The American Mold Builder 2019 Issue 4

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Issue 4 2019

Precise Tooling Invests in Diversification Strategy n AMBA Advocates for Tariffs n Benchmark: Machine Programming n Aptitude Testing for Job Prospects

The Official Publication of the American Mold Builders Association


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Issue 4 2019

CONTENTS 14

32

FEATURES ///

6

DEPARTMENTS /// Speak Out .................................................... 4 Association ................................................. 16 Industry ...................................................... 30 Product ...................................................... 38 Calendar ..................................................... 42 Ad Index ..................................................... 42

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Profile Fostering a New Business Model at Precise Tooling Solutions

14

Advocacy Molds in the Middle: Trump vs. China

21

Preview

22

Technology What to Know Before Selecting a Mold Temperature Controller

26

Strategy Year-End Tax Planning Opportunities

29

View from 30 Aptitude Testing Gets the Right People in the Door at Industrial Molds Group

32

Benchmarking Efficiencies in Machine Programming – How Do You Compare?

34

Safety The Risk of Repetitive Injury

37

Production Harbour’s Automotive Tooling Forecast Offers Cautionary Tale for Entire Industry

41

Management Understand the Impact of Profit Per Sale

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www.americanmoldbuilder.com | www.amba.org

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SPEAK OUT ///

W Toby Bral

AMBA President MSI Mold Builders

elcome to the latest edition of The American Mold Builder. I hope this letter finds everyone well. I know some of you are very busy trying to get a bunch of work through your shops, some of you are very busy trying to find work and the rest of you are somewhere in between. That’s the challenge with making a one-off product – we often seem to be scrambling to get work out or scrambling to get work in. The times of sitting comfortable are certainly infrequent and shortlived, so there is never a dull moment in our industry.

We wrapped up another plant tour in October with the tour of UTM. A big thank you goes out to Scott and his team for hosting us. The plant tour events showcase the great part about this industry and our association: We openly share best practices, successes and challenges. Even though we compete for work, we as a group know that for the industry to grow here in the US, we need to make sure we are all getting better every day. The plant tours are an example of that cooperation, as the tour host is hoping to show the attendees an idea or improvement that can be taken back to their own shops and looking for feedback from the group for improvements that the host shop may not have considered. If you haven’t hosted a plant tour, please give it some consideration. The benefit to the host is even greater than it is to the attendee. One of the AMBA initiatives that I am most excited about is the focus on events for young professionals / emerging leaders. I discussed in previous letters the need to develop our next generation of leaders. This effort is continuing to build momentum. I would encourage any company with future leaders under 40 years old to get them engaged with this group. These are the people who will lead the next generation of moldmaking companies, and they need to build networks that allow them to bounce ideas and challenges off each other. This effort is so very important to the survival and growth of our industry into the next 20 years, so let’s give them every chance we can at success. I would be remiss if I didn’t give an update on the Chinese mold tariff exclusion status. I am sure you have seen the email updates from the AMBA, as this is currently where most of the energy of the AMBA staff and board has been directed due to the deadlines involved. It was a year ago that the Section 301 tariffs on Chinese molds were granted an exclusion due to requests from companies claiming domestic capacity wasn’t there to support the demand for molds. Since pricing is not a relevant reason to exclude Chinese molds from tariffs, capacity is what companies leveraged, even though there is open capacity in the US. Our industry is much better informed and prepared to give the real answers to those capacity questions this time around, as the exclusions that were granted are only good for one year. They now are up for renewal. Open comments either supporting or not supporting an exclusion on Chinese mold tariffs were taken in November. The AMBA has been working with a firm in Washington to monitor the situation and help us make the right responses at the right times. I have been absolutely blown away by the response challenging the exclusion from our US moldmakers to the USTR. In reviewing the comments regarding ALL Section 301 exclusions (not just molds, but any product from China that was granted an exclusion), the vast majority of them are in response to the Chinese mold exclusion and overwhelmingly state that molds should not be granted an exclusion. We, as US moldmakers, have open capacity, and we are letting our voice be heard loud and clear! We will see what happens next, but thank you so much to everyone who has helped flood the USTR with comments supporting our cause. With everyone’s focus on building a strong domestic moldmaking industry I think the future is very bright. Whether it be through networking and sharing best practices, by developing our future generation or through lobbying to support purchasing molds in the US, I believe we as an industry are taking the right steps to ensure that moldmaking will be a strong industry in which to make a career for many years to come! n 4

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American Mold Builders Association 7321 Shadeland Station Way, #285 Indianapolis, IN 46256 p 317.436.3102 • f 317.913.2445 info@amba.org • www.amba.org

Officers National President Toby Bral, MSI Mold Builders Immediate Past-President Justin McPhee, Mold Craft, Inc. Vice President Jim Sperber, Master Tool & Mold Secretary and Legal Counsel Alan Rothenbuecher, Benesch, Friedlander, Coplan & Aronoff LLP

Board of Directors Tom Barr, TK Mold & Engineering David Bowers II, JMMS Mike Devereux, Mueller Prost Don Dumoulin, Precise Tooling Solutions Greg Eidenberger, Paragon D&E Dan Glass, Strohwig Industries Mike Mullholand, Freeman Co. Andy Peterson, Industrial Molds Group Kenny Skar, Vincent Tool Tyler VanRee, Legacy Precision Molds, Inc.

AMBA Team Troy Nix, Executive Director Kym Conis, Managing Director Susan Denzio, Business Manager Rachael Pfenninger, Project Manager

Advising Editor: Kym Conis Advertising/Sales: Susan Denzio Published by:

www.petersonpublications.com

2150 SW Westport Dr., Suite #101 Topeka, KS 66614 P: 785.271.5801 Managing Editor: Dianna Brodine Asst. Editors: Liz Stevens, Nancy Cates Art Director: Becky Arensdorf Graphic Designer: Mikell Burr 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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PROFILE

Fostering a New Business Model at Precise Tooling Solutions By Brittany Willes, contributing writer, The American Mold Builder

“I

retired when I was 50. Around the second year of my retirement, my wife famously said to me, ‘I married you for good or bad but not for lunch. Go do something,” Don Dumoulin explained with a laugh. Dumoulin took his wife’s words to heart and began looking at various companies for a possible acquisition. He eventually settled on a mold manufacturing company called Precise Mold and Plate.

through a downturn – like the industry is going through now with our problems with China – being too specialized is very risky. Precise Tooling is still growing despite the current challenges facing the industry, and that’s because of our diversification. If we were solely tied to the production of new molds, I think it would be a very different story.”

The company had been in business for nearly 35 years before Dumoulin took over. In the nearly seven years since he’s been the owner, he’s made many changes, including rebranding the company as Precise Tooling Solutions, Inc. “We’ve done a lot to diversify the business over the last several years,” he stated. “We’ve taken what was essentially a mom and pop operation and converted it into an aggressive, specialty manufacturer. We’ve gained a lot of skills, talents and processes that we didn’t have before.”

For many manufacturers, it has been a very different story. Last year, when tariffs were suddenly placed on molds and then just as suddenly taken off again, Dumoulin and others in the industry observed a dramatic swing of molds being built in China, then being brought back to the US and then taken back to China.

According to Dumoulin, when he first took over the company the majority of its business was derived from new molds in the automotive sector. Today, those areas account for less than 50% of the business’s focus. This shift away from the old business model was an important part of creating a more diverse company. “Every owner worries about being too specialized and too concentrated in either one industry or one sub-segment of an industry,” Dumoulin explained. “When I first looked at the strategic nature of the business, it was all molds. When you go 6

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Fighting for US molders

“Plastic producers all over the country made what I believe to be a bad strategic decision when they took the business outside of the country,” he stated. “When it comes to making tools, the simple fact is that plastic injection tooling makes up less than 3% of a production run on that tool. So, the decision to keep the molding process in the US but move the mold itself offshore – thereby killing an industry – is just a bad strategic decision. I think at some point in time our customers will have to understand that they need to support US mold builders.” That’s not to say that US mold builders don’t have any support at home. According to Dumoulin, they do. “Quite honestly, many of our customers do support us, and we have a robust industry of mold


PROFILE builders in the US. Still, there are too many who are constantly searching only for the lowest price, and we’ve got to get that fixed.” One way to fix the situation is through reinstating the tariffs – something that Dumoulin and Precise Tooling are working to make happen. “Tariffs will help level the playing field,” he remarked. “We’ve been working very closely with Laurie Harbour of Harbour Results and the AMBA board to put up a strong fight with the United States Trade Representative (USTR) and others to help us get that business back. Getting the tariffs reinstated will help get our industry back in line. Once that’s done, I think the industry as a whole can look forward to renewed growth and success.”

