for unique ways to drive efficiency will be absolutely critical for success. Bring back employees who can help you achieve the necessary gains. Challenge every aspect of the business to determine the best course of action to decrease production costs while maintaining or improving efficiency. If you have two facilities, do you need to open both? Or can you temporarily focus operations in one facility? Can you leverage work-from-home protocols to drive down infrastructure costs? Can you revise roles and responsibilities to better utilize indirect labor? Can you reduce and stretch your administrative staff to do more with less? In general, be creative and challenge everything. Consistently ask, “Why?” Leverage Technology and Automation
Shops must maximize the current technology and automation in place to improve efficiency and limit the number of employees utilized. Businesses must find avenues to run their operations with technology at the forefront. And, although this may seem strange, leadership should be looking at how smart investments in technology could improve operations, and based on what they find out, make a plan. page 28
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Focus on Workforce Readiness
Although often overlooked, workforce readiness is incredibly important for leading through this crisis. Companies need to take advantage of this time to look at the entire workforce and make a plan for what talent they need to bring back, where to trim and where they have gaps. Additionally, plans must be put in place to reengage the workforce and bring them back safely, as well as how to handle those who don’t want to come back for health concerns. And, some shops may want – or need – to consider incentives, including bonus or hazard pay, to encourage people to come back to work. Think Strategically vs. Tactically
Last but not least, leaders need to move from short-term tactical planning to long-term strategic planning that will allow their businesses to align supply with demand. The COVID-19 pandemic is going to have a lasting impact on the economy and the manufacturing industry. Company leaders need to be planning for the remainder of 2020 and 2021 with revised production numbers. Those with strategic plans in place need to revisit and update. And, for those that don’t, now is the time to sit down and put a plan in place. Everyone should be collecting market intelligence to help them understand what is happening in the industries they serve and with the economy, and then planning accordingly. Sales have been and will continue to be difficult but should be a big part of strategic planning. Leadership needs to challenge its sales team to be creative and try tactics that may not have worked in the past but could provide opportunities in this new, evolving climate. There’s no question the industry will undergo significant changes as a result of this pandemic. On a more holistic level, there is the opportunity for positive change. Hopefully, this will be the shift in the industry that we’ve been waiting for. This includes businesses implementing new technologies and automation strategies, embracing a flexible workplace and placing a greater emphasis on keeping employees safe and healthy. The economic impact of the pandemic is going to be felt through December, and it will be sometime in the first quarter of 2021 when we start to see a rebound in the manufacturing industry. However, this rebound likely will be slow. Those leaders who step up, maintain their composure, continue to communicate with their team and look at every aspect of the business and how they can uniquely address challenges are the ones who will be best positioned for success through this very difficult situation. n As president and CEO of Harbour Results Inc. (HRI), Laurie Harbour leads a team of analysts and manufacturing consultants to help small- to medium- sized manufacturers develop short- and long-term strategies, improve their operations, reduce risks and optimize business. For more information, visit www.harbourresults.com. 28
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MANUFACTURING INDUSTRY UTILIZATION DROPS SIGNIFICANTLY Harbour Results conducted a study to better understand how the COVID-19 pandemic is impacting small- to mediumsized manufacturers – both production and tooling. The results show that nearly two-thirds of those shops surveyed are operating at some level of reduced capacity or are closed. Additionally, of those shops that are closed, approximately 70% expect to remain closed for more than one month. The industries experiencing the highest level of impact are the automotive and home appliance industries, with the lowest operating levels of 28% and 57% respectively. Additionally, across all manufacturing processes, companies have indicated that utilization has dropped from as little as 18 percentage points to as much as 35 percentage points. The study also indicates that shops underestimate the time it will take manufacturers to improve, with the majority of respondents stating they will recover in less than two weeks. According to Laurie Harbour, “This is overly optimistic. The effects of this crisis have, in some cases, not even shown up for manufacturers and will last through 2020 and into 2021.” During this crisis, operating cash has been a critical component for companies to maintain viability. In this study, nearly half of shops indicated they had less than six weeks of cash on hand, and 100% are experiencing some level of reduced accounts receivable payments. Also, as expected, sentiment across manufacturers has dipped drastically, with production dropping 21 points to 42% and tooling dipping nine points to 52%. The top concerns of these shops, in addition to employee health and safety, are a global recession, negative financial implications and sales.
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CARES ACT PROVIDES RELIEF TO MOLD BUILDERS By Michael J. Devereux II, CPA, CMP, Mueller Prost
ORelief and Economic Security (CARES) Act – the largest relief n March 27, 2020, President Trump signed the Coronavirus Aid,
package ever passed by Congress almost three times over – into law, thereby ushering a host of new lending and tax provisions available to mold builders.
