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The TPR is pleased to present a feature on Magor Mold, an injection mold manufacturer specializing in molds for medical disposable products for the hospital supply industry. It’s obvious this company is very focused and very driven to provide top quality molds and services – and to grow. We interviewed Wolfgang Buehler, president of Magor Mold, to find out more about this San Dimas, California, company’s business philosophies.
What is your
company niche, and what does your company do that is notable,
One of the unique things about Magor is that we invest a lot in customer service and mold maintenance. With every project, we plan to be able to provide maintenance services on an ongoing basis. We back that up by having a complete service department that is fully equipped with experienced workers and equipment that is always ready to go. We see it as very important to keep our customers in full operation once we have made the mold. One other industry niche that we have manufactured molds for since 1996 is consumer products and female care. We are building super high volume (in excess of half a billion parts per year), large valve gate molds. An example would be a very simple cap for water bottles, producing in excess of 600 million parts per year. Like the medical molds, these tools are also run with very tight parameters for quality and production – a processing window. That window allows for less than 3 parts per million in terms of efficiency. It might as well be 100% efficiency at that rate. Magor is also very strong in product design. We will always provide a quote based on a customer's request but we will also look at the project and offer other solutions that we think would deliver the best manufacturability. When and how did you get into the industry, what attracted you to it? I got a degree in mechanical engineering and plastics from Offenburg University in Germany and worked summers at Magor Mold in California, owned at the time by Max Ruf, a relative. I began my career with an internship at Braun and Maenner, also in Germany. To this date we have a business relationship with Maenner in Germany. They are a mold manufacturer that also makes hot runner valve gate systems. They are unbeaten in that segment worldwide, in our opinion. They are the number one valve gate system manufacturer in the world. With those super high volume molds, when you have to run 5-second cycle times or less, you want the best systems. After immigrating to the U.S. in 1984 I began working at Magor Mold. In 1988 I bought a company, Falcon Mold, which merged with Magor Mold two years later. In 1997 I co-founded APEC, a contract manufacturer for medical device components, with Anura Welikala. APEC began as a testing facility for Magor’s molds. That same year I purchased Magor Mold and have grown the company to become one of the top mold builders in the U.S., particularly for medical devices. Relate a notable "best time" for your company. We manufactured 128-cavity molds for one customer. The last five molds we shipped to them we did not even test. We shipped them to the customer on the East Coast and when they started up, they went into production without a hitch. None came back for any fine tuning or reworking. That prompts an emotional feeling inside of me when this happens. It doesn’t matter how many molds we build, it is a source of deep satisfaction to deliver that level of quality. It actually happens fairly often. In fact, most of the molds we build for dialysis go out of state, and most of those that were built over the last 10 years were not tested prior to shipment – not one had any troubles. The batting average of having the mold perform out of the gate is very high here. We do want to sample the molds, and with APEC as a partner company in the process, it makes it all very seamless. We are offering process development along with the mold sampling. It’s a scientific mold processing development, giving the customer assurance that the mold has an adequate and successful processing window, and no issues validating the mold in-house. To give another example, in 1994 one of our customers, upon our suggestion, needed to build six prototype molds (each was one cavity) and they needed them in 6 – 8 weeks. We were not one of their preferred moldmakers at the time. There were four other suppliers that they were using, but none of those other moldmakers could give them delivery on those molds. I advised the customer that they were spread too thin and it limited their ability to procure the tooling they needed in a timely manner. They decided that they should partner with a moldmaker and put a task force together to oversee the evaluation process. They visited us and also visited the other moldmakers. Each of the other moldmakers had special presentations ready for the customer to view, but Magor did not. So they sat down with us and asked us to answer their questionnaire. We went over the questionnaire, gave them a tour of our shop and showed them how we work. Three days later we were selected to be their partner and they ended up giving us all the molds to build. Ever since then they have