Diverse manufacturing

While the industry itself has suffered some setbacks, Precise Tooling has managed to keep growing and remain profitable. This can be traced to the company’s insistence on diversifying its skill set and product offerings. According to Dumoulin, the company initially focused on three key areas for expansion and development. First, Precise Tooling looked to what it refers to as productivity improvement – mainly, a service business that focuses on repairing and performing engineering changes on current production molds. Having a dedicated service such as this has proven to be invaluable for Precise Tooling and its customers. “It seems like every week we get a call from a customer saying they’ve got a big problem they need help with,” asserted Dumoulin. “So many of our customers are running flat out every day. They need fast turnaround times on repairs or engineering changes. In response to that need, we’ve built an aggressive, reactive team that digs our customers out of problems on a weekly basis.” The ability to provide quick solutions for customers is due to the company’s team of dedicated craftsmen, some of whom have more than 30 years of experience in the industry. “Our lead toolmakers have seen every problem and every challenge out there,” Dumoulin said. “The ability they have to react quickly, to turn a problem around and get that customer back in production is a real tribute to their dedication to the customer and also to the way we run our operation.” The second area Precise Tooling focused on building up was its CNC business – essentially, anything not mold related. The business now does a great deal of work for up to 125 customers each year using the excess CNC capacity it has in its shop, turning the CNC area into a profitable and growing part of the business. The CNC business also showcases another development at Precise Tooling – a focus on developing young employees. Precise Tooling employs nearly 40 craftsmen, 10 of whom make up its CNC team. Of those 10, eight members of the team are under 30 years old. As Dumoulin noted, “In an industry that is plagued

From top: Don Dumoulin (center) invested in Precise Tooling Solutions after retirement. Machined steel bars wait in the CNC machining area. The company produces and sells ergonomic machine bases and workstations.

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PROFILE t page 7

Of the 10 members of Precise Tooling’s CNC team, eight are under the age of 30, showcasing the company’s commitment to developing young leaders.

with a challenge in finding younger workers to replace the older generation that is – or soon will be – retiring, to have virtually our entire CNC department be under 30 years old, including the leaders of the department, I think is a real tribute to our company.” The third area of expansion for Precise Tooling came when the company added specialty manufacturing to its business with the purchase of a company focusing on producing ergonomic machine bases and workstations. Not only has this investment allowed the company to expand its range of products and services, but it allows investment in manufacturing workers themselves. “Ergonomics in the workplace – in all manufacturing settings and even in tool shops – is paramount. According to OSHA, the average back injury costs a manufacturer roughly $80,000 a year,” explained Dumoulin. (For more information on this topic, see the article on page 34). Taking this into consideration, Precise Tooling has been offering its line of custom-built and engineered ergonomic workstations, tables and machine bases for roughly three years. In that time, it has seen its investment grow by leaps and bounds. 8

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“We’ve had a record year when it comes to building these customized workstations,” said Dumoulin. “Our peer group in the mold industry should be taking a look at this as their lead mold builders age. Having the ability to raise the mold base to the right height will help their workers.” Ultimately, it also will help the mold industry: Investing in ergonomics for the workplace makes good sense when compared against the cost of lost productivity and labor shortages resulting from painful injuries that might otherwise be avoided.

Specializing in the future

As Dumoulin noted previously, owners often worry about becoming too specialized in an industry sub-segment. However, having expanded its range into several markets, Precise Tooling is able to also specialize in a few niche areas without suffering any negative consequences. One of those areas is that of high-end LED lighting. “We do business with some 60% of the US lighting market and specialize in LED lighting for automobiles,” said Dumoulin.


LED lighting comprises a niche manufacturing market for Precise Tooling. The company does business with approximately 60% of the US lighting market. “That is a very small niche. There are few moldmakers who do specifically what we do.” Part of the reason there are so few manufacturers venturing into that particular market is the need for specialized equipment. Highly specialized machines and highly technical craftsmen are required to build high-end tools, and many facilities don’t have the capabilities and/or time for such an investment. For example, Precise Tooling was hearing from customers that high-end LED lighting cannot have electrical discharge machining (EDM) used on it, nor can it have a lot of manual polish. To combat this, Precise Tooling purchased the highest-quality Roeders 5-axis machine. As a result, it was able to virtually eliminate manual polish and EDM work on its lighting molds. As LED lighting for automobiles becomes more commonplace, the company’s lighting customers have become more sophisticated in their needs. By investing heavily in capital equipment and adding page 10 u www.americanmoldbuilder.com | www.amba.org

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“The light beam has gotten significantly smaller in recent years,” remarked Dumoulin. “It’s no longer the size of an incandescent bulb; instead, it’s now a microchip that is putting off that beam of light. As that has become smaller, greater precision is vital. That means our skill level has to become more precise as well. We have to have the tools, machines, craftsmanship and the capability to drive those kinds of overall products. We’ve done that very successfully over the last couple of years as LED lighting has become so prevalent in the industry.” Furthermore, by changing the way it produces tools and adding in more machinery, including automation, Precise Tooling has been able to take a significant amount of production time out of its tool builds. Doing so has allowed the company to lower its costs, which in turn allows it to be more competitive with China and other countries. “It’s been somewhat of an expensive proposition for us, but one that has been worthwhile,” said Dumoulin.

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Investing in customer satisfaction

Precise Tooling has come a long way in the relatively few years since Dumoulin became CEO. Part of that can be attributed to the company’s dedication to listening to its customers, assessing their unique needs and determining the best solutions. This is accomplished via a very straightforward method – the customer satisfaction survey. While many businesses may dismiss the use of surveys as a waste of time, perhaps believing their customers won’t be bothered to respond, they’ve proven invaluable for Precise Tooling. “We started the survey process before I bought the company when I was doing due diligence on the acquisition,” said Dumoulin. “A survey was sent out to see what the customers were saying about the page 12 u

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PROFILE

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Precise Tooling surveys its customers annually to measure satisfaction in on-time delivery, innovation, customer service and other areas. company. The good news was there wasn’t anything negative, but there wasn’t anything immensely positive either.” Dumoulin saw this as an opportunity to build on. Initially, the company continued the survey twice a year, asking the same questions each time. This allowed for gathering longitudinal data regarding what customers thought about the business, about the quality of craftmanship and about Precise Tooling’s technology advantage.

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“I put our survey results up against anyone in the industry,” said Dumoulin. “Honestly, we get better results than the Ritz Carlton Hotel chain. On a range of 0 to 5, we have every score north of four and we’ve had consistent growth every year in customer satisfaction to the point now that 100% of our customers tell us they would recommend us to a colleague. We feel really good about that. It’s a score that we use to measure ourselves internally, and it’s a powerful motivator for our team because we know exactly what our customers want from us.” Having previously achieved such positive and helpful feedback from customers, the company now has switched from twice a year surveys to a single annual survey. Additionally, the company makes all of its survey results available online for anyone to see. “That’s how confident we are in the services we provide,” said Dumoulin. “Anyone can visit our website at any time and see firsthand what our customers think and say about us.”

Looking ahead

Despite numerous challenges facing the industry, Precise Tooling Solutions is looking forward to continued growth in the coming years. Thanks in no small part to its dedication to customer satisfaction – which has resulted in investments in equipment, skills and technology – Precise Tooling has positioned itself to meet even the toughest challenges head-on. n


TECHNOLOGY

We are celebrating our 40th Anniversary, and on behalf of the entire Alliance family, we want to thank you for being our partners in this journey. We wouldn’t be here without you. There have been many changes over the years, but one thing has remained unchanged: our grit. It is that grit that makes us who we are and defines our company. When you look around the shop you will see grit coloring our hands, dusting our benches, and swirling through the air. Small remnants of dirt from delivering on promises rain or shine, little pieces of left behind polishing stones, grease, sand and plastic from the molds we clean, abandoned splinters of welding wire and laser engraving soot are just a few of the examples of grit that surround us daily. It is threaded into the fine detail of our lives and no matter how much you clean there will always be a hint of grit that is left behind. That GRIT is the kind you find in our hearts. The GRIT of courage and strength to start a company from nothing. The GRIT to put it on the line and to try new things that no one else thinks possible. The GRIT that provides the passion and perseverance to take on challenges no one else could. The GRIT to do whatever it takes to not only get the job done, but done right. The GRIT that Alliance was built on is a special grade. It makes us who we are and holds us together as a family. GRIT is in our blood and it flows through our veins, feeding the hunger to be better each and every day. The same Alliance GRIT that started as a dream in a garage 40 years ago is alive in every single person that calls this place home. It is our GRIT that makes the difference between us and every other company out there, and it’s the reason why we will continue to be a dominant force in the industry for the next 40 and beyond.

