Overseas Trade Mission - A Wake-up Call for U.S. Moldmakers

Moldmakers speak candidly about their recent trip to Asia and how it impacts business over here.

Several months ago about a dozen moldmakers ventured overseas to take a look at the Asian market and see for themselves why some of their business has been conducted in a foreign land instead of on American soil. This trade mission - sponsored by SPI and led by Glenn Starkey of Progressive Components (Wauconda, IL) and Jim Meinert of Snider Mold (Mequon, WI) answered a number of the participants' questions, eased some of their fears about these unfamiliar countries, and inspired them to keep busy and thrive in a global marketplace.

The 10-day sojourn took these businessmen to Hong Kong, Singapore and China. At each destination, the participants toured moldmaking facilities, met with fellow moldmakers for question and answer sessions, and listened to briefings by industry professionals. They returned from this mission full of knowledge, more confident and optimistic about the challenges they faced, and ready to share this information with their fellow moldmakers.

Why Fly?

For most of the participants, the trip was an exploratory mission to uncover the reasons why they were losing business, clear up some of the mysteries and stereotypes that existed about these overseas shops and see about the possibilities of forming some alliances with these com-panies. According to Rick Finnie of MR Mold and Engineering (Brea, CA), part of his reasoning for taking the trip stemmed from his desire to travel. "I enjoy traveling, but that's a small portion of why I went," he comments. "I wanted to go and see what my competition overseas is because I've been losing work to these people, and I wanted to find out what the reality is: what kind of toolrooms do these people have, how big they are, what processes they are using, what kind of equipment they have, and so on.

"Actually, much to my surprise, everyone was open and honest - or at least they seemed to be - and they let us take pictures," Finnie continues. "I brought back seven rolls of film and most of them are of their toolrooms and molds. I may potentially send some business over there."

Roger Klouda of Cedar Rapids, IA-based MSI Mold Builders echoes these sentiments. "My decision to go was both offensive and defensive - part of it was to look at opportunities over there as far as patterning options and the primary reason was to see what the competition is doing - for we are competing in a global market," he comments. "It's not often another mold shop will let you in the door and let you see what they are doing and talk about their processes. It looked like a good opportunity to get together with some other domestic moldmakers and see what the competition was doing.

"I believe that we have to get out of our own environment to learn things - I look upon it as an investment, not an expense," Klouda continues. Whether it's going to a college or going on a trade mission to see what new technologies are out there, it's an education and I look at it as putting something into my business rather than taking anything away from my business."

For Ben Staub of Bastech (Dayton, OH), the trip was one for research and development. "For the most part it was a learning mission to see what the overseas competition is doing and how they are doing it," he says. "Also, we were looking for possible outsourcers."

Indelible Impressions 

While most of the participants were not terribly surprised by the technology they saw firsthand, to some it was indeed a wake-up call. Peter McGillivray of Dynamic Engineering (Minneapolis, MN) explains. "The perception over the years has been that they were working in bamboo huts with dirt floors, obviously it's not at all like that," he says. "They were more on the same scale as a majority of companies here, although we were seeing the cream of the crop, not just any old job shop. They were more project management intensive than we are, which I think is good."

Glen Shrigley of Trend Technologies (San Jose, CA) agrees. "It was great for me to see these shops in person because I had a totally different picture in my mind of what these shops would look like," he comments, "that was less sophisticated. Now, I'm not so much concerned that they have a better advantage when it comes to technology or anything, they have the same equipment we do." Adds Dave Robinson of Manitowoc, WI-based Kaysun Tool & Engineering, "I was surprised at what I found, some of the shops were very large and sophisticated," he states. "They were more advanced than I thought they would be. They are a bona fide threat to the American mold building industry, there's no doubt, and in my opinion we either participate in it in some fashion and possibly benefit from it, strategically thinking, or we just sit back and watch it happen."

Another surprise turned out to be the peaceful coexistence of these overseas moldmakers. Bastech's Staub comments, "One thing that impressed me with all three of the countries was the camaraderie between the moldmaking industry as a whole - to where they have a whole different philosophy than what I've experienced here in the states. They team up and are worried about their countries being successful as moldmakers. You don't really see that happening here. Basically the philosophy in the states with the companies I deal with is that it's every man for himself. Every tool shop is competing with the guy down the street. Perhaps the main focus here should be teaming with the guy two miles down the road so we can compete with China."

