2012 The American Mold Builder Magazine - Summer

Summer 2012
Aluminum Mold Technology

Mold Demand Outpacing Supply Improving Mold Life Protect with Terms & Conditions
The Official Publication of the American Mold Builders Association
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Speak Out
The American Mold Builder Published by the
By now, the AMBA members that participated in the first ever Benchmarking Survey have received their personalized results. The AMBA Board of Directors and management team are very excited about the opportunity to finally set a standard for our industry. Quite frankly, the mold manufacturing business is very different from most high-volume manufacturers. We are typically custom, build-to-order shops that rely on a very short backlog of orders and the uncertainty of living from job to job. We also take great pride in our individuality and ability to solve unique customer issues with great creativity and skill.
American Mold Builders Association 3601 Algonquin Rd., Suite 304 Rolling Meadows, IL 60008 p 847.222.9402 f 847.222.9437 info@amba.org www.amba.org
Todd Finley AMBA President
Officers and Board of Directors President Todd Finley, Commercial Tool & Die Vice President and Treasurer Michael Bohning, Creative Blow Mold Tooling Secretary & Legal Counsel Alan Rothenbuecher, Ice Miller LLP Board of Directors Mike Armbrust, Mako Mold Corp. Andy Baker, Byrne Tool & Die Robert Earnhardt, Superior Tooling Dan Glass, Strohwig Industries Roger Klouda, M.S.I. Mold Builders Shawn McGrew, Prodigy Mold & Tool Justin McPhee, Mold Craft Tim Peterson, Industrial Molds Group Scott Phipps, United Tool & Mold Steve Rotman, Ameritech Die & Mold Mike Walter, MET Plastics Wendy Wloszek, Industrial Mold & Machine AMBA Team
Troy Nix, Executive Director Kym Conis, Managing Director Sue Daniels, Web/EMarketing/Member Services Shannon Merrill, Business/Advertising Coordinator
Up until now, there has never been the data available for a mold manufacturer to compare its business-to-businesses with similar dynamics. Every time I have looked at financial data of high-volume manufacturers, there have always been excuses such as those businesses are much different than we are and how can you possibly compare their situations with ours? Steve LeFever and Business Resource Services have taken the data from 46 participating companies, quantified and standardized the data and put out a report that is individualized for each company. Finally, we have the ability to see how we measure up! As of this writing, our management team at Commercial Tool & Die (CTD) is looking forward to receiving our report in the coming weeks with great anticipation. We know that we have strengths and weaknesses like every company has, and we cant wait to see if this data will confirm our suspicions or tell us something very different. This will be an opportunity to see how we measure up with the best-in-class companies in our industry. The data will help us identify our weaknesses and point us to where we should focus our improvement initiatives. This also will give us some much needed data to assist us in making goals, identifying metrics and measuring our progress. Some of the data I am very interested in this report is the Employee Productivity section. One of the remarks that Steve LeFever made in his presentation during the AMBA 2012 Convention was that the high-profit companies were spending more on wages and benefits per employee than the average or typical company. I am interested in this dynamic and how CTD measures up because we have made a conscious effort to automate some of our manufacturing in the last several years. The equipment we have invested in is capable of running unattended for long periods of time and the employees needed to plan, program and utilize this type of equipment have a higher skill level and may be more expensive. Im hoping the data will tell us if the investment has been worth the added cost. This type of benchmarking was the first AMBA initiative to bring valuable data of this nature to AMBA members. If you missed out on participating this time around, dont worry. More opportunities lie ahead! Todd Finley, Commercial Tool & Die
Managing Editor: Kym Conis Assistant Editor: Sue Daniels Art Director: Cara Pederson Advertising/Sales: Shannon Merrill Circulation: Shannon Merrill
Opinions expressed in this publication may or may not reflect the views of the Association, and do not necessarily represent official positions or policies of the Association or its members.
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Summer 2012
Contents
12
24
29
Features

Market Trends
Summer Business Forcast - Mold Building Industry Continues to Stabilize When Mold Demand Outpaces Supply
departments
3 Speak Out 20 Product 28 Association 32 Industry 42 Calendar 42 Ad Index
12 24

Technology
Why Plastic Flows Better in Aluminum Injection Molds Use of Surface Layer on Pre-Hardened Tool Steel
Focus
AMBA Scholarship Awards Contribute to Cinderella Story
26