FOLLOW US:


ADVOCACY

Molds in the Middle: Trump vs. China By Omar S. Nashashibi, Founding Partner, The Franklin Partnership

T

here is a saying in Washington, D.C.: “If you don’t have a seat at the table, you’re on the menu.” But sometimes, you’re just caught in the middle, as are America’s mold builders today between a president supportive of manufacturing and customers demanding lower-cost imports from China. As a lobbyist for small- and medium-sized downstream manufacturers since 2002, I have seen plenty of industries and others caught by surprise because they did not have a seat at the table while Washington made critical policy decisions. The American Mold Builders Association (AMBA) recently retained the Washington, D.C.-based lobbying firm The Franklin Partnership to not only give the industry a seat at the table but to reinforce the association’s ongoing efforts to promote its members’ capabilities and priorities. Through several presidential administrations, we have seen firsthand how China employs an industrial strategy of espionage and intellectual property theft, providing government subsidies and currency manipulation to gain an edge over the US and other manufacturers. On July 8, 2018, President Trump declared the US would respond by imposing a 25% tariff on $34 billion worth of Chinese goods, including imports of plastic injection molds (defined under Harmonized Tariff Schedule: HTS 8480.71.80.45). Following imposition of those tariffs, members of the AMBA reported a significant increase in requests for quotes from current, past and new customers. Clearly, the sudden price increase on imported Chinese molds had its intended effect – to promote manufacturing in America. However, on December 28, 2018, the Office of the US Trade Representative announced it would suspend for 12 months the 25% tariffs on plastic injection molds at the request of roughly 50 US importers, a number of which are Chinese-owned subsidiaries. After mold importers received the exclusion, many of those purchase orders never came through. Some mold builders report that the “China price” is typically 35% below what American manufacturers can afford to charge, and unless the US is within 20% of the Chinese quote, they cannot win the business. The 25% tariff President Trump imposed on imported Chinese molds helped bridge the price gap and make US mold builders more competitive. Now, 12 months later, the government must decide by December 28, 2019, whether to extend the exclusion from the 25% tariffs for another 12 months. Among the reasons importers stated when 14

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seeking an initial suspension of the tariffs – and now an extension – is lack of mold building capacity in the US, lack of specialized techniques and, of course, price. One company went so far as to admit it must source molds from China in order to compete with its government-subsidized Chinese competitors. This is why the AMBA mobilized its members and stood up to have the voice of America’s mold builders heard prior to Washington deciding whether to reinstate the 25% tariffs. Since the AMBA began working with The Franklin Partnership lobbying firm in October, it is educating policymakers in Washington, D.C., about the more-than-adequate capacity, superior quality and similar lead times. While, in some industries, few domestic sources often exist – particularly for specialty raw materials – the US Census found 1,439 mold building establishments in this country, employing 35,000 Americans. Just to make things easier for would-be importers, the AMBA maintains a Sourcebook listing 241 companies with their capabilities in 35 categories. Companies – and regulators – can find the latest 2019 Sourcebook under Publications at amba.org to find a mold builder that meets their needs. A few mold importing companies stated the US lacked the specific capabilities to manufacture the specific molds. While there is no doubt the quality of Chinese products continues to improve, few would claim they make a superior product to that manufactured in the US. Second to price complaints, importers cited a lack of domestic capacity and lengthy lead times to identify quality-certified suppliers. The data show otherwise. Surveys and research conducted by Harbour Results, Inc., a leading adviser to small- and medium-sized manufacturers, shows mold


ADVOCACY builders currently operate at roughly a 75% capacity utilization rate, as reported in third-quarter data. Another separate, but smaller survey, confirmed this figure, as respondents stated they remain at under 70% capacity, and only half had received requests for quotes from an importer who filed a petition to exclude a Chinese mold from the 25% tariffs. The final substantive argument to which importers point is longer lead times in the US vs. China, especially when starting a new supply chain. Survey data, again from Harbour Results, show the average lead time for an injection mold of less than 500 tons is 12 to 16 weeks in the US and 10 to 12 weeks in China, while an American 1,000- to 1,500-ton injection mold also has a 12- to 16week lead time compared to an 18- to 20-week wait for the same Chinese mold. The data are clear: The more than 1,400 mold builders – including over 200 listed in the AMBA 2019 Sourcebook – have the capacity at a current 75% rate and the technological capabilities through constant investment to meet current demand in the same time frame as a Chinese competitor. This leaves the obvious – the “China price.” One mold builder recently told me he’s seeing a new China price, where they are

lowering their quotes to levels not seen in years. Further reinforcing the China price challenge, even as we approach the December 28 deadline, some mold builders report an increase in requests for quotes, as many importers expect the government to reinstate the 25% tariff. Oftentimes, despite an industry being stuck in the middle and being pulled in different ways, US mold builders must ultimately choose to stand up at the table for their own businesses and communities. Working with the government often is frustrating. Having lobbied four presidents and five speakers of the US House, I have seen the damage Washington can do when it makes consequential decisions with incomplete information. However, I also have seen our government correct its ways when presented with compelling information from active US manufacturers – but they cannot hear your voice if you do not speak up. n Omar S. Nashashibi is a founding partner with The Franklin Partnership, LLC, a private bipartisan lobbying and government consulting firm based in Washington, D.C. He lobbies the federal government on behalf of manufacturing trade associations and advises clients on formulating business strategies to minimize risk and maximize opportunities resulting from decisions made in Washington.

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ASSOCIATION /// Plan for 2020 with AMBA Publications

Get a head start on planning for the new year with two opportunities from AMBA. Business Forecast Survey Launched AMBA has launched its annual Business Forecast Survey, which gathers industry-wide data from mold builders throughout the US. The final report will include data on sales and profits, tariff updates, quoting activity, 2020 forecasting, anticipated sales trends and more. To complete the survey and receive a free copy of the final report, visit AMBA.org/Events. Wage and Salary Report Now Available Begin planning for 2020 with AMBA’s recently released Wage and Salary Report. Newly shortened to focus entirely on more than 50 job functions in the mold building industry, this report provides mold builders with the insight needed to compensate employees and 2019/2020 compete in the marketplace. AMBA WAGE AND SALARY REPORT

COMPENSATION INFORMATION ON JOB FUNCTIONS WITHIN MOLD BUILDING OPERATIONS

To purchase a copy of the final report, as well as other AMBA publications, visit AMBA.org/publications/browse.

Under-40 Emerging Leaders Come Together for Learning and Growth

On October 15, 2019, several members of the AMBA’s Emerging Leaders Network – innovative and passionate under-40 industry professionals who share a design to further their own leadership growth through networking, best practice sharing and more – came together for the group’s first workshop, Leading from Within. During this event, attendees explored their own Predictive Index Assessments, which analyze four key factors to measure a person’s motivating drives and needs. With a clearer understanding of their assessments, combined with role-play and group discussion, these young professionals walked away with a deeper understanding 16

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of how they can optimize their workplace performance and communication strategies. To join the Emerging Leaders Network and see upcoming events, visit https://amba.org/resources/amba-young-professionals-network/.

Share Challenges and Discover Solutions with AMBA Peer Networking December 11, 2019

Exchanging ideas with others who share the same challenges can be inspiring and motivating – leading to the development of stronger leadership skills that can impact change within an organization. Senior leaders and HR professionals can take a step toward impacting the bottom line by joining other AMBA members for members-only Peer Networking, where attendees participate in a virtual roundtable to share specific challenges and hear solutions discovered by others. Each session is specific to one functional area. This is a free, members-only event. Register today at AMBA. org/Events.

AMBA to Host New Sales Process Forum Feb. 26-27, 2020

In early 2020, AMBA will host its first Sales Process Forum, where mold builders will present best practices on three topics related specifically to the sales process. The event will feature presentations from sales professionals and industry leaders, followed by roundtable discussions, final event takeaways and the development of an action plan for moving forward. Registration includes a networking reception the night before, breakfast and lunch the day of the event and programming. To register for the upcoming Sales Process Forum, visit AMBA.org/Events.

“Ready, Fire, TEAM!” at AMBA Conference 2020 April 29 – May 1, 2020

Mark the calendar for AMBA Conference 2020, April 29 through May 1, in Indianapolis, Indiana. Set to take place at the Hyatt Regency Downtown, attendees will focus on how building the right team the right way can lead to consistent success. Save the date for AMBA Conference 2020 to ensure access to game-changing breakouts, inspirational keynotes and multiple opportunities to network, share best practices and discuss current challenges. Look for registration coming soon at AMBA.org/Conference.


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ASSOCIATION

Recipients received $1,000, $750 and $500 (respectively), which will go to the recipients’ educational institution or program of choice. To read the full story, visit AMBA.org/publications/pressreleases.

AMBA Offers New Workforce Development Resources to Members

Members Honored on Manufacturing Day with Educational Outreach Award

To celebrate Manufacturing Day this year, three AMBA members were recognized for their significant impact in the promotion of a career in mold building. Winners this year included: M.R. Mold & Engineering Corp. (Brea, California), Century Die Co. (Fremont, Ohio) and Westminster Tool, Inc. (Plainfield, Connecticut). Magazin: AMBA

Sprache: EN (USA)

Hosting an Open House – Member Best Practices AMBA has released an addendum to its existing playbook, AMBA Guide to Community and Student Plant Tour Events, titled Hosting an Open House – Member Best Practices. This addendum features information from more than 150 surveys gathered by AMBA members, detailing student feedback on plant tour workshops hosted by member companies. This guide includes a series of “dos and don’ts,” along with recommended day-of plant tour activities shared from AMBA members. To view the completed addendum, visit https://amba.org/resources/recruitment-tools/. This addendum is available as a members-only resource. New Playbook in Progress – Building Community Relationships AMBA soon will publish a new playbook: Building Community Relationships. This playbook will feature interviews from a series page 18 u

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ASSOCIATION /// t page 17 of AMBA member companies, along with strategies to identify potential community members and schools with which to partner, and recommended workforce development resources. The full contents of this playbook will be available in January 2020 at no cost to members.

NEW MEMBERS Mold Vision, Inc. Charles Premananthan, President / Owner 951.245.8020 Mold Vision, Inc., specializes in the manufacture of blow molds for the cosmetic, food, beverage, medical, automotive, aerospace and recreational industries. The company provides services such as product design, rapid prototyping, blow mold manufacturing, CNC machining and blow mold maintenance. Mold Vision specializes in manufacturing, extrusion blow molds for HDPE, PP, PETG, PVC materials and stretch blow molds for PETE material. Custom Tool & Design, Inc. Jeff Mertz, President 814.838.9777 Custom Tool & Design utilizes more than 45 years of experience to design and build high-volume plastic injection molds in the consumer products and medical markets. The company prides itself on innovation, education and quality, while taking a proactive approach toward the future of the mold building industry.