The CARES Act made several taxpayer-favorable changes to the tax code that impact mold builders, some of which should provide much needed cash during the COVID-19 pandemic. The following provides a brief overview of the business tax provisions of the CARES Act. EMPLOYEE RETENTION CREDIT The CARES Act provides for a refundable payroll tax credit for 50% of the wages paid by eligible mold shops to certain employees during the COVID-19 pandemic. The credit is available to mold shops whose operations have been fully or partially suspended as a result of a government order or mold shops that experienced a greater than 50% reduction of quarterly receipts, measured on a year-over-year basis. The credit is equal to 50% of the qualified wages paid to employees from March 13, 2020, through December 31, 2020. The definition of qualified wages depends upon the number of average full-time employees in 2019. For mold shops that had more than 100 average number of full-time employees in 2019, only the wages of employees who are paid during a shutdown or face reduced hours as a result of the plant’s closure or reduced gross receipts are qualified wages. However, for employers with 100 or fewer full-time employees in 2019, qualified wages also include amounts paid to all employees due to the reduced gross receipts. Qualified wages include amounts paid or incurred to provide and maintain a group health plan (on a pro-rata basis) and are capped at $10,000, making the maximum amount of FICA payroll tax credit $5,000 per employee. Mold shops receiving Small Business Interruption loans are not eligible for the Employee Retention Credit. EMPLOYER FICA DEFERRAL This provision of the CARES Act allows mold builders to defer payment of their employer share of the Social Security tax (FICA at 6.2%) for payroll tax deposits required to be made between March 27, 2020, and December 31, 2020. The amounts otherwise due during this period will be due in two installments – the first on December 31, 2021, with the remainder due on December 31, 2022. 30
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Mold shops receiving loan forgiveness through the Paycheck Protection Program, however, are not eligible for the deferral for amounts due after they receive notification of forgiveness. NET OPERATING AND EXCESS BUSINESS LOSSES The CARES Act made two significant changes in the Net Operating Loss (NOL) rules and temporarily removed a limitation on business losses enacted by the Tax Cuts and Jobs Act of 2017 (TCJA). First, the CARES Act removes the 80% of taxable income limitation that was enacted as part of the TCJA. Losses generated in any tax year beginning after December 31, 2017, and before January 1, 2021, (tax years 2018, 2019 and 2020 for calendar-year taxpayers) may offset 100% of the taxable income to which the loss is carried. The 80% of taxable income limitation is reinstated for tax year beginning after December 31, 2020. Second, the CARES Act allows mold builders to carry their NOLs back to each of the five taxable years preceding any losses generated in tax years beginning after December 31, 2017, and before January 1, 2021, (2018, 2019 and 2020 calendar-year taxpayers). The IRS issued special guidance for taxpayers who have already filed their 2018 or 2019 tax returns and would like to avail themselves of the modified rules for NOLs. The CARES Act also delayed a provision originally enacted by the TCJA that limited “excess business losses for noncorporate taxpayers.” The TCJA had enacted a new limitation for owners of flow-through businesses (S Corporations, Partnerships or Sole Proprietorships). This provision, as enacted by the TCJA to be effective for tax years 2018 through 2025, limited business losses exceeding $250,000 ($500,000 in the case of married taxpayers filing a joint return) and were not eligible for carryback. The CARES Act allows excess business losses for tax years 2018 through 2020 and, if net operating losses are generated, allows for a five-year carryback period. Business owners should note, however, that the excess business loss limitation was just one way in which an owner’s loss could be limited. Taxpayers must still be at risk for and have sufficient basis to
claim any ordinary loss. Further, passive shareholders may only offset passive income with passive losses. CREDIT FOR PRIOR YEAR MINIMUM TAX (AMT CREDITS) The TCJA repealed the corporate alternative minimum tax (AMT). Taxpayers that had previously paid the AMT received Minimum Tax Credits (AMT Credits). The TCJA made those credits refundable over four years (2018 to 2021). The CARES Act accelerated the refundability of this credit, allowing the refundable amount in 2018, but making it fully refundable in tax year 2019. However, the CARES Act also provides for an election to take the entire refundable credit amount in tax year 2018. BUSINESS INTEREST LIMITATION The CARES Act temporarily increases the limitation on business interest expense for those subject to the limitation. The TCJA had introduced a new limitation for tax years beginning after December 31, 2017, whose average annual gross receipts exceeded $25 million, a limitation that is subject to inflation (the limitation applied to companies with average annual gross receipts of $25 million and $26 million in 2018 and 2019, respectively).
Any business interest expense that exceeds the sum of interest income and 30% of adjusted taxable income is not allowed as a deduction in the year paid or incurred, and the excess amount is carried forward as an interest expense to future tax years (indefinitely). The CARES Act temporarily increases the limitation on the deductibility of net interest expense to 50% of adjusted taxable income for any tax years beginning in 2019 or 2020. Mold shops concerned that their adjusted taxable income will be minimal or zero are allotted some relief in computing their 2020 adjusted taxable income limitation. At the election of the mold builder, the 2020 interest expense limitation will be 50% of its 2019 adjusted taxable income. QUALIFIED IMPROVEMENT PROPERTY The TCJA modified both the bonus depreciation rules and the definition of qualified improvement property. The TCJA increased the bonus depreciation percentage to 100%, retroactively, for property placed in service after September 27, 2017, through page 33
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December 31, 2022. Beginning in 2023, the bonus depreciation percentage is phased down by 20% each year, with the accelerated “bonus” depreciation phased out by 2027.
Given that it is a technical correction, the provision is retroactive, and mold shops can write off any QIP placed in service after December 31, 2017.
In addition, the TCJA consolidated three types of improvement category assets into a new category called Qualified Improvement Property (QIP). For mold shops, QIP includes any improvements made to the interior of your facility that are placed in service after the date your facility was first placed in service. Improvements do not include enlargement of the building, elevators or internal structural framework.
CONCLUDING THOUGHTS Numerous other provisions, including the Paycheck Protection Program, the Economic Injury Disaster Loans and Emergency Grants, and individual tax relief, were enacted as part of the CARES Act; and Treasury seems to be issuing new guidance as quickly as issues or ambiguities arise. As you may suspect, these provisions don’t exist within a vacuum. Many provisions impact others, as well as existing tax incentives. As such, careful planning is advisable. n
In writing the TCJA, a general 15-year recovery period was intended to have been provided for QIP. However, due to a drafting error, that specific recovery period did not make it into the final statutory language of the bill. As such, under the TCJA, QIP fell into the 39year recovery period for nonresidential real property, and therefore is ineligible for 100% bonus depreciation. The CARES Act provided a technical correction to the TCJA and specifically identifies QIP as 15-year property for depreciation purposes. This also makes QIP eligible for 100% bonus depreciation.
Michael J. Devereux II, CPA, CMP, is a partner and director of Manufacturing, Distribution & Plastics Industry Services for Mueller Prost. Devereux’s primary focus is on tax incentives and succession planning for the manufacturing sector. He regularly speaks at manufacturing conferences around the country on tax issues facing the manufacturing sector. For more information, visit www.muellerprost.com.