Inside Track
Equipment Breakdown Coverage - an Accident Waiting to Happen
36

Strategies
Terms and Conditions: Contracting for Economic Uncertainty Midsized Manufacturers are Major Benefactors of the R&D Tax Credit
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the american MOld Builder Summer 2012
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Market Trends
Summer Business Forecast Mold Building Industry Continues to Stabilize
Over the course of many years, the American Mold Builders Association (AMBA) has routinely examined the trends of the mold building industry by utilizing the final results of its quarterly economic surveys. Although many micro trends can be identified by comparing the current state of business operations to those of three months prior, readers of AMBAs magazine will now be treated to a macro trends analysis of the state-of-theindustry to better understand what is truly happening in the areas of employment, demand measured by median weekly employee work hours and operational benchmarks including, but not limited to, quoting trends, shipping and backlog status and overall profitability. short-term basis, business conditions for the majority of moldmakers across the United States remain very stable as 83 percent with participants indicating conditions as excellent or good. More importantly, however, is the stability of business conditions in the moldmaking industry that is represented in the trend line over the last seven quarters. As can be seen in Figure 1 below, on average, nearly 85 percent of survey respondents have reported either excellent or good business conditions over the last twenty one months. While predicting the future always remains a daunting task, combining data derived from current business
AMBAs Summer 2012 Business Forecast Survey was conducted via an online format for a period of two weeks. Executives from 90 mold building companies, representing nearly 3,000 shop floor and design employees, participated in the survey process. Viewing the reported data from a
conditions along with what leaders are forecasting for the next quarter, reveals a continuation of solid business conditions throughout the remainder of 2012. Since the fourth quarter of 2011, company executives consistently have reported positive forecasts for the upcoming three-month
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Summer 2012
bullish about the future with 89 percent of survey participants indicating an increase or stable future over the next three months. There is some irony to the next three-month business forecasts when examining the macro trend lines for the last eighteen months. Although business forecasts remain strong, operations indicators divulge a slight momentum change. Most revealing are the overall trend lines with
week have slightly decreased from those reported over the last four quarterly surveys. The employee work week for design and engineering professionals mirror this same trend.
Use of simulation software
One unique question that was asked in this summers economic survey related to the use of mold/material process simulation software prior to finalizing the mold/ part design either in-house or with a service bureau. Quite
backlog and shipments. Viewing data provided in AMBAs economic surveys over the last nine months on backlog status and applying linear regression to data collected since the fourth quarter of 2011, backlog appears to be decreasing slightly and shipment volume appears to be following the same trend line. In addition to the data revealing a slight momentum change from previous quarters, the median and average trends in the number of hours comprising the shop employee work
interestingly, 33 percent of the survey respondents reported never using simulation-based software in their finalization process. 15 percent reported always using mold/material process simulation software, and over half engaging in the technology if required by the customer. Reported was that slightly over one out of five survey respondents internally possess at least one set of mold/process simulation software while over 42 percent use outside service bureaus or other outside resources.
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Market Trends
When Mold Demand Outpaces Supply
By Laurie Harbour, President, Harbour Results, Inc.
Its been quite some time since the mold building industry has seen a title like When Demand Outpaces Supply. But it is finally here and the industry has not seen this kind of demand for many years. As Harbour Results tours and assesses mold building operations, we have found todays mold builders to be operating well over capacity, outsourcing to their partners, quoting like never before and struggling to keep up with the demand and deadlines from customers. In most cases, the profitability, balance sheets and cash flow of these companies also has improved. In the last 18 months, the Harbour team has had the opportunity to visit over 100 tool shops throughout the US, Canada, China, Korea and Europe, including Eastern Europe. This is a privilege that we dont take lightly because it has been an incredible learning experience. In every plant we have been in, even those that did not rate well, our team learned new ideas, processes and tools to create best-in-class in toolmakers. When we started this journey, we had some initial perceptions about the tooling making business: Tooling is a traditional industry that has not progressed Toolmakers are artists vs. scientists Tool suppliers run their operations like a job shop and not a manufacturing process Very little implementation of lean manfaturing exists with .tool suppliers Tool suppliers lack flexibility The tooling industry has been hit harder than most industries due to the economy But what we knew for sure was that we would see some of the best tool shops in the world right here in our own back yard the United States of America. What we found was that there are a handful of companies whose businesses are really excelling and pulling away from the rest of the pack. They are innovative, creative, profitable and constantly challenging the business to be better. On the other hand, there is a group of suppliers that is well below average in overall performance, struggling to make money, meet deadlines and overall customer expectations. The largest group of shops is right in the middle. These suppliers are mediocre yet have a strong enough brand and enough new business to stay in the game. However, this group is not doing anything creative to improve their business to be best-in-class. These suppliers will have to make some decisions in the coming year on what they need to do in order to move up the scale to best-in-class status, or watch their companies fall back further in the pack. One thing is for certain, in the current business environment, companies that are not growing are not sustainable. Our assessment of these tool suppliers has allowed us to put together some benchmarking data to see where company performance compares to others and some ideas for how the best-in-class are achieving their results. One of the key
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metrics we look to is sales value per employee. This metric looks at total revenue less any outsourced revenue and is divided by the full-time equivalent employees, which includes overtime. Companies that operate over $161,000 are above average and doing very well. Whats interesting is the wide range that exists among companies. Some are as low as $48,000 per employee and others as high as $220,000. This data shows consistent variation but as companies get larger, the average tends to be higher due to the economies of scale. Those companies that are under $10M are making the least amount of money per employee on average, just under $100,000. This reveals a huge opportunity for companies to improve their performance and profitability at this level. We also look at sales per designer because design and engineering tend to be a major bottleneck as todays companies are squeezed in capacity. Again, the data reveals that companies under $10M perform the lowest at approximately $650,000 per employee while the best are companies over $50M with $1.5M per employee. Some companies are as high as $2.5M while the lowest are around $100,000. The most interesting piece of data is average EBIT (Earnings Before Interest and Tax) across the companies. The best performers are the $10 -20M category, averaging a 10-percent return with some in this group above 20 percent. For companies under $10M, the performance is not bad, averaging 6 percent but ranging well over 10 percent. More importantly, what the data really shows are stair steps of growth. What this implies is that companies begin to make good money and get traction around $10M and then it gets better as they grow towards $20M. However, this threshold is the most difficult to break through. A company that is over $20M has a lot of investment to support the larger entity. It requires more systems, processes, equipment, people, etc. As a result, companies that are $20 30M see a reduction in EBIT performance with the average only at 4 percent and the high only at 7.5 percent. As they grow to $30 40M, it improves slightly to 6 percent with a high of 11.5 percent. However, a much greater swing exists with several companies scoring a negative performance. Over $50M companies average the same, around 6 percent with less variance in the high and low performance but none more than 10 percent. This data proves that there is a sweet spot of just under $20M where companies can make very good money, but
if they have great sales teams and want to charge past that they need to develop the infrastructure to get there and that costs money. Once that is done, a company almost has to go to $50M in order to see the economies of scale in terms of EBIT in the future. The data also reveals average SG&A (Sales, General & Administration Expense) costs, which as one might expect also align with the size of a company. The companies under $10M have the highest percentage cost at 21 percent but as you look at larger companies, the percentages decline and companies over $50M average 7.5 percent SG&A. All mold builders need salary staff to support the business whether small or large and the larger the company the more flexibility can be gained at this level.
One other interesting metric is average revenue per square foot. Although by itself not a critical metric, the data shows that since 2007, the average has gone up 75 percent from $160 to almost $300 per square foot. Companies are showing ability to grow within their current footprint and during this period of high demand, companies should continue to leverage this through new and more efficient layouts.
Moving forward
This data is just a snapshot of the overall information that has been obtained to help companies understand where their performance stacks up to the competition. However, going forward, there are many pressures on the tooling industry that companies still have to face. Currently, the climate looks good and many have already forgotten about the recession of 2008 2010, but more rough times are ahead. Tooling is a brutal market and there are several things that companies have to consider moving forward. page 10 u
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Capacity constraints many mold builders have leverage today and are even turning away work because they are too full. This is a position that companies have not been in for a long time. That said, companies have to be wise about this capacity and plan for the future when customers level out their product cadence and new programs get back to a normal release schedule. Companies need to develop the ability to sell value versus capacity and know how to maintain that in 2015 and beyond when the market shifts again. This return from the recession is not a 10-year wave; it is only a 2 to 3 year wave. Quoting factories many companies today have become quoting factories and as a result, a great deal of transactional waste has been added to the up front process internally. Much manpower and substantial time is spent in this area today and in many cases, on quotes that will never materialize into anything except for price testing. Companies should be careful to manage cost in this area. Increased volumes today, the majority of mold builders is very busy and is, in fact, being challenged by these increased volumes. Many companies were not prepared for these volume increases and they are struggling to meet timing due to a lack of resources and systems to support the growth. Companies are throwing waste at the process and this could lead to negative returns in the near future and loss of a competitive edge as market conditions swing back to realistic levels. Skilled labor probably the largest problem for all toolmakers today is the lack of skilled labor and people to fill the many new jobs in companies. This is an area where toolmakers need to put their money on the table and work with local high schools and colleges to find the right motivated people and then put them in an extensive apprenticeship program. Schools wont train these people; tool shops will have to make the commitment and investment to find and train the future generation. Pricing this is an area that will always be under heavy scrutiny and it will only continue to get tighter as companies release new programs with lower budgets but more complexity of product. This complexity will drive more discrete tools and added cost, which will force pricing down for each separate tool. Payment terms this is an area that is particularly difficult in the automotive industry. It appears that other industries have dealt with this issue in a more productive fashion but automotive is still struggling with terms that provide payment when the tool is shipped or at PPAP (Production
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Part Approval Process). Having leverage today, companies need to utilize this to sell their value to companies that are willing to provide appropriate payment terms. It might mean a loss of a customer or two but this foundation will be critical for survival in future years. Lastly, global pressure continues to be an issue. The threat of China and other low cost countries will not go away and will only continue to grow in the future. Some companies have chosen to use this to their advantage and set up the appropriate partnerships to leverage once their capacity is full in the US. Others have said no to this thought. Going forward, its a global economy and there will have to be some recognition by all companies but these strategies will be critical depending on the future size of their company. The data reveals many opportunities for mold builders to improve their business and move themselves out of mediocre performance and into the leader class. The best companies are reviewing the entire value stream and focusing their efforts on operational improvement in terms of throughput and elimination of waste. A focus on engineering has yielded many companies more time for design and better processes. But the companies that consistently rank the highest in Harbours assessment and have the best performance data are in that position because they have a strong leader and leadership team. These leaders challenge everything and apply system-level leadership throughout the organization. This is the secret ingredient for any company. Combining operational and financial advisory expertise with industry analysis and thought leadership, Harbour Results delivers results that impact the bottom line. The company specializes in manufacturing, production operations and asset-intensive industries, as well as a number of manufacturing processes including stamping, tooling, precision machining and plastics. To learn more, visit www.harbourresults.com.
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11
Technology
Why Plastic Flows Better in Aluminum Injection Molds
By David Bank, Aluminum Injection Mold Co., Dave Klafhen, Advent Tool, Ron Smierciak, Alcoa Forged and Cast Products
The following article is an investigative study directly comparing melt flow characteristics of general purpose resins in QC-10 aluminum molds and P20 steel molds. There have been numerous articles published regarding the cycle time advantage aluminum molds have over steel when configured with the same gate, part geometry and cooling channels, but there is little specific information available to demonstrate why this happens and how it improves the injection mold process. Alcoa Forged and Cast Products (Newburgh Heights, OH) teamed up with Aluminum Injection Mold Co. (Rochester, NY) and sponsored a case study to uncover the differences known to exist when molding thermoplastics in aluminum versus steel molds. The key objectives were to quantify the differences by comparing how thermoplastics react in an aluminum mold versus a steel one, measure those differences, and share the results of the experiment. The results should help moldmakers and molders better understand the potential savings and improvements for molding plastic components in aluminum tools, specifically addressing the following: 1) How plastic material flows longer distances with less injection pressure, when compared to steel 2) How molds fill faster and more efficiently 3) How parts have minimal warp and better dimensional stability Aluminums thermal conductivity is nearly five times greater than that of steel (Table 1). In an article published in Moldmaking Technology magazine, Douglas Bryce discusses an IBM tooling study comparing identical aluminum and steel molds producing the same plastic components over a five-year period. The article suggested that the aluminum molds cost up to 50 percent less to build and can be delivered in one-half the time. It went on to say these tools produced higher quality products having cycle times that were 25 to 40 percent less than the steel molds.
Summer 2012
Measurement
QC-10
P20
In 2005, an article written in the publication Flowfront looked at computer simulation of cycle time and cooling versus actual molding. After carrying out simulations on 12 parts, which had very different characteristics in terms of shape, size and plastic materials, it was concluded that significant savings in total cycle time could be realized by using aluminum instead of steel molds. Cycle time savings of 10-20 percent were seen in cases where there were no critical tolerances linked to the deformation of the part due to the effect of the heat. However, savings of 60-200 percent were seen in cases where heat deformation affected critical design tolerance levels. Studies like these are relevant to the industry and this case study looks at the basis of why plastic flows better in aluminum.
Tooling
Spiral test molds, built in accordance to ASTM D312398 were selected for the tool design. This shape would standardize the channel length, size of overall mold, cooling and gate location. In addition, each mold was fitted with a series of four thermocouples to monitor and document, in real time, what the metal does when injected with molten plastic. All the thermocouples were connected to a data logger and computer for data collection. For the aluminum molds, a QC-10 mold plate was used and for the steel molds, a P20. Six molds of identical geometry were built - three in QC-10 and three in P20. The spiral mold shape was sized at 6mm wide and channel depths of 1mm, 2mm and 3mm, respectively. The sizes of the tools were a standard 7x8 master unit die and all the mold plates were the same thicknesses.
The flow length results were in the same range of the P20 molds. The findings were puzzling. In the end, all the materials yielded basically the same results in all the molds used which was not the expected outcome. With over 25 years experience in processing aluminum tools, it was sure that this trial would demonstrate what is known to be true. The group had to stop and rethink the situation. It was searching for something it knew was there, but did not know how to quantify it, yet. After much discussion, it was decided that the group needed to run the same materials in a trial that included pack and hold. The sprue diameter was identically sized for each of the six unit molds. Identical water lines were drilled to complete the cooling circuits. Four of the six molds, the 1mm and 2mm molds in both materials, were fitted with thermocouples that came in from the back and were approximately 0.5mm from the cavity surface. On the 3mm spiral unit molds, a fifth thermocouple was placed into secondary vent area to monitor the vent temperature during molding. All six molds were laser engraved on the A side in inch increments from 1 to 67. The surfaces were finished with a 600 grit stone. The test was set up in a 55 ton Toyo injection mold machine. Seven unfilled, general purpose thermoplastic resins were selected for this trial: polyethylene, polypropylene, polystyrene, ABS, PC/ABS, nylon, and polycarbonate. Trial Two: Seven resins; six molds with monitored temperatures, pack and hold The second trial was initiated, again recording temperatures. The injection mold pressure remained at the baseline of the material used from trial one. This time the experiment was to process each unit mold as if molding a run of parts in production. Each mold trial began as a short shot (shorter length spiral, in this case) and proceeded to pack out the part to get the best achievable result. Cycle was established when the sucker pin pulled the sprue clean and the part was cool enough to eject. Cycle time and mold temperatures were documented for each tool running at least 25 parts at cycle.
Molding trials
Trial One: Same melt temperature, same mold temperature per manufacturers recommended parameters; seven resins, six tools This trial fixed a predefined orifice, a predefined temperature and a predefined injection pressure (< 1000 psi). A 25-piece sample was run for each mold group. The hypothesis suggests that the flow lengths would be dramatically different between the QC-10 and the P20 molds because of aluminums higher thermal conductivity. The material was dried for the prerequisite period of time and prepped for molding. The melt temperatures were set to the resin manufacturers recommended settings and the molds were brought up to the manufacturers recommended temperature as well. The P20 molds were run first in all the materials. The data found the average spiral flow length to be 10 to 15, consistent with the manufacturers specifications. The QC-10 molds were run in all the materials as well, expecting to produce a dramatic difference in flow length. It did not.
In the QC-10 molds, the temperature graph during this process showed a near vertical increase in temperature from mold set point of about 10 to 12 degrees to an immediate drop back to set point before the mold opened. For a point of reference, the mold cycle for polystyrene was 12.2 seconds as the QC-10 group of molds was finished. All three thicknesses, although yielding shorter flow lengths going from 3mm thick to 1mm thick, were in the same 12.0 to 12.5 second range for total shot-to-shot cycle.
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The P20 steel molds were run at the same temperatures as QC-10. The first observation was the change in how the mold temperatures reacted as the molten plastic was injected. The temperature did not spike up and down with the same intensity as it did in the QC-10 molds. In addition, the cool down time was much more gradual. Also, P20 typically overran the mold temperature set point by an average of about 20 degrees. The increase in the mold temperature due to the injection melt was an additional 15-20 degrees. With all this excess temperature, i.e., mold overshooting and temperature increases with very slow recovery, a difference of 20+ second cycle shot-to-shot in P20 versus the QC-10 cycle of about 12 seconds was noted. At this point, we believed we had finally found the reason that plastic molds better in QC-10, and decided to continue another trial to verify our findings. Trial Three: Two materials, 1 amorphous and 1 semi crystalline, 3mm unit molds of QC-10-and P20, pack and hold It was decided to use only polystyrene (amorphous) and nylon (semi-crystalline) with the 3mm unit molds in QC-10 and P20 in this verification trial because virtually no difference in flow length between any particular mold family and between any materials in the previous trials were found. It was important to look at melt temperature versus flow length versus cycle time. The trial began with temperatures on the low side of the resin manufacturers recommended barrel temperature for the resin being used. Mold temperatures were set to the lowest recommended set temperature. The P20 mold ran in both materials and cycle times, mold temperatures and injection pressure was noted. Then the QC-10 mold ran in both materials, again noting cycle times, mold temperatures and injection pressures. After compiling data, all temperatures were moved to the highest barrel temperature and each mold was run with both materials, again collecting same data. In both temperature tests in trial three for polystyrene, QC-10 cycle time stayed consistent with findings of trial
Summer 2012
two, 12-13 seconds. In the lowest temperature test, P20s cycle time was in the 20- to 21-second range, similar to trial twos findings, but in the higher temperature test, it jumped nearly 25 percent.
Findings
The QC-10 molds heated five times faster than the P20 molds, when set up to run each trial. Across all the trials, the QC-10 mold temperature stayed consistently within 1-3 degrees of the mold temperature set point. During the inject phase, a temperature spike of 10-20 degrees with an abrupt return to set point was observed. The P20 mold temperature stayed consistently 10-25 degrees above mold temperature set point. During the inject phase, additional increases of 15-30 degrees were observed before slowly trending downward. When using the QC-10 molds, an appreciable change was not seen in cycle time, part to part, even when the materials were run at the high end of the manufacturers recommended melt/ mold temperatures. However, the P20 molds continued to get hotter and the cycle time became even longer. In view of these findings, it is not surprising that there are some plastic consultants extolling the virtues of running plastic resin as much as 100 degrees below the manufacturers recommended settings when using P20 or other steel injection molds, even though doing so could void the manufacturers guarantees.
Conclusion
The results of this experiment were both a surprise and not a surprise. It was not a surprise to prove what the group set out to prove, but the road that led it there was an unexpected one. It was pleasing to show that plastic parts molded in aluminum would minimize warp and enhance dimensional stability, allow molds to fill faster and more efficiently and allow
plastic material to flow greater distances with less injection pressure when compared to steel. It was demonstrated that using aluminum gives the benefit of making molds less expensive to produce, shortening mold delivery time, producing higher quality molded plastic parts and enabling the realization of producing more plastic parts per day. The surprise in the experiment was that the expected results were achieved in a different, unexpected way. It was surmised that the desired results would be achieved because aluminum molds would take on heat from the hot melt during the injection phase, enabling the plastic to fill the mold cavity more quickly with less pressure and less density change. Conversely, it was thought that the steel molds would take on less heat, thereby creating more skinning, and restricting the flow front resulting in the need for higher injection pressure and causing density changes from the gate to the longest flow length. What we actually found was that the QC-10 did not take on or hold as much heat as was previously thought, thus allowing the molten plastic to move in quickly and quench info@wi-engraving.com quickly, therefore there was not a density change due to excess injection pressure. It was discovered that the steel actually took on and held much more heat. During the inject phase, plastic filled the cavity and stayed molten M & M Tooling Inc. much longer allowing for additional inject pressure which Your Source! CNC Machining Specialist Wisc_Engraving.indd 1 10/23/08 caused density changes before solidification. Specializing in Mold Shop Overflow Work Custom Mold Bases With a personal touch Hopefully the information provided in this article adds to M&M Tooling Inc., is a complete Custom Mold Base manufacturing facility with the knowledge base used to consider aluminum as a viable capacity up to 35 x 80. We employ top journeymen mold-makers, utilizing Mazak choice for the production of injection molds. CNC machining centers maintaining tight
tolerances, to achieve high quality results.
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References: 1. Douglas Bryce, Moldmaking Technology, Why Offer Aluminum Molds for Production, April 2002 2. Claudia Zironi, Flowfront Magazine, Competitive Advantages of Aluminum Molds for Injection Molding Applications: Process Simulation Used to Evaluate Cycle Times, April 2005 3. American Society for Testing and Materials (ASTM), West Conshohocken, PA. Is a nationally recognized independent test agency. The ASTM test number D312398 describes a spiral flow mold for use with thermosetting molding compound, and also states there appears to be no universal standard for thermoplastics. For further information, contact Aluminum Injection Mold Co., at tbergman@aluminuminjectionmold.com, Dave Klafhen, Advent Tool, at dklafehn@adventtool.com and Ron Smierciak, Alcoa Forged and Cast Products, at Ron.Smierciak@alcoa.com.
M&M Tooling Incs mission is and always will be, to provide follow-through on commitments to our customers, with personal attention that exceeds expectations. Where Your Success is Our Business 395 E. Potter St. Wood Dale, Illinois 60191 Phone: 630-595-8834 Fax: 630-595-6806 Web: www.MMTOOLING.com Email: MMTOOLING@aol.com
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Technology
Improve Mold Life on Pre-Hardened Tool Steel