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RJ Logistics Michael Swafford, Executive Vice President 888.312.1711 www.RJLogistics.com RJ Logistics is an asset-based carrier providing door-to-door solutions throughout North America. The company has a growing fleet of specialized equipment, as well as full third-party logistics services and project management. RJ Logistics’ facilities are strategically located in Metro Detroit; Laredo, Texas; and in Mexico. n


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PREVIEW

Educational Opportunities Abound at PLASTEC West 2020 By Lara Copeland, contributing writer, The American Mold Builder

C

oming to the Anaheim Convention Center, located in Anaheim, California, Feb. 11 through 13, PLASTEC West offers engineers and executives an opportunity to meet and improve their plastics and processing capabilities. Attendees will meet leaders specializing in plastics and polymers, automation, molds and dies, and additive manufacturing. The event offers more education than ever before. The 12-track conference program offers something for all attendees – from R&D and design engineers to regulatory and quality professionals. The new educational formats for 2020 include Lightning Workshops, Tech Talk Panels, roundtable discussion, an exclusive keynote presentation, networking events and more. This year’s conference program was designed to meet the needs of professionals in advanced design and manufacturing.

INCOE Corporation M.R. Mold & Engineering Corp. MGS Manufacturing Group Milacron Mold Tech, Inc. Mueller Prost Prestige Mold, Inc. Progressive Components Pyramid Mold, Inc.

Booth 3838 Booth 1346 Booth 3059 Booth 4294 Booth 4079 Booth 4297 Booth 2159 Booth 3945 Booth 4128 n

A unique opportunity for conference attendees only, the Tech Talk Panels present a live forum for experts to discuss current product development issues and enhancements, complete with subsequent Q&As. The panels include the following: • Overcoming Challenges When Progressing from Prototype to Production Tooling • Additive Manufacturing: The Slow & Steady March to Production • Criteria for Choosing the Right Material for Your Device Another new experience – the Meet the Speaker Lounge – provides the opportunity to ask those burning questions attendees are left with after participating in a session. For the 2020 event, a meeting lounge outside the conference rooms has been added. This will be a place to meet that favorite speaker, network, ask questions and leave with valuable contacts. The following AMBA members exhibiting at PLASTEC West may be of interest to The American Mold Builder subscribers: 3D Systems Accede Mold BORIDE Engineered Abrasives Crescent Industries, Inc. Diamond Tool & Engineering DMS Edro Engineering, Inc. GF Machining Solutions, LLC HASCO America, Inc.

Booth 3450 Booth 3985 Booth 3882 Booth 1572 Booth 3944 Booth 4020 Booth 3560 Booth 3413 Booth 4030

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TECHNOLOGY

What to Know Before Selecting a Mold Temperature Controller By Moldex3D

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n injection molding, the mold usually is controlled at a fixed temperature by making coolant continuously flow through the mold. If the coolant flow is not enough or the coolant temperature is not as expected, the mold temperature won’t be able to stay at the designated temperature. The manufacturers of mold temperature controllers calculate the appropriate mold temperature controller specifications according to the size of the mold and the part. However, it can be a challenge for engineers and analysts using the simulation software to evaluate the performance of a mold temperature controller. In this article, principles will be shared for using CAE software to better evaluate the performance of mold temperature controllers.

The relation between flow and pressure in cooling channels

Users of CAE software can apply two types of boundary conditions for cooling channels: flow rate and pressure. When the coolant flows through the cooling channel, the flow rate at the inlet and outlet are equal. Users only have to measure the flow rate at one side of the cooling channel to attain the flow rate at the other side. Thus, using the flow rate as the boundary condition is easier to control. In terms of pressure, the inlet pressure is higher than the outlet pressure, and the flow is caused by this pressure difference. In Moldex3D, the default value of the outlet pressure is zero. Users only set the pressure boundary at the inlet, and this value will be equal to the pressure difference between the inlet and outlet. If a plot is created to show the relationship between the cooling channel flow rate and pressure, it can be seen that the flow rate gets larger as the pressure difference gets larger. The two parameters are approximately proportional (Fig. 1). Apart from the pressure difference, flow resistance is another factor that will affect flow. Flow resistance varies with some conditions, such as cooling channel diameters, channel length, channel wall smoothness, coolant properties and flow rate. The Darcy-Weisbach equation shows the relation between these parameters (Fig. 2).

The relation between flow rate and pressure of mold temperature controllers

The function of a mold temperature controller is to push the coolant to flow and stabilize the coolant temperature. The main function of the pump in the mold temperature controller is to push the coolant to flow. When the pump pressure rises, the flow 22

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Fig. 1 The relation chart of cooling channel flow rate and pressure difference

Fig. 2 Darcy-Weisbach equation

Fig. 3 The loadable area of the mold temperature controller rate decreases; when the flow rate increases, the pump pressure decreases. The maximum flow rate and maximum pressure values on the mold temperature controller specification can be seen, but the two conditions never exist simultaneously.

Choosing the right mold temperature controller

Users can obtain the flow rate and pressure difference of every cooling channel through cooling channel analysis. The total flow rate of the cooling channels is the flow the mold temperature page 24 u


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In addition to flow pressure, it also is necessary to take the cooling and heating capabilities of the mold temperature controller into consideration in simulation. ” controller must provide. The maximum pressure in the cooling channel is the minimum pressure the mold temperature controller must provide. Users can enter point coordinates of the total flow rate and maximum pressure differences in the line graph. If the coordinate point is below the line, it means the mold temperature controller can provide enough flow rate and pressure. If the coordinate point is above the line, it means the mold temperature controller cannot provide enough flow rate and pressure (Fig. 3).

Before running a simulation

In the injection molding simulation, users usually set high flow rate as the ideal cooling channel condition. However, users will get a large value after converting it to meet the requirements of the mold temperature controller. Therefore, in order to shorten the gap between simulation and reality, it is better to set the channel boundary conditions based on the actual specifications of the temperature controller unit.

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In addition to flow pressure, it also is necessary to take the cooling and heating capabilities of the mold temperature controller into consideration in simulation. Users can check the heating load of the cooling channels and compare the values with the cooling and heating capabilities. If the cooling capability of the temperature controller exceeds the requirement of the predicted heating load of the cooling channel or its heating capability exceeds the requirement of the negative heating load of the cooling channel, that means the mold temperature controller meets the requirement. Simulation technology can provide critical data to help evaluate mold temperature controllers, and it can help greatly in evaluating a mold temperature controller in reality. n Moldex3D is a world-leading CAE product for the plastic injection molding industry. The software assists with simulation of a wide application range of injection molding processes to optimize product design and manufacturability, shorten timeto-market and maximize ROI. The latest version of Moldex3D, R17, was introduced at the K Show and now can provide the data of maximum pressure drop, total flow rate and heat dissipation to assist with the evaluation of mold temperature controller performance. For more information, visit www.moldex3D.com.


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STRATEGY

Year-End Tax Planning Opportunities By Michael J. Devereux II, CPA, CMP, Mueller Prost

T

he Tax Cuts and Jobs Act of 2017 (tax reform) ushered in a host of new tax laws and incentives, and every mold builder has now filed at least one tax return under the new tax regime. Many found new ways to defer or permanently reduce their tax bills, whether that be from enhanced expensing, larger tax credits or deferral of revenue to the 2019 tax year. The 2019 tax return filing season is right around the corner. As such, December is a time for year-end tax planning, whereby mold builders will make significant decisions that impact the amount of tax they ultimately pay for the 2019 tax year. Tax planning can mean several things. Sometimes, companies can recognize permanent tax savings by utilizing tax incentives, such as the R&D tax credit, the Interest Charge – Domestic International Sales Corporation (IC-DISC), or the work opportunity tax credit. Other times, tax planning is all about accelerating tax deductions and deferring the recognition of revenue. For many, it’s typically a combination of both. Moreover, tax planning is not done in a vacuum. Taxpayers must look at the current tax year, as well as future tax years, as some of the decisions a company considers include whether to accelerate or defer income from 2019 to 2020, or vice versa. So, when companies are reviewing tax-planning options, they should analyze two-year projections to ensure they understand what is being gained or missed. The following is meant to provide mold builders with some ideas and tips as they embark on year-end tax planning.

Immediate expensing

Tax Reform improved two popular deductions that allow for accelerated depreciation – §179 and bonus depreciation. The §179 deduction limit was increased to $1 million for 2018, and after being indexed for inflation, is $1,020,000 for the 2019 tax year. Moreover, additional assets were added to the definition of §179 property, including HVAC and security systems; and the §179 phase-out threshold now begins at $2,550,000 of eligible assets placed in service for tax year 2019. Tax Reform also increased the bonus depreciation percentage to 100%, retroactively, for property placed in service after September 27, 2017, through 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. These changes will, inevitably, make cost segregations more valuable. A cost segregation allows taxpayers to analyze their plants and equipment to segregate the cost of real property – which is, generally, depreciable over a 39-year life – from personal 26

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property – which is likely to have shorter depreciable life and qualify for one of the immediate expensing provisions. Taxpayers can “catch up” missed depreciation deductions.

