1. 1 COMPETITIVE INJECTION MOLDING David O. Kazmer, P.E., Ph.D. SME/Eastec 2004 Conference Springfield, MA

2. 2 Agenda Economic Structures & Data Evaluation of Injection Molding Barriers to Competition Modern Molding Technologies Summary

3. 3 Cost Structures Total Production Costs Total Labor Costs Total Consumables Cost Total Facilities Costs Machinery Maint’nce Facilities Yield $/Hr Output Downtime Energy Resin

4. 4 Cost Parameters Cost parameters N.E.China –Operator labor$13/hr$0.70/hr –Eng/Mgt labor$30/hr$3/hr –Energy cost $0.08/kWh –ABS resin $1477/ton$950/ton –Machinery cost$30/hr$15/hr –Facilities cost$7.00/ft 2 $4.20/ft 2 –Maintenance rate10%20%

5. 5 Agenda Economic Structures & Data Evaluation of Injection Molding –Class 0: Obsolete –Class 1: Standard –Class 2: Efficient –Class 3: Lights Out Barriers to Competition Modern Molding Technologies Summary

6. 6 Injection Molding Economics Case Study for a Mid-Sized Molder –200 million parts per year –Average part weight: 10g

7. 7 Class 0: Obsolete Operating Conditions 8 cavities/mold with cold runners Poorly selected hydraulic machines (26 kW) 50 seconds per cycle (optimistic) –Cooling issues & semi-automatic 95% quality level (optimistic) 1 operator per 1 machine 1 eng/mgt per 15 operators 2 shifts, 5 days per week 4 hour setup per 10,000 parts

8. 8 Class 0: Obsolete Factory Characteristics #Operators#Machines#Eng/MgtEnergy Use

9. 9 Class 0: Obsolete Cost Data

10. 10 Class 1: Standard Operating Conditions 16 cavities/mold with 50% hot runners Well selected hydraulic machines (30 kW) 45 seconds per cycle (optimistic) 98% quality level (optimistic) 1 operator per 2 machines 1 eng/mgt per 15 operators 2 shifts, 5 days per week 2 hour setup per 10,000 parts

11. 11 Class 1: Standard Factory Characteristics #Operators#Machines#Eng/MgtEnergy Use

12. 12 Class 1: Standard Cost Data

13. 13 Class 2: Efficient Operating Conditions 32 cavities/mold with hot runners Electric machines (26 kW) 40 seconds per cycle, fully automatic 99% quality level 1 operator per 4 machine 1 eng/mgt per 15 operators 3 shifts, 5 days per week 1 hour setup per 10,000 parts

14. 14 Class 2: Efficient Factory Characteristics #Operators#Machines#Eng/MgtEnergy Use

15. 15 Class 2: Efficient Cost Data

16. 16 Class 3: Lights Out Operating Conditions 32 cavities/mold with hot runners Electric machines (22 kW) 35 seconds per cycle –Fully automatic including crating, etc. 99.9% quality level 1 operator per all machines 1 eng/mgt per all machines 3 shifts, 7 days per week 0.5 hour setup per 10,000 parts

17. 17 Class 3: Lights Out Factory Characteristics #Operators#Machines#Eng/MgtEnergy Use

18. 18 Class 3: Lights Out Cost Data

19. 19 New England Comparison China

20. 20 Head to Head Competitive Assessment

21. 21 Validation: World Production US Plastics industry went from surplus of $894 million in 2000 to a deficit of $1,387 million in 2002 –A swing of $2,281 million. In 2001, China exported $6bn of fabricated plastic products last year. –China also exports plastics in many other forms… –In 2002 China doubled the volume of its exports China is world's largest petrochemical importer –Chinese petrochemical demand is doubling every 8 years.

22. 22 Validation: Molded Utensils In 2003, US imported more than 100bn plastic bags A coalition (Intelplast Group, PCL Packaging and Sonoco Products) claimed that Asian countries were flooding the US market with below-cost PE bags and demanded an anti-dumping duty In September, the US Inter’l Trade Commission determined that "there is a reasonable indication that a US industry is threatened with material injury by reason of imports of polyethylene retail carrier bags from China, Malaysia and Thailand that are allegedly sold in the United States at less than fair value". A producer of plastic utensils found that they could purchase products from China for less than the cost of their resin.