By Per Hansson, SSAB, Oxelsund Sweden
The last decades have seen rapid development in hardmachining, enabling faster tool-manufacturing when using pre-hardened tool steels. Such steels are usually delivered in hardness up to approx. 40 HRC. However, pre-hardened tool steel having 45HRC is today available on the market. Such hardness is suitable in many molding applications, but when molding reinforced plastics, such as glassfiber reinforced ones, higher mold surface hardness is required to achieve desired mold life length. Application of surface engineering (Nitriding, PVD-coating etc.) on prehardened tool steel enables the tool designer/tool maker to tailor-make the desired mold surface properties. Molds having cavity surface hardness above approx. 380 HBW/40 HRC are commonly manufactured using tool steel delivered in soft-annealed condition. Depending on which plastic to mold, such molds are generally heat treated having cavity surface hardness of 45-55 HRC. As is well known, the heat treatment is not only time consuming but also generates distortions due to the phase transformations which take place during the thermal cycle. Furthermore, there also is a risk for cracking of the mold during quenching. Modern pre-hardened tool steel of today, Toolox 33 (300 HBW) and Toolox 44 (450 HBW, approx. 45 HRC), offer two major advantages: Shorter time possible from mold ordering to delivery Known mechanical properties of the mold the slab center line. As is clearly shown, full control of a strongly segregating element like sulfur is possible to achieve in such a caster.
Figure 1. Sulfur segregation in slab center line
Use of fully protected casting, i.e., ceramic tubes in the tapping sequence from ladle into tundish and from tundish into mold guarantee that the inclusion content can be kept extremely low when solidifying, see Figure 2.
Figure 2. Steel inclusion contents, plate center position
0.1 0.09 0.08 0.07 0.06 0.05 0.04 0.03 0.02 0.01 0
Duplex Sulfides Oxides
Steel properties
Steel shops equipped with effective secondary metallurgy facilities can produce super-clean liquid steel, with regard to very low levels of tramp elements as well as extremely low inclusion level. The critical question is how to transfer this super-clean liquid steel into solid state without ruining its properties. Use of a continuous caster equipped with soft-reduction zones, CSR (CSR = Continuous Soft Reduction), enable full control of steel solidification and the continuous casting common center line segregation can be eliminated in the CSR-caster [1]. Figure 1 shows results from trials where slabs of high-sulfur steel have been casted with/without CSR to vary the sulfur segregation level in
Summer 2012
When the steel manufacturer has effective steel heat treatment he also can choose leaner chemical compositions when designing pre-hardened tool steel. Modern prehardened steel chemical compositions differ substantially when compared with traditional tool steels of equal hardness. In this comparison, have the maximum permitted sulfur and phosphorus contents for Superior H13 been chosen? This grade is normally delivered as ESR-re-melted, i.e., it has micro-segregation and cleanliness comparable with CSRcasted steel. (See Table 1.)
Areafraction (%)
The extremely high steel cleanliness of the described prehardened tool steels (Toolox 33 and Toolox 44) enables these to be polished to very high demands, where A2 gloss is possible to achieve.
Table 2. Constants in Taylors equation evaluated for the actual test setup.
Machining properties
Table 1. Typical chemical compositions, all elements are shown in weight-%.
Grade W.Nr 1.2312 (P20+S) Toolox 33 Toolox 44
N 0.16 0.21 0.18
C 476 669 379
Polystyrene Melt F Mold F Cycle sec. Flow Length Nylon Melt F Mold F Cycle sec. Flow Lengh
QC-10
P20
QC-10
P20
Calculations of maximum possible cutting speed at 10, 30 and 45 minutes cutting edge life length, using the wear criterion given above, are shown in Table 3.
Table 3. Calculated maximum cutting speeds.
465 100 12.3 34 555 150 21.0 52
465 100 21.8 34 555 150 24.0 53
430 100 12.0 27 510 150 20.3 39
430 100 17.5 27.5 555 150 22.0 39.5
Grade W.Nr 1.2312 (P20+S) Toolox 33 Toolox 44
V10 min (m/min) 329 412 246
V30 min (m/min) 276 327 205
V45 min (m/min) 258 301 191
As is shown in Table 3, hard machining in a pre-hardened 45 HRC grade requires a reduction in cutting speed of approx. 35 percent when compared with milling in P20+S. Osbelt and Enzelsberger [3] have carried out a study pertaining to reduced manufacturing time for a mold producing spectacle frames. By choosing Toolox 44 instead of W.Nr 1.2344/H13 (Q&T to 45 HRC), they showed that mold manufacturing time can be reduced by 114 hrs, approximately three weeks, when choosing the pre-hardened tool steel (see figure 3).
Figure 3. Mold manufacturing time [3].
An evaluation of the constants in Taylors equation (VTn=C) was made when using the following test setup: Cutting head, Sandvik Coromill 200 80mm Insert, Sandvik GC 1025 Feed = 0.15mm/tooth ap = 2mm Cutting width = 60mm The cutting edge was defined to be worn out at flank wear, vb, of 0.3mm. The constants in Taylors equation are given in Table 2.
Design/manufacturing time (hrs)
Pre-hardened tool steels must have good machining properties and excellent dimensional stability to ease mold manufacturing. Designing a steel to show very high dimensional stability enables the moldmaker to exclude stress relieving in the manufacturing process, thereby further reducing total mold manufacturing time. The machining properties are partly governed by the carbide contents/distribution in the steel matrix. Chandrasekaran et. al. [2] have studied the relationship between different carbide amounts in steel matrix and machineability using flat milling in Toolox 33, Toolox 44 and in the European grade W.Nr. 1.2312 (P20+S).
400 350 300 250 200 150 100 50 0

