By Maggie Taylor, writer, The American Mold Builder

After several unpredictable years, the mold manufacturing industry is primarily reporting positive sentiments as the first quarter of 2023 gets underway.

“We’re on very good momentum right now,” said Tammy Barras, president of Westec Plastics Corporation in Livermore, California. “We’ve made a lot of improvements over the last five years, including seven new machines, and we’re super excited about the new technology we’re bringing in: A Mantle 3D printer for custom mold building.”

Mike McLean, general manager of Byrne Tool + Design in Rockford, Michigan, shares this positive outlook: “We’re confident that we’re going to experience more growth.”

David Bowers, CEO of JMMS Inc. in Easley, South Carolina, also is feeling hopeful. “We’re looking into a lot of big opportunities, especially the continued electrification of the automotive sector. In 2020, we started a project with one of the Japanese OEMs, and they informed us that, according to its upper management, this would be the final new combustion engine that they bring to market. We’re looking into how that’s going to play out with a lot of the things we do. It’s a bit of a challenge, but it’s also an opportunity for us to investigate where that’s going.”

Weathering Industry Inflation
Even with growth and new opportunities on the horizon, the industry is facing a few headwinds. Many industry leaders have named inflation as the primary challenge for their respective companies in 2023.

“This year, it’ll cost me $300,000 more to do business than it did three years ago,” said John Sullivan, owner of Sullivan Tool & Repair in Elgin, Illinois. “That’s because of wages, workman’s comp, soap, toilet paper, electric, gas –everything is going up. You also have to pay workers a lot more money than you did three years ago.”

“Everything is so expensive,” says Barras. “Even power has gone up astronomically. All the supplies have gone up. Passing it along fast enough to keep up with it really is challenging.”

Some price increases are more challenging to manage than others. “We’ve been passing a lot of those material price increases to our customers fairly easily because it’s not just us; it’s all over,” said Barras. “When prices go up or down by more than 5%, we requote raw materials. Our customers understand. We’re all just trying to make the same margins. It’s more challenging on machine rates and overhead. That’s harder to explain and document to the customers. It’s not something you can see coming; it just happens. You need to review your machine rates and make sure you’ve got that captured.”

Sullivan credits his efficient workforce for helping his business weather the challenges of inflation. “I’ve been able to adjust the business every year to be able to do it. Our young workers keep getting better and better. Their wages have gone up, but we’re making more money off them. They can operate two machines efficiently.”

McLean relies on key metrics and Byrne Tool’s decades of experience to ensure growth profitability. “We don’t want to erode margins just for the sake of a growing topline.” He keeps a close eye on man-hours to sales hours, on-time delivery and scrap-and-rework metrics. “We also look at the mix of the types of orders we get: new tools, repairs, engineering changes, that sort of thing. The tooling industry is known for boom-and-bust cycles and the challenge of staying consistent from month to month. But with 25 years in business, we have a solid history of knowing what type of work is profitable.”

McLean also emphasized the importance of ensuring that all employees can see the impact of their own work. “We give everybody access to technology. Everybody in our shop has access to our job tracking software and scheduling, ability to review the CAD and see what’s going on and how they can improve their part of it. We want to make sure we’re instilling a culture of continuous improvement. Transparency with those KPIs and sharing select financials also is something we’re working on. We want people to see exactly how their efforts are affecting the bottom line.”

Building a Strong Workforce
The challenges of inflation are offset by long-awaited improvements in other areas of business. Barras spoke to a drastic – and hopeful – shift to the hiring market. “We actually have options when it comes to hiring for certain positions,” she said. “We’re currently hiring a tooling engineer, and I’ve interviewed six people already and am interviewing two more that are qualified. We also hired a quality technician, and we had lots of applicants who are all qualified. It sounds silly, but it’s nice to be able to find the person that’s right for the job instead of finding a person that could do the job. I’m getting to pick this time.”

Even with the job market recovering, mold manufacturers still are contending with the challenge of a maturing workforce. Attracting and retaining younger workers is a top priority for many companies.

Bowers speaks of the benefits of tapping into local career development resources and connecting with younger populations. “One of the things we’ve participated in is trying to drive awareness of manufacturing down into lower age groups. The Anderson-Oconee-Pickens (AOP) tri-county area has what’s known as the AOP Business & Industry Showcase, which specifically is catered to eighth graders in the region. The workforce development section of the government works with economic development councils from the three counties to pull off a two-day event, where we have manufacturers and employers from the tri-county area set up what essentially is a tradeshow booth to demonstrate what careers are available in their industry segment. It’s centered around career clusters, that the career and technical centers in all three counties are offering as certificate programs during high school.”

Bowers credits the region’s European influence for driving this focus on connecting with younger students. “We’re in the wide swath of BMW, Michelin and other European OEMs that have had a much different focus on education for many years: apprenticeship programs, asking kids to declare interests at a much younger age and providing school-to-work opportunities.”

