Specialty Molder and Foam Fabricator Sees Reversal of Offshoring Trend
Excellent customer service and quality keep customers coming back to a Cerritos, Calif., contract manufacturer of flexible and rigid foam products.
A plastic molder and foam fabrication company in Cerritos, Calif., often hears alarming stories from disgruntled American OEMs that have reshored their precision parts and products back to the states. Foam Molders & Specialties has seen several of its own customers dip their feet into the waters of overseas manufacturing, only to see them quickly return after their experiences were less than wonderful.
Reshoring is building up steam as product manufacturers bring parts and components, and even complete products, back to the United States. More and more OEMs are beginning to see that saving dollars on per part costs does not trump all of the hidden, and not so hidden, costs of doing business overseas.
"Yes, we've had some customers come back; and it was based purely on per part cost when they went overseas," says Norman Himel, the chief financial officer at Foam Molders & Specialties. "We haven't had too many OEMs go overseas, but usually when they leave, they come back within a year. We've had about ten of our customers try that, and about nine of them came back. I think this speaks volumes for what we offer here, and the type of business that we have built."
Himel says that the per part cost for foam fabricated parts manufactured overseas is often 40% to 50% less than for parts made in this country. Many OEMs get infatuated with these low overseas prices, but after doing a production run or two overseas, they often find that the quality, customer service, and lead-times are not acceptable. After adding other unforeseen and hidden costs into the mix -- such as 40-day shipping times on cargo ships and flying engineers to Bangalore or Shanghai -- the per part cost pales in comparison to the added costs.
"When you add up all of the components of excellent customer service and high-quality products that our company offers, it benefits our customers to stay with us," Himel insists. "What they're spending in returns and reworks and having to rebuy products due to deliveries not on-time, costs them more money than staying with us. They're not figuring all of the added costs of doing business overseas, which include lost sales. When you lose a sale, it's really hard to regain another one."
Foam Molders & Specialties (www.Foammolders.com) offers multiple production processes for building components with a variety of foams and plastics, often combining several processes and materials that are then assembled into a final product. Its 120 employees, in 85,000 square feet of production space, offer foam fabrication and material conversion; vacuum forming, thermoforming, and pressure forming; and reaction injection molding of polyurethane.
In addition, the molding and fabrication company is ISO 9001: 2008 and AS9100 (aerospace) certified, and is compliant with ISO 13485 for medical parts and TS-16949 for automotive parts. Foam Molders and Specialties was awarded Business Partner Award of Excellence from a Toyota automotive affiliate company in 2011.
"The type of work that we do is high-value, low-volume," states Kimberly Nozawa, a marketing specialist at Foam Molders and Specialties. "Our customers are teamed up with both our R & D and manufacturing departments, from the start, to develop the best product using the most cost efficient methods throughout the production of their parts. This synergy ensures the use of optimal production methods while identifying and minimizing problems before production even begins," she added. "With this teamwork, our customer's products get to market faster without compromising the specifications or quality of the product."
Reshoring Becomes More Common as OEMs Realize Hidden Costs
The company's CFO tells an increasingly common story of an OEM that reshored its components after having them made overseas. "It was a healthcare product with a prosthetics application, a component part of the prosthetic device," Himel recalls. "It was a soft foam cushion that supported a hard piece of material. We made it for them about seven years. They decided two years ago that they wanted to increase their profit margins, so they found out that they could get the work done cheaper overseas. What happened was the overseas company was not using the same high-quality foam material that we had used. They were using a foam material that was breaking down and wasn't working the way they expected it to."
Even if an OEM is extremely careful about choosing an overseas manufacturer, substandard workmanship and materials can still come back to haunt them on occasion. "Some of the overseas companies have quality certifications, and some of them don't," says Himel. "The substandard material they were using wasn't lasting. Six or seven months after they sold them the parts, the customer said that the parts became faulty, defective, and in some cases stopped working. So this work eventually came back to us, and we continue to have a very good relationship with them."
One of the advantages of utilizing domestic manufacturing is that it keeps manufacturing within close proximity of innovation centers -- design, prototyping, R&D, and engineering departments. "Our R&D department works hand-in-hand with our sales department," Himel affirmed. "We have engineers on staff and R&D production technicians that work together as a team. Most of our customers come in with their own designs, or they have an idea that we can help them formulate into a design. So we can help our clients with design for manufacturability and with their prototypes," he added.
Turnaround times are often front and center when it comes time to brainstorm the best way to process a customer's parts. As Foam Molders and Specialties' CFO points out, honest, upfront appraisals of time are always the best policy for all concerned.