W.Nr 1.2344 / H13 Toolox 44
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Technology
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Cost comparison [4] has been carried out, see Table 4, when manufacturing two identical components, see Figure 4, in Toolox 33 and W.Nr. 1.2312 (P20+S) respectively.
Figure 4. Component made for cost comparison.
The actual test shows a reduction in required machining time with 1:15:35, i.e., 16 percent, when using the prehardened tool steel. On top on that, lead time reduction also occurs because there is no need for added heat treatment!
Mold service life length
Table 4. Cost comparison.
In molds for plastic, molding is abrasive and wears the dominant mechanism, except mechanical damage. The abrasive wear increases drastically when moldingreinforced components, such as glass-fiber-reinforced ones. SSAB has developed a wear model [6] pertaining to describe differences in relative life lengths in components having different surface hardness when subject to abrasive wear. In this model, two main wear regimes can be distinguished: an aggressive and a soft one. The relative hardness, see Equation 1, is used to determine which regime prevails.
Toolox 33 726 3930 70 4726
Steel cost Milling/drilling Stress relieving Grinding Total cost
W.Nr. 1.2312 719 4960 191 260 6130
HVrel = HVabrasive medium/HVmold surface (1) The transition between the wear regimes takes place when HVrel equals 1.6, schematically shown in Figure 5. This means that to obtain longer mold service life the mild abrasive mode shall dominate. Furthermore, the actual wear system also determines the width of the transition zone. Attention must be paid to the slope of the relative wear curve in the transition zone to ensure a safety margin when determining the necessary surface hardness in a given wear system.
Figure 5. Schematic description of relative wear life.
Substantial cost reduction was achieved, 1404 , thanks to faster milling, excellent dimensional stability, no need for stress relieving and machining in only one (1) set-up. When choosing a modern pre-hardened tool steel, the manufacturer had three days in lead time for the stress relieve operation of W.Nr. 1.2312. On top of that, it also had to add time for re-mounting the component in the CNC after this step.
Relative service life
Another comparison, carried out by the Hoffmann Group [5], shows actual time required in each machining step when milling a given cavity in H11 and Toolox 44 resp., see Table 5. The H11 component was heat treated at 45 HRC in the manufacturing cycle, requiring three days lead time in this case.
Table 5. Time required in each machining step.
Severe abrasive wear
Mild abrasive wear
Roughing Pre-finishing Finishing Total
H11 00:53:38 1:43:37 5:14:02 7:51:17
Toolox 44 1:21:40 -------------5:14:02 6:35:42
Relative hardness
(HVrel = HVabrasive medium/HVmold surface)
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The necessary mold surface hardness when molding a glassfiber reinforced nylon component has been determined using this model. The glass-fiber, 1200 HV, will govern the actual wear system. A traditional tool steel, W.Nr. 1.2358, heat treated to 55 HRC was the earlier choice but too short and un-predictable mold life length was achieved. P20 having hardness of 300 HBW was chosen as the reference point in this evaluation and given a relative life length of 1. The calculated relative service lives of different mold surface hardness are given in Figure 6 and in Table 6.
Figure 6. Relative mold life lengths.
after manufacturing of the new mold, i.e., before nitriding, were a couple of test shots (~50-100) run to check the final product dimensions. The mold was thereafter nitride and the serial production started. In this case, was the mold used both as a try-out-tool (before nitriding) as well as a serial production mold (when nitrided)? Thereby were costs and lead times drastically reduced due to the fact that manufacturing of separate try-out-mold and production molds were eliminated?
Discussion
Relative service life
Nowadays, pre-hardened tool steel having hardness of 45 HRC easily can be machined thanks to the rapid development in hard machining. This opens new possibilities to reduce mold manufacturing time in transport to/from heat treatment. Also, heat treatment is no longer needed during mold manufacturing, providing substantial savings in mold cost and manufacturing lead time.
To Ni olo tri x de 44 d (3 5x
References
As is demonstrated in Figure 6, mold surface hardness of approximately minimum 60 HRC is required to ensure the mild abrasive wear mode to prevail. As safety margin has to be added the actual mold surface hardness was chosen to 65 HRC. Changing from the 55 HRC mold to a mold having 65 HRC surface hardness will then increase mold service life by approx. 6 times.
Table 6. Comparison of relative mold service life.
1. A. Lagerstedt. H. Fredriksson, Strnggjutning av verktygsstl. ISBN KTH/MG-UND-02/01-SE, TRITAMG 2002:01. In Swedish. 2. H. Chandrasekaran, R. MSaoubi, O. Karlsson, U. Persson, Milling of pre-hardened mold steels role of microstructure on machineability and tool wear. Proceedings of 7th International Tooling Conference, Politecnico di Torino, pp 623-630. 3. G. Osbelt, E. Enzelsberger, Vom digitalen Designentwurf zur modularen Spritzgussform. Quo Vadis Tools&Manufacture Gmbh. In German. 4. Hasco Hasenclever Gmbh, Private communication. 5. Hoffmann Group, Private communication. 6. WearCalc, SSAB
1)
(4x
P2
44
To o
lox
W .N
r.1 .
0(
23
58
(6
x)
P20 Toolox 44 W.Nr 1.2358 (55 HRC) Toolox 44, nitrided
Mold surface hardness (HV) 340 480 660 820
Relative mold service life 1 4 6 35
When manufacturing the new mold it was decided to use Toolox 44 and to nitride its surface to ensure the proper wear mode in running component production. Directly
Per Hansson is product manager for the Toolox, engineering and tool steel grades, and Armox , protection steel, in the plate manufacturing program at SSAB. His qualifications include a M.Sc. in metallurgical engineering as well as a Ph.D. in welding engineering from the KTH, Royal Institute of Technology, in Stockholm Sweden. He has worked for SSAB since 1988 in key positions for the development of abrasion resistant steels, protection, engineering and tool steel technological advances. One of Per Hanssons main areas of expertise is in the physical metallurgy of steel, especially mechanical properties related to steel microstructure, alloying systems and the influences from the different steps within the manufacturing process chain. For more information, visit www.ssab.com.
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Product
ELEC2RODES Bonded Savings for EDM Electrodes
Ohio Carbon Blank bonds a less costly grade of graphite used for the electrode holding area (the backer) with a higher density material which contacts the work piece (the electrode) during the EDM process. The resulting ELEC2RODE allows not only economical material combinations, but also eliminates the need to mill the electrode in house before use. ELEC2RODES can be used with existing graphite holders or with the companys new economical line of graphite holding products. The ELEC2RODE product is offered exclusively via its user-friendly GRAPHIMATOR software. Simply key in the electrode and backer sizes, electrode material and quantity for immediate pricing. Also be sure to visit Ohio Carbon Blank in booth #E-5148 at this years IMTS. For more information, visit www.ohiocarbonblank.com.
9.pdf
10/6/09
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Ohio Carbon Blank, Willoughby, OH, introduces the ELEC2RODE (patent pending) a new bonded graphite product designed to reduce graphite electrode costs for EDM users of medium- or high-density graphite materials (POCO EDM3 or equivalents). The technology minimizes material use, eliminates milling of blanks for work holding and can reduce overall graphite costs dramatically.
D300 5-Axis Vertical Machining Center from Makino

Makino, Mason, OH, announces the D300 5-axis vertical machining center as the newest entry into the 5-axis aerospace machining arena. Similar to the D500, this 5-axis machining center is designed specifically for small, complex, 3-D contouring of high-quality part production as typically seen in aerospace machining, medical manufacturing, high-end job shop and die/mold applications. The D300 worktable offers a work area diameter of 300mm, accommodating workpiece sizes up to 450mm by 270mm and 120kg. The machine provides X-, Y- and Z-axis travels of 300mm, 500mm and 350mm, respectively, at feed rates of up to 60,000mm per minute. Rotary table axes offer rotational motion of 240 degrees ( 120 degrees) on the A-axis and a full 360-degree (continuous rotation) on the C-axis. The machine comes standard equipped with a 15,000-rpm HSK-A63 spindle with 120Nm (42Nm continuous) of torque for flexible, highspeed machining of various workpiece materials including steel, aluminum and titanium. Optional spindle configurations include a 20,000-rpm HSK-A63 spindle and 30,000-rpm HSK-F63 spindle. Makino uses direct-drive motor technology in the D300s C-axis rotary table and A-axis trunnion for outstanding positioning accuracy and repeatability. The ultra-high-torque direct-drive motors
Summer 2012
also provide superior acceleration and rotary speed characteristics that can reduce cycle times of complex 5-axis simultaneous machining applications by up to 60 percent. For more information, visit www.makino.com.
DME Adds Two New Smartflow Cooling Products

DME Molding Supplies, Madison Heights, MI, the maintenance, repair and operations products division of DME Company, has expanded its comprehensive line of MRO products to include two new Smartflow cooling products: Duoflow Manifolds and Delta-Q Flow Regulators. The new Smartflow offerings reinforce DMEs commitment to providing the industrys broadest product range and best value. Smartflow Duoflow Manifolds are extruded
aluminum manifolds similar to the original Smartflow onepiece design. The manifolds are divided internally and anodized with one red end and one blue end to denote supply and return in a single manifold. Delta-Q is a low-cost precision flow regulator module that can be used in conjunction with other Smartflow components such as threaded end caps, flow meters, temperature and pressure gauges, Dr. Eddy flow meters/turbulent flow indicators, Tracer electronic flow meters and cooling water manifolds. The Delta-Q regulator allows full adjustability of flow volume from unrestricted to complete shutoff, and the modular design allows users to customize models to meet scientific cooling requirements for each application. For more information, visit www.dme.net/moldingsupplies.
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Product
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Magnos Radial Pole Magnets

For exact machining of thin-walled rings on rotary tables, cylindrical grinding machines and lathes, SCHUNK, Morrisville, NC, now offers a vast program of standardized magnetic chucks with radial pole pitch. MAGNOS radial pole plates work with electrically activated permanent magnets and are proven for hard and finish turning, as well as grinding and rough turning. The workpiece can be machined from three sides without a changeover and since the magnetic field is active up to the outer fringe areas, extremely large workpieces now can be clamped securely and deformation-free. Due to the two-dimensional acting holding force, vibrations are greatly reduced during machining. This prevents the cutting edges of the tools from damage and improves the surface quality of the workpiece.
Depending on the individual application, three different styles of standard radial pole magnets are offered. For grinding operations, an AlNiCo single magnet system with automatic demagnetization is available. For turning operations, an AlNiCo double magnet system with high holding forces is offered. The third style is for demanding volume machining during rough turning, an extra strong AlNiCo neodymium magnet system. For more information, visit www.schunk.com.
OKK VB53 Design Feature Satisfies High-End Mold Applications

OKK USA Corporation, Glendale Heights, IL, announces the VB53 design feature to satisfy high-end mold application challenges. The design feature helps achieve superior surface finish and precision, combined with high-speed operation and excellent operator accessibility. The VB53 is standard with 20000RPM spindle with big plus double contact, X-axis travel of 41.34, Y-axis travel of 20.87 and Z-axis travel of 20.08. The VB53s superior surface
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Full-line of insertable carbide ball and flat bottom end mills ranging from .375-10mm to 2.00-50mm Button cutters, threaded type, ranging from 20mm diameter to 42mm diameter radius R3.5 to R10. Button cutter, shell mill type, range from 2.00- 50mm to 6.00160mm with radius R5 to R10.
Cutters for Aluminum and Non-ferrous type materials ranging from 12mm threaded type to 5.00-125mm face mill. Morse taper extensions, MT2, MT3, MT4, MT5. Cat 40/50 holders. All new line of HSK balanced tooling for your shrink fit needs. Harrouns tooling! The most consistent and cost effective on the market. We never give our customers a reason to call the competition.
1111 Fenway Circle Fenton, MI 48430 U.S.A. Phone: 810.629.9885 Fax: 810.629.2745 Email: info@harroun.com
Summer 2012
finishing capability, fewer vibration stripes and less quadrant projections distinguishes itself from the competition through a number of technological innovations. OKKs Fine Pitch ball screw reduces the maximum rapid speed, but increases the overall precision of the entire system along with a rigid machine base. Additionally, the VB53 employs an external, isolated oil cooler, which removes a common source of vibration from the machine, resulting in superior die quality. Visit www.okkcorp.com for more information.
Linear Way Vertical Machining Center

