World-class injection molding: how do you compare?

World-Class Injection Molding: How Do You Compare?

What simple, objective measures can help distinguish a `world-class' plant from the rest? A survey of 380 custom plants offers several yardsticks.

Are you a "world-class" molder? If not, how far do you have to go to get there? These questions are of real concern to top managers of North American injection molding firms, who see themselves competing increasingly with offshore molders and domestically located "transplants," in addition to their indigenous competitors. For them, the struggle to remain ahead of the pack comes down to a need for benchmarks: How do you measure yourself against the best?

In order to supply those missing benchmarks, PLASTICS TECHNOLOGY took both the qualitative approach used in the preceding article, based on indepth interviews with selected molders, and more quantitative research involving a mailed survey of a much larger group, described here.

In order to compare yourself with the best in your business, you have to know who the best are and what questions to ask. Since those were precisely the things we hoped to find out, we had to start with a hypothetical list of questions and "world-class" candidates and test it out to see if it worked. We asked a couple of dozen molders and suppliers of equipment and resins to recommend firms they believed to exemplify "world-class" injection molding. They provided a list of 50-60 firms and 80 plants, 26 of which eventually responded to the questionnaire. These served as the "control group" against which we compared survey results from the overall population of molders.

There was general agreement among these sources on several broad categories of "world-class" traits that the questionnaire should be designed to look for: 1) commitment to "total quality management" and "continuous improvement" philosophies; 2) use of up-to-date technology--including computer-integrated manufacturing (CIM) and robotics; 3) "full-service" capabilities, especially sophisticated design engineering services; 4) responsiveness to customers; 5) participation in "strategic partnerships" or "alliances" with customers and/or suppliers; and 6) top-to-bottom employee involvement in all of the above. In addition, some sources believed we should look for quantitative measures of how all of the above affect a plant's productivity.

The foregoing provided the major outlines for the survey questionnaire. Among our sources of specific questions under those major headings was a questionnaire that a Fortune 500 company used recently to evaluate its custom vendors and captive plants, which was described to me as "the most thorough evaluation that anyone has done for qualifying `world-class' custom molders."

From all this advice, we prepared a seven-page questionnaire, which was reviewed by a half-dozen sources, revised again, and then mailed to a computer-generated list of over 4000 custom injection molding plants, constituting better than 95% of all such plants in the U.S. and Puerto Rico. We restricted our research to custom molders, because we anticipated that it would be difficult to distinguish the relative degree of "world-class" quality of a captive molding operation from that of its corporate parent.

We ultimately received 380 usable responses, including 26 from the list of recommended plants with "world-class" reputations. Included in the analysis below are comparisons of plants with under 10 injection machines to those with 10 machines or more, in order to see whether "world-class" traits are within the grasp of small custom molders.

Overall, the results show that custom firms with "world-class" reputations do indeed stand out from the pack by most of the measures considered important by our consulting sources. And smaller plants often--but not always--tend to trail larger ones in their frequency of adoption of "world-class" methods.

DO YOU HAVE TO BE BIG?

The returns divide neatly in a 60:40 proportion between the larger and smaller size categories defined above. Only one of the "world-class" control-group plants has fewer than 10 machines. Overall, the 148 smaller plants have a median of six machines each. The 232 larger plants range from 10 to 175 machines, with a median of 17. Median size for all plants surveyed is 12 machines, which matches exactly the average number of machines per plant counted in PLASTIC TECHNOLOGY's Manufacturing Census.

The "world-class" plants range in size from eight to 175 machines, with a median of 26--larger than that of the overall group. This might suggest that larger firms with more financial muscle are more apt to achieve "world-class." On the other hand, it may be that the very fact of being "world-class" tends to increase a firm's growth opportunities, helping it become larger than average.

As shown in the first chart labeled "World-Class Horizons," 58% of the "world-class" plants belong to firms with more than one injection molding facility, more than double the proportion of the entire group. Some of our consulting sources believe that a "world-class" molder must have multiple plants; and furthermore, they must be geographically distributed close to end-user markets, rather than all in the same neighborhood. Geographically distributed molding firms account for 50% of "world-class" plants in the survey, three times the proportion of all plants.

