Injection Molding Company Reduces Costs and Lead Time with SETAAC Assistance
In 2005, Criterion Technology was facing a substantial downturn in revenue due to import competition. It was then that this manufacturer of acrylic domes for the security camera industry turned to the Southeastern Trade Adjustment Assistance Center (SETAAC) for assistance. Based at Georgia Tech’s Enterprise Innovation Institute in Atlanta, the Center helps manufacturers develop and implement turn-around strategies to better compete with imports.
“From about 1997 until 2001, we were strictly a thermo-forming operation. Thermo-forming is where you heat sheets of acrylic and pull a vacuum on them, causing them to naturally form a hemisphere,” explained Myra Boyt, vice president of operations for Criterion, based in Thomaston, Ga. “When the bulk of the imports started coming in, injection molding tools were just starting to hit the market and we began transitioning to injection molding.”
Criterion added its first injection molding machine in 2001, and according to Boyt, added another three machines almost immediately. Product is less expensive to make via an injection molder, and it also produces less scrap compared to thermo-forming. Criterion’s entire product line is comprised of domes for security cameras ranging in size from four to 20 inches in diameter. The domes, which include high-end optics, are used primarily in department stores, casinos, hotels, post offices and schools.
“As long as we were thermo-forming, I don’t recall seeing a competitor in the market. But when the technology became available to injection mold, it was like everyone jumped on the bandwagon,” remembered Boyt. “By the end of 2005, we had experienced a 20 percent decrease in sales related to imports. At our local Existing Industry Roundtable in Thomaston, Susan Hall with Woodbury Box told us about SETAAC and how successful she had been with it. That’s when the call went out.”
Mark Hannah, a SETAAC project manager, conducted an initial review of Criterion and helped the company prepare an application for the U.S. Department of Commerce. Once the company was approved for funding, he developed an adjustment plan that included projects to receive funding support. Hannah and Marla Gorges, director of SETAAC, answered questions, provided advice and handled the paperwork flow.
“When we perform a diagnostic review of the company, we are looking for areas that can help the company improve. We develop a list of strategic projects that will have the biggest impact on the firm,” Hannah said. “Once the funding is approved, we receive competitive bids on the projects and the work can begin.”
Typically, companies that are involved in the SETAAC program receive assistance in marketing consulting, manufacturing improvements, information systems improvements, employee training and maintenance and quality systems improvements. Over the past two years, SETAAC has helped Criterion in three areas: the installation of a new ultraviolet (UV) hard coating machine, training in computer-aided design (CAD) and research in a sunlight testing system.
“When our domes are inspected, it’s very subjective. Each operator looks at the dome and tries to determine if a scratch or polycarbonate speck is going to show up on a camera once it’s installed,” Boyt explained. “We did some work with the optics lab at the University of Alabama-Huntsville to build a sunlight test system. Based on the information we received from them, we will eventually develop a sunlight test system where a laser shoots through the dome. Based on a computer program and criteria we select, the dome will either pass or fail. We’re hoping to have that up and running by second quarter 2008.”
Boyt noted that the CAD training has been especially beneficial for Criterion. Before the company had in-house capabilities, the flange rings (part of the injection mold tool that makes the outside flange of dome unique for each customer) had to be outsourced. By designing and producing its own flange rings, Criterion can save approximately a third of its costs in this area, as well as reducing lead time by half. According to Boyt, those time and cost savings are then passed on to Criterion’s customers.
The third project funded by SETAAC – the design, development, installation and startup of a second UV hard coat machine – has also proven valuable to Criterion’s bottom line. When applied to polycarbonate domes, the UV hard coating increases the domes’ scratch and UV resistance. Boyt says that this added process has opened new markets for the polycarbonate domes and has reversed Criterion’s downward trend in sales.
“Most of our rebound in sales can be attributed to hard coat. Both of our hard coat machines run two 12-hour shifts, three days a week, for a total of 72 hours a week,” she said. “We could not keep up with production demands if it weren’t for that second machine.”
Firms that are accepted into the SETAAC program pay for 25 percent of the diagnostic visit and report. The Department of Commerce generally pays half of the cost of project implementation for activities to benefit the company. Private sector consultants submit quotes for implementing the identified projects and are chosen by the company to execute the outlined changes.
Last year, SETAAC helped more than 30 companies in Alabama, Florida, Georgia, Kentucky, Mississippi, North Carolina, South Carolina and Tennessee. On average, these companies received $42,000 in matching funds. In the last three years, SETAAC’s clients have increased sales by 26 percent and improved productivity by 28 percent.