The VM3224 joins Milltronics (Waconia, MN) newest line-up of linear way vertical machining centers. With its 38 x 24 table, the VM3224 has travels of 32 x 24 x 26.
The enclosure is designed with removable side doors for accessibility through full saddle travel to accommodate long parts. VM3224 is equipped standard with Milltronics 8200 CNC Control, linear roller ways, dual arm 24-pocket tool changer, 6-spigot flood coolant, 180 gal coolant capacity and chip auger. Coolant and chip control are enhanced by enclosure design featuring a single, integrated auger. It comes factory-ready for 1000psi through spindle coolant and fourth axis interface. Machining accuracy is increased with 38mm ball screws that are stretched and anchored with triplex bearings on each end. This allows the axis to run faster and smoother while minimizing thermal expansion. Cutting performance and material removal are enhanced by the casting designed to optimize rigidity and by the standard 18/12 HP BIG Plus in-line belted 10,000 rpm spindle. Milltronics will be at IMTS 2012 at Booth S-8329. For more information, visit www.milltronics.net.
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Focus
AMBA Scholarship Awar ds Contr ibute to Cinder ella Story
The American Mold Builders Association (AMBA) recently awarded scholarship funds to students of AMBA members nationwide. The Annual Scholarship Program continues to demonstrate AMBAs commitment to the industry, education and offering valuable member benefits. In 2011, the AMBA Annual Scholarship Program underwent some critical changes in application criteria in order to better channel funds back into the industry to support those going into moldmaking or a related trade. This years awards not only continued in this new direction but contributed to one special Cinderella Story of particular note. 2012 AMBA Scholarship Recipient Barbara Flemming of Metro Mold & Design, Rogers, MN, returned to college to earn her Associates Degree in Management Accounting. Making the decision to go back to school and hold down a full-time job while maintaining family commitments is no small feat. When I committed to returning to college for my degree, I set two goals, said Flemming. The first was to study hard and get everything I can from every class. The second was to keep the financial impact as low as possible. I am happy to say I succeeded at both.
Larry Hauck (left), general manager, presents the AMBA scholarship award to Aleksandra Avrutina, whose father, Gennadiy Avrutin (right), is an EDM machine operator at P M Mold Company.
Sharing her Cinderella Story with the AMBA Scholarship Committee, she recounted that the AMBAs $1000 scholarship award was matched by the Minnesota School of Business, thereby doubling the award. My pumpkin turned into a $2,000 chariot at the last minute, said Flemming. On a final note, she was awarded Highest Honors on graduation night and looks forward to using her degree to further develop her career at Metro Mold in project management. Over the course of my college career, I took advantage of perfect attendance rewards, testing out of classes, selling books back and the AMBA scholarship award to accumulate a pretty big cost savings. The total savings ended up being over $8,000, said Flemming! I thank the AMBA very much for the generous award that greatly contributed to that. Each year the national office of the AMBA awards scholarships to the employees or dependants of employees of AMBA member companies. The Annual Scholarship Program is designed to help facilitate education in moldmaking in the US. This scholarships priority is to assist students who desire to pursue a career in mold design, CAD/CAM programming for machine tools, machine tool skills or moldmaking, plastics industry manufacturing (including plastics engineering, plastic part design or plastics processing technician) and other areas of continued training/education. To date, the
Barbara Flemming, an accountant at Metro Mold & Design, is presented with an AMBA scholarship by Tony Nuss, COO and supervisor.
Summer 2012
AMBAs Annual Scholarship Program has awarded over $225,000 since its inception in 1991. The AMBA wishes to congratulate the following 2012 AMBA Scholarship Recipients and wishes them the best in their endeavors: Rachel M. Schmitt, Lansing Community College, daughter of Beverly Schmitt, Accountant at Franchino Mold & Engineering Aleksandra Avrutina, Milwaukee Institute of Art and Design, daughter of Gennadiy Avrutina, EDM Machine Operator at PM Mold Company Kaylee Wieringa, Ferris State University, daughter of John Wieringa, Moldmaker at Die-Tech and Engineering
Beverly Schmidt, an accountant at Franchino Mold, is presented with a scholarship award by Bob Franchino, the company president. Beverly is accepting the award on behalf of her daughter Rachel.
Barbara Flemming, Minnesota School of Business Elk River, Accountant at Metro Mold & Design Jacob A. Sorenson, Muskegon Commuity College, Welder at Viking Tool and Engineering
The specialty steel industry is not as big as some may think. In reality, buyers only have 2 choices when it comes to specialty steel suppliers in North America. One supplier is posing as three separate companies, but operates as a joined enterprise. And the other is a bit more nimble. Ellwood Specialty Steel is the number-one choice for fast service and faster delivery, on the day promised or earlier. Whether you need a quote or have a question, ESS stands ready to meet and exceed expectations, every time. For more information on how to avoid the 3-headed enterprise or to get a fair and independent quote, please visit http://nostrings.elwd.com
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inside Track
Equipment Breakdown Coverage - an Accident Waiting to Happen
By Rick Miller, Acrisure
I have been insuring mold builders for over 30 years and in looking back over that period, its surprising to see that the most common type of loss to those shops is not what you might think....its not fire, explosion or tornados; its equipment and machinery breakdown! Lets define a few items so that you have a better understanding of how Equipment Breakdown coverage can help your business. Mechanical failure including rupture or bursting by centrifugal force Electrical failure including arching that causes direct physical loss or damage to your covered equipment
What is covered equipment?
What is an equipment breakdown incident or loss?
The common insurance policy for Equipment Breakdown Coverage defines it as

CRY-2883 Prelim1-1.fh11 1/15/07 3:33 PM Page 1
Equipment designed and built to operate under internal pressure or vacuum Communication equipment and computer equipment Fiber optic cable Any other electrical or mechanical equipment that is used in the generation, transmission or utilization of energy Equipment Breakdown Coverage is intended to cover those sudden and accidental physical breakdowns to your equipment but you also must be aware of what it will not cover. Here are the normal exclusions found in many policies: Leakage at any valve, fitting, shaft seal, gland packing, joint or connection Malfunction including but not limited to adjustment, alignment, calibration, cleaning or modification The function of any safety or protective device Defects, erasures, errors, limitations or viruses in any computer equipment, data, media and/or programs Depletion, deterioration, rust, corrosion, erosion, settling and wear and tear The following is just a short list of claim examples that have occurred in mold building shops that we have seen over the years: 1) 2) 3) 4) 5) 6) Operator error on a CNC vertical mill ($18,500) Power board malfunction in a CNC EDM ($37,000) Probe explosion due to high RPMs in a CNC mill ($38,000) Spindle damage to a 5-axis CNC mill ($52,000) Air conditioning compressor failure ($64,000) Counterweight malfunction and damage to a large horizontal boring mill ($600,000)
A failure of pressure or vacuum equipment

C M Y CM MY CY
CMY
In many of these loss examples, business interruption occurred. This could be in the form of extra expenses to
Composite
Summer 2012
have your people work overtime or having the work done by another shop. Business interruption also can include the loss of future work due to not having a key piece of equipment available while it is being repaired. Here are some recommended steps in the reporting of an Equipment Breakdown loss: 1) Timely reporting. Do it immediately, even if you are not sure if it is a covered loss. Notify the insurance company and your agent. 2) Immediately start repairs. 3) Take pictures of the damaged machine and damaged parts. Retain the damaged parts so that the adjuster can examine them. 4) Document the following: Timeframes and activities leading up to the machine going down Keep records on all hours spent to repair the damage and/or to move the work from the damaged machine to an alternate one. Keep track of any overtime necessary to meet deadlines that the damaged machine has caused for the shop
Document all outsourcing of the work to other companies 5) Designate a key person in the shop to handle all aspects of the claim and answer the claims adjusters questions. 6) Before a loss occurs, try to develop a contingency plan for the shop. It may take a considerable amount of time to obtain repair parts for foreign-built machines. Equipment Breakdown Coverage is an important part to insuring your business properly. The average cost to have this important coverage on your Commercial Policy is approximately 30 to 60 cents/$1,000 of value. If you had a $1,000,000 building and contents of $3,000,000, the coverage would cost you approximately $1,200 to $2,400, depending on where your facility is located, the type of equipment you have and your insurance carrier. Acrisure is the AMBA-endorsed commercial insurance program providing competitive insurance tailored to the mold building industry. For more details, visit www.acrisure.com/programs/amba/ or email Rick Miller at rmiller@thecampbellgrp.com.
Corroplast FM is the new stainless steel mold base material available exclusively from SCHMOLZ+BICKENBACH. The team of metallurgical engineers from Deutsche Edelstahlwerke GmbH specically developed this grade for the plastics tooling industry. Corroplast FM offers the benets of an improved microstructure, superior machinability and excellent corrosion resistance compared to other free machining stainless grades. Corroplast FM is ideally suited for mold bases, manifold plates, hot halves and other plastics tooling associated with processing corrosive resins (PVC) or used in corrosive manufacturing environments. For more information about Corroplast FM, please visit our website or contact us at (800) 323-1233 ext. 2295.
USA www.schmolz-bickenbach.us (800) 323-1233 Canada www.schmolz-bickenbach.ca (800) 268-4977
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Association
AMBA Night at the Ballpark in Conjunction with IMTS 2012
Coming to Chicago for IMTS? Join your fellow moldmakers at AMBAs Night at the Ballpark. At 7:10 p.m. on Thursday Sept. 13, the Chicago White Sox will play will play the Detroit Tigers at the US Cellular Field. Join us for networking and taking in a game. The Warning Track Patio has been reserved for the AMBA group. Tickets are $95 per person, (includes game ticket and unlimited food and drink from 5:30-7:30 pm). Round-trip bus transportation will be provided to and from McCormick Place to US Cellular Field. Call 847.222.9402 or email sdaniels@amba.org to reserve tickets.
Thank you to the Night at the Ballpark Sponsors:
New Webinars from AMBA

Protect Your Molds during Shipment and Delivery
Wednesday, Aug. 15, 2012, Noon - 12:45 p.m. CT Presenters: Rick Miller and Jay Fagan, Acrisure Cost: AMBA members - Free and Non-members - $50
Social Networking Brings New Challenges for Employers
Join this 45-minute presentation (free to members) to learn what you should know about protecting your molds when you place them in the custody of a Common Carrier. There are many factors to consider and many opportunities for things to go wrong while a mold is being transported to a customer site, so learn what you need to do to protect the mold shipment while its in transit from your site to the delivery location. Find out who carries the liability for any damage or loss that occurs to the mold during transport, and how to best prevent and handle these situations. In addition, this webinar will cover the following important shipping terms and forms with which you should be familiar: Released Bill of Lading / Uniform Straight Bill of Lading Motor Carriers (unfiled) Tariffs Carmack Amendment and its impact on Interstate Shipping Laws EXW (Ex Works) International Trade Terms for overseas shipments The webinar will discuss a broad range of issues encountered by mold builders when shipping molds, and also will include a review of International Terms and Conditions as they apply to the shipment of new equipment from overseas sites.
Summer 2012
Wednesday, Sept. 19, 2012, Noon - 1 p.m. CT Presenter: Paul Bittner, Ice Miller, LLP Cost: AMBA members - $25 and Non-members - $50 Facebook, Twitter, LinkedIn ...studies report that social networking dominates our time spent online. Join this webinar to hear about the latest trends and best practices for employers regarding social networking, monitoring and electronic use policies. In addition, learn about what to do when employees are using social networking sites in a way that impacts their employers business. This 60-minute webinar will highlight some of the new issues raised with the boom of social media. Paul Bittner of Ice Miller, LLP will discuss the following: Social networking effects on business The National Labor Relations Board requirements Electronic use policies Social media when making hiring decisions Privacy rights How does your company compare? What employers can do Register online at www.amba.org/Webinar_Registration.php.
P R O D U C T I O N
A R T
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2012 MMT Leadtime Leader Award Winners Announced
Two long-time AMBA member companies were selected as this years winners of the 10th Annual MoldMaking Technology (MMT) magazine Leadtime Leader Awards. This years winner is Industrial Molds Group, Rockford, IL, and the 2012 honorable mention winner is M & M Tool and Mold, Green Bay, WI. These awardspresented by MMT and Progressive Componentshonor outstanding moldmakers who best demonstrate overall innovation, efficiency, quality and commitment. For more information, visit MMT at www.moldmakingtechnology.com.
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AMBA Plant Tour Workshop Industrial Molds Group Productivity through Teamwork - One US Moldmakers Strategy to Competing in the Global Marketplace
Sept. 13, 2012 9 a.m. - 1 p.m. On Sept. 13, Industrial Molds Group, Rockford, IL, breaks the mold when it comes to the way it manages its moldmaking business! With nearly 45 years in the business of making high-quality injection molds, the associates at Industrial Molds Group have learned a very valuable lesson: building the highest quality molds in a world manufacturing economy isnt just about having experienced engineering and modern manufacturing capabilities. More importantly, its about achieving excellence at every step of the project process. At Industrial Molds, the process of manufacturing a mold doesnt hinge on one or two key people. Instead, it literally involves the entire company on each project and utilizes the Team Approach to set itself apart from other US-based mold builders. Integrating a team-based approach as soon as a quotation is received ensures that input from all facets of the organization is gathered in order to maximize design optimization. It also ensures end customers that their molds will run efficiently in the production process. Once out of the design phase, concurrent manufacturing ensures delivery dates are met with nearly 60-80 percent of each project funneling through automation cells. For more information or to register, visit www.amba.org. Special Thanks to the Tour Workshop Sponsors:
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Welcome New Members and Partners