R&D tax credit

The R&D tax credit is the tax incentive likely to have the biggest impact in reducing a mold builder’s tax liability. The R&D tax credit rewards innovation. Tool builders that are designing and developing new tools or improving their processes may be engaging in activities that are eligible for the R&D tax credit. While Internal Revenue Code (IRC) §41 (the code section governing the R&D tax credit) was not changed, the R&D tax credit’s value increased by 21.5% when Tax Reform reduced the top corporate tax rate.

For tool builders making the proper §280C election on an originally filed return (including extensions), the value of the credit was increased significantly. The §280C election percentage is equal to 100% minus the top corporate tax rate. When Tax Reform lowered the top corporate tax rate from 35% to 21%, the applicable percentage found in §280C went from 65% to 79%. As a result, credits will be greater with the same level of research expenditures.

Other credits and incentives

In addition to the R&D tax credit, many other tax incentives are available. For instance, mold builders that regularly export their tools may find benefit with an IC-DISC, a way of reducing the federal tax liability related to the profits made on export sales. In addition, those industry members hiring within specified targeted groups, such as food stamp recipients and qualified veterans, can qualify for the Work Opportunity Tax Credit (WOTC).

Methods of accounting

Tax Reform expanded upon the accounting methods available to small- and medium-size taxpayers. Mold builders with average annual gross receipts of less than $25 million over the


STRATEGY Proper planning is important to be sure that mold building operations and their owners take full advantage of the new law.” prior three years may adopt a number of accounting methods that were not previously available to them. Those with less than $25 million of average gross receipts from the prior three years may change to the cash method of accounting, be exempt from the requirement to account for inventories, and exempt from the Uniform Capitalization (UNICAP) rules for tax years beginning after December 31, 2017. Each requires a separate accounting method change and some planning to ensure the change in method of accounting is done properly.

IRC §199A flow-through deduction

The Qualified Business Income Deduction in IRC §199A, which was enacted as part of Tax Reform, allows a 20% deduction of Qualified Business Income to all noncorporate taxpayers (i.e., flowthrough entities, such as S Corporations, Partnerships and LLCs).

Proper planning is important to be sure that tool builders and their owners take full advantage of the new law. For instance, many tool builders own their buildings in a separate entity and rent the plant to the operating business. Real estate entities may qualify for the deduction, but only if they are operating like a trade or business. That means no triple net leases, separate checking accounts, etc. Companies not operating like a trade or business may be considered an investment and, therefore, not eligible for the new deduction.

Conclusion

While the aforementioned ideas are likely to be the most impactful for mold builders, companies should evaluate what incentives, methods and structure are best for them, given their goals and fact patterns. n 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 is a member of the AMBA board of directors and 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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VIEW FROM 30

Aptitude Testing Gets the Right People in the Door at Industrial Molds Group By Dianna Brodine, managing editor, The American Mold Builder

R

ecruiting and retaining employees are the critical issues facing the mold building industry. To assist with employee retention, the American Mold Builders Association (AMBA) created the AMBA-certified Skills Certification Program to assess and certify the skills of front-line mold manufacturing workers. By investing in training, from entry-level through the first level of supervision within all sectors of the industry, the AMBA program adds value and enhances training once an employee has been hired. However, how do mold builders ensure they are getting the right people in the door? Industrial Molds Group, located in Rockford, Illinois, has committed to aptitude testing for prospective employees. Aptitude testing allows the company to make an informed decision about whether or not the job applicant has the ability to succeed in the role by assessing the skills that need to be performed prior to making a hiring decision.

Aptitude testing provides baseline for success

Industrial Molds Group specializes in all facets of injection mold manufacturing, whether developing new tools, optimizing design or reworking existing tools. The company was established in 1968 and focuses on thermoplastics, thermoset, die cast and insert precision applications for markets that include automotive, appliance, industrial, electronics, packaging and others. “We started using aptitude testing five years ago,” said Andy Peterson, production supervisor, Industrial Molds Group. “At first, we tested all apprentices. We noticed that those who scored higher did better, and vice versa for lower scores.” At this time, Industrial Molds is using an aptitude test available through the National Tool & Machine Association (NTMA), but there are a multitude of aptitude testing options available through a quick web search that can be used to screen potential employees. “The NTMA test is timed, with four sections testing mechanical aptitude, mechanical reasoning, math and reading comprehension,” said Andy Peterson. The test allows a maximum of three hours for all four sections of the test. Tim Peterson, vice president of Industrial Molds Group, continued: “Applicants score from one to 100, and we use 70 as our internal benchmark. We use it to tell us if applicants have what it takes to do the job.” “NTMA recommends a score of 68 or higher,” said Andy Peterson. “We went with 70 internally for new hires. We do use the testing

consistently with new hires who have little to no experience, and it has worked really well. The only change I would make is potentially raising our minimum score to 75.” Andy Peterson said the company has a “sweet spot” that it has identified – a number above the minimum that generally indicates not only an ability to do the job, but also a likelihood that the new hire will stay for the long term. That number, said Tim Peterson, could vary for other companies. “You’ve got to benchmark what works for you and not for others. We’ve learned that an interview might not go well, but if an applicant scores well on the test, that person might be someone we would to take a chance on.” Andy Peterson continued, “We started testing to eliminate – or at least reduce – bad hires. We have seen less turnover as a result, and the aptitude tests have removed some of the emotion out of the hiring process.” n www.americanmoldbuilder.com | www.amba.org

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INDUSTRY /// GF Machining Solutions Academy Unveils New Offerings

Machine tool provider GF Machining Solutions, Lincolnshire, Illinois, announced new training modules and on-demand options to help customers maximize the potential of the GF division’s products. GF Machining Solutions Academy’s mission is managing the transfer of knowledge, from research and development to customer services, sales, application support and training. The new training modules, as well as on-demand options tailored to customers’ specific requests, will result in welltrained operators capable of using 100% of the potential of their GF Machining Solutions machines. The academy’s curriculum is composed of two tiers: “Learn to operate” modules, which provide in-depth training to help customers use their machines autonomously, and “Maximize performance” modules, designed to help users develop expert-level knowledge on such topics as advanced measuring and programming. For more information, visit www.gfms.com.

Heidenhain Opens New Central US Sales Office to Support Expansion

Heidenhain, a motion control feedback solution provider with North American headquarters in Schaumburg, Illinois, and San Jose, California, announced the opening of a new central US sales office as part of the company’s continued North American expansion efforts. Operating in Longmont, Colorado, this new office now provides direct sales support for the central US and Mexico, previously managed in either Heidenhain’s Illinois or California headquarters. “The Longmont location is centrally located near Denver, Boulder and Fort Collins – a growing R&D, industrial and higher educational corridor – which we can now more efficiently support with our motion control technology expertise,” said John Thormodsgard, Heidenhain’s sales director for Central Region. For more information, visit www.heidenhain.us.

Meusburger to Integrate PSG in 2020

In 2020, Austria-based Meusburger, maker of high-precision standard parts, will fully integrate the hot runner and control systems specialist PSG into the company and operate under the Meusburger brand. PSG remains a strong product brand. To maximize synergies, the two companies have been working together since Meusburger’s acquisition of PSG in 2016. This cooperation will be strengthened under the Meusburger brand. Extensive know-how in the individual product segments can be better combined and further developed for the customer. With PSG as a strong product brand in the fields of hot runner and control 30

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systems, Meusburger is a reliable full-range supplier in mold and die making. Operations at both PSG locations in Germany – Viernheim and Seckach – will continue. For more information, visit www.meusburger.com.

Hypertherm Introduces Subscription Pricing for ProNest LT Nesting Software

Hypertherm, a Hanover, New Hampshire, manufacturer of industrial cutting systems and software, has announced subscription pricing for its ProNest® LT CAD/CAM nesting software for light industrial cutting applications. Smaller companies and individuals who have air or conventional plasma and oxyfuel cutting machines can subscribe to ProNest on a monthly, annual or three-year basis. Monthly pricing begins at $29.99 (US), and subscribers, may start a subscription, add or remove users or features when needed, and cancel anytime. Hypertherm is offering a free seven-day trial subscription. With ProNest LT, subscribers get access to live support from knowledgeable professionals in addition to online resources, such as video tutorials. Expert-level cutting parameters based on the specific material type and thickness are included with the software set-up. For more information, visit www.hypertherm. com/ProNestLT.

Exact Metrology Now Represents GOM CT in US

Cincinnati- and Milwaukee-based metrology services provider Exact Metrology has become a distributor of the GOM CT scanner in the US. GOM is an established global company in structured light scanning technologies. The company develops, produces and distributes software, machines and systems for industrial and automated 3D coordinate measuring technology, 3D computed tomography, as well as 3D testing based on the latest research results and innovative technologies. Exact Metrology will house a GOM CT scanner at its Brookfield, Wisconsin, location, to be used for customer demonstrations and educational purposes, as well as contract scanning. The computed tomography scanner GOM CT provides 3D data of internal and external component geometries in exceptionally high resolution. The system shows its greatest strengths when digitizing smaller plastic and light metal parts. For more information, visit www.exactmetrology.com/ metrology-equipment/gom-ct-scanner.

