Views: 15 Author: China Mold Factory Publish Time: 2020-05-13 Origin: Yiannopoulos.net
Setting up a plastic injection molding plant may sound scary if you consider the process from a distance. The question is, is it as difficult to set up as some fear? Why do people often think that getting started with a manufacturing plant of that nature is only for the big shots? There are so many misconceptions about getting started with a plastic injection molding business, and if you do not know the facts, you would be kept languishing in the dark, while the truth can be closer to you than you imagine.
The injection molding industry, just like many technologically driven industries, have transitioned through various stages, and has now become what it is today. So let us start with how plastic molding injection got to where it is today.
The History of Injection Molding Companies
Rewind to a couple of decades back, and you would realize that back then operating a $30,000,000 manufacturing company was seen as a big investment. As you would suspect, that became the trend for some years. However, as we speak there have been some considerable changes in the industry. For instance, due to acquisitions and mergers, and the fast-paced growth that the industry has seen, opening such a company now will be seen as a meager investment.
That is not to say that an individual cannot have a private injection plant. With less than one million dollars, you can actually run a plastic molding injection plant wherever you want today. If you belong to such private entities and would love to have a company that is into molding stuffs, then you have to go about it the right way. That way, you can get what you want.
Trying to become part of the custom injection molding marketing space with only 2 or 3 presses as well as minimal capabilities implies that you may be accessing a tightly contested market which is surely crowded already with thousands of molders existing at the bottom end. Because a considerable number of these molders who earn around $1 million every year aren’t part of the secondary services chain, the competition existing amongst them is actually down to price. The effect of that is an impact on profit margins, as well as a reduction in survival rate.
The tight survival rate and low margins is understandably so because of the demand for high-quality products. Furthermore, is the fact that the entry point into the custom injection molding business has been stepped up by world-standard molding facilities combined with technologically-driven manufacturing features.
Therefore, as opposed to accessing the market on a small budget like what investors leveraged on 3 decades ago, you need a lot of investment to sit comfortably in this market and remain at the high end. For that reason, many people had to approach the bank, get clearance from leasing companies, financial institutions, or source funds from private individuals before they can have their dreams fulfilled.
The expected profit was another thing that discouraged people from getting along with this bandwagon. A lot of money was needed to run the business. The idea of just buying auxiliaries and molding machines without making any financial provisions for maintenance in the long run was certainly not good enough. Any corporate entity planning to benefit fully from a market like this should be prepared to go beyond doling out the initial capital for purchasing every needed item; they should also be prepared to align their activities with the latest technology trends, and see how they can stay updated at all times. So you can see that coming into this kind of market is something you have to be mentally and financially prepared for.
Focus on a niche
Injection molding is actually applicable to a wide variety of products. It can be used to produce different items. But with injection molding, you certainly do not want to end up as a Jack of all trades. Therefore, one of the first things you need to get settled with is the niche you intend to specialize in.
Experience has shown that most of the successful molders actually got to where they are now because they have spent years manufacturing such parts, they have been used to the market demands. They have become extremely good at what they do because they discovered a niche of their choice and stuck with it.
So if you are looking to edge your competitors as a recognized molder, you ought to define your niche, and learn everything learnable about that niche. If you miss out on this niche part, you may find yourself struggling with the market as you find it hard to satisfy your customers.
Hence, it has become increasingly obvious that anyone who intends to begin an injection molding busic must look for a niche-based market or a particular type of product and concentrate on molding that for those who need it. You should give thorough thought to whether you want to mold small parts or large parts? Or would you prefer to go for high dollars, low volume parts? Or are you more comfortable with low dollars, high volume parts? You need to give special considerations to these questions, as your success will be partly hinged on what path you decide for yourself.
For instance, non-reusable medical items like syringes are made and used in large numbers every day. When you now look at something like this you would probably assume that the manufacturers of such items must be raking in their millions given the number of syringes that are used in one day. Unfortunately, it does not work like that. For the case of syringes, the profit gained from one syringe is very small, and surprisingly much less than a cent.