grown into an extremely good customer for us, and that’s a very notable best time. Winning a contract like that was very important. They felt that we spoke with complete honesty and from our experiences and memory, rather than polishing up presentations to make an impression. Along with that partnership, a couple of years later another company we had never worked with came in and wanted to transfer a product line from Germany to the U.S. They wanted to build a plant to manufacture medical disposables here. We were awarded the contract, starting with six molds for components and today, 12 years later, they probably have over 50 molds making the components for these products, and we built every one of them. We gained that partnership simply by performance, by building those first six molds. They invested $50 million to build that plant and they were nervous. We earned the business for years to come and we continue to earn the partnership. We currently have about 10 customers. We build partnerships – we are not a marketing company; we don’t sell. Two of our top five customers have been among our top five for the past 10 years. They are in the medical disposable business and are Fortune 100 companies that are growing, and we’re growing with them. Magor does not do one-off projects; we are interested in building long-term partnerships with our customers. Similarly, relate notable challenges that your company has overcome. We have about five customers that will tell you that Magor Mold brings together projects in every instance. Being able to build 128-cavity molds and have them run right out of the gate is a success story in and of itself. A couple of years ago a medical company came to us with a request for quote on a product that was previously made in Switzerland for them. It was a proprietary product to the Swiss moldmaker due to the moldmaker having a proprietary hot runner system that allowed gating in a specific location. It was a multi-cavity mold for a syringe plunger. The leading hot runner manufacturers could not come up with a solution that would allow us to compete with the Swiss moldmaker, but the medical company really wanted to build the molds in the states due to costs. So we came up with a concept and a solution that found acceptance and we got the contract awarded to us. We developed the tool on our own dime and made a two-cavity prototype to prove our concept. However, prior to the prototype, the customer awarded us a contract for another multi-cavity mold, and two others followed before they even saw the prototype. We did all of this simultaneously. The critical dimensions of the molds had steel safe conditions, meaning we would build the mold and fine tune it and then size the parts, due to shrinkage. We built the second mold to perfect dimensions according to the numbers we derived from the prototype and it was perfect out of the gate. We saved all that time in sizing. Since then we have used the gate design that we developed on several molds. The unique thing is that we are using an existing hot runner system from a leading supplier and simply applying our design to it. In another instance, we built two 32-cavity molds with a semi hot runner application. Our customer wanted a third mold. We gave them a quote for another 32-cavity and also quoted it as a 64-cavity mold, showing them how they can save time and money on a valve gate system. They were surprised at how we could gate that system, and we got the P.O. plus an order for a four-cavity prototype.
When you are
working on projects with your customers, what aspects would you like
them to
Sometimes a shop will raise prices when they are busy. Magor Mold will never do that. I don’t believe in doing that; we are much more consistent. A mold represents a certain value and that value doesn’t change with our backlog situation. List newly acquired technology, machinery or key personnel (in last year). We bought a fantastic piece of equipment that sets us apart. A Yasda high speed hard milling machining center with a pallet changer – without a doubt recognized as the best hard milling machine in the world. It’s a Japanese machine. The investment in that machine was a little over a half million dollars, while most competitors are investing in machines from Switzerland or Germany and their price is $300,000. We built a special room for high speed machining that is air conditioned 24/7, keeping the machining very consistent and the tolerances extremely tight. We bought this over a year ago. It’s afforded us tolerances and repeats and has only improved our capabilities including running lights out operations. We house that machine with three additional high speed machines, the last of which came in with a 60-station robot for electrode manufacturing. We are running an unmanned second shift on those machines. Currently, we are looking at a second Yasda, identical to the one we have which would deliver even greater operational capabilities. We have a continuous investment strategy in equipment and the company is debt-free. We have a policy of "save and buy", we don't finance. Has your company recently expanded? Plans to expand or form partnerships/alliances?
