November 2005
www.mtdmfederation.ca

Precisely Canadian is produced by the Canadian Machine, Tool, Die & Mould Federation, a Cooperative Initiative of CAMM, CTMA, CPMA and the Mould Makers Council of CPIA.

The Goal of the Federation is to Address as a Unified Force the Issues Common to Each Member Association.

Table of Contents

  1. China Sourcing Turning Out To Be Not So Cost-Effective
  2. Federation’s Safety Group Program is More Than Dollars Returned
  3. Auto Expert Shows Encouraging Outlook For MTDM Players
  4. Supplier-Dedicated Trade Show Was Quite a Success
  5. Poco Graphite Shares Its EMO Insights With Precisely Canadian
  6. Good Lessons and Insights from Popular Speaker at Federation Conference
  7. Well Planned Canadian Presence at Australian Show Paying Off
  8. EMO 2005 Continues as a Huge Display of Technology
  9. Quality and Turn Around Continuously Addressed by Standardized Components
  10. All in All, Economic Outlook by RBC is Good for Canada
  11. News Bits and Pieces for MTDM Businesses
  12. Forecast Survey Gives a Thumbs Up For American Mould Makers
  13. Plastics and Chemistry Integral To Canadian Economy
  14. Advantages of Canadian Tooling Show Off Well in Global Market
  15. Last Word: Let’s Put A Sense of Unity into Our Government Export Programs

China Sourcing Turning Out To Be Not So Cost-Effective

ED BERNARD
Chairman, CMTDMF (President, Bernard Mould Ltd.)

Why do two to three Chinese mould shops contact me every day to “partner” with them? I’ve never been to China but I have colleagues that tell me I’ve got to go and witness the explosive growth over there. Am I rightly suspicious that they really want to tap into my company’s experience and access to my customers more than partnering with me?
 
I consider China as a communist country where government-driven strategies overlook human rights, intellectual property protection, and as a country that appears unconcerned with our standards against environmental abuse, as well as health and safety regulations that we abide and live by.
 
These lower standards reduce overhead costs to a level that would be both illegal and immoral in Canada. I could, but hopefully never have to, “partner” with a company in China that abuses human rights and our earth’s environment, in order to provide my customers with greater value. But, I’m still committed to finding better ways through innovation and experience.
 
As a country, Canada is now made up of every nationality and race the world has to offer, living together in a very unique, and democratic society. We are a lot like our American neighbours, although I’ve been told Canadians as a whole are more polite.
 
Am I glad that many of our industry’s customers are having problems with the quality of their tooling sourced from China? I cannot gloat but I can offer a solution to them: work at developing a more advantageous relationship with your North American tool makers.
 
Members of the Canadian Machine, Tool, Die, & Mould industry have a lot to offer customers around the world. We have had experience with customers in different parts of the world for a long time and many of us have roots from abroad. We have well developed communication and data management abilities, and our tooling offers high levels of quality and predictability.
 
We understand our customers’ needs and can anticipate potential problems before they occur. We are able to advise our customers on how to produce lower cost goods using “manufacturing friendly” ideology, based on a broad understanding of not just tooling, but the entire manufacturing process.
 
Consider as well what I’ll call the synergy of our MTDM culture. An employee is trained at a technical college and coops, then apprentices under a mentor in a shop that is globally competitive. He, or she, moves to another shop, taking all of this expertise to share with new colleagues. With each MTDM project, there’s a challenge to achieve greater levels of sophistication and once again our demographic model moves on.
 
This employment turnover is creating an expanding resource of knowledge that is transferred and shared with an expanding universe of employers and their employees. Customers are a beneficiary as well, because this pool of knowledge is used to give those customers tooling that is packed with experience and innovation. 
 
Our manufacturing culture is therefore certainly well worth preserving, and protecting. Your local industry association is one way to do just that. Get involved.
 
ed@bernardmould.com, CMTDMF

Federation’s Safety Group Program is More Than Dollars Returned

So paying your annual workers compensation premium is a fixed overhead. Well, guess what. It doesn’t have to be when you participate in the Federation’s Safety Group in Ontario Program. Your Canadian MTDM Federation and the Workplace Safety and Insurance Board in Ontario are working together to help your company improve health and safety, and that “bottom line.”
  • The benefits of joining the program are really multi-dimensional. Your company will have fewer lost-time injuries and a significantly lower severity rate. Your company will also develop the motivation to implement health and safety initiatives that are ongoing. The program is also an excellent resource to train your supervisors and members of your joint health and safety committee.
The Safety Group was first established in 2003 with a Windsor Chapter which received an actual refund for the participants of $77,000. Last year, a new chapter was established for the Toronto and area Federation members.
 