Manufacturing requirements and quality are two stringent things, and needs clear materials from which the items are made. That makes it even difficult for molding to be economized in any way. So for these manufacturers to break even and make good profits in such high volume production for medial parts, they explore various ways that can help cut down cost, while quality is not compromised in the process, as well as high efficiency. While many molders appear to love this route for making their profit, others have a different opinion.
Some others would prefer to mold low volume items that would cost some more money. That looks like an ideal way to make more profit from a specific standpoint. For instance, take a look at the box used for housing the instrumentation that monitors an IV drip. Whoever decides to go into the manufacture of such items must do that so it meets with international standards. They are usually manufactured in just like 100,000 units every year.
Another category of people prefer to stick with manufacturing component parts that aren’t so common like gears and the likes. For such items, they don’t need to be beautifully appealing. They only have to fit nicely and serve the purpose for which they have been manufactured. Obviously, I hope you now understand why you need to settle with a particular niche and see how you can become an expert there.
In summary, there is more to this injection molding business than to just mold any component part, put them inside a box, and have them sent to your customers. Majority of manufacturers now visit molders seeking for engineering and design services, tooling services, as well as after-mold and assembly services.
Hence, as a molder who is looking to surpass the competition, all these factors will have to be considered as that would define the type of injection molding plant that you would need.
Regardless of how you have secured your funding to commence an injection molding plant, the next thing you want to do after sorting out the niche you are interested in is working on the construction of the plant. Whether you buy or build, your plant’s layout is an essential consideration if you are hoping to have a profitable and efficient operation. You need a space of about 1000 square feet for individual molding press; that comprises molding production, offices, and quality control, secondary operations, storage area, mold maintenance, as well as repair section.
You equally have to decide if you will be needing a cleanroom molding. Decide whether handling of materials will be manual or automatic in the area of conveying systems or if you would be making use of both. Where you do intend to store your materials? And you need to find out if such a layout will be favorable for the kind of items you want to manufacture.
If a cleanroom which is required for molding electronics and medical parts is needed, you ought to come up with how that can be achieved as well. This is the part where you are introduced to the various cleaning room types. They include class 100, class 1000, class 10000, and class 100000. Each level has its own set criteria and are expected to meet specific requirements according to FDA standards. Class 100 has turned out as the stringent of all of them, while class 100000 is an environment without dirt, making it a much easier option.
If handling of material is to be done manually like in the case of applying forklifts for moving gaylords, or the 1000 pound container of resin, you would require an adequate amount of space to accommodate those sort of machinery. Then in a situation where pneumatic conveying equipment are applied, an enclosed storage space between rows of several presses that is perfect for keeping bags as well as other materials away from sight would have to be considered.
In recent times, many manufacturers are beginning to employ a material handling system that is centrally operated. It is gaining popularity with each passing day. Such systems situate hoppers, dryers, resins, as well as blenders in a particular place, most times inside a basement beneath the presses or above all the presses on top a mezzanine. Small sized pneumatic loaders and vacuum pumps at individual machines move resins between the centrally situated hoppers down to the presses through a tubing network. Such an arrangement will help in dryers and large Gaylord away from sight. That way, machines can be easily arranged together on the ground, making the handling of materials to be a lot easier since all the resins can then be controlled from a single spot. While a central system as this one may be expensive to set up initially, in the real sense, they are most cost-effective after using them for a while.
You must be planning to work with a few employees if you are putting up a manufacturing plant of this nature. And you also have to realize that keeping trusted production employees is not something everyone gets on their first hire. Hence, you may end up making a series of hires before you eventually settle with the workers of your choice. The competitive nature of the skills market for molders is a big challenge to all of them. So you will have to look for a way to beat this like every other successful employer in this industry. To actualize that, you would have to work with robotics and employ automation systems for undertaking several manually purposed tasks. With robots, you can get parts removed from the mold, sprues can also be removed, and they are equally good at assembling things. A lot of robot operated systems in this setting are mounted atop the press where their positioning has nothing to do with the plant’s layout arrangement. However, you may decide to apply conveyors or some other equipment that can handle parts together with the robots. Your only responsibility at this time would be that there is sufficient space for the equipment to be positioned. If that has been achieved, then it will be easier for you to manage all the necessary operations within the defined space and still end up with high efficiency.