We have been growing every year for the last ten years, even in 2000 and 2001, when the market was quite depressed. In the last four to five years we have experienced 40% growth – and it’s a controlled growth. Are you involved in any industry organizations or educational programs related to the trade? SPE – Society of Plastics Engineers SPI – Society of the Plastics Industry We also have an internal internship program of four years, where our young people go to a local college and take industry related classes and are trained in different machining processes. We currently have three apprentices and are looking to increase that number. What do you think about changes occurring in the industry due to globalization? How has it affected the way you do business? Change is a part of our daily lives; we can’t just close our eyes to it. China has many of the same concerns that we have in terms of materials costs, scrap, etc. We ship medical disposables over there because we can make them more efficiently. We build molds for our sister company, APEC ASIA, and we are always looking at opportunities over there. I see an increased push toward even higher efficiencies, yields, and a reduction in scrap and maintenance. In addition, I feel that medical disposables will continue to be manufactured in the U.S. because they are fully automated. Asia is going to have problems coming up – I’ve been there several times now. Materials are going up for them; labor costs are rising plus other costs, making them less competitive. It’s changing, but we can still manufacture these products more cost-effectively because we have a very efficient molding and assembly process. We can’t compete in a market where there is only a one year lifespan on products, but for longer running molds we can. What will the industry look like in 3 to 5 years?
In the business we are in, any mold that is utilized above 75% capacity is a high production tool. Also in medical, the product lifecycle is much longer than electronics or automotive. So tooling can be depreciated over 5-8 years (we have one customer that depreciates tools over 13 years, which is incredible). If you depreciate the mold over 5 years, like those we build, the mold depreciation portion of the piece part price is only 5%,,meaning 95% of the part price is made up of other elements such as efficiencies, yields, scrap, maintenance, uptime and more.. For example – a multi mold project over several years – to date the first three molds have produced over 8 million shots or 240 million parts. The mold cost in that scenario is probably only 2-1/2% of the piece part price. That’s the analysis that we do and show our customers. Those are the things we are concentrating on. If we are able to reduce the bulk of what it takes to make a part by 10%, then the mold cost is well justified. There will be a push for even greater efficiencies over the next 10 years and beyond. We push toward higher efficiencies, higher yields, reducing scrap and start-up time, reducing maintenance, and increasing up-time. Our focus is improving the mousetrap and increasing the capabilities of our molds. It will make our molds more expensive in doing so. If we tried to make them cheaper, we might not be in business. We need to focus on manufacturing costs, the 95%, not the mold depreciation, the 5%. ============================================================================= Additional Background Information: Number of years in business: 40 (Magor Mold was established in 1967) Current number of employees: 62 including engineering staff Current square footage: 30,000 square feet. Three years ago the company expanded from 15,000 to 24,000 square feet, and then recently added another 6,000 square feet. Additional locations: none
Website:
www.magormold.com Industries served: Medical (95%), caps and closures, and packaging
Contact Information:
Wolfgang Buehler |
Cost
savings is the bottom line. So we strive to not only make our molds
better but we also show the customer how that mold will save them money
over its production lifetime. Sometimes it’s hard to get this way of
seeing things into people’s heads, but when you get the right people
into the room, they see it and are open enough to listen and do what’s
best for their companies’ bottom lines.
We
have had several interviews with companies in Asia to form an alliance.
We are looking, just like we did with APEC, at possible partnerships.
We are not in a hurry to do it, but we could yield some labor savings in
some of the operations we do here in moldmaking if we find a good
partner in Asia. But that is a very difficult and lengthy process
because of the tenure and the loyalty of employees that is traditional
in Asia. Even a five-year commitment by employees there is unusual.
Their training programs are not on par with the U.S. and it is the
employees that make the difference… they are a great asset not only to
our company but to our customers. We have employees who have been with
Magor Mold since we began. There is a huge knowledge base here, but the
same cannot be said for Asian moldmaking companies. 
It
is certainly not a fast moving industry and I don't see a lot of changes
in that short time frame. As far as Magor's business is concerned, in
3-5 years some of our customers’ product lines will have matured and we
may be building 32-cavity molds for components that we are building
4-cavity molds for today.