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1  OBITUARY: PLASTICS NEWS REPORTER BILL BREGAR Bill Bregar, who spent 31 years reporting on the plastics industry, died April 5 of an apparent heart attack at age 58. Bregar was a plastics industry star, known for his extensive industry knowledge and long list of sources and friends. He joined Plastics News as a staff reporter shortly before the publication’s launch in 1989. His beats changed a few times, but Bregar is best known for his years of experience covering plastics machinery. Initially he covered building and construction, and he has long been one of the publication’s experts on injection molding, thermoforming and rotational molding. He was promoted to senior reporter in 1996. Bregar wrote the popular Heavy Metal blog on PlasticsNews.com, where he wrote about machinery and workforce issues, and personal experiences. He also wrote a monthly column on best practices.  ROLLOMATIC APPOINTS COO The Rollomatic Group, maker of precision CNC tool grinding machines with North American headquarters in Mundelein, Illinois, has announced the appointment of Joe Kane as COO for both Rollomatic Inc. and Strausak Inc. Kane will remain president of Strausak Inc. The combined companies will further fill out their global presence in providing top solutions for precision tool grinding. Kane will remain in the company’s Mundelein office and will oversee all areas related to the operation of the two companies. He will manage the combined team of applications engineers and will provide leadership and training to the field service manager, parts and logistics manager and the customer solutions manager and their teams. Day-to-day operations, IT/IS and facility also will be Kane’s responsibility. For more information, visit www.rollomaticusa.com. TOOLING TECH GROUP ANNOUNCES EXPANSION OF FT. LORAMIE FACILITY Tooling and automated systems producer Tooling Tech Group, Macomb, Michigan, has announced that it has broken ground on a 10,000 sq. ft. expansion of its thermoforming and compression moldmaking facility in Ft. Loramie, Ohio. The expansion, expected 34
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to be completed in the third quarter of 2020, will bring the total manufacturing space to 100,000 sq. ft. at this location. This addition will accommodate two new COMI LaborShape 5-axis machining centers, specifically designed for high-speed machining on aluminum and light alloys. Recognized for their high accuracy and finishing ability, these machines will add metalworking capacity, improve speed and efficiency, and provide the ability to complete complex part geometries. Additionally, the space will be large enough to accommodate additional machining centers. For more information, visit www.toolingtechgroup.com. HASCO INDIA RECEIVES AWARD FOR BEST PLASTICS & POLYMERS BRAND 2020 At the presentation of The Economic Times’ brand awards in February, HASCO India, a supplier of modular standardized components and accessories in Bangalore, received the award for Best Plastics & Polymers Brand 2020. This prize is of special significance in India because The Economic Times, with its head office in Mumbai, is the second most widely read English-language business newspaper in the world. The criteria for the Best Plastics & Polymers Brand Awards are cost-efficiency, excellence, technology and sustainability. HASCO India was able to convince the jury on all four counts. The company’s success derives from the HASCO brand values of agility, innovation, simplicity and performance. As an internationally leading standard-component specialist, HASCO has been active in India since 1998. For more information, visit www.hasco.com. TST OFFERS VISI LICENSES FOR ONLINE WEB TRAINING Tooling Software Technology, LLC, Clarkston, Michigan, a provider of CAD/CAM/CAE software and North American Master Distributor for VISI and PEPS, offers virtual training. VISI Modeling: True Hybrid Modeling is the foundation of all VISI products and provides a robust, powerful solid and surface modeling system. VISI Modeling offers extensive CAD interfaces; an easy to learn interface; solid, surface wireframe and mesh geometry deformation;
blending; associative tool detailing; surface repair and analysis; and combined wireframe, solid and surface modeling. A Modeling Seat includes advanced freeform CAD, 3D modeling, hardware dongle and unlimited Help Desk support. For more information, call 248.922.9293, email Sales@tst-software.com or visit www.tstsoftware.com. US DEPT OF LABOR ANNOUNCES NEARLY $100 MILLION IN APPRENTICESHIP GRANTS The US Department of Labor announced the awarding of grants to 28 public-private apprenticeship partnerships totaling nearly $100 million through the Apprenticeship: Closing the Skills Gap grant program. Grants will support large-scale expansions of apprenticeships in industries including advanced manufacturing, healthcare and information technology. President Trump’s Executive Order on Expanding Apprenticeships in America called for increasing the number of apprentices in the US across all industries. There are more than 6.4 million job openings reported in the US and expanding apprenticeships will help individuals gain the skills necessary to fill these vacancies. The program supports apprenticeships that include a paid, work-based learning component and a required educational or instructional component that results in the issuance of an industry-recognized credential and that meet appropriate quality assurance standards. For more information, visit www.dol.gov.  COMAU PARTNERS WITH EXECHON TO DEVELOP NEW MACHINING SOLUTIONS Turin, Italy-based Comau, an advanced industrial automation products and solutions provider, and Exechon – a joint venture between Lockheed Martin, Tecgrant AB (formerly Exechon AB), a Sweden-based technology company, and Abu Dhabi-based Injaz National that offers parallel kinematic machine technology – have joined forces. Comau and Exechon will design and produce a new Comau machining center able to handle lightweight framing and structural components for multiple sectors, with a particular
focus on automotive, aerospace and electrification. To spearhead a new machining paradigm able to handle large, complex aluminum parts, the companies have started a strategic cooperation. They will leverage their respective competencies to develop a concrete solution for customers that can cost-effectively meet key drivers within the evolving machining market. For more information, visit www.comau.com. CGTECH ANNOUNCES NORTH AMERICAN VERICUT USERS' EXCHANGE EVENTS Software provider CGTech kicked off the first of its 2020 North American VERICUT Users’ Exchange (VUE) events on March 2 in Irvine, California. Each year, CGTech hosts VUE events for its customers worldwide. At VUE 2020, CGTech staff will provide a firsthand look at the new features in the latest release of VERICUT, version 9.0. Attendees also will learn what is already in the works for version 9.1, will see tips and tricks for improving manufacturing efficiency and will have the opportunity to express ideas about the future direction of the software. New features in VERICUT 9.0 include several enhancements designed to increase power and improve efficiency, including a new graphics engine. For more information, visit www.cgtech.com. EXACT METROLOGY SET TO OPEN NEW CENTER IN MOLINE, ILLINOIS Exact Metrology, Inc., Brookfield, Wisconsin, a comprehensive metrology services provider, has added a new facility in Moline, Illinois. The location will serve as a training, support, contract measurement and sales center. Training will be provided on software packages such as PolyWorks®, Geomagic and PC-DMIS. Hardware classes will be offered for Romer, Leica Tracker, Surphaser® and Leica RTC 360. Exact Metrology also will offer a complete range of portable Coordinate Measuring Machines (CMM) and custom classes for any measurement needed. Day classes and half-day classes will be available. Contract services that will be offered include CMM measurement, custom programming, inspection and reverse engineering. For more information, visit www.exactmetrology.com. n
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WHAT I “LOVE” ABOUT THIS COVID-19 EXPERIENCE by Phillip Van Hooser, author and keynote speaker
f you’re looking for a reason to vent today, the title may be reason
“How dare anyone suggest they ‘love’ something as horrid as COVID-19,” you might be thinking – or even screaming. “This self-centered author (jerk) probably is ignoring public health directives, convinced he’s somehow special and immune to it all.” “Seriously! Is he completely clueless regarding the severity of this situation?”