To participate in the 2006 program, new members have to submit a completed application form by December 31. At the end of your first year, your company could share in a rebate based on more than $6 million in WSIB premiums, over and above your individual experience-rating program.
 
At the beginning of each calendar year, your firm selects five health and safety elements from the WSIB’s Safety Group Achievement List and then implements these elements throughout the year, using the Safety Group’s Five-Step Management Program. One-on-one assistance is available.
 
Networking and mentoring are also important components of the Group. The aforementioned rebate is based on the entire group’s success in implementing selected safety elements. (Companies that are a member of the Safe Communities Incentive Program can not join the program.)
  • Participation in the program is quite straightforward. You are required to participate in at least four of five Safety Group meetings throughout the year and complete baseline and year-end assessments of your company’s health and safety program’s strengths and weaknesses. Three out of the five elements of the Five-Step Management System must be completed to be eligible for the potential rebate.
The cost to join is quite modest, based on a sliding scale of number of employees and there is a minimum charge to attend the meetings. Remember December 31 is the deadline to start participating in the 2006 program.
 
For full details on the benefits of participating in the Safety Group Program contact Julie McFarlane at CTMA (info@ctma.com). Put on the subject line, Safety Group Program. There’s also a contact at the WSIB’s Prevention Division, prevention@wsib.on.ca.

Auto Expert Shows Encouraging Outlook For MTDM Players

Once again the annual Export Development Canada’s conference in Windsor, Ontario, offered delegates a basketful of insights and information to help implement and maintain a competitive status for at least the year ahead.
 
And once again, Dennis DesRosiers, of DesRosiers Consultants Inc., was a guest speaker offering an incredible range of details on the state and status of the Canadian automotive industry, the North American automotive industry, and issues affecting the machinery, tool, die and mould sectors.
 
The good news, and there was quite a bit, is that Canada continues to grow within North America, with the positive factors outweighing the negative conditions.
  • From his extensive statistical offerings, DesRosiers showed the audience that vehicle production in Canada is estimated to translate into just over a 16% share of the North American output for 2005, a total of 1,745,462 units to be exact.
  • But that’s down from 2,710,683 units last year! Yes, but that figure represented a 16.7% share of the North American output.
As you all know, the pricing environment remains very lean in North America with price “deflation” affecting everyone’s profitability. The root of this lean pricing environment according to DesRosiers is the excess supply of light vehicle capacity in North America which will get worse before it goes any better.
 
You have to be a believer however that this pricing environment is positive for most demand variables but negative for industry profits. That scenario even has a name: “Profitless Prosperity.”
 
So now on to the MTDM sector which DesRosiers certainly recognizes as under siege with a move away from the players’ traditional customer base to a more international customer base. Okay. So what’s the outlook for the MTDM people.
  • Well, there are two versions, or “camps,” as DesRosiers calls them: those with a heavy weighting on the economic variables are slightly positive; those with a heavy weighting on the industry variables are slightly negative. The former gives us a North American market that should grow by one to three percent per year over the next few years to reach 19 million-plus vehicle sales annually.
  • However, auto analysts are leaning more on the industry variables and they have the market down two to three percentage per year to under 18 million vehicle sales. This outlook also sees a lot more of a downside risk to the outlook if GM and Ford decide to aggressively undertake a restructuring.
For the MTDM players, DesRosiers told the delegates that demand doesn’t appear to be a problem. In fact, there will likely be strong demand for tools in North America. Also, the number of new vehicle models in the market is increasing rapidly.
 
He also gave the group some rather good news: US imports of off-shore tooling is declining and that indicates that demand is being sourced increasingly from on-shore, repeat, on-shore MTDM players. Stand up as well and congratulate yourselves because DesRosiers told “you” that Canada is by far the best performer in the US MTDM market.
 
So what about China and Korea? No doubt, they are becoming important and could account for as much as 10% of the US import MTDM demand shortly.
 
