Category Archives: Global Market

A Look at the Current State of the Plastics Industry Worldwide

Worldwide Plastics Industry, Plastic Products, Plastics Manufacturing

Plastic Product Manufacturing

As 2014 comes to a close, what better way is there to end the year than with good news? It seems that the plastics industry has officially rebounded after feeling years of strain. In North America, the period between 2008 and 2010 was especially hard as the world struggled through a major economic recession. But an article in Plastics News cited increasing production and investment in North American plastic manufacturing plants recently. A number of facilities were toured for the article, and the overall picture is one of growth and optimism as more businesses are upping equipment purchases.

Overseas, the plastics industry is seeing more interest as well. It is even considered a key to the re-industrialization of Europe.

“The plastics industry is an important part of the solution for a circular economy and for a resource efficient Europe,” said Patrick Thomas, president of PlasticsEurope and CEO of Bayer MaterialScience. He spoke at PolyTalk 2014 in November, and discussed the importance of the plastics sector in driving innovation and creating a more resource-efficient world.

Like North America, Europe saw tough times in 2008 and beyond. And, as in North America, there is a renewed push to increase manufacturing production and create more jobs to support the economy. Currently, the plastics sector is among “the top five most innovative sectors in the EU representing one in 25 patents being submitted by the [European] industry between 2003 and 2012,” according to Plastics Today.

And rounding out the regions where plastics have seen growth, Asia has maintained a substantial share of the market for decades. According to another Plastics News article, “of the 53,000 additional molding machines sold annually around the world now vs. a quarter century ago, about 90 percent of them (or 48,000 injection presses), are sold in the emerging markets of Asia.”

For a while, this global marketplace represented a serious threat to domestic manufacturers. Lately, however, the field is leveling out as costs rise overseas and production returns to other countries. In particular, the United States is seeing a major shift to reshoring as newer technology and more efficient supply chains make it easier and cost-effective to do business there rather than in countries like China. And with innovation at a peak and better plastic composites being created all the time, it’s no wonder that the plastics industry is witnessing this trend. We hope it continues long after the New Year!

Visit our website to see how TCA Technologies can provide custom solutions to help meet your plastic manufacturing goals in 2015.

Bringing Electronics Manufacturing Back to the U.S.

Motorola is manufacturing its Moto X smartphone in Fort Worth, Texas. Apple announced that assembly and some manufacturing of the MacBook Pro will be done in the U.S., as well as adding 2,000 jobs at a new component manufacturing plant in Mesa, Arizona.  Why are electronics manufacturers starting to bring their business back to North America? Many technology giants sent jobs and operations overseas to take advantage of cheap labor and large factories. The reasons for manufacturing and assembling in Asia are now starting to dwindle and the reasons to bring these operations back to North America are skyrocketing. Labor is getting more expensive and working conditions are improving in countries like China, India, and Thailand so companies can no longer take advantage of the low wages and long hours. Shipping costs are increasing as well so companies are spending more and more to ship these products back here. But perhaps the most legitimate reason to bring electronics manufacturing back to North American soil is the design/production disconnect.

North American companies typically retained design functions here even when they sent manufacturing offshore. This separation led to very inefficient production of a variety of products. Designs done here evolved into things that were not easy to manufacture, prompting workers overseas to change the designs or charge more for labor and time. Bringing back product manufacturing reunites the design function with the people who make the components, streamlining the entire process for a higher quality, lower cost item. GE is a great example of a company that has reshored manufacturing of multiple products and ended up simplifying their entire process, fully expecting that the improved communication and innovation will translate directly into improved profitability.

Check out the recent articles below for more information on the Made in America movement:

INDUSTRIAL EQUIPMENT and our (not so) grand obsession with PRICE

We are obsessed with price.  Whether it is for products or services, price seems to have become the single most important determinant in most purchases.  Retailers offer to match each others’ price in a rush to the bottom, with one preaching that a lower price results in a better life; but, is it true?

In the business-to-business marketplace too, price has assumed an all-important position.  Given the realities of global competition, an emphasis on price at all levels of the business cycle is not only understandable, it is essential.  However, have we followed the historic human tendency and ‘carried it too far’?  How important is price; really?

Let’s admit right up front that price is important.  It is a vital element of consideration when we compare the value of competing proposals.  However, it certainly does not stand alone.  In fact, when price becomes detached from the overall value proposition, when it becomes the overwhelmingly predominant or even singular focus, it is a dangerously incomplete and unreliable measure.  Price is an honest measurement only when balanced against other factors.  A ‘price only’ or ‘price-above-all’ approach to purchasing excuses us from learning the essentials, from actually thinking about what we are doing.  However, we use the excuse at substantial risk.