COLLECTIVE VULNERABILITY In the early stages of my search, the first glimmer of hope appeared cloaked in obvious weakness, despair and helplessness. I have sensed it in the downcast tone of daily updates provided by our local, state and world leaders. It’s evident in the eyes of exhausted caregivers. I even have heard it in the innocence of a child wondering if “it’s OK to breathe today?” I’m finding that weakness, despair and hopelessness, as painful as each can be, also are great equalizers when experienced and shared with others. One thing we must realize – we’re all in this together.
If there ever was a justifiable time to let off pent-up angst, it surely must be now. I get it. I’m feeling it, too. Isn’t everyone? So, if unleashing vitriol helps you cope with our current situation, then I’m good with that. After all, the objective is to help you in some way – both now and into the future. And, we need all the help we can get right now.
In times past, natural catastrophes might have given rise to communities, regions and even entire countries rallying together in their shared moment of need. But, the entire world? People of every age and ethnicity, every socio-economic classification, every political or religious inclination all suffering from the effects of the same malady at the same time? It simply has never happened before.
THE STARK REALIZATION Like everyone else, I am trying desperately to come to grips with our world’s new current reality. Less than six short months ago, it was inconceivable that more than a handful of the people on this planet could have accurately described what COVID-19 – the coronavirus – was or, frankly, even cared.
We quickly learned that COVID-19 is no respecter of persons. Though some have proven more susceptible to its physical ravages than others, every human has proven capable of being an agent of transport – a carrier. We have suffered personally, or unknowingly provided opportunity for the suffering to occur in another or watched helplessly as the suffering morphed around us.
Yet less than 180 days later, well over a million people worldwide have been stricken by it. Tens of thousands have died from it. And, economies on every continent lay in tatters due to it.
COLLECTIVE CREATIVITY Again, like it or not, we are all in it together. I call this new reality “collective vulnerability.” And, when collectively vulnerable, the only conceivable way to fight a common enemy and win is to do so collectively … together.
A previously anonymous disease, COVID-19 became known everywhere virtually overnight. The images and repercussions of the resulting human tragedy are likely to live with us all our lives. Frankly, it may be too early for some, maybe even you, to begin an intentional search for positives. But, from a mental health perspective, I can’t wait. I’m searching now for any positives that might be drawn from this nightmare. Otherwise, I fear every future thought and memory of this coronavirus plague – especially the loss and suffering – will continue to cause emotional devastation long after the virus itself has run its course. So, I’m telling myself, “If I can just learn something from this experience, then the great cost of human life and suffering will not be completely in vain.” 36
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Thankfully, we are. We have washed our hands and kept our distance out of greater concern for the safety of the aged, weak and physically compromised among us. With soap and water as our primary weapons, we marched forth to do battle with this unseen enemy. Almost overnight, industrial leaders turned their facilities from making automobiles and pillows to ventilators and surgical masks. Healthcare and residential care providers donned those masks and stared down prevailing airborne pathogens – not in an effort to prove themselves heroic, but rather to stay true to their calling and commitment, to serve others selflessly despite personal risk.
We realized that in our shared, collective vulnerability, it was unreasonable to expect any one person, group or leader to resolve this shared crisis. Therefore, we rallied, collectively embracing our shared vulnerability and then moving forward together. #1: I hate the disease, but I love that we have found greater strength in one another. COORDINATED RE-PRIORITIZATION As we moved forward together into the unknown, new plans of action were required. It’s impossible to plan effectively, with supreme confidence, for possible occurrences that no one has ever seen or experienced. And, despite what critics and armchair quarterbacks might say after the fact, no one could have planned with absolute certainty and accuracy how the COVID-19 pandemic would unfold and the destruction it would unleash. Yet in the midst of the crisis, I have witnessed the emergence of what I now call, “coordinated re-prioritization.” That is where planning, experience and common sense all coalesce to determine what immediate actions are necessary and appropriate – and what aren’t. Hospitals quickly became overwhelmed with coronavirus patients – and decisions were made to forego previously planned “elective” surgeries in order to free up beds for those in immediate distress. When those beds quickly filled to capacity, new “field hospitals” sprang up virtually overnight in unlikely places such municipal convention centers, cruise ships and in mobile tents in public places. When the number of qualified healthcare workers grew dangerously thin, retired healthcare professionals voluntarily headed back to the front lines of service. Things might not have played out as we might have hoped. But, that was all right, too. For in a state of coordinated re-prioritization, the most important things to remember are the following: 1. not the plan, but the objective; 2. not how we used to do it, but how it must be done now; and 3. not who gets the credit they crave, but who gets the help they need. #2: I hate the disease, but I love the rise of our collective creativity and inner determination to do whatever needed to be done. COLLATERAL DAMAGE I watched a movie years ago that first introduced me to the concept of “collateral damage.” Generally speaking, the term refers to unintentional casualties that occur in a military operation.
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WHERE MOLD MANUFACTURERS WILL CONNECT
JOIN US ONLINE: JUNE 8-13, 2020
A REMOTE EVENT EXPERIENCE Amerimold Connects is FREE to attend This is a remote event that brings the amerimold showfloor experience to your home or office. A dynamic online platform, the vendor showrooms will allow you to personally engage with this industry’s domain experts and thought leaders. You can easily access the latest insights on tooling, software, processes and technologies in one place. Register today then join us June 8-13 at Amerimold Connects.
Features of Amerimold Connects include: • • • • •
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R E G I S T E R T O D AY A T PRESENTED BY:
Early in the process of re-prioritizing and deploying resources in the fight against COVID-19, President Trump referred to our coordinated effort as “going to war against an unseen enemy.” The “war” analogy suggested a fight was necessary, imminent and worthy. This was not a war of ideology. This war required a fight for the lives and livelihood of our families, friends, neighbors and fellow citizens. Unfortunately, some turned their immediate attention to the impending collateral damage – those who would suffer innocently. Would-be “experts” and “talking heads” rushed to the nearest camera or microphone to predict countless deaths, healthcare services overruns, stock market collapse, economic ruin and almost certain recession. Frankly, some were right, to one degree or another. COLLATERAL ADVANTAGE Unfortunately, it was far harder to find those willing to highlight the “collateral advantage” of the moment. All citizens were called to the front. There were to be no bystanders. No one could “sit this one out.” Whether it meant caring for the sick, tending to the elderly, educating children, producing and delivering food, providing essential services, sharing available resources or simply staying home intentionally – we all had an assignment.
