Study bucks myths about molding success

If you want to earn high returns on your revenues don’t grow too fast, and be a supplier to the medical market. These are a few of the conclusions reached in a year 2000 survey of the North American (primarily US-based) plastics industry conducted by Plante Moran, a management and accounting consulting firm. The survey results, which analyzed the sales of 163 companies generating US$2.7 billion in revenues, were presented at SPI’s 2002 Structural Plastics Conference by Plante Moran accountant Jeff Mengel.

The survey found that sales to the medical industry generally gave a higher return than sales to other industries, such as automotive, packaging, electronics and construction.

More surprisingly, the survey found that a number of standard industry operating objectives, such as sales growth, lower wages, higher quality, better delivery, having more customers and moving up the supply chain did not correlate directly with higher return on sales or assets. The survey explains the lack of a statistical connection between return and companies with higher quality and better delivery, for instance, by noting that, “customers may gripe about (a lack of these qualities), but they won’t pay extra for higher performance in these areas.”

The survey found that companies with the highest returns were those with sales to the medical industry, high press quote rates, faster set-up and mold change times and a higher number of presses under 100 tons.

Median utilization of injection molding equipment with 400 tons and less of clamping force was 44%, based on the percentage of hours making parts out of 8,760 hours available.