Milacron LLC still often referred to by

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1 Milacron executives Mark Vanzant and Jim Kinzie say that contract manufacturing has become an important tool to diversify the overall business. Milacron Optimizes Capacity with Contract Business Contract manufacturing, once just a tool to use excess capacity at Milacron, becomes a vital diversification strategy Sarah A. Webster Editor in Chief Milacron LLC still often referred to by its legacy name Cincinnati Milacron and still based in Cincy got out of the metalworking tools and grinding business in Ever since, it has focused its efforts on being a world leader in plastics machinery, mold technologies and industrial fluids. The company, now owned by the private equity firm CCMP Capital Advisors LLC, has been rapidly expanding, acquiring Mold-Masters (Toronto, Ontario) earlier this year and giving credence to its tagline: Now More than Ever, Your Most Complete Partner in Plastics. October 2013 ManufacturingEngineeringMedia.com 55

2 Contract Manufacturing Profile Today, Milacron consists of Milacron Plastics Machinery (injection, extrusion and blow-molding); Mold-Masters (hot runners); DME Co. (mold technologies); Milacron Aftermarket (parts and service) and CIMCOOL Fluid Technology (metalworking fluids and services). But a little-known part of the Milacron business has also been growing, too. About a decade ago, Milacron planted the seeds of a contract manufacturing business to offset the cyclical nature of the machinery business, which is highly sensitive to the ups-and-downs in the economy. See us at SOUTH-TEC Booth #919 & FABTECH Booth #N-2007 These thrust-bearing races are manufactured as part of an industrial machine. They are machined using horizontal CosenAdvantages machining and vertical turning centers from a AISI C1117 steel 54" (1372-mm) diameter ring weighing over 1000 lb (450 kg). Milacron manufactures five of these monthly. The strategy is now regarded as vital to the company. Milacron s contract manufacturing business, known as Milacron Contract Manufacturing, has provided a relatively stable source of revenue, especially during tough times, and it s also been a steadily growing source of revenue. We have a pretty cyclical business, said Mark Vanzant, director of Manufacturing and Engineering, Milacron. This was a strategy we arrived at years ago to help us kind Round Programmable Bandsaw See us SEE US at AT WESTEC WESTEC Booth #3300 BOOTH & SOUTH-TEC 3300 Booth #611 of balance our manufacturing loads. Using [the] machining facilities we already have, we look for business that requires similar capabilities. Most often, that has been customers with big, high-tech parts, including those in the oil and gas, wind, agriculture, 14.2 Round Enclosed Bandsaw mining and locomotive sectors, among others. Milacron also provides parts to other noncompeting machine builders who sometimes do not have enough capacity to meet orders ManufacturingEngineeringMedia.com October 2013

3 Our niche is low volume, high technology, said Jim Kinzie, plant manager, Milacron, Mount Orab Operations. Kinzie, who has worked in various positions at Milacron during his 42 years with the company, explained that the large vises, injection screws and fabricated or cast-iron bases that Milacron manufactures for its plastic extrusion, blow-molding and injection-molding machines makes Milacron especially capable to make smaller lots of large items. The machinery to make the parts is pretty much the same, he said. Vanzant added: We have capability up to about 60-ton parts. Milacron s contract business has grown to more than $8 million in sales annually, which Vanzant called a small part of total sales, but an important diversification tool. The company learned how important that diversification was during the Great Recession, when the machinery side of the business took a severe hit. During that period, the contract manufacturing business made up nearly 40% of the shipment s out of the Mr. Orab plant. It was a boon to us during that period, Vanzant said. And while Milacron still had to lay off workers, he noted that without the contract business: It would have been worse. Today, Milacron has come to consider this contract manufacturing business, once meant only as a offset to use excess manufacturing capacity, as highly important to the overall business strategy. We will subcontract Milacron work to maintain our contract business, Kinzie said, explaining: Once you lose it, you won t get it back. The problem with turning it on and off is losing customers. We try and keep the contract work growing no matter how business at Milacron is doing. We need to be able to fall back on that. The contract manufacturing business does have some boundaries to its growth, however. Milacron will not compete with its machinery customers. Because those customers are ABB Robotics. From small parts to the largest. Automated metal fab made easy. From entry level systems for smaller parts to the most intricate, highly engineered systems for heavy, large frame welding, ABB has the ideal robotic system for the full range of welding, cutting and metal fabrication applications. With industry leading software innovations that reduce programming complexity, ABB robots and modular systems can easily handle small batch runs of highly diverse parts. The ABB family of robots includes a selection of integrated dressing models that deliver 15% shorter cycle times, lower operational costs and greater flexibility. See us at FABTECH Booth #N ManufacturingEngineeringMedia.com October 2013