As costly as this fight has been, it will be won. Once we review the high cost that was paid, we must also recognize what we learned. #3: I hate the suffering this disease has caused, but I love fighting side-by-side with people I care about and who care about me. So, do I really “love” COVID-19? Of course not! I wish this horrible disease and the suffering it has caused could have been avoided. But, that is no longer possible. What is possible is that we commit ourselves to what we can learn from the experience and what we can learn about ourselves. And that, I do love! n Phillip Van Hooser, CSP, CPAE is committed to helping organizations transform their business outcomes by building engaged employee relationships. He is a keynote speaker and author on leadership, service and communication. His popular book, “Willie's Way: 6 Secrets for Wooing, Wowing and Winning Customers and Their Loyalty” recently hit #1 in Customer Relations on the Kindle store. Connect with Van Hooser on LinkedIn and Facebook.
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INFORMATION DOWNLOAD: HOW MOLD BUILDERS ARE MOVING FORWARD DURING COVID-19 Compiled by Dianna Brodine, managing editor, The American Mold Builder
Tits members where member company representatives can discuss
he AMBA has been offering roundtable discussion webinars for
issues related to the current pandemic with their peers as businesses begin to ramp up production and bring employees back on site. Here, a brief glimpse is provided into the conversations happening between mold builders across the country. Member companies are not identified in this article.
HOW ARE YOU SCREENING EMPLOYEE HEALTH? WHAT SAFETY MEASURES ARE IN PLACE? • We asked our employees to complete a five-question questionnaire, with questions based on recommendations from the CDC, such as have you been exposed to people who have traveled internationally, are you experiencing flu-like symptoms, etc. We are verifying their survey responses every day. One entrance has been designated for employees, and we are taking temperatures, which is now mandated by our governor. • We are taking employee temps before they clock in, have made it mandatory for everyone to wear masks and are encouraging anyone who is sick to stay home. We have one person (foreman or plant manager) taking temps in each building. Also have a checklist so we know who is in the buildings each day and that their temps were taken. • Masks are available, but not mandatory. However, we need to start taking temps. We have varying start times, and there’s no one up front right now when people come in, so it’s a logistics issue as to how that is implemented. • We have masks available, but not mandatory. We haven’t done anything formal with the temperature-taking yet. We also are following the CDC-recommended precautionary cleaning in high-touch or high-traffic areas. • We have made masks mandatory. We also have restricted visitors until June and no one is going out to visit customers. There is no temperature testing right now, but every employee has the HR manager’s cell phone number and all employees have been told to stay home and call if they are ill or have been exposed. • We are mandating face masks, so we’ve provided reusable, washable face masks to all employees. • We’re treating masks like all of our other PPE, where in certain areas of the plant it is mandated that masks are worn and in other areas it is not. 40
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Our facility put yellow tape on the floor to remind everyone about maintaining safe distances. We also have put Xs at the entrance to offices to stop employees from walking into those spaces, and we have measured appropriate distances between chairs in the break room.
HOW WILL YOU BRING OLDER WORKERS (OR EMPLOYEES IN GENERAL) BACK AND KEEP THEM SAFE? • Some workers are able to work remotely, so we keep them there. Also, we have one employee nearing retirement and we are working out an alternative position that will enable him to minimize interaction. We also are offering a second shift that a lot of people are taking advantage of – both those who are older and people who suddenly had children at home when school was cancelled. We want to make sure everyone feels safe and comfortable coming to work. • We staggered shifts so that fewer employees are working each shift. Also, we changed our schedule so more people are working four 10-hour shifts and then spread those employees out over six days. • We went from four 10-hour shifts to two different cells – so now one cell works M,T,W and the other works Th-F-S. This gives us less people on each shift, less people co-mingling. It’s been a difficult process, but this is our third week and we’re starting to get the bugs out. It’s all about keeping people safe, so we’re doing the best we can. I’m not sure we’ll go back to our old shift schedule. Eventually, we’ll be running more hours – we are more efficient now, but we don’t have the bodies to be as efficient as we can. We may stay in this setup and hire more employees down the road.
HOW ARE YOU CLEANING / DISINFECTING? • Disinfection materials are available at each station. We’re lucky in that we already have some distance between each work station, and we’re asking the operators to clean and disinfect their own stations. • We have gotten multiple quotes for outside cleaning services, but haven’t implemented anything yet. • We’re using an internal person working full-time. They have a checklist that goes hour-by-hour as to which high-touch areas and which parts of the shop to clean at specific times.
We’ve got an internal cleaning crew and have added a couple of workers to that crew to deal with the added disinfection. We have an internal person who wipes everything down at the end of the day, so the next day it’s clean. We also have an external cleaning service that we have given specific direction to that complies with CDC recommendations. We have four shared CNC programming stations, so that’s a concern for us. We’re constantly cleaning those, and they all have Clorox wipes near them, but the habits of our employees haven’t been reinforced yet – they aren’t doing it as consistently as they should.
HOW ARE YOU TRACKING PAYCHECK PROTECTION PROGRAM (PPP) SPENDING? • We received money pretty quickly. It appears the bank is in charge of validating what that money is used for, and our bank recommended that the funds be placed in the general fund. Because we are working with a local bank and have a relationship with them, we’ll validate the funds that qualify at that time. • Our company is creating a sub-area in Quick Books to have the ability to track those funds. • We’ve put all of that money into a payroll account, with no tracking after that. • Assuming we receive it, we’ll keep it in a separate account and transfer money into the bill-paying account for payroll, using a spreadsheet to see if there’s room to work in utilities, etc. There are several calculators available that will show if we can get it forgiven, allowing us to maximize the potential for forgiveness.