Members Rexam Mold Manufacturing, Buffalo Grove, IL
Len Graham, Business Unit Leader 847.325.3043 www.rexam.com Rexam Mold is a global mold manufacturer supplying the needs of medical, consumer packaging and closure markets. Rexam provides full support from product design assistance to mold qualifications.
Partners TST Tooling Software Technology LLC, Clarkston, MI
A & C Mold Co. Inc., St. Charles, IL
Jim Kesteloot, President 248.922.9293 www.tst-software.com North American provider of Visi software offering consulting, training (onsite/offsite) classes, TST custom applications, die design and help desk support. TSTs complete mission and commitment is to provide the complete solution for the mold industry.
Andrew Mendala, CEO/President 630.587.0177 www.acmold.com With a customer base spanning different industries, A & C Mold has been able to rise to meet various customers challenges and create a mold to fit customer needs. Whether a simple injection mold or a series of complex pieces, AC Mold has the tools and the knowledge to complete any project in both the rubber and plastics industries.
Bohler-Uddeholm Corp., Elgin, IL
Kevin Rochford, Director of Sales 800.638.2520 www.bucorp.com Provider of mold base steel and related machining services, including saw cutting, rotary and surface grinding, milling, handling holes and clamping slots and more.
Meusburger US, Inc., Charlotte, NC Iris Winkelbauer-Hoelzl, President 704.280.8411 www.meusburger.com Meusburger is a leading manufacturer in the field of standard parts for mold and toolmaking and sells its products in more than 50 different countries. The company operates several sales offices, one of them in Charlotte, NC.
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Summer 2012
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industry
IMTS Show 2012 to Host First-Ever Job Center
IMTS The International Manufacturing Technology Show 2012 will partner with experts from Trillium CNC / CNC Jobs to bring the first-ever IMTS Job Center to IMTS which is being held Sept. 10-15 at Chicagos McCormick Place. Located in the West Building Booth W-200, the IMTS 2012 Job Center will provide a forum for the IMTS community to learn more about and make connections to careers in manufacturing. Companies will have access to top-level talent for manufacturing positions, and job seekers will find countless resources as they search for their next career opportunity. Using the IMTS Job Center, high-performance manufacturing professionals can search available jobs, post resumes and be interviewed by recruiters in private interview rooms. Employers can speak with industry experts on the best ways to attract and screen the strongest candidates for technical manufacturing positions. Advice will be provided ranging from recruitment, advertising and screening to employee recognition. We bring over 28 years of experience in technical recruitment and staffing expertise to what we view as North Americas most important manufacturing event, says Bob Lawson, director, Trillium CNC / CNC Jobs. As the battle to staff skilled talent in manufacturing continues to grow, it is more important than ever to have access to the tools and expertise that can help companies attract and maintain a highly skilled workforce. Employers and job seekers can prepare for a visit to the IMTS 2012 Job Center before the show in a number of ways: Employers should compile a list of open positions to fill or those that may need to be filled in the near future with complete job descriptions and skill requirements and bring business cards. Job seekers should create a basic resume including previous work history and contact information. Create a reference sheet including names and contact information for previous supervisors. Job seekers are encouraged to bring both documents on a memory stick for easy uploading or printing in the IMTS Job Center. Those who need immediate career search assistance should register at www.trilliumjobs.com to view non-confidential opportunities. For more information, visit www.imts.com.
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Summer 2012
Tech Mold Inc., Tempe, AZ, a leading designer and manufacturer of high-tech, multi-cavity injection molds for high-volume production for the packaging (caps and closures), medical disposables and consumer products markets, is celebrating 40 years in business in 2012. Tech Mold was founded in 1972 by Bill Kushmaul, a Bill Kushmaul stands by a 96-cavity moldmaker by trade, mold, in which Tech Mold specializes. who has been in the industry for 58 years. New industries, particularly the personal computer industry, business equipment and telecommunications, led the charge and created a huge demand for plastic components. Tech Molds success was tied closely to that growth. Today, Tech Mold employs just over 80 people, and Kushmaul considers that a big responsibility. Once you hire people youre responsible for them, and I take that responsibility very seriously, he said. For Kushmaul, its not all about business however. He considers his greatest accomplishment to be that of balancing the needs of his family with the needs of the business. Balance is very important, he stressed. Balancing work and family means that you can find that place where you are comfortable and can be happy. One the main reasons any of us do what we do here is for our families.
Tech Mold Celebrates 40 Years in Business
thickness. The aluminum cores and cavities are housed in 4140 steel, with P-20 for the nozzle seats and other components where wear is a consideration, to protect the aluminum cores and cavities. The second- and third-largest production aluminum plastic injection molds designed and built by Franchino are a 211,000-lb mold with a 35-drop hot manifold and a shot weight of 134 lbs, and a 215,500lb mold with a 27-drop hot manifold for multimaterial molding and a shot weight of 118 lbs. Founded in 1955, Franchino designs, engineers, and manufactures custom die-cast dies and plastic injection molds, and also provides contract machining and engineering services. For more information, visit www.franchino.com.
Westminster Tool and OMNI Mold Systems Announce Strategic Partnership
Westminster Tool Inc., Plainfield, CT, a manufacturer of precision injection molds that specializes in providing innovative manufacturing solutions for the plastics and composites industries, is pleased to announce the formation of a strategic partnership with OMNI Mold
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Huge Aluminum Molds Completed by Franchino
Three of the largest production aluminum molds ever manufactured were recently completed by Franchino Mold and Engineering (Lansing, MI). The largest, weighing 300,000 lbs, has a 50-drop hot manifold and was constructed using multiple materials including 5000- and 7000-series aluminum, and 4140 and P-20 steel. The shot weight is 176 lbs. The mold was created for a leading septic and storm-water product manufacturer in the US. Todd Phillips, VP of sales & engineering for Franchino, said that according to Vista Metals (Fontana, CA), an international supplier of specialty aluminum products that poured the blocks, and Clinton Aluminum, which cut and squared the mold blocks for the mold, these were the largest theyd ever been requested to make. Phillips said that the cores and cavities are aluminum because the customer needed faster cooling times for the part, which has a 0.25-inch wall
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Systems of Lisbon, CT, a supplier of standardized mold components. Westminster Tool and OMNI Mold Systems have been doing business together for over ten years. Both companies believe a formal strategic partnership will enhance their ability to bring their customers products to the market faster. In 1994 OMNI Mold Systems developed the idea of maintaining a complete inventory of standard mold bases and Versa-Slide slide components, creating the ability to ship all orders in one day. Westminster Tool incorporates OMNI Mold Systems standardized mold components as part of its customized solutions to ensure completed products are ready for production. Maximizing B2B relationships has been at the core of Westminster Tool for years. Most recently, in addition to its strategic partnership with OMNI Mold Systems, Westminster Tool also has partnered with Roehr Tool Corporation and Single Temperature Controls. For more information, visit Omni Mold Systems at www.omnimold.com or Westminster Tool at www.westminstertool.com.
Commercial Tool & DIE Earns Safety Award
Commercial Tool & Die, Inc., Comstock Park, MI, recently received the prestigious Michigan Safety and Health Achievement Recognition Program (SHARP) Award today for an exemplary safety and health management system. The Michigan Occupational Safety and Health Administration (MIOSHA) established the Michigan SHARP Award to recognize employers that have achieved workplace safety and health excellence far beyond their peers. MIOSHA CET Division Director Nella DavisRay presented the SHARP Award to the Commercial Tool Health and Safety Committee on behalf of all employees in early August at an awards ceremony and luncheon. All employees are entitled to a safe and healthy workplace. A positive environment with open communication, employee involvement and participation and a respect for one another has helped us achieve high levels of safety performance, said Commercial Tool Owner and CEO Douglas Bouwman. Commercial Tool & Die, Inc. is a leading manufacturer of plastic injection molds, checking fixtures, special machinery, aerospace tooling and custom molding. Commercial provides quality service to the automotive, medical device, appliance, aerospace and hardware industries. For more information, visit www.commercialtoolgroup.com.
Single Part Award in the International Plastics Design Competition (IPDC) at NPE2012 in April. Industrial Molds next captured the Leadtime Leader Award given at the recent amerimold trade show in Novi, MI. The company, founded by the Peterson family patriarch, Jack Peterson in 1968, has grown to become one of the largest and most recognized mold companies in the Midwest. With 60 employees including a top-notch engineering team, and recent investments in automation and machine tool capabilities, Industrial Molds Group has managed to cut its leadtime for new mold design and build to eight weeks. Over the past three years, Industrial Molds has invested more than $1 million in state-of-the-art highspeed machining, EDM equipment and software. It also has invested in hiring and training the best moldmakers available. Today the company is run by a management team of John Kuntze, CFO, and brothers Eric Peterson, operations manager, and Tim Peterson, who also serves as sales manager. We understand that any company can buy equipment, but it is the creativity of our engineers, the innovative thinking of our mold designers and the precision skills of our machinists and moldmakers that make the difference and put us on the cutting edge, said Tim Peterson.
Metro Mold and Design Launches Medical Expansion
Industrial Molds Group on Winning Track
Industrial Molds Group, Rockford, IL, is the proud manufacturer of a complex mold in a metal-to-plastic conversion of a water outlet for customer MPC that won the
Summer 2012
Metro Mold and Design, Rogers, MN, is adding six electric injection molding machines and one new blowmolding machine this year as part of a major expansion in the medical field. Metro Mold and Design does rapid mold manufacturing, custom injection molding, thermoset plastic molding, extrusion blowmolding, precision CNC machining, product prototyping and product assembly and finishing. Major customer markets include general manufacturing, medical devices, fuel cell components specializing in bi-polar plates for the fuel cell stack, printer components, custom plastic containers and enclosures. Metro Mold President and CEO Tim Holland said, "We have been experiencing tremendous growth in our precision molding and precision machining solutions over the last six to eight years and the medical segment was the next logical market to apply our experience producing high-precision parts." Currently, 20 percent of the company's business is for medical customers. MMD serves many US Fortune 500 medical device makers and most of the top medical device companies in the Twin Cities market. A new facility in Brooklyn Park, MN, has the capacity to employ 250 people. "Our investment in this new facility displays our commitment to growing
along with our customers. It was a critical next step for MMD that will allow us to serve the growing needs of our medical OEM customers and foster a collaborative environment that spawns the intellectual property MMD and its partners need to thrive in today's global economy," said Holland.
C U T T I N G
E D G E
S O L U T I O N S
SCHMOLZ+BICKENBACH USA, INC., Brea, CA, has begun stocking tooling materials at its existing warehouse in Brea, CA, to better serve its customers in the western US. The products stocked in Brea include Formadur Plastic Mold Steels, Thermodur Hot Work Die Steels, Cryodur Cold Work Tool Steels and MoldMAX Copper-based alloys produced by Materion Brush Wellman. The Brea Service Center is one of seven locations for distribution in North America. The improved access to the local tooling market allows SCHMOLZ+BICKENBACH USA to provide faster deliveries to its customers in the region with reduced logistical challenges. For more information visit www.schmolz-bickenbach.us
SCHMOLZ + BICKENBACH Expands Tooling Materials Inventory to CA
Insert & solid carbide tools for conventional, high speed & hard milling. Inch and metric sizes 0.020 to 1 1/4 & 0.5 to 32 mm Ball nose, toroid, bull nose, square & back draft tools for virtually every milling application Cut cores, cavities & surfaces cleaner, smoother & faster
CLM Buys Die-Sep
CLM Marketing, Inc., an investor group headed by brothers Charles, Louis and Michael Bowler, recently acquired the assets of Die-Sep, LLC. Terms were not disclosed. Die-Sep, LLC was owned and operated by Joe and Lynne Forrestal of Janesville, WI. Forrestal, a former injection molding maintenance manager, invented the DieSep machine to replace the half hour-plus tedious method of using cranes, pry bars and hammers to open his firms molds with a three-minute method. Using his invention to open, tip up one half, return that half to a down position and close the mold significantly shortened the time period needed, protected the mold from pry-bar damage and reduced the potential for worker injuries. A core-pull for activating cores also is available. Die-Sep benefits a tool room in many ways other than opening molds, tipping mold halves and closing molds. Some additional benefits include working cores, tipping entire molds, pulling plates, bluing, checking for leaks, timing of molds, reducing injuries to tool room personnel and eliminating the potential damage to molds from prying them open with a pry bar. For additional information, contact Mike Bowler by email at mike@diesep.com or by phone at 225.464.6424 or Louis Bowler, louis@diesep.com, 262.767.9751.
WORLD HEADQUARTERS 30200 Ryan Road Warren, MI 48092 U.S.A. Tel: (586) 573-9450 Toll Free: 877-645-5782 877-MILLSTAR Fax: (586) 573-9451 info@millstar.com www.millstar.com
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Strategies
Terms and Conditions: Contracting for Economic Uncertainty
By Alan Rothenbuecher, Ice Miller LLP
Given the challenging economic times, we are all looking for ways to improve the bottom line. Even after combating some of the more traditional problems that erode profit such as raw material costs, machine rates and labor expenses, a business bottom line is still subject to significant exposure if its sales terms and conditions (T&Cs) are deficient. T&Cs can be one of the most valuable defenses to economic uncertainty and dealing with financially distressed customers. Unfortunately, more often than not, T&Cs create more ambiguity than they eliminate. Highlighted in this article are some of the most common deficiencies, all of which represent ideal opportunities for shifting risk and lowering exposure in customer relationships. unless you do something affirmative to get rid of it. Implied warranties not only provide that your product is fit for the ordinary purposes for which the product is to be used, but also can be expanded depending on how long the supplier has been dealing with the customer and what the supplier should have reasonably known about how the customer would use the products. The best way to avoid liability for an express warranty is not to make one in the first place. Unfortunately, that also is the best way to avoid selling your products. After all, you make an express warranty every time you adopt specifications, say something orally about your product or point to a sample or model. Having done one or all of these things, you have created customer expectations that your product will comply with the representations made. One option is to live with the liability assumed by these representations. Your other option is to disclaim or at least limit those express warranties to the ones you think you and your product can live up to. Unfortunately, this is a very tricky course to navigate because there is a strong public policy against disclaiming representations you make to generate business. Therefore, any disclaimer of an express warranty must be crafted very carefully. Here, form can be as important as substance. Unless a disclosure of warranties is properly formatted to be conspicuous, it can be void. And, if an express warranty has vague or imprecise language, it can result in a warranty so broad as to undermine any disclaimers. The takeaway is that this is not an area of law that is friendly to suppliers. Unlike most contract law, where courts will look at what you and the customer agreed upon, this area is rife with minefields for the unknowing. Do not be in a position where you are held responsible for warranties that you did not make or even know existed.
Warranties: What you say and what you dont say about your products