23. 23 Agenda Economic Structures & Data Evaluation of Injection Molding Barriers to Competition Modern Molding Technologies Summary

24. 24 Resource Cost as a Competitive Barrier Labor rates Material costs Overhead costs These are hard to control in U.S. Need to use less resources! –Or avoid commodity markets

25. 25 Capability as a Competitive Barrier Automation requires very high consistency “Open loop” strategy: –Monitor & control inputs –Accept all parts without inspection “Closed loop” strategy: –Characterize process (design of experiments) –Monitor outputs –Accept good parts –Adjust process to fix problems

26. 26 Investment as a Competitive Barrier Each application requires: –Automation –Sensors –Software –Extended setup times Investment is significant w.r.t. tooling costs Difficult to earn back unless high volume Very difficult to try unproven technology

27. 27 Agenda Economic Structures & Data Evaluation of Injection Molding Barriers to Competition Modern Molding Technologies Summary

28. 28 Modern Manufacturing

29. 29 Molding Technologies: Automation Robotics provides for: –Reduced labor content (demolding & degating) –Repeatable cycle times –Fast cycle times Trend to continue: –Cheap computers –Low cost motors & standard designs

30. 30 Molding Technologies: All Electric Machines All electric advantages –~50% of the power –Silent operation –Cleanliness –Precision –Reduced AC costs Trend to continue –Automotive hybrids fuel motor technology –Asian machine technology improves

31. 31 Molding Technologies: Hot Runners Melt delivery systems provide: –Low pressure drops –Fast cycle times –Zero material waste –Tight quality control Trend to continue: –Lower priced systems –New technologies –Economic decisions

32. 32 Molding Technologies: Cavity Pressure Control Closed loop pressure feedback provides: –Automatic V/P switchover –Improved consistency –Quality control data Trend to continue: –Low cost sensors –Cheap computers –New technologies Improved control Improved sensing

33. 33 Molding Technologies: Quality Control Quality control systems should enable: –Automatic acceptance or rejection –100% part testing –Automatic cycling –Variance analysis Trend to grow: –SPC is crude compared to emerging methods –Sensor:analysis explosion –Improved capabilities

34. 34 1-D Flow In A Tube Hagen-Poiseuille –Viscous, laminar flow (constant viscosity) –Relates flow rate, pressure, and viscosity Flow conductance, k, defined as:

35. 35 Flow Network Analysis Consider a two-branched hot runner system Geometry & flow conductance known –Develop flow conductance matrix

36. 36 Flow Network Analysis Apply boundary conditions: –P1, P5, & P6 observed –Q2, Q3, & Q4 equal 0 Solve on-line in real-time

37. 37 On-Line Analysis Results Pressures –Mostly similar –Flow rate & fill effects? Flow Rates –Not previously observable on-line Coming ability to estimate part weight, shrinkage, melt temperature, … BEFORE MOLD OPENS!!

38. 38 Molding Technologies: Electronic Data Systems Electronic data systems should enable: –Production scheduling –Materials requirements planning –Real time plant feedback –Real time process feedback

39. 39 Many Molding Technologies Coinjection Dynamic feed Gas assist In-mold assembly In-mold color In-mold film In-mold painting Insert molding Lost core molding Mold filling analysis MuCell Pad printing Pulsed heating Rapid prototyping Stack molds Thin wall Two-shot molding Water assist

40. 40 Head to Head Competitive Assessment

41. 41 Summary Competitiveness isn’t all about labor rates –Automation & localization can largely offset True commodities are in jeopardy. It is about efficiency … –Knowing which/how to leverage technology … and differentiation –Market understanding, penetration, & recognition –Product & process specialization –Cost & time performance

42. 42 Final Thoughts Mid-Term Issue: Oil & Natural Gas Supply –Increasing Asian demand –Weakening dollar Government debt Trade deficit Euro as preferred currency Long-Term: Sustained Labor Demand –Global supply of all labor –Improving supply chains