Some sources insist that to be "world-class" you must also be international. "World-class" plants are again three times as likely as plants in general to belong to firms that have plants abroad.

In a similar vein, note that nearly five times more of the plants in the "world-class" group engage in some export activity than those in the total group. Interestingly, 42% of the small plants do some exporting vs. only 18% of the larger ones. However, the actual level of export activity by plants surveyed is still rather low. Only 15% of the "world-class" group and 12% of the total group export more than 5% of their sales, and only 4-6% of either group export more than 10% of sales. Here again, the small plants are a surprising standout: 22% of them export more than 5% of sales and 12% export more than 10% of total sales.

'WORLD-CLASS' IS FULL-SERVICE

The accompanying table shows that the "world-class" group tends to be much more than just molders, offering customers a wide variety of ancillary services. But the same was true of the overall group (both larger and smaller plants), so this does not appear to be a useful factor for singling out "world-class" players. Note that we counted both plants that could offer those ancillary services on-site and those that could take advantage of such capabilities at another facility within the same firm. For example, a number of firms have central corporate design/engineering or tool-making facilities to serve all of their molding locations.

Besides asking whether a plant or a firm offers tool-design services, we asked, "Does your plant take an active role in tool design for most molding jobs?" The answer was "yes" for 92% of the control group and 90% of the full sample (including 88% of small plants and 92% of larger ones).

One area in which the "world-class" segment does stand out from the group is in design engineering services. In offering CAD/CAE, finite-element structural analysis, and mold-flow analysis, the control group scored well ahead of the rest.

'WORLD-CLASS' QUALITY

A philosophy of "Total Quality Commitment" is usually the very first thing that comes to mind when people are asked to define "world-class" manufacturing. As shown in the large chart on the preceding page, our "world-class" sample stands out from the group in the breadth and depth of their quality programs. Whereas 100% of the "world-class" group claim to have at least partially implemented a formal quality program, 10% of the overall group (6% of larger plants, 16% of small ones) admit they have not even gone that far.

All the "world-class" plants recognize the importance of adopting statistical measures as the basis of a formal quality program; yet others are less far along in this regard. "World-class" plants also far outnumber the rest in adopting "zero defects" as an official goal, and in having a "continuous improvement" policy, using quality circles or the equivalent, rewarding workers for improving quality, and performing quality audits of materials suppliers, incoming quality tests on raw-materials shipments, statistical machine- and process-capability studies, and "design-of-experiments" techniques. Small plants are only half to three-quarters as likely as larger plants to include any of these elements in their quality programs. Ninety-five percent of the "world-class" plants have one person dedicated solely to implementing the quality program vs. 61% of the whole group (74% of larger plants and 36% of small ones).

"World-class" plants also measure their quality performance in many more ways than other plants do. Whereas virtually everybody uses customer-specified part-quality attributes as a measure of job performance, "world-class" plants are also very concerned about staying within a processing window that correlates with acceptable part quality. And while a large majority of all plants considers internal reject rates and customer reject or return rates to be important measures of quality performance, "world-class" plants are also highly concerned about less nuts-and-bolts measures, such as on-time delivery rates, maintaining cost standards, and response time to customer inquiries or complaints. Once again, "world-class" plants are farther along in use of statistical quality measures. Again, small plants are generally only 60-85% as likely as larger ones to use such quality measures.

Half the "world-class" group and one-quarter of the overall group provided a typical or average Cpk for their most important quality variable (usually part dimensions). The median was a respectable 1.33 for the "world-class" group and 1.4 for the entire sample. This suggests that mainly firms with excellent quality use Cpk data at all.

One proof of the pudding is that 92% of the "world-class" group said they are approved as "ship-to-stock" suppliers for at least some customers, meaning that shipments are accepted without inspection. That compares with 78% for the whole sample (65% for small plants and 86% for larger ones).