T&Cs need to be drafted in a way that both you and your customers know what you are representing as to the quality of your product and what you are not representing. Express warranties (what you are representing) are only created when you do something affirmative. Implied warranties, on the other hand, are automatically a part of your contract with your customer unless you do something to limit or exclude them. Your T&Cs need to be carefully crafted so that both you and your customer know which express warranties are in the contract and which implied warranties are not in the contract. It is important to keep in mind that a warranty is not simply limited to any written warranty, but will include certain warranties implied by the law unless properly disclaimed. Unknowingly, you can be assuming a warranty obligation that is dramatically broader than what you have put in black and white. For example, the implied warranty of merchantability is part of your contract with your customer
Summer 2012
Terms and Conditions can be one of the most valuable defenses to economic uncertainty and dealing with financially distressed customers, thereby shifting risk and lowering exposure in customer relationships
Remedies: what is my exposure?
Even if warranties are properly addressed, unless the T&Cs limit the buyers remedy to repair, replace or return of the product for the purchase price, the scope of recovery can become rather broad and include the costs of repairing products of which it is a component, the cost of procuring substitute goods and similar obligations. This exposure could be broadened further by the indirect, special and consequential damages discussed below. T&Cs often limit recovery to repair of defective goods, replacement with conforming goods or repayment of purchase price. Ideally, these options are identified as the buyers exclusive remedy. However, if your T&Cs dont disclaim indirect, consequential or special damages, you are leaving the door open for much more significant exposure. The reason that most suppliers dont exclude these types of damages in their T&Cs is because they do not know what these other damages mean or the wide range of expenses covered by these types of damages. Indirect damages include reasonable charges, expenses and commission incurred in covering any other reasonable expense related to the delay of delivery or sale of defective goods. Consequential damages include any loss resulting from the general or particular requirements of your customer that you knew or should have known about. For example, if you deliver defective products to a manufacturer, there is a strong argument that you should have known that defective goods would cause a disruption of production and consequently, loss of profits. Special damages can include anything that flows from the error and can cover remote losses if youve had a long relationship with the customer. In an economic downturn, customers are going to be watching the bottom line as closely as you are, and you cannot afford to be stuck with bills for lost profits, downtime, personal injury and property damage. If your customers are large operations, these are the kinds of claims that can reach a magnitude that may result in having to shut the doors. Late or non-paying customers are an all too common theme in todays business landscape. Getting out in front of issues with financially distressed customers is absolutely critical in this climate. All too often, T&Cs fail to provide some basic tools a vendor can use to deal with a delinquent customer, such as the assessment of late fees (to ensure that customers do not start to use the supplier as a bank) and the ability to recover all costs of collection (including attorneys fees). Dont be in a position where you have to ask yourself, Is it worth getting paid what I am owed?
You have already upheld your end of the contract; you should not have to pay to get them to uphold their end. Surprises are not only bad for the bottom line, but can be injurious to your relationship with the customer. The phone call after a shipment of late or defective goods may never be welcome, but it can be less rancorous if you have been clear about the extent of your financial liabilities from the start. In addition, you can point out that you include these limitations in T&Cs with all your customers, thereby protecting your financial viability in these uncertain times. This means that customers may have to eat some of the costs that flow from error, but it also means they have a supplier they can depend upon to keep producing the products they need.
Fine line between adding value and increasing exposure
Rarely is a vendor-customer relationship quite as simple as I make you buy. Often, the supplier plays an active role in developing specifications for the products and perhaps even in tooling development. These value-added services can mean getting and keeping the business, but also represent an additional source of risks for a supplier. This sometimes blurry line between adding value and increasing exposure raises key questions. Who owns the tooling or product design? Whose problem is it if there is a design defect? What if a third party sues because there is an intellectual property infringement with respect to the design? The lack of a clear-cut answer to these questions can be a source of friction with a customer. Far worse, any ambiguity can represent inadvertently assigning intellectual property or proprietary rights to another party or finding oneself in the cross-hairs should a customer be pursued for claims related to tooling or a product design the vendor helped (even marginally) develop. While there is no standard way to answer these questions because every relationship is different, vendors need to get out in front of these issues in their T&Cs. What should be consistent, however, is that you should only be held responsible for those facets of the project over which you had some control and, frankly, for which you are paid.
The takeaway
As businesses are becoming increasingly concerned with the financial health of their vendors given the economy, they are beginning to run the numbers on how much it would cost them if their suppliers go under or their custom-made products cannot be made. As a result, companies appear
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to be becoming more collaborative recently because both sides of the table have a vested interest in keeping each others business viable. As these dialogues spring up, they may present a great opportunity to clarify the nature of the obligations within even existing relationships and to ensure your T&Cs reflect that understanding. Tightening up business terms and shrinking exposure are the low-hanging fruit of cost-cutting. They are steps rather easily taken when considered against the backdrop of more dramatic approaches, such as workforce reductions and benefits cuts. Giving T&Cs a thoughtful review is always important, but is an absolute must in these difficult economic times. This publication is intended for general information purposes only and does not and is not intended to constitute legal advice. The reader should consult with legal counsel to determine how laws or decisions discussed herein apply to the readers specific circumstances. The article was originally published in the Spring 2009 issue of Plastics Business. Alan Rothenbuecher is a partner at Ice Miller LLP. His practice consists of complex business litigation involving trade secrets as well as false advertising, business torts and infringement. He also has a significant immigration practice. He can be reached at 216.394.5075 or har@icemiller.com.
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Strategies
Midsized Manufacturers are Major Benefactors of the R&D Tax Credit
By Saqib Dhanani and Rebecca Icenogle, Paradigm Partners
Confirmed by the latest IRS statistics (The article is based on the latest data available from the IRS so the charts are current per available data. Based on historical data, the numbers would vary minimally so although the data is not more recent the essence of the article would remain the same.) We hear it all the time from prospects: Were a manufacturer, not an engineering firm. Im not sure we really do R&D, or Were not a Fortune 500 company; Im not sure we have enough R&D to file for a credit. When it comes to the Credit for Increasing Research Activities (I.R.C. 41, the R&D credit), there is a common misconception that if you dont have a laboratory, a dedicated R&D division, or an engineer on staff, you wont qualify for the R&D credit. While those things can certainly be evidence of R&D, they are far from being the only factors.
Percentage of R&D Credits Claimed by Manufacturers
69% 69% 69% 72% 71% 2005 Percentage Claimed by Professional, Scientific, and Technical Services Companies Percentage Claimed by Manufacturers
manufacturers frequently have more R&D than they think and are ideal candidates for filing the R&D credit. Part of the misconception about who can take the R&D credit stems from the definition of R&D. Put simply, 41 has a four-part test for qualified expenses: 1. The activity must be for the design and/or development of a new or improved business component. 2. There must be technical uncertainty inherent in the developmental process. 3. A process of experimentation must be undertaken in order to eliminate the technical uncertainties encountered during design and development. 4. The process of experimentation must rely on one or more of the hard sciences, such as engineering, physics or chemistry. The many rules and exceptions that make up the R&D tax credit can make companies, especially manufacturers, think that they have no qualified research activities when they actually do. Although traversing these complexities can be difficult, with the help of tax professionals, many manufacturers have found that they do have activities that qualify them for significant R&D credits. An equally common misconception is that only large, Fortune 500 companies can benefit from the R&D credit. Actually, among manufacturers, midsized companies claim the credit far more frequently. This is due in part to the fact that midsized manufacturers frequently spend time doing small, customized and one-off projects as well as prototyping, whereas larger manufacturers often have a greater focus on non-qualified production. The next chart shows that midsized manufacturers (those with receipts between $1,000,000 and $100,000,000) make up the vast majority of manufacturers filing for the credit. Midsized manufacturers generally claim approximately 70 percent of the total credits claimed by manufacturers3. Further, as the chart below shows, those midsized companies are not just the manufacturers with receipts in the $50-100 million range. In most years, the manufacturers claiming credits come equally, if not more frequently,
21.17% 21.16% 20.84% 18.36% 18.59% 9% 9% 10% 10% 10%
2009
Percentage Claimed by All Others
In reality, manufacturing companies actually benefit from the R&D credit more than any other group. Since 2005, manufacturers have consistently claimed approximately 70 percent of the total amount of R&D credits given out by the federal government1. The term R&D conjures the idea of laboratories, engineering firms and other organizations that focus solely on scientific research. However, as the first chart demonstrates, professional, scientific and technical services companies make up a very small percentage of the credit when compared with manufacturers2. Manufacturers consistently have claimed around 70 percent of the R&D Tax Credits since 2005. This is due in part to the fact that manufacturing companies frequently have numerous types of activities that may not seem like traditional R&D but actually do meet the requirements of 41 for purposes of finding qualified research expenses for the R&D credit. As a result,
Summer 2012
Percentages based on statistics on total credit amounts versus amounts claimed by manufacturers and professions, scientific and technical services companies in each year. www.irs.gov/taxstats/article/0,,id=164402,00.html. Percentages based on IRS statistics on Corporations Claiming a Credit, by Manufacturing Subsector. www.irs.gov/taxstats/article/0,,id=164402,00.html. Id. Saqib Dhanani and Rebecca Icenogle are both Attorneys at Law with Paradigm Partners. Paradigm Partners is a national consulting firm specializing in complex federal and state tax and funding incentives for both public and private entities across a host of industries. The companys core consulting portfolio includes R&D Tax Credits Analyses, Hiring and Location Tax Incentives, Grant and Non-dilutive Funding Advising, IC-DISC, Cost Segregation Studies and Tax Controversy, Patent and Audit Defense Services. For more information, contact Saqib Dhanani at SDhanani@ParadigmLP.com, 281.558.7100 or visit www.ParadigmLP.com.
from the $1-10 million than the $10-100 million range4. From 2007-2009, manufacturers with $1-10 million in gross receipts claimed an average of 37 percent of the total credits and manufacturers with $10-100 million in gross receipts claimed an average of 33 percent of the credits claimed by manufacturers. Across the spectrum of midsized manufacturers, companies are finding R&D tax benefits related to their own market niche.
In summary, midsized manufacturers are the big winners when it comes to benefitting from the Credit for Increasing Research Activities. While navigating the twists and turns of the R&D credit can seem daunting, with a little help from tax professionals, many companies are finding it can be a very rewarding endeavor. Just because a company is on the smaller side or does not have an R&D department does not mean it will not find benefit from the R&D credit. On the contrary, as the charts above show, it is the midsized manufacturer that has the most to gain.
1
Number calculated from statistics on total credit amounts claimed and amount of credit claimed by manufacturers in each year from 2005-2009. www.irs.gov/taxstats/article/0,,id=164402,00.html.
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CALE nDA R
AuguST
AMBA Webinar: Protect Your Molds during Shipment and Delivery, August 15, 847.222.9402, Register at www.amba.org/Webinars.php
AMBA Webinar: Social Networking Brings New Challenges for Employers, Sept. 19, 847.222.9402, Register at www.amba.org/Webinars.php
OCTOBer
SePTeMBer
AMBA Webinar: Mold Lien Laws, Oct. 3, 847.222.9402, Register at www.amba.org/Webinars.php 2012 International Rubber Expo, Oct. 9-11, Cincinnati, OH, 330.972.7814, www.rubber.org/2012-rubber-expo PACK EXPO International, Oct. 28-31, Chicago, IL, 703.243.8555, www.packexpo.com
IMTS 2012, Sept. 10-15, Chicago, IL, 703.893.2900, www.imts.com AMBA Plant Tour Workshop, Industrial Molds Group, Sept. 13, Rockford, IL, 847.222.9402, www.amba.org AMBA Night at the Ballpark, US Cellular Field, Sept. 13, Chicago, IL, 847.222.9402, www.amba.org
NOveMBer
Euromold 2012, Nov. 27-30, Frankfurt, Germany, 49.69.27.40.03.0, www.euromold.com
Ad index
Acrisure ....................................................................... www.acrisure.com ...........................................Inside Back Cover A. Finkl & Sons Co..................................................... www.finkl.com .........................................................................39 AMBA......................................................................... www.amba.org ..........................................................................38 CAE............................................................................. www.caeservices.com ...............................................................21 CGS North America, Inc............................................. www.camtool.com.....................................................................41 Crystallume Engineered Diamond .............................. www.crystallume.com ...............................................................26 DME Company ........................................................... www.dme.net.............................................................................30 DMS ............................................................................ www.dmscomponents.com..........................................................5 Dynamic Surface Technologies .................................. www.dynablue.com ........................................ Inside Front Cover Ellwood Specialty Steel .............................................. www.ess.elwd.com ....................................................................25 Erowa Technology, Inc. .............................................. www.erowatech.com .................................................................32 First American Payment Systems ............................... www.first-american.net .............................................................31 Harroun Enterprises .................................................... www.harroun.com .....................................................................22 Incoe Corporation ....................................................... www.incoe.com .........................................................................29 M & M Tooling, Inc.................................................... www.mmtooling.com ................................................................15 Makino ........................................................................ www.makino.com......................................................................11 Millstar, LLC .............................................................. www.millstar.com .....................................................................35 Noren........................................................................... www.norenproducts.com...........................................................23 Progressive Components............................................. www.procomps.com ...................................................Back Cover Rocklin Manufacturing Co. ........................................ www.rocklinmanufacturingco.com ...........................................33 SCHMOLZ + BICKENBACH USA, Inc. .................. www.schmolz-bickenbach.us ....................................................27 Sescoi .......................................................................... www.sescoi.com ........................................................................39 Ultra Polishing Inc. ..................................................... www.ultrapolishing.com ...........................................................20 Wisconsin Engraving Co. Inc. / Unitex ...................... www.wi-engraving.com ............................................................15
Summer 2012
RICK MILLER
Over 35 years experience insuring mold builders just like you.
JAY FAGAN
Over 35 years experience insuring businesses just like yours.
For businesses that expect more.