The Conclusions Then
  • Significant opportunities for global parts companies to enter the North American market through investments, joint ventures, licensing arrangements or technology transfers. It is these suppliers that the MTDM sector should target according to DesRosiers.
  • Many North American OE parts suppliers are vulnerable to failure and the Delphi failure could set off a domino effect.
  • The issues in the MTDM sectors have more of a supply side content than demand side.
  • To capture the presentations made by the other speakers at the EDC conference, including Price Waterhouse, go to www.edc.ca/auto.

Supplier-Dedicated Trade Show Was Quite a Success

At the start of October, tool, die and mould makers in the Detroit area had a chance to witness live demonstrations and hear leading experts from their industry at the “Built for Die/Mold Technology Expo” given by Makino at its Die/Mold Technologies Center in Auburn Hills, Michigan. Turnout for the three-day event was in excess of 450.
 
Jim Bouck, a manager with Plante & Moran's Process and Quality Management Consulting Practice and the Plastics Industry Team talked about the implementation of lean manufacturing. Then Rod Jones, president and founder of the manufacturing-based sales and marketing consulting firm Decision Technology, Inc., offered his expertise on how to keep existing customers satisfied; how to develop new customers in existing markets; and how to find new customers in emerging markets.
 
Several suppliers were also able to highlight the latest advances in technology, tooling, CAD/CAM systems, materials and metal cutting processes. Knowledgeable personnel were on hand to discuss specific process solution applications. 
 
Demos were given on 17 machines, each providing a specific metal cutting solution including new metal cutting methods, high performance hard milling, RAM and wire EDM processes, fine hole processes, automation, lead-time compression and micromachining techniques.
 
Visitors also saw a mold development process for sunglasses that eliminated polishing, fitting and benchwork in order to eliminate blend lines. Plastic parts of the process were also on display. A weldless mold technology was also introduced.
  • If you’d like further details on the event contact Mark Rentschler at Mark.Rentschler@makino.com. You could also inquire about the deep rib cutting capabilities in the company’s V-Series.

Poco Graphite Shares Its EMO Insights With Precisely Canadian

For the mould maker, the more appropriate hall to visit at the huge EMO event in Hanover was Hall 12. Here, exhibitors presented the latest milling machines, machining centers, micro machining, EDM and graphites. In the past, managers of mould and forging operations were only looking at the latest EDM equipment for the production of cavities.
 
Now, with the changing machine technology, they are looking at a combination of hard milling, wire EDM and sinker EDM to produce cavities.
 
High speed milling machines are ideal for producing large, forging dies and simple plastic mould cavities. Many of the large applications have moved in this direction.
  • Where once a mould maker might have used one piece of equipment to complete the cavity, multiple machines are being used to get the optimum results.
High precision EDM equipment is producing the critical features in large moulds and the more intricate small work necessary to meet consumer demand for smaller, high quality plastic goods.
 
Part of this trend showed in the number of graphite electrode machining centers that were producing detailed electrodes for this type of cavities.
Not only were manufacturers touting the speed of the equipment, but the accuracy and fine detail that could be produced. A major graphite manufacturer of premium grades had a machining center on its stand to demonstrate the fabrication of detail electrodes.
  • Graphite manufacturers in general were exhibiting premium grades that are necessary for production of detailed shapes that can only be produced with these grades.
As mould makers embrace the available technology of production methods and graphite grades, they are able to reduce production costs and increase efficiency to be competitive in a world-wide economy.
  • Precisely Canadian thanks Shirley Owens of Poco Graphite (www.poco.com) for providing this copy at Precisely Canadian’s request.

Good Lessons and Insights from Popular Speaker at Federation Conference

Jerry Lirette, former president of the D-M-E company, was a guest speaker at the early fall joint annual meetings of CAMM, CTMA and CMTDMF. His remarks were extensive, and insightful. Precisely Canadian offers a few of his remarks:
 
Consider that: WalMart is the largest company in the world and WalMart is the largest customer of the Chinese. The company has over 6,000 suppliers and over 80% are located in China. Now over to General Motors. GM  is requiring its top 250 suppliers have offshore manufacturing capability. Previously, GM required suppliers to only be able to supply parts at the lowest price (using offshore sources). (Lirette gives Automotive News, 8-1-05 as the source.)
  • Delegates had cause to listen when Lirette told them that the Big Three has blundered its contract negotiations year after year, relative to health care and pension commitments. Now, they demand suppliers “foot the bill.”
  • From a supplier’s perspective, the transplants are now generally better to do business with than the Big Three.
Country that Shows Promise: Mexico currently imports more than $1 billion (US) in tooling and moulds annually. This large volume is due to a shortage of tool shops in the country, apparently less than 100.
 
