Local manufacturers can fit the mold in China

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Local manufacturers can fit the mold in China

By James Meinert, for SBT

China isn’t a four-letter word, but mention that country’s name to many Milwaukee-area manufacturing job shop managers, and they’ll probably respond with a few of their own.
However, the issue of blended manufacturing – combining operations here with outsourced production in China – need not be an emotional one. It’s possible for manufacturers here to use offshore capacity to their own benefit and to the benefit of their customers.
One of my consulting clients is a major plastic mold builder in Michigan that wants to continue to focus on its core business of producing very large molds. I was asked to find this company some good sources for smaller and medium-size molds in China, for several reasons.
First, the industry has an average size shop of about 30 employees, which is not large enough to handle large tooling programs of many molds, so capacity is the issue.
Most plants do not have the ability to handle a complete auto program of 30 to 40 molds. My customer has 150 employees, so he will apply his people doing the very large tools and farm out the smaller tools to sources in China.
This Michigan shop uses his location as an advantage and helps automobile industry customers with prototyping and product design support, warrantying the complete tooling package wherever it is built.
The company provides follow-up and start-up help to get and keep the tooling running in production.
This idea gives my customer some good competitive advantages over other shops, including lower overall costs for the complete package.
My client can also help its automotive clients like General Motors, which builds several models of Buick in Shanghai. My client recently secured about 10% of the internal Chinese market among US automakers.
International dynamics and a healthy two-way approach to global trade have helped the plastics industry achieve a better trade balance than many other industries. In fact, our US plastics industry exports more than it imports.
How does this work? Having a good relationship with tool shops in China can support my customer’s efforts to export to China and also allows the large Michigan shop to be more competitive with his molds going into Mexico and other export markets.
A plastic mold maker can also cooperate with US-based plastic molding and processing equipment manufacturers in their export efforts, providing support as those capital equipment companies work to sell complete turn-key programs, including molds and product designs.
More and more, major manufacturers are globalizing; their suppliers can retain much of their business if they follow suit.
I am helping another Michigan company that manufactures hot runner systems and components used by plastic mold makers all over the world. A hot runner is a device used to evenly distribute the melted plastic to all parts being filled in a mold – in the required condition and temperature.
I am organizing a factory in China to do some of the manufacturing and assembly and to do support for the many multi-nationals that are located in China. As more electronic, auto, medical and consumer products are manufactured in China, services and products that feed the industrial machine are required – and those specialized industrial products and systems can originate in the US.
Actually, there is a lot of demand for this sort of thing. This hot runner system manufacturer has become very global, with both sourcing and selling, and mold components are being moved from Brazil into Mexico.

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James Meinert is president of Meinert Market Services, Grafton. For 15 years, he was president of Snider Mold Co., Mequon, and still serves on that company’s board of directors.

March 7, 2003 Small Business Times, Milwaukee

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