"We also work very closely with our customers as far as their lead times are concerned," Himel points out. "One of the first questions we ask them when they come in the door is 'When do you need this?' And then we try to be very honest and straightforward with them. We let them know exactly what we can do for them. If this fits within their lead times, we'll be glad to do the work for them. Usually this works well, because the customers tell us that if they know the actual lead times, they can usually make arrangements with their customers to fit it in correctly."
Problem solving is a key ingredient in the company's value-added offerings. In one instance, an OEM was not able to initiate a job that other contract manufacturers deemed impossible or too difficult. The Foam Molders and Specialties staff, however, welcomed the opportunity to participate in this production challenge. The aerospace part was a very small, ultra-soft, foam seal used for windows in an aircraft. The part had very stringent requirements: height: 0.001-inch +/-0.02-inch, width: 0.08-inch +/- 0.02-inch, and a length of 40 inches.
"When our owner heard that the other company thought it was impossible or too difficult to make, that got his attention because he knows that we have a lot of expertise and many capabilities," Himel remembers. "He likes to take on the most challenging parts, so we gave it a try."
Undaunted by Technical Challenges with Small Part
Technical challenges with the tiny aircraft seal included an extremely soft, hard-to-work-with material, fixturing problems, and a requirement for extreme precision. All of the problems were related and the material could not be changed, according to Himel.
"The material used was so soft that applying pressure would compress the foam more than the tolerance allowed," Nozawa explained. "Also, the holding fixture itself was a technical challenge due to the size of the piece. This was a very delicate and low-tolerance piece to work with, causing tremendous difficulty and requiring extreme precision. And, while the original procedure included a grinding method, the new process involved heat, steam, and pressure. The results increased production by 400% and consistently produced a part that met our customer's expectations."
"The reason why this part was so complicated was because the parts were very small, but they still wanted them to be extremely precise," says Himel. "We had to rebuild the fixtures so the foam wouldn't cave in," he continued. "So we used a completely different process. I can't give away too much about the process, but, basically, what we did was work with it under different environments to make sure the foam stayed in the same state while it was being processed. So we were able to get them the parts faster, and were able to give them a little price break the next time we processed the parts. Our process, therefore, was repeatable and we made excellent parts for them with little rejects."
Foam Molders and Specialties does work for a diverse variety of industries, everything from aerospace and office products, to shower transfer systems for disabled people and head rests and lap bars for amusement park rides. The owner and founder of Foam Molders and Specialties, Daniel Doke Sr., started the unique business in his garage with one industry, but customers eventually wanted him to build other parts and products.
Not only does the company build parts for a wide variety of industries, but it also creates unique products with a wide variety of materials and manufacturing processes. Himel says that the company might not know how to make a particular part, but it's quite willing to do the research to develop a process to make it happen. "I don't think there is a company in America that has the capabilities that we have in this industry," says Himel. "There are companies that do certain aspects of what we do, but I don't know if there are companies that can do everything that we do."
With four different departments -- fabrication, vacuum forming, specialty molding, and automotive -- operating out of four buildings in two plants, Foam Molders and Specialties offers a diversified process chain for its customers. "When a prospective customer comes in to us, we tell them that we're a one-stop-shop," says Himel. "They can bring in their ideas or a CAD model, which might have multiple pieces and need several processes. They won't have to go to other vendors to get all of the parts completed; we have the capabilities to take care of the whole component.
The company's Fabrication Department is a conversion area where a variety of different foams and plastics are formed together to build a myriad of parts and products. The company can vacuum form sheets up to 12 feet x 10 feet x 0.5-inch thick, and can fabricate foam down to thousandths of an inch. "It's like doing sheet metal fabrication, but the media are plastics and foams," Himel explains. "We also might make a plastic piece in our vacuum forming division that will fit into the foam. And we have an assembly area where the plastic piece will be glued onto the foam. So it will end up a finished part that will be handed over to our customer complete."
The vacuum forming department turns out large and small parts. One advantage of vacuum forming is that it's less expensive for lower volume part runs than injection molding, and the cycle times are very fast.
The company's specialty molding department churns out a multiplicity of parts using reaction injection molding (RIM). The company's fourth department is automotive, a special department for painting and forming automobile parts for most of the big car companies in the U.S. and worldwide. "We mostly do painting and a little bit of molding work for them, and we service the aftermarket industry with running boards," says Himel.
After 42 years in business, much of the family-owned company's work is still from repeat customers and word-of-mouth advertising. One of their primary core values is treating vendors and customers with the highest level of respect.
"Our customer retention plan is based on the simple premise of providing excellent customer service and excellent quality," Himel maintains proudly. "It's also part of our marketing plan. If we do a good job for our customers, they're going to refer us to their customers."
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