It seemed appropriate as well for Lirette to note that intellectual property rights are respected more so by Mexico versus China, possibly because Mexico has more to lose if it alienates the United States. (75% of Mexico’s exports end up in the States.)
Some of Mexico’s mould making businesses are more involved in retrofits, modifications, repairs, and establishing alliances with shops from other countries.
 
The conclusion: Continue to develop a tooling niche and continuously perfect and market your capabilities within that niche. Also, there is a substantial amount of over-capacity of machinery that is killing businesses in North America. A solution is to work on a collaborative basis with other tool manufacturers so that everyone does not have to duplicate their investment in machinery and equipment.
 
This will reduce: a) your investment, b) your under utilization of machinery and your overhead.  This should increase your profitability and reduce your financial exposure during lean times. Properly managed, this should also enable you to reduce your lead times to be more competitive against the Asians that are working around-the-clock to produce tools for the North American market.

Well Planned Canadian Presence at Australian Show Paying Off

The Canadian Consulate General in Sydney, Australia has provided a concise wrap-up of September’s AUSPLAS trade show. The information shows that extensive effort was made to ensure the exhibitors’ success in establishing a presence in Australia, and even bringing in new business.
 
AUSPLAS is the only plastics machinery trade show in Australia/Oceania and takes place every three years. Overall, the number of exhibitors was described as impressive but some of the displays were smaller and there was less operating machinery. To the results then:
  • Two Canadian companies have started serious discussions with three prospective local agents regarding representation in Australia/New Zealand. One Canadian company has initiated negotiations to purchase (and significantly expand) a machinery manufacturing business in Melbourne. If the negotiations fail, they will consider setting up a new factory from scratch. The company has met with several prospective customers (Tier One automotive) who are very interested in its machinery, far superior to machinery currently used in Australia.
  • The two largest food and beverage packaging conglomerates in Australia have expressed considerable interest in the optimizing software developed by Canada’s NRC for blow moulding and thermoforming lines. In one case, discussions have commenced to license the Canadian technology.
  • And, a major thermoforming equipment distributor is very keen to be the Australia/New Zealand representative and has requested a demonstration version to be sent for detailed evaluation.
  • One of the largest beverage packaging companies in Australia will shortly be sending ‘drawings’ to one of the Canadian delegates, in order to facilitate a quote on blow moulds.
  • A milk bottle manufacturer attended a product presentation and has expressed serious interest in Canadian stretch reheat blow moulding machinery. Three members of the Canadian delegation have identified three separate technologies, available from other exhibitors, which could enhance the competitive advantage of their existing businesses. Discussions are underway.
A suggestion out of AUSPLAS: If you are going to exhibit at another trade fair consider the following suggestion. Make sure your visuals are top quality. And, while it was difficult to ensure attendance at product presentations at specific times, a plasma screen was still a valuable tool for attracting attention with video clips of operating machinery and animation-rich Powerpoint presentations.
(Canadian companies used the equipment on several occasions to deliver one-on-one introductions to prospective customers.)
 
So, you missed the show and the opportunities. The Australian consulate suggests next year’s NPE will attract many Australian processors and that could be a prime opportunity for matching making and site visits to Canada, before and after the show.
  • To obtain a full copy of the report on AUSPLAS, contact Kishani Navaratnam at kishani.navaratnam@international.gc.ca, trade commissioner, Canadian Consulate General, Sydney, Australia. For a report on the Australian plastics industry check out ITCan's InfoExport Internet site: www.infoexport.gc.ca.

EMO 2005 Continues as a Huge Display of Technology

This report on the EMO trade fair is part of a somewhat longer article prepared by Horst Schmidt who attended the Hanover, Germany trade fair last September.

According to Horst, EMO was a vivid testament to a basic fact: there’s been a lot of consolidation of companies into groups of companies under a common ownership through purchases and/or joining of companies into one.  However, the nameplates of the formerly independent machine builders are still used. 

Also, more machines are designed for niche markets and/or applications. Generally, machine designs are becoming more modular across the industry and more adaptable to integrate into production lines.  