HOW IS QUALITY ENSURED?

Over 70% of both "world-class" and all molders agree that primary responsibility for achieving product quality resides with the production or manufacturing department, rather than with the q-c or q-a department, whose role, several respondents said, is largely one of documentation.

However, the "world-class" plants may be more committed to practicing what they preach, judging from the greater extent to which machine operators are directly involved in quality measurement. Within the control group, 40-44% have operators record SPC or SQC data, rather than having technicians, q-c inspectors or supervisors do it (some use both). Only half that proportion of the overall group lets operators keep SPC/SQC records. Of the "world-class" group, 60% also record SPC data automatically without manual intervention, and 48% do so for SQC data. That compares with 22-23% for respondents overall.

All of the "world-class" group and 81% of the total retain historical records of molding process data for reference in case quality problems are detected later on.

Eighty-four percent of the "world-class" group, vs. 33% overall, store and download process setup recipes electronically, reducing the chances of error the next time the mold is run.

Sixty-eight percent of the "world-class" sample, vs. 46% overall, require setup technicians to start with previously optimized setpoints when setting up a job, rather than letting them "ad lib."

And 88% of "world-class" molders do not allow machine operators to tinker with established setpoints, vs. 72% for the overall group.

Regarding quality-assurance techniques, 64% of the "world-class" group use a coordinate-measuring machine vs. 29% overall; 84% of "world-class" molders use an optical comparator vs. 64% overall. Small plants were far behind larger ones on both counts.

'WORLD-CLASS' QUALITY TRAINING

All the "world-class" plants and 72% of the whole sample provide employees with some training in quality principles and methods. As shown in the pie chart on the preceding page, the control group provides quality training to a broader spectrum of their employees--and that training is also more extensive. Initial quality training for "world-class" plants amounted to a median of 20 hr for salaried workers and 16 hr for hourly employees vs. 12 hr and 8 hr respectively for the overall survey sample.

In addition, 96% of the control group said their quality training was on-going rather than one-time only vs. 80% for the whole sample. On-going quality training within the "world-class" sample was a median of 20 hr for both salaried and hourly workers vs. 16 hr among molders overall.

Experts on quality unanimously assert that commitment to quality must be equally strong from top to bottom of the organization: 88% of the "world-class" group said that was true in their plants vs. 66% of molders overall. By contrast, 25% of all molders said quality commitment was strongest at the top of their organization; only half as many "world-class" molders agreed. And unlike any "world-class" respondents, 5% of the whole group said quality commitment was stronger at lower levels of their organizations.

'WORLD-CLASS' CIM

The large chart on the preceding page shows that "world-class" plants are much more aggressive than others in adopting computer-integrated manufacturing. For example, the "elite" are two to three times more likely to monitor process and production data from their molding machines at a remote terminal, or to make those data available to multiple terminals in different areas of the plant, to network those process and production data with other plant databases (like quality, inventory, order entry, or personnel), and to use the computer-monitored processing data to automatically qualify a shot as probably good or bad, depending on whether all key variables remained within a quality "window."

Not shown in the chart is that 69% of the "world-class" group and 24% of the whole sample have machine operators or other floor personnel key in downtime and reject codes on the monitoring computer system. Also not shown is that 42-50% of "world-class" plants use process or production monitoring on all their machines, compared with 10-24% of the whole sample.

For the group as a whole, larger plants were two to three times more likely to use these CIM technologies than small plants. For example, only 15-20% of the small plants have remote process or production monitoring vs. 43-44% of the larger plants.

Note that less than half the overall group (32% of small plants and 55% of larger ones) run any of their machines under closed-loop control, while almost all the "world-class" plants do. Of the control group, 35% use closed-loop control on all machines, while only 10% of the whole sample do so.

The same chart shows that "world-class" plants are also well ahead of the pack in using computers for maintenance and production scheduling, materials resource planning (MRP), and inventory control of raw materials and finished parts. Again, larger plants outnumber small ones by a factor of two to three. While a large majority of "world-class" plants schedule their press time by computer, only 19% use computer scheduling to ensure availability of key auxiliaries like dryers or mold-temperature controllers. Only 15% of the whole group take this precaution.