This is exactly how Klouda of MSI Mold Builders feels. "Here in the U.S. moldmakers don't share as much as they should, and over there, they shared information every day and for the good of the industry rather than for the good of individual shops," he says. "We as moldmakers in the U.S. also need to work together for our own good. We are not each other's enemies, we do have to compete but there are things that each of us do better than another. From an industry standpoint, we do need to get together and focus on maintaining our industry and its viability domestically as well as improving our ability to work on the outside and do more exporting than we currently do."

Lessons Learned 

The consensus of the group appears to be that while the United States and Asia are matched pretty evenly when it comes to equipment and technology, Asia clearly wins out in the both the management and education/training areas while retaining a cheaper labor force.

"Something that stood out in my mind was the amount of planning, the aggressive schedules and the planning and administration efforts that these companies exert in managing their businesses and managing their schedules and leadtimes," Don Blue of Steinwall, Inc. (Minneapolis, MN) comments. "Additional layers of management and administrative effort above and beyond what you would typically see in the states existed; and I expect a lot of that is a result of the labor rates and the wages in China versus here. They are spending more and throwing dollars at the planning and the detail and the documentation."

Finnie of MR Mold and Engineering plans to use this knowledge to his ad-vantage at home. "I can't speak for anyone else but I felt this is something I want to work on - getting our company more organized, more focused and making some decisions about what our short- and long-term goals are, and then start working on them," he explains. "Since I've been back I've been quoting more aggressively and I've talked with my employees here and told them we're going to have to be more aggressive. Not only do we have local competition here in southern California, but we have competition in the Midwest, the Orient, Portugal." According to Ron Pleasant of Kenton, OH-based Pleasant Precision, Inc., the Asians also have a tremendous ability to teach quickly. "They are teaching middle management classes and courses so when U.S. companies go over there to get things manufactured they find that middle management people are quite available and that they are educated in specific methods of manufacturing," he states.

Shrigley of Trend Technologies also puts in his two cents about the education and training facilities. "Hong Kong had a great facility and Singapore had a simply amazing facility where they train 3000 toolmakers a year," he says. "The way they had it outfitted and the way it was funded - it just blows away anything we have here in the U.S. that I know of. I just can't believe we don't wake up over here and start doing something.

"I'm not so much worried about their technology today," Shrigley continues. "I'm worried about their technology over the next five years because they are training their next generation of toolmakers much better than we are here. Unless we start doing something here, and the various associations and shop owners get together and start developing our future toolmakers, this industry will be in trouble."

The Home Advantage

All of the participants returned to the United States more knowledgeable about their foreign competition and positive about the fact that they could capitalize on the many advantages the U.S. has over this competition. MR Mold & Engineering's Finnie feels the United States has an edge from a geographical standpoint.

Pleasant of Pleasant Precision takes this notion one step further. "Our main advantages are proximity and our ability to respond in a quick manner," he explains. "If you can do the job quicker, I think American companies will choose our proximity and also choose us and pay more money. But, we have to learn how to do things in a compressed manner without lowering our costs, and invest in some equipment that allows for things to be done quicker. Most of all, we need to address how can we meet our customers' demands from a delivery standpoint. That's my most resounding comment - delivery is everything!"

No matter how today's moldmaker's choose to thrive in today' changing business conditions - forming alliances domestically and/or overseas, working to further reduce delivery times or streamlining internal operations - education and knowledge are the keys to staying successful. "A year from now, I'm ready to go on another mission!" states Pleasant of Pleasant Precision. "You simply need to see things for yourself."

The participants are pondering the possibility of a future trade mission to another part of the world. "With Mexico, we think we have the low cost center sitting right south of our border and we're not necessarily grabbing hold of that," states McGillivray of Dynamic Engineering. "There's no question Hong Kong, China and Singapore have Mexico in their crosshairs and they're going to be aggressive in getting in there."

 

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