  • In light of the piracy of technology issue in China, it shouldn’t have been a surprise that the Japanese government has placed export restrictions on technology to China.  The Japanese machine tool industry is not able to export current and advanced machine tool controls to China. Machine tool controls displayed at EMO have to be changed to older controls before they can be exported to China.

There were a large number of new machine tool configurations at EMO, particularly in the medium-sized machines (1.5 m x 1.5 m) machines. All in all the machine tool prices have held the course if not come down a little. 

State of Machine Technology: Milling

  •  Five axis has become the norm
  • Spindle speeds of 24,000 rpm are standard offering
  • Most machines have gone to linear bearing ways
  • All machine builder are offering high pressure through-spindle cooling
  • Tool changers have as standard equipment a 20, 30, 50, 60 and more tool capability
  • Linear motors are still only offered by a few machine builders such as Jobs, OMV and Macof
  • Ball screws are still the standard but now most are cooled and there is a move to stationary ball screw and rotating nut
  • There were many innovative five-axis machine configurations especially in the smaller machine to a 1.5 meter machining envelope.

Electric Discharge Machining 

  • Standard power supplies range from 60 to 120 amps with 200 amp available.
  • Sinkers are moving to higher speed heads with most servo ball screw-driven for better control and faster cuts
  • The carbon electrode is now catching on in Europe, used in more than 30% of the applications. Copper electrodes are used in the rest, but all new machines are being designed for both copper and carbon burning
  • Large tank machines are now available from most machine builders but are still special order. Standard tanks seem to stop at the 1.5 meter size.
 Cutter Technology
  • The major advances seem to be in surface coating technologies and materials for cutting tools and carbide inserts
  • Solid diamond point tools are commonly available
  • There is a strong move to cutter systems where a sequence of cutters is designed to do all aspects of the machining operation from roughing to final fine finishing
  • The shrink fit holder is the new standard holder; new holder cooling systems, using coolant submersion, were introduced.

Machine Controls 

  • The most common machine controls in order of numbers displayed and shown were: Heidenhain, Siemens 840D, Fanuc, Selca. Fidia controls were only displayed on a handfull of machines from Italy.
  • All controls had five-axis and high speed capabilities.

Automation 

  • More of the standard CNC machines are being adapted into automated manufacturing cells as opposed to building specialty, one-off machines. 

EMO 2005 was roughly 75% the size of past Hanover EMO exhibitions but even at that reduced size, it is three times the size of IMTS in Chicago which is the largest machine tool show in North America.  The event attracted exhibits from 39 countries and there was representation from professional trade associations from 24 countries.

  • Ed.’s Note: The full text of Mr. Schmidt’s EMO wrap-up will be available in the fall issue of the CTMA News and subsequently posted on its website, www.ctma.com.

Quality and Turn Around Continuously Addressed by Standardized Components

Precisely Canadian asked the D-M-E Company to author an update on advances in mould components. The original thought for such a wrap-up came from a quote in a profile of the TDM industry in which the owner of a mould making business said if he started the business all over again, he’d need fewer mould makers because of the technological advances. (Source EDC, www.edc.ca, Automotive, Innovations in Windsor-Essex TDM industry.)
  • The article is complete in that offers a generic update on at least a dozen aspects of standardized mould components in this one resource, and serves as well as an educational tool for your new tool makers.
Contact details for the full and again, generic article, are given at the end of this summary.  Did you know for example, that standardized mould bases were introduced six decades ago. Well, that’s a bit of “fun” information.
 
The more useful fact is that a mould base is not just a stack of plates. Features such as guided ejection, leader pin vents, pry bar slots, lifting ring holes, and ejector housing covers can be built in, with little or no impact on delivery.
 
Euro-standard mould bases and components, internal threads, collapsible cores, dual rod lifter systems, plate control devices, runner shutoffs, venting, wear inserts are some of the components addressed in the article.
  • To receive a copy of the full article use the email: info@dme.net. Make sure you put in the subject line: Standardized mould components article, Bob Starr.

All in All, Economic Outlook by RBC is Good for Canada

Ever heard of “convergence of economies?” If not, you now have, from the RBC Financial Group. In its latest economic outlook, its economists tell us from the time of the 2001 recession, the United States has been the G7 growth leader with the Eurozone G7 countries trailing behind. 
 
But now, growth rates in the G7 economies are moving closer together with the U.S. economy moving down from earlier lofty levels and the remaining G7 economies picking up the pace.
 