4 typically in plastics, however, and Milacron is typically selling metalworking services, this has not been an issue. We do not compete with our customers, Vanzant said. For example, he noted, We do not do molds. The process is somewhat similar to turning, except instead of one cutter working at a time, there are maybe six eight cutters working at a time. It removes a considerable amount of stock, Kinzie said. Optimizing Manufacturing Capacity Milacron has two large factories that make a variety of small and large parts required to make plastics machinery. There s a 500,000-ft ² (46,500-m²) facility in Batavia, OH, as well as a 190,730- ft² (17,738-m²) facility about 15 miles away in Mount Orab, where the majority of contract manufacturing work is performed. The equipment we have in our facility is a wide range, from small parts to large parts, geared to make the parts required for extrusion, blow molding and injection molding machinery, Kinzie said. Milacron offers precision CNC milling, grinding, turning and hard-facing operations, as well as a number of secondary and finishing operations, such as whirling, heat treating, deburring, coating, freezing, testing and more. At Mount Orab, the facility consists of five connecting buildings. Each building has a different type of operation. One makes small parts you can pick up with your hand. Two plants make large parts that are moved by crane or with a forklift. A fourth building does heattreating and other specialty processes. The fifth does long and skinny, shafttype work, which is where the company makes its screws for the injection business. Among its many machining capabilities, which are listed in detail on the company Web site, Milacron also does whirling, a specialty operation. The whirling machines (made by Weingärtner in Austria) have a ring with a series of different types of cutters. As the ring spins, it travels down the shaft. I am Accuprofitable. High performance tools and lower costs means greater productivity to you. You would never sacrifice quality for affordability and you shouldn t have to. Accupro tools are crafted to meet the highest standards for performance. But at 15-20% lower cost than other premium brands, they re priced to keep your bottom line as low as possible. Exclusively Distributed By mscdirect.com/accupro

5 Among Milacron s greatest assets in securing contract business, however, is the company s sizeable, highly-skilled and flexible manufacturing workforce of about 230 workers, 175 of whom are machinists. We have a higher skill set. All of our machinists must be able to read their own blueprints, do their own setups, Kinze said. The rest of the people are support people, manufacturing engineers, production control. We do our NC programming in house. With their large, highly-skilled workforce and varied technical capabilities, Milacron also does some machine refurbishing in its contract manufacturing operations. Planning Ahead Managing the contract manufacturing business has not been much of a change or difficulty for Milacron, Kinzie said. That s because the plants already operated on a contractor customer-focused basis internally, with different parts of the business placing orders to the manufacturing operations. It s not easy, but we try and treat every order as if it s from an external customer, Kinzie said. We have five different internal customers because the businesses for the injection, extrusion and other business units, they all submit orders to us. That makes the contract customers just another customer, he explained. Because most Milacron jobs are smaller and custom, versus large automated operations, Kinzie said, We do an awful lot of capacity planning. We move around the machinery. We have the ability to move people around. We have to be very flexible. And fast. We re able to provide that customization as rapidly as possible. Milacron uses J.D. Edwards EntepriseOne ERP software to manage its capacity and other operations. Typically, the machinery side of Milacron forecasts its sales about six months in advance, leaving the machining operation to book its excess capacity. Virtually all machines are built to order, with very few stock machines. ME Solution Evolution. Experience Does Count... A Leader in EDM Drilling Since Everything for EDM Michigan :: North Carolina :: Massachusetts :: California :: Illinois Headquarters :: Phone :: Fax :: ISO 9001:2008 See us at SOUTH-TEC Booth # ManufacturingEngineeringMedia.com October 2013