Basically, space needed for secondary operations can be arranged in any of these ways: either the room is designated specifically for such purposes or it could be at the side of the press. Your choice of location will be determined by the type of secondary operation you have in mind as well as the amount of available space. A couple of molders like to undertake their secondary operations simultaneously with every cycle as a means of maximizing operation time and minimizing handling. This could result to efficiency increase since there will not be any need for you to box, move, and unpack items for any secondary operation, as well repacking them afterward. And because handling will be much less on the parts, you can expect to have a lower amount of scraps – this is another significant consideration. This demands that every operation be considered as one, and arranged in cells, basically committed to a single assembly or product, occasionally with more than one part.
How you set up a facility and execute attendant decisions has a lot to do with the market type you are dealing on, the kind of parts needed for molding, and what your customers would prefer to have. From the outset, you should equally think of expanding the plant or the production floor space in the future. Although a 10000 square feet space may appear empty when nothing is inside, it can lack the needed space when ten presses as well as auxiliary equipment has been put inside. A safe way to go about this is leasing a building that would contain twice as much space as what you currently have in mind. That way, you will not run into any challenges when the time comes to grow your business.
Warehousing: one of the secret requirements
You would need adequate space for storing unused molds, material Gaylord and bags, the finished products that customers would like to request for, as well as other necessary equipment. Usually, molders end up using approximately 10% of whatever their entire floor space is for warehouse purposes. This would differ based on the size of molded parts you aim to get, the variety of materials that should be kept at hand, as well as the molds you intend to store.
Some group of molders like to keep their resins in storage silos; these group of molders only specialize in just one market or a maximum of two markets that are closely related. Or they could decide to mold huge parts from 1 or 2 materials or decide to make parts in their millions from one material. Resins that are stored in a silos can be pumped onto a machine pneumatically. That way, no shelf space will be needed for storage. But other molders prefer to store items on a shelf due to the kind of business they are operating. This particular storage method has been deemed as a cause of overcrowding and responsible for lack of proper organization.
Cost justification of the molding machine
An injection molding machine is more than just buying anything. Rather, it is a worthy investment. And as it is with all investments, you would be quite curious on knowing the profit you stand to gain from this sort of business. What value would the machine add to your operation as a whole? Exactly at what point will you be breaking even? How long will the machine generate enough money to pay for its worth? As ordinary as some of these might sound, going into an injection molding business without sorting all these out will only keep you uncertain.
The guys who are into manufacturing of machines have stated that molders consider various parameters when they are trying to do an evaluation of cost justification. Some hinge their decision purely on who is offering them the cheapest deal. While that may be the only approach that most people know, you should realize that what you pay for on any machine today is what is called Price. But what you would be paying for that same machine long-term is known as Cost. Cost will comprise how much you pay for maintenance and energy usage.
Determining the return on investment for a particular press would require the consideration of various factors. A highly significant factor that will influence how much you invest on a machinery is the cost of using it with energy. Economic experts have said that a manufacturing business is most likely going to be spending between 5 and 7 percent of whatever their entire budget is on energy. Think of the quantity of energy that will be used up by a 15 press plant, and you would be surprised. Energy has turned out as a serious issue that cannot be overlooked. The AC variable motors and speed pumps installed on most recently manufactured equipment, and which can be retrofitted onto older equipment is a means of reducing power consumption, since they are only operational when their functionality is needed within the cycle of operation.