The RBC forecast offers us a growth in the U.S. economy of 3.4% for 2005 and 3.2% in 2006, with core inflation reaching close to 3% by the end of 2006. Its previous forecast had 3.7% in 2005 and 3% in 2006 and a similar forecast for core inflation given only a minor change in the output gap.
  • Recent surveys by the Bank of Canada are showing that businesses in Canada are adapting to the rise in the Canadian dollar more quickly this time around, compared to previous periods of a sharp Canadian dollar appreciation.
Hold On, Maybe Convergence Won’t Happen, Or Will It?
 
Katrina and higher oil prices could push an otherwise soon-to-improve U.S. current account deficit further into the red delaying the convergence of cycles among G7 economies. Consumers, governments and businesses are all expected to save less, temporarily, thus exacerbating the U.S. current account deficit. That’s according to the RBC outlook.
 
Based on Congressional Budget Office (CBO) analysis, RBC says Hurricane Katrina could reduce U.S. payrolls by 400,000 by the end of this year and cut real GDP growth in the second half of 2005 by approximately one percentage point.
 
While the supply of oil does not pose a large problem given the release of strategic reserves, the higher price of gasoline due to a lack of refining facilities is expected to cut into consumer spending and most importantly personal savings (further adding to the current account deficit).
 
Summary Perspective by RBC
  • A more visible convergence of business cycles among the G7 economies will emerge once the U.S. current account deficit starts to improve and the effects of the oil price shock and clean up from Hurricane Katrina diminish.
  • The leaders (United States and Canada) and laggards (some Eurozone countries) will show the sharpest difference in monetary policy stances.
  • The other economies are seeing, or will shortly see, their leading indicators, output gaps, inflation and monetary policy all move in the same direction.
  • Countries with more mature business cycles have already begun to lift rates, or are about to do so. The United Kingdom is the exception given the early start to its recovery. More central banks are expected to follow the U.S. Fed and raise policy interest rates.
  • The domestic economy remains strong and the latest improvement in the merchandising trade numbers suggests that the Canadian economy is now operating in a narrow state of excess capacity.
  • The full text of the RBC Financial Group’s Outlook is available at www.rbc.com/economics.

News Bits and Pieces for MTDM Businesses

A “thank you” is in order for all the Federation member companies that have participated in its Annual Wage & Business Survey. Companies that participated electronically will receive a final report in mid-December. Those that used a print format will receive their hard copy final report in January. This is a private survey in that only members who participate receive the results. Results are not sold or available publicly.
 
Some of you might be receiving the Tooling Progress Report. Its website offers the opportunity to have your company profiled, at no cost. It’s easy to do since the questions are posted on the website. There’s a database of company profiles and they all read as effective marketing tools. If you’d like to take advantage of this opportunity, drop a note to info@tooling-progress-report.com and put in the subject line, “company profile.”
 
In this issue of Precisely Canadian there’s a very brief synopsis of advances in standardized mould components by the D-M-E Company with a link for a full article.
The CAD/CAM company, Cimatron, will be holding in early December another webinar of topics pertinent to the tool and mould maker. To register, go to the events section of www.cimatrontech.com.
 
In mid-October, the U.K.’s GTMA took a trade mission to Beijing, China, coinciding with the 2nd International Die and Mould Conference in that city. The itinerary was arranged by the China Mould and Die Association. The trade mission was not limited to GTMA members and was assisted financially by the UK Trade & Investment body. GMTMA’s website is www.gtma.co.uk.
 
Winners of the IDEA competition by IDSA (Industrial Designers Society of America) can be seen on its website, www.idsa.org. The entry deadline for the 2006 IDEA program is February 13, 2006 and late entries will be accepted until February 20, 2006. This international competition attracted entries from many countries including Canada.
 
Toyota Motor Corp. is expected to build another North American assembly plant. Michigan is the favored location. The news originated in the Wall Street Journal.
 
Interested in the toy market? Just past is the Shanghai Toy Expo in China, an annual event in October. Next, the Nürnberg International Toy Fair which takes place in February. The website for both is www.toyfair.de.
 
If luxury packaging is a market you’d like to tap into, an annual event, called LuxePack just finished in Monaco but there is another show next May, in New York and then at the end of May, in Sao Paulo, Brazil.The website for LuxePack is www.luxepack.tm.fr.

