Eduardo Beira

European mould industry:Towards a new competitive positioning

Eduardo J. C. BeiraJ. Menezes

Eduardo Beira

Tool, dye and industrial moulds

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import

export

internal market

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Industrial moulds exports (P)

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MouldmakersNew entries (P)

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Exports (P)

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Exports (P)

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Exports (P)

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Brinquedos

Matr.Construção

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Electrodomésticos

Elect./Telec.

Outros

Embalagem

Ind. Automóvel

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Ind. Automóvel 27% 14% 1%Embalagem 18% 7% 13%Outros 18% 15% 7%Elect./Telec. 12% 9% 21%Electrodomésticos 7% 34% 9%Ut. Domésticos 7% 14%Mat. Eléctrico 6% 13% 6%Matr.Construção 3%Brinquedos 2% 8% 28%

100% 100% 100%

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Portugal (I)according to USITC (2002)

• Unique industry characteristic:– small industry dedicated almost exclusively to exporting

• Strengths:– Specialist training colleges– Quick lead times, technological capability, price, and low labor costs– Quality, technology, service, skilled in producing high precision and

complex dies and molds

• Weaknesses:– Small domestic market with lowest productivity indicators (sales per

worker) among ISTMA members– Lacks modern automotive and aerospace industries to stimulate

technological advancement– Many die and mold producers tend to be small companies with

limited financial and management resources

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• Despite Portugal small size, it has emerged as a world leader in the production of industrial moulds

• Portugal is the eighth-largest producer of dies and molds in the world and it exports to more than 70 countries

• Portugal is also one of the world´s principal producers of precision molds for the plastics industry.

• Portuguese moldmakers are highly specialized, concentrating in different production areas such as mold cavities, mold bases, polishing, large molds, and precision molds

• Since Portugal joined the EU in 1986, the share of companies capable of manufacturing complex molds grew from less than 30% to more than 80% in 1997

• Molds for less complex products such as toys and electrical appliances have been supplanted by more complex molds for the automotive, electrical equipment, pharmaceutical, telecommunications, medical equipment and computer industries

Portugal (II)according to USITC (2002)

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• Recently several larger moldmakers in the Marinha Grande region have shifted from being solely tooling producers to become integrated suppliers of design and manufacturing services, principally for the european market

• Since joining the EU, Portugal´s mold industry has steadily evolved from a labor intensive industry to a capital intensive one

• It possesses world-class equipment produced in Germany, Switzerland and Spain

• The majority of companies have access to the latest generation of software, CNC and EDM machines, finite-element-analyst technology, machining centers, 3-D measuring machines, and DNC and CAD/CAM/CAE systems

• Many of Portugal mold manufacturers have instituted Simultaneous or Concurrent Engineering and Total Quality, and many qualified for ISO 9001 and 9002 certification

Portugal (III)according to USITC (2002)

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• The strange case of the portuguese mould industry

– No tradition of precision metal manufacturing industries• No local industrial equipments and automobile industries

– No significant local moulding and plastics industry– Regional base– Poor commercial base

– From a technical craft to a engineering discipline

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• Low cost was not the critical succes factor for the portugueses mould industry

– Portuguese mould manufacturing model• No “toolmakers”• Functional specialization• Mould assembling vs part manufacturing• Scalability / capacity easily available• Shorter time to market

• Importance of international buying agents

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1950´s

MetalTechnology

Plastic / materialTechnology

Idea, concept

LathesMillingCopying

GravadoresPart models

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1960´s

Final Product

MetalTechnology

Plastic / materialTechnology

Idea, concept

Free form milling

GravadoresPart models

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1970´s

MetalTechnology

Plastic / materialTechnology

Final ProductIdea, concept

DNCEDMHeat treatments

Part engineering drawingsMould design drawings Mould injection test runs

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1980’s

MetalTechnology

Plastic / materialTechnology

Final ProductIdea, concept

CAD/CAMCNC

Pilot runsCustomer integration

Part designPrototyping

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1990´s

MetalTechnology

Plastic / materialTechnology

Final ProductIdea, concept

CAD/CAM/CAE integrationCIM

Customer partnerships“Nypro” model

Product engineeringPart design & PrototypingConcurrent engineering

CAEMould engineering

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2000´s

MetalTechnology

Plastic / materialTechnology

Final ProductIdea, concept

Rapid toolingHigh speed machiningSensors / Intelligente mould

First runs / mouldingProduct assemblingLogistics and distributionQuality certification

Product decorationDesign for competitive priceReal and virtual prototyping

In mould decorationIn mould assemblingMultimaterial moldingCycle time optimization

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A growing puzzle of techologies

MetalTechnology

Plastic / materialTechnology

Final Product

MetalTechnology

Plastic / materialTechnology

Idea, concept

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2000

• Moulding and plastics assembling offshores to China

• Mould manufacturing to China

• The customers are dropping the european mould makers ...

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China

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China

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Luen Shing (PY) Industries

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7000 moulds per year

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2500 people

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!!!

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China

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Zhejiang mould city

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China

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China

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China

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USA imports

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china

germany

taiwan

portugal

s korea

italy

spain

france

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Japan exports to USA

japan

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And now?

• Our competitive values (versus China)

– Knowledge / experience– Customer base and network / reputation– Western based: close to the customers– Culture / language– Commercial experience– Better in the “non standard” products

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And now?

• The traditional mouldmaker mould is running out– Especially for “large” mouldmkers (>60 people)

• A new business model is needed • A new commercial approach is needed

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• A new portfolio of skills and competences– Along the four directions– Anyway, an increase in complexity of operations and business

– More engineering– More innovation – More integration – More services

• AROUND THE MOULD

MetalTechnology

Plastic / materialTechnology

Final ProductIdea, concept

Rapid toolingHigh speed machiningSensors / Intelligente mould

First runs / mouldingProduct assemblingLogistics and distributionQuality certification

Product decorationDesign for competitive priceReal and virtual prototyping

In mould decorationIn mould assemblingMultimaterial moldingCycle time optimization

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– A NEW COMMERCIAL POSITIONING– More marketing

• Different level• Different contacts• International networking

– More commercial skills • Technology and engineering based• Strong soft skills• International trading• 2+ languages mandatory • Management of large and complex projects

– New prospecting activities– More commercial investment

• Non material• Higher financial and business risk

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• Restruturing

– Higher funding needs– Reducing fragmentation by M&A– New actors?

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• Multinationals– OEMs and “first tier”

• They will buy 70% of their moulds in low cost countries (Ásia)– Where large volume moulding is / wiil be based

• Remaining 30% of high precision and high complexity moulds– Concurrent engineering– Certified quality– Plastic and metal advanced technologies– Long term partnerships

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• “Independent custom moulders”

– From the margin to the core of the portuguese industry customer base?

– Business policy implications• How to close deals?• And the network?

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• Two business approaches for the future

– Multinationals / transnationals• More integration and partnership• Lower volume• Complexity based specialization • Non standard approach

– “independent custom moulders”• more volume• Comercial arena to be (re)discovered• “engineering & tooling” based

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• Leverage the client base and industry networking

• Reinforce the industry based cooperation and marketing

• Reinforce the technologies competences– Key roles of Technology Centres

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• And the automobile industry?

– A new phase of innovation and change• Opportunities and dangers• More cooperative?

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• Future will not be in technology and machines– Although they will be necessary

• Future will call for a competitive repositioning of the business model– Non technical soft skills will be critical

• Hope: the industry has a long tradition of change and flexibility– Customers are to be prized!

Eduardo Beira

• Thanks for your attention