Other investment factors to be considered are the machine’s performance history, repeatability of shot to shot, as well as whether the purpose of the machine will be to execute high speed, high volume applications, or low volume, slow cycle applications. Ultimately, the yield is what will be most important. Hence, you would want to consider what the yield will be like.
Knowing what the return on investment is will be reliant on the intended application. A couple of stuffs can be easily measured in advance, but as for the rest, you would have to wait for the process to commence fully before you can know what to expect.
Another significant factor to be considered in this regard is the molding type you intend to work with. Would you prefer the large, hot runner, and multi-cavity mold that works with larger tonnage machinery, or conventional, single cavity molds that works with smaller tonnage machinery? Controls as well as how fast a particular system responds are also to be considered. Would you want a press that offers versatility, or you are okay with a press that does one type of job?
Choosing The Most Suitable Equipment
The type of equipment you have decided to work with will also have an effect on your profit margin. Hence, it has to be critically assessed as well before you take any step. For instance, the biggest molder groups around the U.S. make use of presses that have clamping force of about 100 tons. The bulk of molders work with presses ranging between 100 and 350 tons. Presses that are within the 350 and 750 tons range make up the third largest group of molders. However, a considerable number of injection group molders go into this business with molders that are small or medium sized.
It is only normal that the bigger presses will cost more. Therefore, you should always have it at the back of your mind that the bigger the press, the more money you will be spending. As such, when you look at it critically, you would understand that you need to give serious thoughts to the parts you intend to mold. In any custom operation, allow yourself some room to be flexible regarding the size of what you look forward to mold.
At that juncture, the type of equipment you will be going for will be hinged on your business plan as well as marketing strategy. Your choice of equipment will equally determine where your business will be headed.
Not only that, the services you intend to provide, like some of the ones we mentioned above, as well as the machinery that will make that possible will also be given due considerations. For instance, if you lack any in-house mold making equipment, you still need some equipment to undertake mold repair and maintenance. Would you be involved in any secondary operations that comes your way? If yes, what are the equipment that will be able to undertake such operations? So you see why you cannot leave any stones unturned. There are various molding equipment that exist out there, you can go online and run through their costs, and see which one fits with your budget and requirements.
Item quality is another thing that will also define your success level in the market. That is why the next section will be exposing you to the essence of quality and how you can achieve that in all your parts.
This has to do with how much you will be spending on your operations in the course of the year. You need to take employee bonuses, audit fees, sales tax, income tax returns, pooja expenses, equipment insurance and plant insurance into consideration. Depending on where you are situated, you need to find out what applies to your area. Different statutory requirements apply to different cases at different locations. You need to have these assessed at the very beginning when you are starting.
Start with a working capital that will be enough for like 6 months, so you don’t run into any sort of unforeseen expenses in your operations. That amount is not part of what you will be spending on your equipment or machinery. In fact you are not to touch that money unless it is deemed necessary. Think of that money as a buffer.
What You Need To Know About Quality Issues
This is the part that has to do with thinking of how your plant will evaluate the quality of products. Within the previous decade or so, quality assessment has become a significant business process that every business needs to take into account and anyone hoping to going into plastic injection molding. The successful molders already have processes in place that helps them evaluate and know if more efforts are to be employed to output high-quality products. The relationship that has existed between custom molders and OEM has been an interdependent one. It was not until recently that custom molders had their way in undertaking productions the way they wanted.
Well established OEMs like the computer and automotive industries have implemented the quality philosophy in the course of their manufacturing, as they sought after larger market share. Technically, one wants to conclude that this approach has helped them greatly. They came to the conclusion that their products cannot be superior to the quality of the parts they are using. As a result, the responsibility for ensuring a high quality product has been shifted to the corridors of custom molders who are in charge of manufacturing the component parts.
Although a number of molders do their manufacturing according to customers’ specification, others worry about all the quality and standards raised by organizations like Six Sigma, ISO 9000, SQC, and SPC, considering the molding processes. So while majority of molding companies are quick to apply these high quality guidelines in their operations, others frown at the necessity of the process and argue that asking for a particular quality level may not be needed.