Forecast Survey Gives a Thumbs Up For American Mould Makers

The Fall 2005 Business Forecast Survey conducted by the American Mold Builders Association in Roselle, Illinois, reveals that business continues to remain steady, despite pockets of increased activity, depending on markets served for members (about 350 companies).
 
It is the individual remarks by respondents that offer the penetrating insights of the industry. According to one member, business activity was good but profit margins required continuous gains in productivity to retain the necessary profits.
 
Mould prices were about the same for just over half of the respondents and just over 20% of the replies indicated prices were actually higher. Business projections looked favorable but not sufficient enough to increase employment according to another member.
 
Raw material prices were certainly hurting the bottom line with a majority saying they were experiencing significantly higher steel prices compared to six months ago.
 
One encouraging observation: apparently there’s a perception that some of the work is starting to come back from China.
  • Looking for additional “hard” and “soft” business activity stats in the United States? The Tooling & Manufacturing Association in the United States produces a quarterly business trends survey for the industry. Check www.tmanet.com for the latest figures. Then there's the Institute for Supply Management which produces a Report On Business posted on its website, www.ism.ws on the first business day of every month after 10:10 a.m. (ET). And, if you want machinery sales in the States, try www.amtonline.org.

Plastics and Chemistry Integral To Canadian Economy

When it seems that plastics is always under attack, it is encouraging to see commerce and consumers having a chance to understand plastics in a more positive light. Last fall, the Design Exchange, in the heart of downtown Toronto’s business section, mounted a major exhibition with the sponsorship of CPIA, Decoma and American Express that investigated the historic and contemporary place of plastics in our society.
 
The exhibition was diverse in that it presented advances in plastics technology after 1945, as well as the cultural implications, and its applications, both domestic and commercial. 
 
One of the historical sections conveyed the immense role of plastics in Canadian industry. With a focus on the automotive industry, the construction industry and the innovations of such companies as Decoma and Husky, this section was quite striking--with injection-moulded bumpers and fenders of several Daimler Chrysler products on display.
 
Aided by six video presentations about the diverse use of plastics in Canadian industry, this section emphasized how Canada’s economic livelihood was by a large part dependent on the petrochemical industry.
 
The exhibition also explored the issues of sustainability, new technologies and recycling. Presenting visitors with the latest information about bio-plastics and similarly innovative and promising products, this section emphasized the industry’s commitment to social and environmental responsibility.
 
Ed.’s Note: Precisely Canadian readers might use this article as an education piece for their own efforts to show off the value of plastics.
  • Precisely Canadian thanks Michael Prokopow of the Design Exchange for this information. The Design Exchange is located at 234 Bay St., Toronto. ON M5K 1B2. The website is: www.dx.org.

Advantages of Canadian Tooling Show Off Well in Global Market

BY CY MCGRATH
General Manager, Progressive Components Canada

Canadian mould builders have rightly earned a North America advantage for decades. However, the world is evolving in new ways and Canadians must continue to be creative in order to be competitive. This article takes a closer look at the players in that field and shows that there are still many ways for Canadian mould builders to compete and even expand against competition that is overseas.
 
Before describing some of the advantages, let’s acknowledge some legitimate concerns.
  • Sourcing tooling in lower cost regions such as China or Taiwan has been initially attractive although there is definitely a higher risk with regards to the quality of the mould.
  • The appeal of offshore tooling has been stronger when piece parts were very simple in design; confidentiality wasn’t a concern; or the tool was not meant to run for extended periods of time.
Another legitimate concern centers around moulds the Canadian industry doesn’t see or even get to bid on. Tooling for entire product platforms has been researched and developed, prototyped, tooled, run and assembled overseas. 
But it’s hard to believe R&D will cease to exist in North America, even with the concerns over the piracy of intellectual property rights by mould makers in other countries.
 
Because sourcing overseas is not adopted by all mould customers Canadian mould makers can step up and be noticed, if they bring the right mindset and capabilities to light. Positioning your company accordingly is even more important with the increase in the value of the Canadian dollar against the American currency.
 
Certainly, Canadian mould builders who survived the economic fallout of 1999 – 2001 have emerged with lean manufacturing procedures and other strategies for optimizing processes.  This has helped reduce costs and made them more competitive against global tooling sources than they were in the past.
 