Husky Announces Organizational and Leadership Changes for Improved Delivery

Husky Injection Molding Systems, Bolton, Ontario, Canada, an industrial technology provider to the plastics processing community, announced organizational and leadership changes to its Hot Runners, Controllers and Medical (HRCM) business aimed


///

at helping the company more quickly and effectively support evolving customer needs. Wes Grove has been appointed chief operating officer. In his new capacity, Grove is responsible for the company’s NGOM, rigid packaging and HRCM global operations teams. Aurelien Bastien has been appointed president to Husky’s HRCM business. He was vice president of beverage packaging China, Japan and Korea, where he contributed to business growth in Asia Pacific. Stefano Mirti, Husky’s former president of HRCM, is leaving the organization after an outstanding 24-year career. For more information, visit www.husky.co.

CGTech Welcomes Mark Forth as Global Business Development Manager

CGTech, Irvine, California, a provider of verification and simulation software technology for the manufacturing industry, is pleased to announce the appointment of Mark Forth as global business development manager. Forth joined CGTech corporate headquarters in Irvine in October, with more than 25 years’ experience in the CAD/CAM industry. During that time he has held roles at Delcam and Autodesk within applications, sales, product management, marketing and business development. At CGTech, Forth is responsible for driving strategy, business performance and partnership development. He resides in the United Kingdom with his family. For more information: visit www.cgtech.com.

INDUSTRY

M.R. Mold & Engineering Corp. Expands to New Location

M.R. Mold & Engineering Corp., known globally for its capabilities to build liquid silicone rubber and plastic injection molds, is moving to a larger facility in its hometown of Brea, California. The company is making this move to gain more space for new equipment and turnkey opportunities for customers, with the new facility totaling 22,350 square feet. Company officials hope to make the move by the beginning of 2020. The company will move departments individually as to not interrupt the flow of work. An open house and 35th anniversary celebration are being planned for the spring. For more information, email Geri Anderson at geri@mrmold.com or call 714.996.5511. n

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31


BENCHMARKING

Efficiencies in Machine Programming – How Do You Compare? By Rachael Pfenninger, AMBA Project Manager

U

nderstanding how to schedule jobs and maintain efficiency in any mold manufacturing facility can be critical to a business’s ability to win orders and keep existing customers – both of which significantly impact the bottom line. This is why any loss of efficiency (particularly in job programming) is worth tackling as soon as it’s identified. With that said, there are many ways to program jobs efficiently, and no mold builder does it exactly like any other. For this reason, AMBA surveyed its members to benchmark programming efficiency in their shops. Gathered data included workforce representation (including total employees vs. CNC programmers and set-up operators), preferred programming software, shop floor programming vs. offline programming, the efficiency of certain programming methods for repeat and new jobs, and recent investments in technologies and/or machines to improve efficiency. Of the 63 respondents surveyed for this report, the largest geographic Chart 1 concentration represented the Midwest US region. The top markets served included the consumer products, automotive and medical/ optical/dental markets. Most rely heavily on new jobs – most mold builders reported that less than 50% of their work included repeat jobs. Overall, average lead times for those jobs tend to be in the nine- to 12-week range, although most shops have a small percentage of Chart 2 work that falls both below eight-week lead times and above 17-week lead times. Regardless of reported annual revenue or top markets served, the most popular programming software amongst respondents included Mastercam, 3D Systems/Cimatron and Autodesk

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(Powermill). However, when correlated to the number of CNC programmers and set-up personnel on staff, those using the Autodesk (Powermill) software employed – on average – double the number of programmers and set-up personnel of the other two software options. (See Chart 1.) Overwhelmingly, respondents indicated that CNC programmers (rather than set-up operators) were expected to program the majority of jobs in the shop. Interestingly, nearly half of all respondents indicated that their CNC programmers had some level – up to four years – of experience in designing, while another quarter employed CNC programmers with up to four years of experience in moldmaking.

When examining machining, nearly 75% of respondents shared that their CNC programmers had five or more years of experience. (See Chart 2.) These levels of experience indicate that there is clearly some value in crosstraining, particularly if a company is having trouble sourcing qualified CNC programmers.


...nearly half of all respondents indicated that their CNC programmers had some level – up to four years – of experience in designing...”

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Unsurprisingly, respondents largely found that CAD/CAM programming is a more efficient programming method than either conversational or manual controls. However, several of those surveyed acknowledged that conversational controls can be relatively efficient, particularly for repeat jobs. Of those respondents who do prefer manual controls, most rely on repeat jobs rather than new work. n To purchase the full report, including a summary of what investments other mold builders are making to improve efficiency in their shops, visit https://amba.org/publications/browse/.

Key Tips to Filling Your CNC Programming Needs If you struggle to find talented CNC programmers, the following steps could be worthwhile. 1. Take a look at the capabilities of your programming software. With the right system in place, set-up operators with less knowledge could perform the same tasks and produce the same quality of work. 2. Crosstraining can be a valuable way to expand your CNC workforce. If you have difficulty sourcing CNC programmers to fill new positions, consider existing employees in moldmaking, machining and designing. 3. Mold builders tend to rely heavily on new jobs, which could be sucking up productivity. By sourcing more jobs that tend to be repeated, mold builders may be able to diversify the types of jobs in their shop, improve efficiency and decrease the workload of the programming staff.

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SAFETY

The Risk of Repetitive Injury Editor’s Note: In July of 2019, Delia Treaster, Ph.D., CPE, Ergonomic Technical Advisor from the Ohio Bureau of Workers’ Compensation, presented “Essential Ergonomics” at an Environmental, Health and Safety Summit for the manufacturing industry in Columbus, Ohio. This article is an approved summary of her presentation.

D

elia Treaster, Ph.D., CPE, Ergonomic Technical Advisor from the Ohio Bureau of Workers’ Compensation explained that “ergonomics is simply no more and no less than fitting the work to the worker,” and that the goal of ergonomics is to “reduce wear and tear on the human body from the work that people do.” She explained that a person’s size and other physical attributes are a common factor in the mismatch between a worker and their work, noting that everybody – every body – is different. Tall, short; strong, not so strong; left-handed, right-handed. These variations often are at odds with a workplace that was designed for the average worker (there is no average worker) or that was designed with an unconscious bias – that is, an unconscious tendency to build something to suit one’s own height, strength or dominant hand.

Ergonomic injuries

The objective of ergonomics, as it applies to fitting the work to the worker and reducing work’s wear and tear on the body, is to prevent or reduce the risk of injuries. These injuries generally 34

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develop slowly and affect the soft tissues. “Tendons are really high in the list of structures within the human body that can get hurt,” said Treaster. Ligaments are also common injury sites, as well as nerves and blood vessels, and sometimes bones. Injuries can go by a variety of names. “A lot of ergonomic injuries are called musculoskeletal disorders, MSDs,” said Treaster. They have been called cumulative trauma disorders (CTDs), and they are also called RSIs – repetitive strain injuries. The words cumulative and repetitive hint at the slow development of these injuries. Low back pain is an extremely common type of MSD. As Treaster puts it, “80% of the entire working population at some point in their working life will have back pain,” which could stem from many root causes including pulled muscles, overexertion, a sprain or strain, or an underlying disc disorder. Musculoskeletal disorders also include carpal tunnel syndrome, rotator cuff tendonitis, tennis elbow and deQuervain’s syndrome (also called Blackberry thumb). While MSDs are usually mild and temporary, some of them – such as those arising from heavy exposure to vibration – can lead to complete disability. Whether they are mild or extreme, they are so common that they account for about 30% of workplace injuries. These MSD injuries can be costly for employers, with indirect costs dramatically compounding the direct cost. Treaster cited direct cost figures from 2013, noting that a carpal tunnel syndrome


SAFETY would cost about $18,000 for a lost-time injury; a cervical disc displacement was about $64,000; a lumbar region sprain could be about $3,000; and a rotator cuff sprain might be $35,000. Treaster used an injury with a $63,000 direct cost to illustrate how indirect costs factor into the equation. “The indirect costs can be up to four times that,” she said. “So if it’s $63,000 in direct costs, you are well over $240,000 in terms of indirect costs.” While direct costs are medical payments and compensation, indirect costs are not in plain sight. Treaster described direct costs as “the tip of the iceberg versus what’s below.” She noted that indirect costs include things like hiring costs and training for a replacement worker, overtime to make up for slower-than-usual production, missed deadlines, damage to equipment and tools, and loss of goodwill.

Major risk factors

The three major risk factors for ergonomic injuries are force, posture and repetition. Treaster stressed that these are the big culprits, and that at least one is present on any given job. In a situation where a worker lifts and places a box, for instance, force equates to the amount of muscle force required for the task. Posture comes into

play if the worker must, for example, reach over something to lift or place the box in an awkward way or in a way that moves the box away from the worker’s center of gravity. Repetition can, of course, amplify a task’s wear and tear on the body. When major risks are combined, the likelihood of injury can skyrocket. “If you just have just one – bad posture – that’s a lower risk,” said Treaster. The risk increases dramatically if a task includes two of the three major risk factors. Treaster explained that “going from having one to having two risk factors increases the risk of an MSD something like 16 times.”