As an AMBA member, you should expect more from your insurance provider. Knowing your business is our business at Acrisure.
Contact Rick and Jay at 800.748.0351
www.acrisure.com
upgrade your specs... in a flash.

unlock mold history
When Tooling Engineers visit their suppliers, accessing mold drawings and performance data is difficult - and it can be nearly impossible to obtain when they are not nearby. Progressives new CVe Monitor provides: Cycle time monitoring to verify consistent part quality and cost Maintenance activity tracking to reduce unscheduled mold stoppages Reports accessible to Tooling Engineers wherever the mold is run Along with performance history, drawings and setup sheets are stored on the units 2GB flash drive. And, with all of this capability fitting into the same pocket as the worlds most popular cycle counter, your mold specs are ready for an upgrade.
learn more about the cve from industry experts at www.procomps.com/cve
See Progressive Components at: Plastics Caps & Closures 2012 | MD&M Minneapolis | Expoplast | Euromold |

2012 The American Mold Builder Magazine - Summer

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Summer 2012

Aluminum Mold Technology

The Official Publication of the American Mold Builders Association

THE ULTIMATE PROTECTION AGAINST WEAR FROM GLASS FILLED PLASTICS!

DYNA-BLUE & DYNA-MAX BENEFITS

CUT COST INCREASE TOOL LIFE WITH DYNA-BLUE & DYNA-MAX

Todd Finley AMBA President

Visit our website:

LOOKING FOR INNOVATIVE MOLD COMPONENT SOLUTIONS?

Windsor, ON Schaumburg, IL Fountain Valley, CA Hong Kong

the american MOld Builder

Use of simulation software

the american MOld Builder

Visit Makino at IMTS 2012 Booth S-8700

Improve Mold Life on Pre-Hardened Tool Steel

Duplex Sulfides Oxides

Grade W.Nr 1.2312 (P20+S) Toolox 33 Toolox 44

N 0.16 0.21 0.18

C 476 669 379

465 100 12.3 34 555 150 21.0 52

465 100 21.8 34 555 150 24.0 53

430 100 12.0 27 510 150 20.3 39

430 100 17.5 27.5 555 150 22.0 39.5

Grade W.Nr 1.2312 (P20+S) Toolox 33 Toolox 44

V10 min (m/min) 329 412 246

V30 min (m/min) 276 327 205

V45 min (m/min) 258 301 191

Design/manufacturing time (hrs)

400 350 300 250 200 150 100 50 0

Mold service life length

Table 4. Cost comparison.

Steel cost Milling/drilling Stress relieving Grinding Total cost

W.Nr. 1.2312 719 4960 191 260 6130

Relative service life

Severe abrasive wear

Mild abrasive wear

Roughing Pre-finishing Finishing Total

H11 00:53:38 1:43:37 5:14:02 7:51:17

Toolox 44 1:21:40 -------------5:14:02 6:35:42

18 the american MOld Builder

Relative service life

P20 Toolox 44 W.Nr 1.2358 (55 HRC) Toolox 44, nitrided

Mold surface hardness (HV) 340 480 660 820

Relative mold service life 1 4 6 35

D300 5-Axis Vertical Machining Center from Makino

20 the american MOld Builder

DME Adds Two New Smartflow Cooling Products

Moldflow Analysis Experts!

When you need a solution 630.761.9898

Magnos Radial Pole Magnets

OKK VB53 Design Feature Satisfies High-End Mold Applications

NEW! High Feed Cutters

HIGH QUALITY CUTTING TOOLS

22 the american MOld Builder

Linear Way Vertical Machining Center

24 the american MOld Builder

Ellwood Specialty Steel - Ready and Reliable.

United States Ellwood Specialty Steel 800-932-2188 esssales@elwd.com

Canada Ellwood Specialty Metals 877-978-2772 esmsales@elwd.com T O O L S T E E L P R O D U C T S

What is covered equipment?

What is an equipment breakdown incident or loss?

The common insurance policy for Equipment Breakdown Coverage defines it as

A failure of pressure or vacuum equipment

26 the american MOld Builder