Reader's "Die"-gest
IADD members from the die manufacturing and converting camps see similar opportunities and challenges ahead.
By Susan Friedman, Editor
Talk about an industry with a bunch of one-track minds. A new diecutting/diemaking industry survey, jointly developed by the International Association of Diecutting and Diemaking (IADD) and packagePRINTING, reveals diemakers and converters hold largely unanimous opinions on the current business climate.
Diemaker and converter respondents from the label, flexible packaging, folding carton, and corrugated market segments see bright spots on the immediate business horizon, punctuated with a relentless need for increased production efficiencies and a strong loyalty to existing diemaking arrangements and operations.
An edge on expectations
When it comes to assessing business prospects, a wave of feel-good vibes washed forth from both diemakers and converters. Nearly three quarters—69 percent—of diemaker respondents expect growth to continue in the next 12 months.
Some chalk up their upbeat predictions to converters' positive outlook, as well as continued expansion of end-user businesses, such as CD packaging. Converters' ever-increasing technical knowledge is also working in diemakers' favor. "Due to increased awareness of converters, quality tooling should take a larger share of the market," comments Clint Medlock, president of Stafford Cutting Dies, a provider of rotary and flatbed dies which largely serves the corrugated segment.
Other diemakers are geared up for growth with new accounts, increased capacity, new plants, equipment investments, and/or bolstered sales staffs and marketing efforts. One diemaker sums up his positive growth projections for the packaging market in one word: opportunity. Another indicates growth will be centered in rotary dies, as they continue to appear more often in new machines on the market.
Diemakers with a less-rosy outlook for 2001 express concern over the slowing economy and industry consolidation. One notes the potentially negative impact of die quality improvements. "Better quality materials and better quality manufacturing equal less repairs and too much supply," he writes.
Converters are a little more reserved in gauging increases in die usage and diecutting work. Still, 54 percent expect business to grow this year, based on such measures as the addition of diecutters or flexo presses, increased customer demands for multiple product lines, and beefed-up sales forces. Nearly a third expect business to stay flat. One converter with this view says his customers are not indicating substantial growth over the next 12 months.
Assessing, addressing die challenges
Just as their business climate perspectives largely parallel each other, the survey shows many diemakers and converters see eye-to-eye on the most formidable diecutting challenges facing the packaging market.
Diemakers and converters identify the same top two industry hurdles: quick turnaround to meet press schedules, and quick die tooling changeovers. Diemakers are most adamant about quick turnaround concerns, with 65 percent giving it the nod. One respondent plans to address this issue with a general focus on "fast flow manufacturing, additional personnel, and improved communications" in the coming year. Another intends to hone in on simplifying and streamlining thermal die manufacturing.
Notably, 8 percent of diemaker respondents identify a specific piece of new equipment as a key element in their quick turnaround arsenal: the Gerber Profile™ automated router. At American Steel Rule Die, which was primarily a jig die shop, the Profile first took up residence about a year ago. According to President David Catanzarite, the Profile system maintains jig dies' holding power, verticality, and reknifeability characteristics while improving accuracy. Catanzarite notes the system was fairly inexpensive to bring in (compared to lasers), and highlights the versatility of its routing table. For very intricate work in which punches or knives are extremely close together, however, he favors laser's approach.
Aside from enthusiasm for the Profile's role in addressing production issues, a whopping 86 percent of diemakers identify automated rule processors as the technology with most significant overall benefit for diemaking/diecutting in the packaging segment. Giuseppe Cumbelic, president of SRD Steel Rule Dies, first installed an automated rule processor nearly six years ago, and now employs eight processors to serve SRD's folding carton customer base. With eight machines, each can complete a different element of one die simultaneously. "This equipment optimizes the line," he states. "It organizes you better so you can move faster." In addition to savings in turnaround time and materials, Cumbelic says the consistency and quality of automated rule processors can eliminate worries about dedicating a master diemaker to a complex job, and transform employee training processes.
While diemakers largely emphasize technology solutions to manfacturing turnaround and makeready, converters clamor loudest for training. Of the 51 percent of converters concerned with turnaround, and the 49 percent concerned with changeovers, several do note the intent to invest in technology, such as waterjet ejection systems, or "an affordable automated bender." But the lion's share of remedy requests are centered in education: more in-depth technical information; press operator training courses; and literature for rotary diecutting of folding cartons on a flexo press. "Can paperboard suppliers recommend the best cutting rule to use?" inquires one folding carton converter. "Trial and error waste time." Respondents do not imply diemakers have ignored their educational needs. Fifty-seven percent report receiving technical support from their die suppliers.
Where is the work going?
Turnaround issues rear up again in diemakers' and converters' assessments of current die manufacturing arrangements. Diemakers believe turnaround pressures are the top reason packaging converters will continue to turn to outside sources for dies (cited by 76 percent), followed by the need for technical expertise (cited by 59 percent).
Notably, turnaround time is also the highest motivator for converters to maintain their current approaches to die production, whether done in-house or outsourced. Nearly half from the in-house contingent give turnaround top billing, and nearly a third who use outside suppliers give it the nod.
"To accommodate the amount of dies we purchase, and our typical turnaround of one to three days, we'd almost have to build a full-blown die shop," relates Sam Rudegeair, quality control manager at Grafika Commercial Printing. Rudegeair says the use of an outside supplier is a convenience that eliminates the investment and start-up challenges Grafika would face to produce the range of flatbed and solid rotary dies it uses.
Forty-six percent of diemakers believe it is unlikely that seismic shifts in diemaking set-ups will occur in the coming year; that is, they do not expect a large number of existing customers to take die manufacturing in-house, or a large number of formerly in-house operations to approach them for assistance.
Affirmatively, 66 percent of converters report there will be no change in their current diemaking set-up in the coming year. Just 9 percent plan to bring diemaking operations in-house, while 14 percent plan to look beyond current in-house operations for diemaking services.
Stability will also rule supplier selection in 2001, with 71 percent of converters revealing no plans to change die suppliers this year. Those using outside diemaking services report using a range of one to five suppliers. One-third look to two suppliers. One in five use just one.
Converters' reasons for looking to multiple diemaking sources vary, though respondents repeatedly report splitting rotary and flatbed business. Another frequently mentioned motivator is back-up. One folding carton converter explains his supplier structure as "One primary, and one for back-up, or if fast turnaround volume is too much for one supplier."
Others highlight specific capabilities as the cause for multiple sources. "Some diemakers can't manufacture for certain machines," notes another carton converter. Still others find a general sense of security in diversity—and this view isn't limited to a single packaging segment. One folding carton converter recently added two suppliers to the two it has used for years to ensure competitive pricing. A label converter confirms, "We need flexibility. No business should have one choice."
A collective resource
When it comes to providing businesses with choices, the IADD's diverse membership and extensive network enables converters, diemakers, and industry suppliers to make new professional connections and strengthen existing relationships. While economic spurts, mergers and acquisitions, the shortage of skilled workers, changes in technology, and increased competitiveness have been a reality for some time, it is how a company responds to the increasingly frantic rate of change that determines whether or not it succeeds.
"Keeping informed of new technologies and finding a reliable and quality training source are two reasons our membership has increased 21 percent over the past year," explains IADD President Ken Holliday of SouthEastern Die. "In addition to personalized technical expertise, local chapters and publications, IADD has begun providing hands-on, reality-based learning programs." This year will see the debut of IADD's 2001: A Diecutting Odyssey, to be held May 1-3 at the Nashville Convention Center in Tennessee. In addition to 100+ exhibitor booths, a variety of educational sessions will be held inside fully operational diecutting and diemaking Techshops™.
