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2 posts from March 2009

March 19, 2009

The "Green" Molding Machine - Take the money and RUN!

So, you say you do INJECTION MOLDING, right?  and from time to time, you've had to defend what you are doing to some gang of environmentlists who'd like to see you shut down because you do plastic, and plastic is EVIL, right? On the one hand, I've had that argument at least a couple times a year since 1968, and if you ever want copies of the speeches I've given at various zoning commission hearings, county and state legislatures, etc. just call me................ I especially enjoy the point in each session where I volunteer to get out my "plastic detector" to see how much plastic each protesting green power person is wearing or carrying, or get them to admit they did not arrive at the meeting on horseback. Even better if you mold polyolefins, and you get to ask them just how deep in petroleum byproduct the whole earth would be if all the waste from making gas and oil had NOT been made into plastic?

On the other hand, getting inside the heads of some of these folks can be very enlightening at times, and can also bring some green to your bottom line, if you pay attention and act on your new knowledge. For example, how many of you in New Jersey have heard of "Smart Start"?  Do you know that the State will fund up to 80% of the cost of new equipment that saves energy? Do you know that ANY molding machine can be retrofitted with improved controls and barrel heaters that qualify for the State rebate program? Anyone from Wisconsin reading this? Similar program is in place there, too.

Here's the REALLY GOOD AND GREEN part of this deal. If you do the retrofit on, say a 500 ton injection machine with around a 75 - 125 ounce barrel, you might spend about $8,000.00 on the conversion. If you're a Joisey boy, the State will give back $6,400.00 under the Smart Start program, so your press upgrade will actually cost you $1,600.00 out of pocket. Or will it, really?

Punchline to the above is this: The upgrade will cut your operating cost for injection unit heating by at least 30%, or the vendor takes it all back and gives you a refund. That converted 500 ton press, at NJ utility rates, would save you about $12,000.00 a year off your electric bill if it runs 24/5/250 per year. (Of course you DO have a KWH meter on that machine, so you know exactly how many dollars that 30% is going to be worth to you, right?) So your out of pocket cost for a better performing, more accurate temperature control setup on your press would be a negative $10,400.00 cost, or in other words, your Company MAKES A PROFIT OF $10,400.00 per each machine converted. Of course next year you only MAKE an extra $12,000.00 per press, because you paid off all the costs in the first year.

Oh, yeah, the other thing is you get to put out press releases about being an environmentally responsibe Company, talk about the reduced burden on the power grid thanks to you, and your reduced Corporate Carbon Footprint, and yadayadayadah.....Did I mention you get to fly the "ECO-HERO" flag out front?  Nice pale green, with a big picture of a cute frog on it? Seriously, this is real, it's being done all around the country, and if you are doing any round the clock high volume processing and NOT looking into these "Green Machine" conversions, then you are just being a Dodo, and we all know what happened to them.

Here's a clue: If you go out on the press floor, stand near one of your injection machines, and get a nice warm feeling from the heat coming off the barrel, you're a Dodo, and that machine is spending up to $20,000.00 a year of your PROFITS to keep the plant warm, and fighting your air conditioning all summer while putting your workers at risk of burns or heat stroke.

Did I mention the other Dodoism, where your press controls are 5 to 8 years old, and your temperature variance from setpoint is more than +/- 15 Degrees F, which means you are almost never molding your parts to the correct processing temperatures, so you get shear stress at the low end of the variance, and overheat/flash at the high end?

Injection molding is still nearly as much art as science, but unless your "artists" on the press floor have the best science backing them up, then you are going to be losing ground against the other folks out there who are actually paying attention. Had an energy survey done yet? Know what each press on your floor costs to run per day/week/month/year?  Does your scheduler know which machines cost least to run each job? Do you know you can retro in a KWH meter on a press for less than $300.00, so you'll know what your real costs are? The devil is in the details, and some of us are actually having a pretty good time bringing the green revolution to our industry. This is a train everybody needs to jump on fast.

After all, how many jobs of yours went overseas to save the client 20% or even 10% with shipping, and could have been saved if you had only taken the opportunity and changed your presses from space heaters back to eco-friendly cheaper running more efficient more profitable INJECTION MOLDING MACHINES!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

I've yammered on enough, I guess. The potential to turn your own Green Machines program into badly needed profits is real. Anybody interested? Get in touch, and I'll be happy to point you to the programs and some of the pioneer vendors who can help.

After all, how many penny apiece plastic parts do you have to mold to get a $20,000.00 bottom line profit?

At 10% NET, that would be 25 Million penny parts. Just so you know. Been There, Done that, got the raggedy T-Shirt to prove it.  Think (folding) GREEN!

Remember the latest buzzwords you need to carbon-offset the critics:

Sustainabilty      Ecologically Friendly      Reduced Corporate Carbon Footprint    GREEN

Geen Team Projects    Environmentally Sound    DiminishedPower Grid Stress

I can keep this up all day. Point is, this stuff resonates with about 50% of the population, so pay attention, and work to benefit from the awareness that you can develop, listening to the "enemy"

Milacron/Chen Hsong - A Match Made in.......?