Also note that 46% of the "world-class" plants and 20% of all plants update their computerized machine schedules automatically by means of real-time production and downtime monitoring.

EMPLOYEE INVOLVEMENT

Most knowledgeable sources agree that it takes more than technology to make you "world-class." Employee involvement and a sense of "ownership" in quality programs and other major goals of the organization are held to be essential. Of course, that's a particularly difficult factor to quantify. Three-quarters of both "world-class" plants and the overall survey sample rated themselves highly (4 or 5 on a 1-to-5 scale) on harmonious labor relations within their plants. Also, 83% of "world-class" and 77% of all plants rated themselves highly on both encouraging and using employees' suggestions. Those were two categories in which small plants rated themselves significantly higher than did larger plants.

Training is a key factor in enabling workers to take an active role in managing quality and productivity. The bottom chart on p. 99 shows the major categories of training provided. In all categories, the percentages are much higher for "world-class" plants and also for larger vs. smaller plants. Some additional types of training mentioned by respondents were management or leadership, health/safety, and group problem-solving skills.

Forty-two percent of "world-class" plants and 24% of all plants have a full-time, in-house training staff (16% of small plants and 29% of larger ones). Twenty-four percent of "world-class" plants and 17% of all plants spend more than 1% of sales on employee training. Very few of either group spend more than 5% of sales on training.

Machine operators may be helped to improve their quality or productivity performance by feedback on how they are doing. Easy access to such data is available (often via display monitors at the machine or on the molding floor) to operators at 85% of "world-class" plants and 57% of all plants, with not much difference between large and small.

'WORLD-CLASS' PRODUCTIVITY

Few would dispute that in order to be "world-class" in productivity as well as quality, you must have up-to-date technology. The chart on the facing page, "Who's Investing in Robotics & Automation," shows that our "world-class" sample is well ahead of the average (and larger plants ahead of small ones) on this score. The pie chart on "Average Machine Age" shows that our "world-class" sample also has a younger population of injection presses. Furthermore, 69% of the "world-class" sample have planned schedules for machine replacement, compared with 35% for all plants (22% for small and 44% for larger).

Keeping your machines and molds in good repair is also essential. Ninety-six percent of "world-class" plants have planned schedules for preventive machine maintenance, and 88% have similar programs for molds. Comparable figures for molders overall are 78% and 66% respectively, with small plants about 10 points below larger ones.

The advent of "Just-in-Time" thinking in the 1980s taught processors the wastefulness of tying up working capital and valuable floorspace in inventories. The chart on the facing page, "World-Class Is Just-In-Time," shows that the control-group plants are farther along in JIT implementation than the average, though most of the survey sample claims some JIT activity. Small plants again are 10-20 percentage points behind larger ones in all JIT categories.

The "world-class" sample reported a median inventory level of 30 days' worth of raw materials vs. 20 days for the overall group. The control group also kept a median of 10 days' inventory of finished parts vs. 14 days for the whole group.

Possibly owing to their greater usage of closed-loop machine control, the control group reported a median level of 50% of their machines running unattended, compared with 30% for all plants. That translated into a ratio of machines to operators of 8.3:1 on an average shift vs. 1.9:1 for all plants, suggesting higher labor productivity for "world-class" plants.

Another potentially interesting productivity ratio was suggested by one of our consulting sources--that of average job-run time divided by average mold-change time. For all plants it was 35:1, and for "world-class" plants it was 40:1.

Assuming optimum uptime efficiency, "world-class" plants estimated their maximum theoretical machine-capacity utilization level at 87.5% (median). That's similar to the 85% median estimated by all plants.

When asked what they consider to be a typical "good" or "acceptable" machine uptime or utilization rate, the control group's median answer was 85% vs. 80% for the overall sample--in both cases very close to their theoretical maximum level.