HOW MANY LAUNCHES ARE BEING DELAYED OR CANCELLED DUE TO THE COVID-19 SLOWDOWN? • We’re getting a few small hit-or-miss jobs, but are hearing that cancellations may be coming. • We are just starting to hear from customers that they are holding back. We have a good workload, and I’m getting quotes
in, so it still feels pretty good. But I’m concerned that the quotes will stop coming in. it’s more of a gut feel, but I have heard from customers in the last week that they are holding off on spending. We’re hearing the same thing from a couple launches we’re involved in – that the launches are getting backed off. These customers are waiting to see what the global economy does, because they get parts overseas, which will affect timing.
ARE YOU STILL QUOTING A NORMAL NUMBER OF PROJECTS? • We are busy quoting right now in most areas. • We’re down approximately 15 to 20%. • Our shop is down approximately 40%, but we’re tied to automotive so it’s expected. • Quoting volume is only 70% of where we want to be over the last two weeks, but the more concerning thing is that our release jobs is only 30% to 40% of where we want it to be. • Our quoting is down significantly, but the quotes have a high capture rate – like 90%. • Quoting is up, but potential start dates have really moved out. Everything used to be two to three months, and now it’s four to six months. • We have a record quote book right now, but only $9,000 in orders last week. It’s a tale of two cities. • Our shop is down in quoting about 30%. This sampling of perspectives from around the US provide mold builders the opportunity to benchmark their own facilities and evaluate best practices. To join the next AMBA webinar, visit www. amba.org/events. n
www.americanmoldbuilder.com | AMBA.org
1 ROLLOMATIC INTRODUCES CAPABILITY IN SHARPENING OF DIAMOND-COATED CARBIDE TOOLS Rollomatic Inc., a Swiss machine tool manufacturer with North American headquarters in Mundelein, Illinois, announces new capabilities related to the LaserSmart 510 laser cutting and ablation machine. A drawback of diamond-coated carbide cutting tools is that thick-film coating makes the cutting edge dull, and thin film coatings often wear prematurely. Rollomatic has developed a process to sharpen thick film diamond-coated cutting tools. The Rollomatic CNC Laser Cutting Machine LaserSmart probes the surface of the coated cutting edge to detect the exact shape and position. Then the laser cutting process removes just enough diamond coating to make the cutting edge sharp. Only a predetermined amount of the coating, just around the cutting edge, is removed by the laser process. For more information, visit www.RollomaticUSA.com or email solutions@RollomaticUSA.com.  MEUSBURGER OFFERS LATCH LOCK Austria-based Meusburger Georg GmbH & Co KG, maker of dies, molds, jigs and fixtures, now offers the E 1817 latch lock. Latch locks are used to control molds with two split-line, three-plate molds. With the new E 1817 latch lock, Meusburger has created an exclusive and cost-effective alternative to existing products on the market. The new latch lock’s simple mechanical functional principle offers maximum reliability in the control of three-plate molds. It features a compact design and low machining effort prior to its installation. An animation of the E 1817 latch lock is available to show the individual steps in detail, and CAD data can be downloaded in the shops. The E 1817 latch lock is available from stock. For more information, visit www.meusburger.com.  TOOLING TECH GROUP ANNOUNCES FLEXBASE MODULAR AUTOMATED WORK CELL Tooling Tech Group, Macomb, Michigan, a provider of custom automated systems for assembly, joining and inspection as well as tooling, has announced the availability of its FLEXBASE standardized modular automation cell. Easily integrated, flexible and scalable, the 42
the american MOLD BUILDER | Issue 2 2020
FLEXBASE system can be configured as a stand-alone, automated workstation with manual loading and unloading, or linked together via conveyors to quickly create a complete automated assembly line. FLEXBASE features a welded steel frame base in standard sizes of either 48" x 40" or 72" x 40" and a 37" high aluminum top plate ready to be fitted with custom tooling or fixturing. Each standard system comes with an upper and lower conveyor with stop and blocked sensors and pallets with nests that conform to almost any product. For more information, visit www.toolingtechgroup.com.  ACU-RITE OFFERS FREE UPGRADE DOWNLOAD FOR ITS POPULAR DROS Motion control feedback solution provider HEIDENHAIN Corporation, Schaumburg, Illinois, has announced that to enhance digital readouts (DROs) in machine shops across the world, HEIDENHAIN’s ACU-RITE brand is making new free downloadable upgrade software available. The upgrade assists users of current model ACU-RITE digital readouts to be more productive and efficient, while continuing its ease-of-use tradition. ACU-RITE’s current family of DROs includes models 100, 200 and 300. The new software version – “v1.4.0” – is available on the ACU-RITE website / Software Updates. Highlights include: Axes Q – the letter Q has been added to the axes’ names list; a “Zoom Timeout” time delay has been added to the Dynamic Zoom & Highlight feature; and a “Send Position” soft key has been added. For more information, visit www.acu-rite.com.  SUHNER OFFERS NEWLY DESIGNED VERSION OF BEX 15 Suhner Industrial Products, Rome, Georgia, manufacturer of special industrial tools and special components, introduces the BEX 15 machining unit. With maximum spindle speed up to 23,000 RPM, the BEX 15 offers higher speeds and improved production inline. Standard variations are equipped with 0.55 kW, 0.75 kW and 1.5 kW electric motors. An adapter flange allows installation of multiple spindle heads and angle heads. A new style timing belt drive multiplies the motor speed up to 13,050 RPM spindle speed. An AC inverter drive increases the spindle speed up to 23,000 RPM at 87 Hz. Standard motor mounting on BEX 15 machining spindles is in
4 the rear. Optional front motor mounting is available upon request. Additional optional features include frequency converter and direct drive servomotor. For more information, visit www.suhner.com. RUD OFFERS TOOL MOVER: A REVOLUTION IN TOOL MAINTENANCE RUD Ketten Rieger & Dietz GmbH u. Co. KG, Aalen, Germany, maker of tyre chains, sling chains and chain systems, offers Tool Mover for moving heavy tools and bulky items. Ideal for unmounting tools from injection molding machines or dismantling machine parts weighing several metric tons, the latest generation features a larger working surface at the lowest possible working height. The machine axially rotates tools and machine components up to 64 metric tons. Available in six standard sizes, the smallest (with a table area of 800 x 1300 mm) can handle up to 10 metric tons. The largest standard version – THS 64 – can rotate tools and machine components weighing up to 64 metric tons on its 3500 x 2500 mm table area. For more information, visit www.rud.com. VIRAL SIGN OFFERS ADVANCED COVID-19 SCREENING Viral Sign, Inc., Edina, Minnesota, has announced the launch of the