What are these other factors that we must take into account during the purchasing decision?  At a minimum they include providing answers to three basic questions:

  1. What Are we Buying?  Do we thoroughly understand what we are purchasing and how it fits into our business?  In the final analysis, we are buying goods or services that will allow us to provide recognizable value to our customer (and to the ultimate consumer if they are not the same entity) and do it in a manner that allows us to receive value from the transaction too.
  2. Who Are we Buying For?  This question has a number of sub-questions but two are particularly important: 1) do I understand how they will use what I am purchasing, and 2) do I understand what will be their challenges in its use?  For example, perhaps our purchase is custom automated machinery to be used by the production division of our organization, a pressure cooker of dates, budgets and stringent quality controls.  Will minimizing the initial capital expenditure adversely affect subsequent expenditures on maintenance, labour requirements, our ability to sustain production requirements, quality of our products or services, our ability to respond quickly to changing market requirements (in other words, lifetime costs and capabilities)?  In the end, we are all dependent on our corporate ability to do our part in providing sustained satisfaction to the ultimate consumer.
  3. Who Are we Buying From?  Continuing with our production machinery example, we will need to ask ourselves: Do they truly understand our operating environment and where their product or service fits into our ability to provide value to our customer?  Will they not only support their product but support our production personnel; or, are they responding to our price-only purchasing approach by being a price-only supplier and providing minimal support?  Are they an ethical company; do they have a transparent approach to doing business; do their employees, suppliers and customers speak highly of them?

We all know that there are substantial benefits to price competition.  Price competition drives efficiency.  Price competition drives innovation.  But does price justify our obsession with it?  A less than thoughtful response will cost us in the long run.

The Benefits of Composite Materials

Composite materials are being used more and more throughout various industries for a number of reasons. Aerospace, automotive, consumer products and building products manufacturers all benefit from using different composites to their advantage.

These composites are created by combining two or more materials with different physical or chemical properties to produce a new material. The end result is a composite, which has different characteristics from the multiple components that went into it. This is done to take the most useful qualities from materials while removing the weaknesses. Composites are often stronger, lighter or more cost effective than pure materials.

Boeing is one specific aircraft manufacturer that is taking advantage of these combined materials. The company’s Boeing 787 model is composed of carbon fiber reinforced plastic and other composites. Some of Boeing’s incentives for using these materials are a 20 percent decrease in weight compared to older models and maintenance reduction.

Carbon-fiber is a key component in aerospace manufacturing, but it is far from a new material. This composite was developed over 50 years ago and has been used in aerospace application heavily since the 1980’s. Boeing’s 787 model is a step forward with this technology because half of the aircraft is made of carbon-fiber reinforced plastic and other composite materials.

While the composite material industry is valuable to aerospace; the aerospace industry is a crucial element to composites. Composite World went as far as calling aerospace, “one of the largest and arguably the most important [market] to the composites industry.” By using composites that are lighter, stronger and less expensive than alternative materials, manufacturers in the aerospace, automotive, consumer products and building products industries can make products that are more cost effective and efficient.

Automated Manufacturing and the Need for Flexibility

In our last two blogs we’ve talked about the changing mindsets of consumers, and the effects those changes have had on manufacturing. In particular, we’ve looked at how access to a global market has made consumers more discerning with their tastes and purchasing habits. To compete for a consumer base with more options than ever before, companies have to offer more diversity in their product lines. Increased product diversity has created a need for more flexible manufacturing systems.

In the past, systems have been geared towards high volume output of a singular product. More and more, companies are looking for machinery that can accommodate smaller runs across a wider variety of parts, materials and manufacturing operations. This can mean allowing for different types of product inspection as well. To achieve all of this, flexibility needs to be built into the base manufacturing system. In this way, the door is open for new and different manufacturing cells and tooling to be added down the line. Allowing for these additions can mean investing more in the base machine. But the cost of that base machine is spread across more parts, and a longer life span as the machine can evolve with your product line.

Flexibility allows manufacturers to not only handle different products, but product improvements as well. Today, companies are presented with a tremendous amount of feedback on their products, requiring them to constantly update and upgrade those products. Flexible manufacturing systems allow manufacturers across an ever widening spectrum of industries to handle the changes and upgrades that invariably take place over a product’s lifecycle.