In the same vein, both the control group and overall group estimated 10-15% of their jobs run at a longer cycle than the bid or standard rate, while 85-88% run at or faster than the standard/bid rate. Likewise, both groups claimed a 90% overall machine cycle efficiency relative to standard. Sixty-two percent of "world-class" plants post the standard or bid cycle time where the operator can see it; 45% of all molders do so.

Some of the molders who advised us on this project thought certain financial ratios might distinguish "world-class" from other plants. The following results were obtained:

* Materials costs: Median was 35% of sales for "world-class" plants and for all plants in the survey. This compares with an average of 38.3% of sales for 52 custom injection molders in the 1989 Financial and Operating Ratios Survey of SPI's Financial Management Committee.

* Direct labor: Median was 10% of sales for "world-class" and 14% for all plants. SPI averaged 12.3% in its survey. A lower labor percentage could correlate with greater reliance on automation and computerization among "world-class" plants.

* Indirect labor and overhead: Median was 18% of sales for "world-class" and 28% for all plants. SPI's survey average was 22%.

* `Value-added': A couple of "world-class" processors who advised on this project recommended including this measure, defined by them as sales minus direct labor and purchased materials and components. The median value-added obtained by subtracting the median values shown above is 55% for "world-class" plants vs. 51% for all plants. SPI's survey average was 49.4%.

* Profit: Median was 10% of sales for "world-class" and 15% for all plants--both figures much higher than SPI's 5% average profit before taxes.

Internal scrap and reject rates are another key measure of productivity and quality. Median for "world-class" plants is 2.25% vs. 3% for all plants. Median customer reject or return rate is 0.35% for "world-class" plants vs. 0.5% for all plants.

Safety is another important contributor to productivity. Eighty-five percent of "world-class" plants have a formal plant safety program, compared with 64% of custom plants overall (48% of small plants and 74% of larger ones). And 42% of "world-class" plants have a full-time safety director vs. 18% overall (13% of small and 22% of larger plants).

As shown in the bottom chart on p. 100, 77% of "world-class" plants seek to improve their productivity and quality by investing in R&D; 62% conduct such R&D at their own facilities, and 42% help pay for work done at a cooperating firm or institution (many do both). Overall, 49% of custom plants invest in R&D, including 39% of small firms and 56% of larger ones. Even 35% of small firms (and 43% of larger ones) conduct some R&D in-house. Median level of R&D investment is 1% of sales for "world-class" and all larger plants. Yet those small plants that conduct R&D invest a median 5% of sales in that activity, raising the overall median to 2% of sales.

'WORLD-CLASS' RESPONSIVENESS

Responsiveness to customers is generally considered to be another essential component of "world-class" manufacturing. Today, the ultimate in fast response is provided by direct computer-to-computer communications, known as Electronic Data Interchange or EDI (see PT, July '90, p. 15). Overall, 37% of respondents claimed some usage of EDI (see chart on p. 101), including 21% of small plants and 47% of larger ones. Among the "world-class" group, usage level reported was 62%, mainly for order-entry purposes.

Ability to supply quality data along with shipments, or at regular intervals, is also becoming a key requirement of sophisticated customers. Among the "world-class" group, 96% provide quality data to customers (69% do so commonly) vs. 80% for all molders (72% of small ones, 86% of larger ones).

Both "world-class" and other plants reported the same median speed of response for generating quotations--five days--and for answering customer inquiries or complaints--less than one day.

There also was only a small difference in median on-time shipment performance reported--97.5% for "world-class" and 95% for all plants (large and small equally).

Many of those who were consulted on this project feel that an essential activity of any "world-class" manufacturer is the formation of so-called "strategic partnerships" or "strategic alliances" with customers and/or suppliers of materials and machinery. Such close links give a molder the edge through "insider" knowledge of product development trends by customers and of technological developments by suppliers. All told, 44% of respondents (30% of small plants and 53% of larger ones) said they engage in such partnerships or alliances, more often with customers than with suppliers (see chart). Among "world-class" plants, participation was 88%. [Charts 1 to 10 Omitted] [Tabular Data Omitted]