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Transferred tools
offer rewards, but there are By Rhoda Miel , PLASTICS NEWS STAFF Think of all the molders out there that have run into problems in the last few months, and add in all those who may not survive the year. Then think of all the molds and all the work those companies have run that need to find new homes. There are likely to be thousands — maybe hundreds of thousands — of tools transferred from failing businesses to other molders this year. While that work could mean a chance for molders to fill excess capacity on their presses, if they’re not careful, those same contracts could create more problems if the companies take on transfer work for which they’re not prepared. “They need to understand what the impact is going to be on their income statement,” said Jeff Mengel, a partner with consulting firm Plante & Moran PLLC. Much of the work will come from the auto industry because of the turmoil in the supplier base there, but there is business available from nearly every sector. A range of issues should be considered, Mengel said, from the condition of the tool to the new molders’ existing equipment to making sure the transferred business will pay for itself. With the expected boost in transferred tools, however, some companies are setting up new businesses aimed specifically at the work. Injection molder First American Plastic Molding Enterprise of South Beloit, Ill., has created a specialty in taking on transfer work and is marketing itself to molders and customers. Progressive Components International Corp.’s tooling maintenance arm, ToolingDocs, launched a tool-transfer business to act as an impartial third party, repairing and testing tools and preparing them for the next molder.
Software and training firm RJG Inc., meanwhile, has scheduled nine different classes this year on tool transfers, to train companies about what goes into a successful transfer. Now is the right time to get ready, Mengel said. Customers thinking about ramping up production will need to get molders on board that can keep up with them. It’s not as easy as just finding space on existing equipment, though. Tools may be coming in poorly maintained and with little or no paperwork. End-of-arm tooling that belongs to the molder — rather than the tool owner — is typically removed with little or no information available. Things can get even worse in a “hostile transfer,” when an original equipment manufacturer pulls a tool from its supplier without the supplier’s consent. “I’ve been hearing some horror stories of how these tools have been handled,” said Gary Chastain, a consultant and trainer with Traverse City, Mich.-based RJG. “There’s one tool that was pulled out and put on the back dock in the rain and left there for two weeks. There are instances where the company put in the old inserts, because they haven’t received payment yet on the new inserts.” “You don’t necessarily have the motivation to do a thorough job to that mold on the way out the door,” said ToolingDocs operations manager Steve Johnson, who has seen work transferred from some of his former employers. Taking on transfer work may mean taking on dozens of tools that are in poor condition all at once, Mengel said, not just two or three tools. Companies bidding on that work either need dedicated staffers who can repair and reverse-engineer tools to the point that they will work on the firm’s equipment, or have contacts with businesses that can. “It’s back to the black magic era,” he said. “You need experienced people with older skill sets who can interpret how the mold was designed to be built and tweak it back to better operating status.” ToolingDocs’ new transfer business is in a neutral location — its new mold-maintenance site in Ashland, Ohio. The company can document the condition of a tool when it leaves the original molding shop, test the water flow and check the lines, clean it and make repairs, while also creating a new set of documents to match the mold. “We’re taking a systemic approach to tool transfers,” said Randy Winton, ToolingDocs’ global tooling manager. “We’re not looking to be a freight hauler and just move tools, but [to] create standard processes and documentation.” RJG’s focus is on what has to happen with the tool once it is at its new location. Chastain noted that creating a successful transfer business, though, begins well before the tool even arrives. The entire business team — engineering, sales and manufacturing — needs to use due diligence in bidding on transfer work that it uses with new work. Get any available paperwork from the final manufacturer in advance on tool design and part production, Chastain said. If the company has mold-flow analysis, use that. “It becomes a lower-risk tool transfer if you get information in advance,” he said. The higher the risk, the more potential that the new company could run into some of the same financial problems running the mold as the previous company, which just extends the damage cycle to even more firms. “If [molders] want to be [players] in the future, they have to understand how to do these transfers, or those tools may be back around for bidding,” Chastain said. First American got a crash course in mold transfers in 2005 when Hurricane Katrina struck along the Gulf Coast. First American’s molding plant in Ocean Springs, Miss., was cut off from electricity and out of business for weeks. The company’s automotive customers could not wait for their parts, though, so First American loaded all 60 tools in Ocean Springs and shipped them to its sister plant in Illinois. In two cases, the molds running in small presses were left in the press and the entire machine was loaded and moved, said Bill Bartlett, First American Plastic Molding President. Though First American had its own tools — and knew how those tools were run — it was still forced to put them on new equipment under less-than-ideal conditions and start production quickly. But Bartlett takes pride that the company kept delivering parts and caused no delays for its customers despite its internal issues. It built on lessons learned during Katrina when a major customer called on First American to take on 50 molds from another molder that was shutting down. First American has its own in-house tool shop to handle repairs and has close relations with another six nearby toolmakers it can call on when transfers come their way. “It’s a big job for the customer and the supplier, so you don’t want to go through it two or three times,” Bartlett said. “It’s important that you understand the ground rules before you do it.” Customers and molders alike need to know who will pay for any replacement parts, and need to understand there will be higher scrap levels on their equipment as the transferred business launches. Some tools will be beyond repair. First American and its customers agree in advance who is responsible for any costs that might arise. The company also is prepared to show its financial condition to potential customers to assure them that it’s fiscally able to take on work, but at the same time is cautious about the new customers it takes on. “We want to make sure that our customer is sound,” Bartlett said. Companies that can do the work now to get ready for transfer business will reap the benefits, Mengel said. “[Tooling transfers] is not a pandemic,” he said. “It’s not as if all the tools are running around, but as production volume increases, there may be more work for transfer. It’s not just automotive. It’s all over the map. There are going to be opportunities in appliance and construction and automotive once these industries recover.” Displayed with Permission of Plastics News, Copyright Crain Communications Inc. Originally published in Plastics News August 17, 2009. Be a TPN Guest Speaker! If you'd like to submit an article for a future issue of the TPN, please contact Editor Cyndi Kustush at editor@tooling-product-news.com for editorial guidelines. Be sure to provide complete contact information and any proposed topics or ideas.
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