“You start thinking ‘red tape’ the minute you hear government funding, but for the amount of good we’ve gotten out of it, there was very little paperwork involved,” Boyt said. “It’s also hard for companies to open their financials for the world to see. But once you get past that initial fear factor and demonstrate how you’re going to spend the money, it was very easy. I would most definitely recommend SETAAC to other companies.”
North Carolina Garment Manufacturer Beats the Odds with SETAAC Assistance
Mack and Mack, a Greensboro, N.C.-based women’s apparel manufacturer, is something of an anomaly. It is a U.S. cut-and-sew manufacturer in a country where nearly 91 percent of the 20.8 billion garments purchased in 2006 were imported. It has increased employment in an industry where employment decreased from 585,700 in 1998 to 204,800 in 2007. And it has managed to do all of this while the U.S. trade deficit soared to $62.2 billion in July 2008.
“We design, cut and sew better women’s wear for distribution to some 65 specialty boutiques throughout the United States. Our entire operation – administration, design, production, shipping, receiving and a retail outlet – is housed in a single, 7,300-square-foot building in downtown Greensboro,” explained John Davis, co-owner (with his wife Robin) of Mack and Mack. “The textile and apparel industry, once prominent elements of our local economy, has moved offshore to take advantage of huge cost savings. We have established a niche market, but until we become a household name we will always work on narrow margins. And that is where the SETAAC program has been a great help.”
The Southeastern Trade Adjustment Assistance Center (SETAAC), based at Georgia Tech’s Enterprise Innovation Institute in Atlanta, helps manufacturers develop and implement turn-around strategies to better compete with imports. SETAAC project manager Mark Hannah conducted an initial review of Mack and Mack and helped the company prepare an application for the U.S. Department of Commerce. Once the company was approved for funding, Hannah developed an adjustment plan that detailed projects to receive funding support, including assistance in marketing and sales, new product development and equipment training.
Firms that are accepted into the SETAAC program pay for 25 percent of the diagnostic visit and report. The Department of Commerce generally pays half of the cost of project implementation for activities to benefit the company. Private sector consultants submit quotes for implementing the identified projects and the company chooses which consultant to hire to execute the outlined changes.
“With SETAAC defraying most of the cost, we were able to have one of our newly-hired designers trained on our pattern digitizing equipment, which would have cost us around $4,000,” Davis said. “Normally, we would have depended on the limited in-house experience available, along with our outdated help manuals. Instead, we were able to have a trainer spend a week at our facility with our designer, giving her invaluable insight into the latest techniques.”
Mack and Mack’s equipment digitizes garment patterns and prints them on perforated paper; sizes can automatically be scaled in the computer. According to Davis, it is not feasible to send the patterns to overseas factories for production because of their strict quality control.
“Admittedly, our business model is unusual. We have a very attractive boutique in the front of our facility and, once you get further in, there are glass doors through which you can see people at sewing machines making the clothes that are on the sales floor,” he said. “Almost all the clothes hanging in the store are made in black – because that’s a color we know we can always sell – and you can try them on. You choose the style and color, and in two weeks you can pick up the clothes that have been made specifically for you. Making one outfit at a time is one of our best selling points and, at the same time, one of the things that is most challenging in terms of growth.”
SETAAC has also helped Mack and Mack upgrade its Web site, a key component of the company’s marketing strategy. Davis notes that having the Web site configured for e-commerce has allowed Mack and Mack to increase its sales and diversify its revenue sources. In fact, the company exceeded $1 million in sales last year for the first time since 2003 and increased its workforce from 12 to 17 during the same time period.
“It’s partly natural business growth, but I do feel the growth was abetted greatly by having the assistance provided by the program,” Davis said. “We have created three jobs – two in production and one in administration – and retained all of the jobs we already had. Having the additional help has allowed my wife and me to focus on the bigger picture.”
Mack and Mack was founded in 1995 by Robin Mack Davis who started out cutting garments on a ping pong table in her parents’ basement. After five years, the firm relocated to its current location in the historic district of downtown Greensboro. The firm has grown over the years, and now sells its original designs in 65 upscale boutique clothing stores nationwide. According to Davis, SETAAC’s assistance will help the small manufacturer continue to grow and compete in a global economy.
“I can think of few other government programs for small businesses where the intended benefits are so well-targeted and so effective,” he said.
About the Southeastern Trade Adjustment Assistance Center:
The Southeastern Trade Adjustment Assistance Center (SETAAC), based at Georgia Tech’s Enterprise Innovation Institute in Atlanta, helps manufacturers develop and implement turn-around strategies to compete better with imports. Last year, SETAAC helped more than 30 companies in Alabama, Florida, Georgia, Kentucky, Mississippi, North Carolina, South Carolina and Tennessee. On average, these companies received $42,000 in matching funds. In the last three years, SETAAC’s clients have increased sales by 26 percent and improved productivity by 28 percent.