JMMS Inc. has fully embraced the benefits of the European approach. “We participate in a school-to-work program: High school kids go to school for half the day for general curriculum requirements and then come to the job site for technical skills and training. We’ve partnered with five different disciplines – machine technology, mechatronics, CAD design, aerospace and welding – and we’re constantly recruiting out of those programs.”

Sullivan has been investing significant time and money into recruiting younger workers for nearly a decade. “Back in 2014, I had all old guys working for me. Then I talked to my son, who was getting married. He was running a tire shop and making good money, despite never having touched a trade. I told him to come work for me.”

This led to Sullivan also hiring several of his son’s friends, with excellent results. “These guys are awesome and super bright. My son’s brother-in-law was a computer genius, so we were able to show him how to run a CNC right away. My son had a friend in welding who didn’t like welding, so we hired him. He’s been here six years, and he’s turned into one of the best toolmakers you can imagine. We got two other people the same way. We try to find kids that are borderline geniuses and have hardworking skills. Now, I’ve probably got one of the youngest shops out there.”

Protecting Capacity Against Supply Chain Challenges
Sullivan is transparent about the sacrifice required. “I make no money off them for a year. But you have to be willing to sacrifice. I have friends who are owners, and I’ve tried to tell them to do this, and they say, ‘Oh, no, I can’t do that. I can’t afford it.’ A lot of these companies that are closing had so many workers retire that they didn’t have enough people to do the work anymore. But you have to find a way to have the finances to do it. It’s challenging. I’ve had to change up my thoughts and do different things a lot.”

Sullivan makes an effort to nurture employee loyalty and ensure that Sullivan Tool & Repair is a nice place to work. He’s also strategic about protecting the business from the possibility of losing a worker. “Never make it so only one guy knows a given machine,” he advises. “People can walk and put you out. I have two people who know every machine no matter what, so if someone goes on vacation or walks out, nobody can put me out of business.”

Sullivan also is careful to protect his business from the challenges associated with ongoing supply chain delays. “We have everything in-house. If things break down now, you might be waiting three months to get it back up and running. We have a hole popper, but if it ever broke down, we’d be in trouble, so we bought another one. You have to keep upgrading equipment.”

Bowers takes a different approach to ensuring capacity. “One of the things that separate (JMMS Inc.) from many other mold manufacturers in the US is we primarily utilize what I refer to as the ‘supply chain concept of manufacturing.’ Many other US manufacturers set themselves up so that they’re capable of every machining discipline and requirement needed to manufacture molds. At JMMS Inc., we only manufacture in-house when we are the best fit for a project and we do a lot of purchasing and subcontracting.”

JMMS Inc. has leveraged a proprietary resource for AMBA members to find reliable partners for outsourced work: the AMBA Work Capacity Tool, which was launched in August of 2022. “The Work Capacity Tool is not so much a marketplace as a networking platform, all based on open capacity among AMBA members,” said Bowers, who is on the AMBA Board of Directors. “There are two sides to it. You, as an AMBA member can enter your open capacity, categorized into different machining and process disciplines associated with mold manufacturing. Or, if you need to outsource work, you can go into the database and query for open capacity. The database will give a list of pre-qualified companies who have capacity in a requested discipline, and you can reach out to them directly to see if they have any interest in bidding on your project.”

Bowers has successfully used the tool to find and establish partnerships with other companies for outsourced work. But he understands that some companies may feel reticent about using it, especially in an industry that often prefers to keep things in-house. “I’ve been engaged in the process of outsourcing for nearly 25 years, but other companies have been focused on doing everything themselves. They’re concerned about the risks of this process of going to outside. Throughout history, this phenomenon has been present in the mold manufacturing industry.”

His conversations with AMBA members about the tool often reveal recurring concerns. “They’re asking, ‘How can I trust them not to steal my customer? What if they don’t make their delivery? What if they have some quality mistake that is detrimental to my customer?’ It’s very difficult to make someone feel comfortable about something they’re uncomfortable with.”

Industry Collaboration
Bowers believes the entire industry, not just JMMS Inc., can benefit from a more collaborative approach. “It’s just as important for me to talk about the challenges of this industry as much as it is personal business. There are so many more industry-wide challenges and opportunities for us to seize as an industry. But the idea of collaboration and cooperation with other companies is only happening in pockets. That continues to be a challenge in our organization, and that’s one thing the AMBA Board of Directors is trying to strategically address.”

Bowers has clear advice for mold manufacturers on protecting themselves in collaborative partnerships. “Be clear about the data and have very good written specs and documentation. Specify what the quality requirements are, along with the level of inspection and validation. That’s the best you can do to protect yourself and control your purchase.”

Barras’s advice during any season is to stay focused on a company’s north star – its employees. “I recently gave a presentation that included a slide on our ‘Why.’ We don’t do this because of the products. Obviously, we have to make money, but that’s not the reason we do it. The reason we do what we do is the people that work here. People can buy houses, send their kids to soccer camp, go on vacation and build their lives because of the work they’re doing at Westec. Our people are our most important asset. They make it happen.”