Advantages to Purchasing a Mould from Canada
 
Proximity to a customer is clearly an advantage Canadian mould builders have – the ability to “service what you sell.” This breeds an ownership mindset and definite responsibility because “you” know your tooling is for a long-term customer. Quality steels and components are a given; risky short cuts are not used. With narrow profit margins, no one wants to have to absorb the cost of repairs or alienate a customer, forever.
  • On the other hand, the tool maker thousand of miles away from a customer knows once the mould is shipped, it’s not likely to be seen again.  Issues of substandard materials and falsified steel certs can be legitimate concerns for the customer, who won’t discover these deficiencies until it’s too late.
There’s now a growing number of mould buyers with global procurement experience who are becoming more receptive to the merits of lifetime value for a mould over short-term cost savings.
 
Value-Added Approach Is a Winning Approach
 
By offering a full service or value-added business, distinct from any overseas competition, Canadian tool and mould builders have won and maintained business from North American customers.
 
These tool and mould makers are offering upfront consultation on part design. The gain for the customer is optimized performance of the tooling.
  • Another winning approach for Canadian mould builders is to manage multi-mould tooling programs. These companies are able to offer maintenance as needed, with minimal delay. Engineering changes can also easily be accommodated.
Some of the Canadian mould businesses are also providing imported tooling for which they have overseen the design and production processes to ensure the quality is as specified. They are able to honour corporate mandates for overseas tooling while still controlling the program and minimizing any negative impacts.
 
Trust Factor Still Important in Tooling Industry
 
Because not all mould buyers don’t have the resources to monitor the progress of a tool project thousands of miles away so, a local source is a better source to achieve that control.
 
From the perspective of the OEM, we’re regularly hearing stories about duplicate tooling built by tool makers overseas who seem unconcerned about patents and proprietary designs that are vital to an OEM’s success.  It’s more important now than ever before for OEMs to protect their new products and again sourcing from Canada is certainly an effective solution.
 
An important resource for the Canadian TDM industry is the support given by the federal and provincial governments. The industry is offered and participates in far more outbound and inbound trade missions than our neighbours. A more recent development is the Great Lakes Manufacturing Council, a Canadian/American initiative that will offer participants alliances, collaborative efforts, and partnerships.
 
Canada’s educational infrastructure is also a major advantage to sourcing from Canada. Humber Collage and St. Clair College are producing graduates that are highly skilled. The industry can also tap into any number of research facilities with the efforts of the University of Windsor perhaps the more well known.
 
Every country has of course its own TDM associations. CAMM, CTMA, CPMA, and the Mould Makers Council of CPIA are just that. They have recognized that by working together they’d be able to address offshore competition more effectively. The venue for that mission is the Canadian Machine, Tool, Die & Mould Federation, more often known as the Federation.
 
My Conclusions
 
Two scenarios are certainly evident within the Canadian tool, die and mould industry: Canadian tool makers are achieving important gains to strengthen their ability to succeed in a global industry and, their customers are rethinking their purchasing strategies.
 
My message to the Canadian players is that this is the time to ensure the trend continues.
  • Cy McGrath is general manager of Progressive Components Canada, a leading supplier of components for the injection mould, blow mould and die cast die industries.  You are welcome to comment on this article by emailing Cy at Cy.McGrath@procomps.com. Just put in the subject line: Response to article. And, if you’d like to see your comments published, anonymously or otherwise, let Cy know.

Last Word: Let’s Put A Sense of Unity into Our Government Export Programs

In addition to any number of trade fairs in China, the information on China seems to be non-stop. Ontario’s Premier, Dalton McGuinty, hit the nail on the head quite accurately when he said you couldn’t expect to just drop in on China and start doing business there. Right, you need a plan, and likely help with the plan.
 
It is encouraging then to read in the recommendations of the Canadian Manufacturers and Exporters Association’s “Manufacturing 20/20 Initiative” a recommendation for a China strategy. CME wants to see a coordinated and integrated approach that responds to the economic challenges (but also) takes advantage of the opportunities out of China.
 
The 20/20 Initiative also tells us there is a need for greater coordination and alignment in trade policy, financing services, and support programs across all private and public agencies in Canada. The goal would be to enable international trade, investment, intellectual property protection and business partnerships in emerging economies.
  • For those who say that mandate is already addressed by the many government programs, federal and provincial, I’d have to say “yes,” but really not so. There are so many programs and initiatives out there that at times it is confusing. Where do you start, what program is best to first use?

Disclaimer: All information in this publication is accurate to the best of our knowledge.
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