And if you look at it pretty closely, these quality requirements are not only making the competition one sided, it is also causing small scale producers to lose out of the market in unpleasant fashion.
As long as it has to do with quality and molders, size is not a reliable parameter for knowing which company is better than the other. A big company that has a big plant can be managed poorly and that will reflect on how much profit they will be making eventually. In stark contrast, a small size company that is managed well can operate and have a higher productivity, which will amount to higher profits in the end. It has been, however, confirmed that whether you are a big or small molding company, they all have similar challenges, it’s only that they are faced with these challenges on varying magnitudes. Similar to what you see in life in general, the bigger the molding company, the bigger their problems.
So if one should put it simply, it means that quality control cannot be undermined in this business for anyone who seeks success. Regardless of where you find yourself, whether as a big molding company, or as a small molding outfit, including quality assessment as part of your business strategy is what will ensure that you win eventually.
Other Important Issues
You cannot be thinking of running a plastic injection molding facility without considering safety as one of your greatest priorities. There are certain instances where employees have ended up with severe injuries, or even lost their lives due to poor machine maintenance as well as other related issues. When it comes to a molding plant, you need to be highly conscious of safety.
Sometimes, you get to witness operators using a rod to take out something that is stuck within a mold. Molding clamps are to be executed with the right torque. One needs to analyze and observe all safety precautions before such operations take off. Also, internal wiring has to be considered.
Verification of all the available electrical systems within such an environment should not be taken for granted. A couple of companies have unfortunately ended up with huge losses just because they failed to do what they were supposed to do.
The reason why all these unnecessary losses have to be avoided is because a huge loss occurring within the first year of operation may result to insolvency, and closing of the business ultimately.
It helps to do as much research as you can, like what you are doing now. Gathering enough information as much as possible will help you at the end of the day. But nothing is comparable to experience. That is why professional help will get you farther than you think. With the right professional help, you can quickly know if you are not doing what is expected of you, and it will help flatten your learning curve to an extent.
This article has touched on quite a number of areas of the subject in question. We have been able to assert that even though setting up a big plastic injection molding company would require lots of money, setting up one for a small startup is also possible, and can be achieved by anyone. Furthermore, we stated that you don’t need millions of dollars before you can get established in a business of this magnitude. There is always room for anyone who wants to participate. The competition is just what you have to be aware of. In the injection molding industry, becoming a Jack of all trades may not be the wisest choice for anyone. It is essentially important that you major on a particular niche. If you are going to be running other secondary operations alongside the niche you are focusing on, fine. But choose a specific niche, and you would become an expert in it as time progresses. We equally touched on having a befitting plan layout for your plastic injection molding plant. If the layout of your plant site is not properly planned, you are bound to run into problems of different types later on. Some of the challenges may include an overcrowded section in your storage area and stuffs like that. With an easy layout plan, it will be easy for you to scale out productions without any hitches. A good business plan requires that the area of manufacture you intend to go into is what will determine the cost of your investment. Consider all that has been mentioned and you shouldn’t have any issues with your cost justification process. Quality is another factor that has been explained in the course of this article. The molders who determine and dictate the market forces do so because they give priority to quality by installing several quality assurance procedures in place. If you want your brand to make sense before your customers, you have no choice but to follow in the footsteps who have succeeded. It doesn’t matter whether you are a big company or a small startup, you need to factor quality assessment processes into your workflow. It will be useless if you are running an injection molding facility that lacks all the necessary safety standards. It will not only lead you to problems when you least expect, but it is capable of running your business to the ground eventually. Safety procedures have to be fully followed and observed if you don’t want to be bankrupt in a year. Check all electrical systems and make sure they are in good shape before you okay them for use. You need to be doubly sure everything is according to the required safety standards prior to giving any go ahead for full operations. If you put all what you have gathered so far in this article, there is no way you will not succeed in the business of plastic injection molding.