company’s advanced screening technology at the manufacturing facility for Precise Tooling Solutions in Columbus, Indiana. Viral Sign enables users to identify the presence of virus, including COVID-19, in individuals prior to the onset of symptoms. Viral Sign leverages the power of infrared imaging and an advanced screening algorithm to produce a comprehensive thermal signature of the face. In real time, the algorithm assesses the thermal signature to identify patterns consistent with early, pre-symptomatic influenzalike illness, including COVID-19. The total time required for Viral Sign to capture the infrared image, evaluate the thermal signature and indicate the suspicion of virus is approximately two seconds. Don Dumoulin, CEO and owner of Precise Tooling Solutions, said, “Our customers depend on us for on-time deliveries, and this technology helps ensure that Precise craftsmen can continue to meet the high expectations of our customers. We are happy to showcase the Viral Sign technology to other interested employers.” Viral Sign, Inc. develops and markets advanced screening technology to limit
the spread of virus and communicable disease in the workplace, in healthcare facilities and in public venues. To learn more, visit https:// viral-sign.com/. Precise Tooling Solutions is a specialty manufacturer that designs, builds and repairs injection molds and is an authorized seller of Viral Sign. For more information, https://precisetooling.com. BORIDE’S CRISTONE® MATERIAL NOW AVAILABLE IN END BRISTLE BRUSHES BORIDE Engineered Abrasives, Traverse City, Michigan, a developer, manufacturer and distributor of abrasive products, has added Cristone® End Bristle Brushes to its extensive offering of polishing products and accessories. Made from the same highquality crystalline fibers as the popular Cristone® Crystal Fiber Detail Polishing Stones, End Bristle Brushes are the perfect tool to use for cross hole deburring, surface finishing and polishing aircraft parts, engine blocks and medical devices. The Cristone® Bristle Brush structure incorporates nanotechnology that saves time by allowing the finishing of surface roughness with only one fine grit. Brushes come in one size and many grits – ranging from 150 to 6,000 – allowing work on the hardest of materials, such as carbon, to nonferrous metals, such as aluminum. For more information, visit www.borideabrasives.com. TRELLEBORG UNVEILS NEW ECO-FRIENDLY DUST-FREE TOOLING BOARD Swedish engineered polymer solutions provider Trelleborg has announced a new tooling board, TC760X. Kerry Lyons, sales manager for Trelleborg’s applied technologies operation globally, stated: “Our TC760X tooling board is really unique in that it does not dust during machining; the board flakes rather than chips, for a cleaner cut. Less dust means less machine breakdowns, resulting in improved production efficiency and greater cost savings, with reduced environmental impact.” Will Ricci, business development manager for Trelleborg’s applied technologies operation in the US, stated: “The TC760X board provides toughness without sacrificing the glass transition temperature (Tg). The material has a Tg of +140 page 44
www.americanmoldbuilder.com | AMBA.org
g n i h s i l o P d l o M & Repair t Lates e h t g in id v o r P r Technology fo • Finishing Stones • Laser Welders • Ultrasonic Polishers • Micro-TIG Welders • Power Tools • Diamond Abrasives • Mold Polishing Classes
°C, with a low coefficient of thermal expansion, resulting in faster curing, improved machining, and quick and easy direct-to-part manufacturing.” For more information, visit http://bit.ly/31PdYu8 and www.trelleborg.com.  NEW RING ENCODER FROM HEIDENHAIN RESISTS CONTAMINATION Motion control feedback solution provider HEIDENHAIN CORPORATION, headquartered in Schaumburg, Illinois, and San Jose, California, has introduced a new midrange, high-accuracy ring encoder that is suitable for position measurement applications that require high tolerance to contamination but do not demand the accuracy level of an optical encoder. The HEIDENHAIN ERM 2203 is optimized to meet those needs. HEIDENHAIN ERM 2203 ring encoders are most suitable for applications such as gear-wheel grinding machines and others that require similar high accuracy but must operate in an often-contaminated environment. The ERM 2203 retains the 200 µm signal period of other current ERM products, though the graduation error has been reduced by approximately 30%. For more information, visit www.heidenhain.us. HASCO INTRODUCES NEW AIR VALVE Z4913/… Austria-based Hasco, a supplier of modular standardized components and accessories, has introduced the Z4913/… air valve for a safe, reliable production process. With targeted venting of the plastic component on the moving half of the mold, the vacuum can be optimally released with the air valve. Simple assembly and dismantling in the mounting hole allows rapid, reliable fitting and removal, with the feed tolerance reducing tilting danger. The mechanical stroke limitation boosts process reliability. The air valves can be flexibly positioned and installed to save space. All components in contact with the melt are stainless steel and resistant to aggressive plastics. The series, suitable for fast runners, can be used for working pressures of 3 to 10 bar and temperatures of up to 250°C maximum. For more information, visit www.hasco.com.
For more information
800.243.4466 Ext. 223 or 227 44
the american MOLD BUILDER | Issue 2 2020
 OPEN MIND OFFERS ADVANCED CAM SOFTWARE OPEN MIND Technologies AG, a German developer of CAD/ CAM software solutions, has announced the advanced capabilities of hyperMILL® CAM software which offers advantages when using 5-axis machining for moldmaking. The hyperMILL® MAXX Machining Finishing Module, a performance package of the hyperMILL® CAM software suite, is the CAM programming source enabling the use of conical barrel cutters to reduce cycle times over 90% and is ideal for planar, ruled and curved surfaces often found in complex 5-axis components. hyperMILL® MAXX Machining offers three powerful modules for finishing, roughing and drilling. OPEN MIND’s hyperMILL® 2020.1 has powerful 3D and 5-axis machining enhancements for complex machining applications including mold and die. In addition, it increases ease of use and overall programming performance, and includes new automation and additive manufacturing strategies. For more information, visit www.openmind-tech.com. n
CNC MACHINE UTILIZATION: DOWNTIME From a study conducted by MachineMetrics
ith IoT coming to maturity and achieving market penetration, we have on our hands a whole new arsenal of data with which to drive decisions. In an increasingly complex manufacturing environment, manufacturers are looking for any edge they can get to remain competitive in a heavily globalized economy. Over the last three years, MachineMetrics has collected data directly from the controls and sensors of thousands of machine tools. These machines span across hundreds of companies in the US, representing all kinds of machine tools in all types of industries. These data have been collected in the “2019 State of the Industry.”