Ok, so I've been away a while, but what's a bit of time among friends, right? Speaking of friends, and the title of this piece, I'm betting that Chen Hsong Group is not feeling really friendly with Dave Lawrence and Milacron these days, what with Milacron going into Chap 11 with an outstanding bill of $489,000.00 owed to Chen Hsong. Proves two theories I've had a long time, now, first that forming an alliance with an Asian press house to keep your domestic business going is unlikely to work out for you, and second that Milacron management over the last few years (like the last 20) has not been doing the kind of long term thinking that should be required when you are running a company that has a history reaching back into the 1880's. Having been involved with injection molding for an EXTREMELY long time, seeing Milacron going under just seems a crying shame. Kinda wish they'd taken the time to observe and learn from the mistakes of all the other American injection machine builders who were years ahead of them on the path to oblivion, and used the observation to work out some way to not do exactly the same things that put all those builders on the scrap heap. I'm thinking about a couple used-to-be famous names, like Reed-Prentice/Package Machinery, Farrel, Stokes/Pennwalt, Van Dorn, Trueblood, HPM, Battenfeld, and a few dozen smaller companies that all managed to lose their once tight grip on the US market.

I blame it on accountants, and corporate lawyers, and investment advisers, all of whom have managed to bring most everything down to the bottom line, even when the bottom line was one that did not matter, in the overall picture. Bottom line mind sets in this business will get you a whole spectrum of bad decisions. Like the in-house bookkeepers at lots of major USA molding operations who were mistakenly allowed to look over the bids on capital equipment purchases twenty years ago, perhaps, and just HAD TO make the point that the latest then-Japanese machines would cost the Company 20% less than staying with Reed, or HPM, or Van Dorn. Forget that the US machines had about 25 years of service life capability compared to 8 or 10 for the imports, so the 20% extra cost was probably going to become a 200% SAVINGS over the import machines in the long run, that bean counter was going to get a BONUS for cutting costs that year. Anybody seen any of those guys lately? Still have one working for you, still pushing for the bottom line on everything? Ever catch yourself thinking he'd probably fit in the big Nelmor?

 Hate to say it again for the millionth time, but we in this business have a real propensity to shoot ourselves in one foot after another. An older fellow I used to work for, (imagine that!) always used to exercise what he called the "Presidential Prerogative" in major equipment buying decisions. That was to have some  hotshot engineering types (That would have been me and the rest of the engineers) survey the available equipment, price at least 4 choices, and then war-game amongst themselves, each guy presenting one of the products as his own and letting each of them try to prove theirs the best and show the shortcomings of all the rest.  After all that, the "P-P" decision was always his, and always surprising, in that the lowest priced solution was almost never the one chosen.

We ran REED machines the first 10 years or so, then moved on to Stokes Pennwalt when the Reeds lost out in performance testing for some thinwall closures, and ultimately had a few dozen of those and an equal number of Van Dorns in place when the Big Guy retired and the Company fell into the hands of a crowd of "Venture Capitalists" in the late 1980's. Those guys brought in their accountants to oversee "all capital purchase decisions" which meant all new machines were the smallest and cheapest that could hope to run each job. Capper to that was that the accountants decided our veteran commissioned sales reps were making way too much money with 5% of the gross, so they implemented a "sliding scale" rate that halved the salesmen's take above a randomly selected sales volume number. Kind of like the current geniuses capping executive pay at $500K, because it's a number they like. Of course the sales died off, the "capped" reps went to work for the competition, and the Company died within 18 months after the "smartest guys in the room" implemented their new regime.

Nobody to this day seems to "Get it" that our kind of businesses have to be run by people with vision that reaches above the bottom line. One worthwhile quote from my mentor in this business: " You can't build a Company up if you are always counting your change and worrying that you don't have enough. To do any good you have to make the competition count their change. Makes them lose focus." 

The plastics industry in the United States was invented and run by people with a real competitive spirit, a willingness to take risks, and an ability to choose correctly between acceptable risks and ones that were not. Milacron is a great example of risk-averse management making each and every one of the same bad decisions made by all the other defunct USA press builders. The real threat to the plastics industry as a whole, is that we will lose our focus, being too concerned about making safe moves to ever again break out and do the kinds of creative things that formed the basis of our past successes. 

Lately, too many of us are running scared, and doing just what everybody else is doing, to avoid standing out too much, risking being noticed and perhaps getting eliminated, once noticed. If you look at the success stories in plastics over the whole long time the industry has existed, none of them involve being more careful than everybody else, more reserved, more focused on the counting of pennies where there were dollars to be gathered up and run with.

Here's a thought, lets all take a few minutes to contemplate the moves we'd have made a few years back, when the economy was still OK, there was at least one USA press builder left, and we just thought of a great way to boost the profits on that one long running job out there on the press floor......you know, the press floor, where all the money actually gets made, or lost?

BTW, DO NOT let the Company accountant know what you're up to, just go do it and reap the rewards when it succeeds.

 




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