Applied ergonomics

In using ergonomics to fit the work to the worker, Treaster explained that this includes accommodating workers’ physical differences such as height, strength, age and dominant hand. Achieving the right work-to-worker fit may require adjustments to what Treaster called engineering controls or may take changes in administrative controls. Engineering control changes are those that affect the workplace itself. “You are looking at changing the workstation,” said Treaster, “by changing the design, the layout, the dimensions, or the physical page 36 u

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Ergonomics is like golf; it’s a game of inches. Two or three inches can make a huge difference.” geometry of the workplace in some cases. Sometimes you are looking at tools, at changing the tools you are using. Or you may need to bring in some mechanical assists.” Changes in administrative controls might be the correct solution, including training, doing job rotation or job enlargement. The process itself may require review and adjustment. Treaster said that the pace of work often is an issue to be addressed, especially in industries where workers are paid on a per piece basis and are therefore inclined to work at a rapid pace.

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“This can cause people to work through their breaks or cut their breaks short,” she said, “Breaks are intended to literally give your body a break, to stop doing whatever it was you were doing and give your body a chance to recover. When people are paced by machines or externally, and they don’t have the ability to rest or take a micro-break, that can actually be detrimental.” When reviewing the workplace for ways to improve the ergonomics, Treaster advised manufacturers to seek progress, not perfection. “Don’t look for perfection when you make ergonomic changes,” she said. “You are looking to incrementally improve the ergonomics of the workplace.” And in making those changes, Treaster made this point: “Ergonomics is like golf; it’s a game of inches. Two or three inches can make a huge difference.” Treaster mentioned some simple ways to fit the work to the workers. A scissors lift can be used to raise a workspace so that excessive bending is eliminated. Work areas can be outfitted with turntables (including those that are set in the floor to accommodate forklift traffic) so that workers can rotate a pallet, for example, rather than reaching across or walking around it to load items. A third example is a simple, inexpensive idea: add wheels to long ladders in a way that allows a worker to move the ladder by rolling it rather than carrying it. “Ergonomics is fitting the work to the worker,” said Treaster in summing up the presentation. “You want to accommodate individual differences. That’s key to this concept of ergonomics. You reduce risk factors – force, posture, repetition. You can redesign the workplace, the tools, the equipment or the process.” “Be aware,” she said, “it’s not always a one-time solution. Sometimes you have to iterate. You make a change, and then you realize, ‘Well, I was close but not quite there, so I have to make another change.’” n


PRODUCTION

Harbour’s Automotive Tooling Forecast Offers Cautionary Tale for Entire Industry By Dianna Brodine, managing editor, The American Mold Builder

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n November 2019, Laurie Harbour, president and CEO of Michigan-based manufacturing consulting firm Harbour Results, Inc., presented the results of the annual Automotive Tooling Forecast. In this article, we share some of the data from the report – but the whole story isn’t told by the data alone.

Forecast: Tooling demand to see significant drop

“The situation we’re seeing is the effect of a broader change in the automotive industry – it’s a shift in the traditional methods of making cars and the types of cars we make,” said Harbour. “We’re facing a new normal that includes economic uncertainty, government volatility, and the tariff and trade situation.” As 2018 ended, the industry had started to slow down, according to the Tooling Forecast data. LMC data had forecasted the 2018 demand for tool spend at $9.7 billion, but it actually ended at $6.6 billion. This primarily can be attributed to large-scale programs that weren’t launched when expected, and tool shops felt the impact. In addition, vehicle launch mix has changed. In 2017, 30% of launches for the Detroit 3 were all-new vehicles – when every tool on a car or truck changes, tool builders stay busy. But, in 2019, only 19% of those Detroit 3 launches were all-new vehicles. A similar trend was seen with Asian OEMS and the European 3 – fewer components are changing on the vehicles launched. New entrants into the market included all-electric product. Some of those tools were made in the North American market, but some were not.

Also a good story for toolmakers: Nearly 100 more nameplates are expected over that same 10-year period, which means more complexity is entering the market at lower volumes. “The opportunities exist for those that have the ability to flex in the market to go after new business at competitive pricing,” said Harbour.

What is the impact on toolmakers in other markets?

“The biggest concern for toolmakers in other markets is those in automotive are trying to diversify, so they’ll invade other markets, such as power sports (Polaris), agriculture (John Deere), appliance (GE), etc.,” said Harbour. “The shops in other industries need to understand that these guys are hungry and will competitively bid to stay in business and land new, non-automotive work.”

As a result of the drop in demand, tool shop revenue was down 6% in 2018, and the total volume of quotes dropped 5% in a oneyear period. Capacity utilization is at the lowest point seen over a 6-year period. At least 10 tool shops have closed their doors, and up to 2,000 employees have been laid off.

What do AMBA members need to do right now?

“This forecast is difficult for us to share,” said Harbour. “We are passionate about helping the North American manufacturing industry remain competitive. However, the ongoing marketplace change and competition from low-cost countries – specifically China – already have impacted tool and die makers.”

Harbour suggested that, as the tooling market contracts, “it is important that shops position themselves for the future. Tool shops must continue to put plans in place to shore up weaknesses, maximize technology and talent, and control costs.”

Are there opportunities for auto tool makers?

The number of automotive OEMs selling vehicles in North America is projected to rise by 2026, from 21 in 2006 to 27. The number of OEMs who build vehicles in North American plants will be up from 13 in 2006 to 23 in 2026. “This is significant for the automotive toolmakers if they can capture some of these new OEMs and diversify into these new markets,” said Harbour.

“Tool suppliers don’t have a lot of time to readjust their business,” Harbour cautioned. “The change in industry workforce, in the marketplace driving the change in this automotive landscape – it’s happening right now.”

These plans include stress testing the business – performing a complete financial assessment with particular focus on the balance sheet. At the same time, work on operational efficiencies to drive throughput and plant improvements now, while things are slow. Harbour said now is the time to visit customers and hunt for work. “The key is flexibility,” she said. “Stress tests help companies understand where they stand, if they are in trouble and what plans they need to put in place.” n www.americanmoldbuilder.com | www.amba.org

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PRODUCT /// BORIDE Adds ENESKAsonic Ultrasonic Polisher Set, Diamond Compound Kits

BORIDE Engineered Abrasives, Traverse City, Michigan, announced its latest advancement in the field of ultrasonic polishing, the ENESKAsonic Ultrasonic Polisher Set. The ENESKAsonic features an Auto Tune function that determines the optimum frequency for the tool being used, as well as a Boost Mode feature for power-intensive jobs. The set includes the control unit, ultrasonic handpiece, handpiece support stand, one 3mm round tool holder, one 1mm flat tool holder and other accessories. The company also has introduced Mold Makers Diamond Compound kits, known for a wide thermal processing range and consistent diamond particle distribution. Each kit includes (5) 2-gram syringes of the industry’s most popular grades and a 2-ounce bottle of Diamax Thinner. For more information, visit www.borideabrasives.com.

GF Machining Offers AgieCharmilles CUT 2000

GF Machining Solutions, a provider of machine tools, technical solutions and services based in Switzerland, offers the AgieCharmilles CUT 2000 X wire EDM, with Spark Track technology and an Integrated Vision Unit, now restyled under the GF Machining Solutions brand. The Vision 5 software interface allows manufacturers to optimize production, achieve flexible job management, and improve quality and productivity. Open guides on GF Machining Solutions’ automatic wire changer allow the use of a combination

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of wire diameters between roughing and finishing, reducing machining time and resulting in up to 32% greater productivity. With the Intelligent Spark Protection System providing information about spark distribution on the wire, the CUT 2000 X’s Spark Track technology allows users to avoid wire breakage, reduce part defects and simplify machine operation. For more information, visit www.gfms.com.

Starrett Expands Hardness Testing Line

The L.S. Starrett Co., an Athol, Massachusetts-based global manufacturer of precision measuring tools and gages, metrology systems and more, has significantly expanded its line of benchtop hardness testers, adding a total of 16 testers. New Rockwell Hardness Systems include two regular Rockwell Digital Testers, two Superficial Rockwell Testers, two Twin Rockwell-Superficial Rockwell Testers and two Twin Rockwell-Superficial testers with a Dolphin Nose design. New Vickers Hardness Testers include six Micro Vickers Testers, two with Digicam Basic Manual Software, two with Digicam Auto Software and two testers with Auto Turret control. In addition, there are two Macro Vickers Testers for handling up to 17 test forces. The new Starrett Digital Brinell Hardness Tester features automatic loading and can handle 10 scales. For more information, visit www.starrett.com.

Meusburger Introduces profiTEMP+ Hot Runner Controller

Meusburger, an international manufacturer of products for die, mold, and jigs and fixtures construction, introduces the profiTEMP+ hot runner controller from PSG. In addition to intelligent functions like Smart Power Limitation (SPL) and MoldCheck, the controller


///

features a 7” multi-touch screen for easy and intuitive operation. Advantages include precision power output through high resolution of the actuating signal on the heating output; uniform, controlled heating-up with automatic ramp; relay heating – heating up of zone groups in a sequence; monitoring of the sensor signal to detect sensor break, polarity reversal and short-circuit; safety shutdown in zones upon detection of a critical error in the heating circuit; and early detection of leaks through continuous process monitoring. For more information, visit www.meusburger.com/EN/GB/index.