Two types of data were collected for the study. Utilization data were pulled directly from the machines and are based on the percentage of time a machine is reporting an active state. An active state is sent by the control of the machine based on certain heuristics defined based on the domain of the machine. For example, on some machines, if a G-Code program is running, the machine is considered active. So, if a machine has 33% utilization in a day, it means that 8 out of 24 hours the machine was actively running a program. It does not mean that the spindle was active that whole time, but rather that it was reading and executing a series of commands from a G-Code program, which may include built-in pauses, set-up time, etc. Downtime data were annotated by machine operators and are based on the percentage of time a machine is reporting an active state. An active state is sent by the control of the machine based on certain heuristics defined based on the domain of the machine. Machine operators are prompted to annotate downtime whenever a machine goes from Active to Inactive. Operators annotate based off pre-determined categories that executives in their company have determined. These annotations are then mapped to one of seven categories: Unplanned Mechanical, Planned Mechanical, Cleaning Machine, Operator Unavailable, Inspection, Lack Material/Jobs and Changeover. Average machine utilization for Quarter 3, 2019, was 25.2%. DOWNTIME RATES AND REASONS In addition to collecting raw utilization data, we also prompt operators to provide reasons for long periods of downtime. Looking at the rates at which various downtime reasons occur reveals a kind of “fingerprint” for each machine type in terms of its average operational and maintenance needs. Stamps stand out as particularly prone to losing productivity due to lack of an operator and also tend to be stopped more often for changeovers. This is consistent with their overall low utilization. Horizontal lathes exhibit relatively high rates of cleaning and planned mechanical service compared to other
machine types. By contrast, grinders and Swiss CNCs encounter downtime more rarely and generally for broader sets of reasons. Shop owners could learn a lot about their own machines and operations by comparing against these patterns. (See Chart 1.) According to our data, the most common reason for downtime is that there are not enough operators, confirming the belief that manufacturers can’t find enough skilled labor to run their shops. Downtime benchmarks can be used to inform your business planning practices. Perhaps if you have a disproportionate amount of downtime due to changeovers compared to the industry, you should consider analyzing ways in which this could be streamlined to better align with your peers. (See Chart 2.) n MachineMetrics is the machine data component of the Digital Factory; manufacturing's first Industrial IoT platform designed for discrete manufacturing. For more information, call 413-341-5747, email info@ machinemetrics.com or visit www.machinemetrics.com. www.americanmoldbuilder.com | AMBA.org
MAY AMBA Annual Meeting – Industry Insights and Updates, May 27, 12:00pm EST, www.amba.org/events JUNE Sales Strategy – AMBA Roundtable Discussion, June 3, 12:00pm EST, www.amba.org/events
AMBA Emerging Leaders Virtual Ignition Workshop Series, June 18, www.amba.org/events AUGUST AMBA Plant Tour Workshop: Century Die Co., August 13, www.amba.org/events Plastec East 2020, August 18-20, www.plasteceast.com
Today’s Business Operations – Continuing Roundtable Discussion, June 4, 12:00pm EST, www.amba.org/events Amerimold Connects, June 9-13, www.amerimoldexpo.com The New Normal: Best Practices for Minimizing Employment and Financial Risk in COVID-19 Era, June 16, 12:00pm EST, www.amba.org/events
Alliance Specialties and Laser Sales.................................................................www.alliancelasersales.com/tmfgalliance...........................................................................13 AMBA.........................................................................................................................www.amba.org............................................................................................................................... 3 BORIDE Engineered Abrasives........................................................................www.borideabrasives.com....................................................................................................... 16 CAM-TOOL.............................................................................................................www.camtool.com...................................................................................................................... 41 Crystallume, a Division of RobbJack Corporation.....................................www.crystallume.com............................................................................................................... 27 DME............................................................................................................................www.dme.net/estore............................................................................................... Back Cover Dynamic Surface Technologies.........................................................................www.dynablue.com....................................................................................Inside Back Cover Erowa System Solutions.......................................................................................www.erowa.com.......................................................................................................................... 37 Federated Insurance..............................................................................................www.federatedinsurance.com.................................................................................................17 Finkl Steel..................................................................................................................www.finkl.com.............................................................................................................................39 Gesswein....................................................................................................................www.gesswein.com....................................................................................................................44 Grainger......................................................................................................................www.grainger.com......................................................................................................................29 HASCO America, Inc............................................................................................www.hasco.com............................................................................................................................12 INCOE Corporation.............................................................................................www.incoe.com............................................................................................................................31 Meusburger...............................................................................................................www.meusburger.com...............................................................................................................21 Mold-Tech Midwest...............................................................................................www.mold-tech.com................................................................................................................. 35 MoldMaking Technology/Amerimold............................................................www.amerimoldexpo.com......................................................................................................38 PCS Company.........................................................................................................www.pcs-company.com........................................................................................................... 33 Plastic Engineering & Technical Services, Inc.............................................www.petsgroupintl.com............................................................................................................. 7 Progressive Components....................................................................................www.procomps.com/pins...................................................................... Inside Front Cover SCHMOLZ + BICKENBACH...........................................................................www.schmolz-bickenbach.us.................................................................................................. 11 Superior Die Set Corporation............................................................................www.superiordieset.com.........................................................................................................10 Ultra Polishing, Inc.................................................................................................www.ultrapolishing.com...........................................................................................................15 Vincent Tool.............................................................................................................www.vincenttool.com............................................................................................................... 16 Wisconsin Engraving Co. Inc./Unitex.............................................................www.wi-engraving.com............................................................................................................ 23 YRC Freight..............................................................................................................enrollhere.net............................................................................................................................... 32
the american MOLD BUILDER | Issue 2 2020
We are so grateful to our health care heroes. They took on the fight and have cared for us so brilliantly during these unprecedented times. Humbly and proudly, in support of their great sacrifice, and with your full support, we delivered with record speed the mold bases and components you needed to help manufacture the medical equipment and PPE so desperately required. We are never surprised by the ingenuity and â&#x20AC;&#x153;can-doâ&#x20AC;? attitude of our customers. It's why, for the past 77 years, we have been proud to serve the needs of America's Mold Makers. With You... Every Step of The Way.
Call Toll Free at: 800.626.6653 Or visit us at: dme.net/estore