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What Can You Expect in Moldmaking for Calendar 2013?

The Future of Moldmaking

The election is over, the fiscal cliff addressed, and the Jersey Shore finale is behind us.  It looks like time to dust ourselves off and see what is really coming down the pike in our chosen fields of business.  In the wild world of plastic moldmaking, many tooling budgets were exhausted in third quarter 2012, leaving anticipation of what is coming for early 2013.  (In case you were wondering, our bet is that you will see a rise in rotational molding services (Roto molding) in the near future).

In a Clare Goldsberry piece, recently printed in Plastics Today (http://www.plasticstoday.com/articles/moldmaking-five-predictions-2013), a study by Plate and Moran which ended in 2011, revealed some positive indicators for North American moldmakers, in particular.  Cited were:

  1. Press utilization increased for the second year in a row
  2. Resin costs are down nearly 1.6% overall
  3. Several industries has seen significant increases overall, most notably, the automotive and aerospace groups.

Interestingly, movements to avoid the historically cyclical automotive business sector and move toward medical and pharmaceutical industry molding, were met with a softening in that market segment.

Also reflected in the Goldsberry piece were five predictions for the moldmaking industry:

  1. The successful mold manufacturers will tend to be the larger shops with significant resources to support the cost of sales, customer-dictated payment schedules, and increased demand from customers for more services.
  2. Large OEMs are losing their patience with smaller companies that do not have the financial wherewithal to meet the demands of the big OEMs or even the Tier 1 suppliers which many mold makers supply. A strong financial position is almost mandatory in the light of today’s economic conditions.
  3. OEMs will tend to keep new mold builds in the U.S. given their skittishness about intellectual property theft and reluctance to pay the added costs (which they are finally realizing are part of price they pay for going half-way around the world). Confidentiality is becoming a greater concern among OEMs, and that will increase as moldmakers become innovators, incorporate new technologies in the molds, and design and build total manufacturing cells.
  4. More OEMs are taking the Toyota approach: “Buy it where you build it.” That said, it also means that “best cost” remains a major factor. Moldmakers will still have to be competitive with other regions of the world when it comes not only to price, but also mold design and total cost of ownership as well.
  5. Collaboration will be more important than ever. OEMs want the best their mold suppliers have to offer in molds that offer the latest technology, lower costs to manufacture components, and reduce downtime and maintenance.  Silos at the big OEMs will break down, there will be an increase in technology sharing among OEMs, mold manufacturers and technology suppliers in things such as hot runner systems and other key mold components.

While the predictions are quite positive, it does bespeak an increased need to monitor closely what you are hearing from your clients.  Keeping your ear to the ground appears to be even more important, given changing business climates.