New Adjustments Plates, Guide Bush, O-Rings and Plates from HASCO

International moldmaking component maker HASCO now offers a variety of new components. Z555/…, Z556/… and Z557/… adjustment plates come in 70 new sizes, in 1.2842 and hardened to 58 HRC, and are available in round and rectangular versions, ready-to-mount. The new guide bush Z1300/... comes in high-strength aluminum bronze and is available in 42 dimensions, with excellent heat and corrosion resistance. The high-temperature O-rings Z98HT/… are made of a special FKM material (fluorinated rubber copolymer), distinguished by their orange PTFE anti-friction coating and available in around 40 sizes. HASCO’s P1/… plates are now available in some 2,000 additional variants – dimensions, thicknesses and materials – with several thousand stressrelieved P1 plates ready for delivery from stock. For more information, visit www.hasco.com/en/.

PRODUCT

driver module that replaces an otherwise necessary control unit. In its current design, this module comes with a default setting that fully opens/closes the needle. Using an external smart interface (ESI) that is connected for this purpose, needle stroke and force can be individually set for specific applications, including multiple steps. Up to 24 valve pins per system can be individually programmed using this ESI. Once these parameters have been saved in the driver module, the system is ready to produce highquality molded parts consistently without a control unit. For more information, visit www.hrsflow.com/eng/.

Liechti Offers Adaptive Milling Technology and Minimal-Quantity Lubrication Process

Lincolnshire, Illinois-based Liechti Engineering, a GF Machining Solutions brand and maker of 5-axis airfoil machining solutions, has automated the adaptive milling process. At the same time, Liechti has added a unique minimal-quantity lubrication (MQL) process. With automated adaptive blade milling, the workpiece is measured in the machine and the Turbosoft CAM software generates and optimizes the tool path. The automated adaptive blade milling solution can be fully integrated with a range of flexible manufacturing systems. Liechti’s MQL process places a small amount of lubricant exactly where it is needed through the spindle on the cutting tool to eliminate any loss of efficiency. MQL is available on all new Liechti machine models and can be retrofitted on legacy models currently in the field. For more information, visit www.gfms.com. n

HRSflow Offers FLEXflow One

HRSflow, San Polo di Piave, Italy, the hot runner division of INglass Spa, now offers FLEXflow One: The Servo Driven Valve Gate System without Control Unit. The servo driven FLEXflow One needle valve systems for hot runner nozzles have a simple

www.americanmoldbuilder.com | www.amba.org

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PREPARE FOR 2020

amba publications provide valuable data Prepare for 2020 with leading-edge benchmarking data that provides insight into current conditions, allowing mold builders and industry professionals to plan for the upcoming year.

2019/2020 Wage and Salary Report 2019/2020 AMBA WAGE AND SALARY REPORT

▪ Low-, average- and high-wage ranges for over 50 job functions ▪ Latest industry practices and trends ▪ Job descriptions and related years of experience

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Efficiencies in Machine Programming Report ▪ Recent investments in technologies and/or machines ▪ Preferred programming software and strategy ▪ CNC and setup operator: training, responsibilities and experience

Managing the Sales Pipeline ▪ Ratio of sales employees to the rest of the workforce and total revenue ▪ Management responsibilities related to sourcing sales leads ▪ CRM and/or ERP system use: sales leads/follow-ups, quoted work and more

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MANAGEMENT

Understand the Impact of Your Profit Per Sale By Jill J. Johnson, president, Johnson Consulting Services

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ew enterprises truly understand the actual profits generated by the individual sales they make. Most metrics for sales effectiveness are monitored by reviewing top-line revenue results. Yet, the most critical determinant of ongoing business viability is understanding what revenue actually drops to the bottom line after all costs have been taken into account. You must understand what profit is generated by sales to each of your clients. Then consider the benefits and vulnerabilities the cumulative impact these sales mean to your business.

Understand the impact of the profit per sale

Each sale has multiple components impacting its final profit. You should consider your total cost of goods sold, including investments in promotion and delivery expenses. Factoring in the costs associated with the staff time required to generate a sale is a must, too. Unfortunately, few companies consider all these expenses when developing their marketing and sales strategies.

Know your profit per client

Frankly, not all clients are worth the effort to generate the sale. Sometimes your business growth goals mean you also are growing beyond clients you have historically served. This transition period is a vulnerable point for any enterprise. It also is very stressful because you might wind up losing a client that could have provided greater revenue value if you had not been afraid to maximize your relationship. Study the costs associated with serving each client – especially if you have long-term clients you like personally. If you have not taken the time to explore the costs of the sale, their value to your business may have changed dramatically over the years. Before abandoning these clients, try to identify options to trim your expenses without jeopardizing quality. But, it may be time to move on if they are not generating any real profit to your company.

Evaluate sales profitability

There are two ways of looking at sales profitability data: by the individual clients or by combining clients using some specific target marketing components. Grouping clients by similar characteristics – such as industry sector, number of employees, location, etc. – makes it easier to identify trends in the data used to assess the profitability of each of these major segments.

If Client Segment A generates solid profits for you, but all sales efforts are being devoted to Client Segment B – which is barely breakeven – the choice is obvious. Retool your sales activity to attract more prospects from Client Segment A. Focus your sales activities and expenditures toward those type of customers who can best be served by your enterprise, who will stay with you over the long-term and who will generate solid profitability.

Monitor individual client profitability

A complete review of the mix of your customers and sources of sales will reveal potential vulnerabilities if market conditions change. It is not enough in today’s competitive marketplace to look only at total overall sales. If one customer generates more than one-third of your sales, you are in an extremely vulnerable position if you lose that client to a merger, change of staff or if it goes out of business. Controlling and monitoring your client profitability and cost of sales allows you to take corrective action before your business’s survival is at risk.

The impact of pricing on profitability

A close companion to client profitability is understanding the impact of various pricing strategies on the perceived value of your goods and services, and how they intertwine in attracting the customers who will buy from you. Engaging in discounted pricing strategies often attract customers who are buying from you based on price, not your value. This can be a slippery slope. You may get clients who keep you busy, but who do not generate the profits you need to build a sustainable enterprise or build your net worth.

Final thoughts

Reviewing the trend information for each major client segment is an impactful approach to revaluating the effectiveness of sales and marketing efforts. It removes emotions and relationships with clients to allow you to be more detached in considering their impact on meeting your business objectives. They are no longer people you like, but a bigger grouping of customer segments that impact future costs and business growth. n Jill J. Johnson is the president and founder of Johnson Consulting Services. Johnson helps her clients make critical business decisions and develop market-based strategic plans for turnarounds or growth. For more information, visit www.jcs-usa.com.

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FEBRUARY 2020

PLASTEC West, February 11-13, www.plastecwest.com Webinar: Peer Networking: Senior Leaders, February 12, www.amba.org/events Sales Process Forum, February 27, www.amba.org/events

APRIL 2020

AMBA Conference 2020: Emerging Leaders Pre-Conference Session, April 29, www.amba.org/events AMBA Conference 2020, April 29 to May 1, www.amba.org/events

JUNE 2020

PLASTEC East, June 9 to 11, www.plasteceast.com amerimold, June 10 to 11, www.amerimoldexpo.com

JULY 2020

Young Professionals Leadership Summit, July 22 to 24, www.amba.org/events

AD INDEX /// Alliance Specialties and Laser Sales......................................... www.alliancelasersales.com................................................................... 13 AMBA Benchmarking Publications......................................... www.amba.org........................................................................................ 40 AMBA Events........................................................................... www.amba.org/events............................................................................. 28 BORIDE Engineered Abrasives............................................... www.borideabrasives.com...................................................................... 24 CGS North America Inc............................................................ www.camtool.com.................................................................................. 38 Crystallume, a Division of RobbJack Corporation................... www.crystallume.com............................................................................ 10 Dynamic Surface Technologies................................................ www.dynablue.com...................................................... Inside Back Cover Erowa System Solutions........................................................... www.erowa.com..................................................................................... 12 Federated Insurance.................................................................. www.federatedinsurance.com................................................................. 23 Finkl Steel................................................................................. www.finkl.com........................................................................................ 31 Gesswein................................................................................... www.gesswein.com................................................................................ 18 Grainger.................................................................................... www.grainger.com.................................................................................. 20 HASCO America, Inc............................................................... www.hasco.com........................................................................................ 9 INCOE Corporation.................................................................. www.incoe.com...................................................................................... 27 Kruse Training.......................................................................... www.krusetraining.com.......................................................................... 19 Meusburger............................................................................... www.meusburger.com............................................................................ 17 Milacron/DME.......................................................................... store.milacron.com................................................................... Back Cover Mold-Tech Midwest.................................................................. www.mold-tech.com............................................................................... 39 MoldMaking Technology......................................................... www.short.moldmakingtechnology.com/leader..................................... 11 PCS Company........................................................................... www.pcs-company.com.......................................................................... 35 Plastic Engineering & Technical Services, Inc......................... www.petsgroupintl.com............................................................................ 5 Progressive Components........................................................... www.procomps.com/pins..............................................Inside Front Cover Superior Die Set Corporation.................................................... www.superiordieset.com......................................................................... 36 Ultra Polishing, Inc................................................................... www.ultrapolishing.com......................................................................... 36 Vincent Tool............................................................................. www.vincenttool.com............................................................................. 21 Waymint, Inc............................................................................. www.waymintinc.com............................................................................ 15 Wisconsin Engraving Co. Inc./Unitex...................................... www.wi-engraving.com.......................................................................... 24 YRC Freight.............................................................................. www.yrcfreight.com............................................................................... 25 ZWSOFT.................................................................................. www.zwsoft.com.................................................................................... 33 42

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