2010 The American Mold Builder - Spring

www.amba.orgtheamericanmold builder

Volume 24 No. 3

IN THIS ISSUE:IN THIS ISSUE:

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speak outa message from our president

“The American Mold Builders Association is dedicated to promoting our member services and overall competitiveness in a world market, through membership participation, for continuous improvement to strengthen our industry and establish our value in a global economy.”

This is the mission statement of the AMBA. I am very excited and honored to assume the role of president of this incredible Association. While I know I have some big shoes to fill, I am excited to represent our one of a kind Association dedicated to U.S. mold manufacturers. With all of the challenges we have been facing these last 10 years, this organization, its staff, and its members have, in response, challenged themselves and risen to the occasion. One of the big reasons for our success these last couple of years has been the leadership of Steve Rotman (Ameritech Die & Mold, Inc., Mooresville, NC). We owe Steve a tremendous thank you for his time and dedication to the AMBA. Thank you Steve!

The AMBA has an impressive board of directors. I am very proud to be associated with this group. I’d like to take this opportunity to give our sincere thanks to two outgoing directors; Scott Harris, (Harris Precision Mold, Tempe, AZ) and Donna Pursell (Prestige Mold Inc., Rancho Cucamonga, CA) for their service and dedication to the AMBA and its mission. Both Scott and Donna have served our board successfully for a long period of time and have both brought a degree of professionalism and perspective that have served our Association proudly. We wish them both the very best!

Additionally, we are excited to announce two new directors. Michael Bohning (Creative Blow Mold Tooling, Lee’s Summit, MO) and Andy Baker (Byrne Tool & Die, Inc, Rockford, MI) have joined the AMBA board. We have had great success in getting new directors involved and we continue to encourage our members (YOU) to get involved at the local and national levels.

I am also excited to introduce your to the new Vice President of the AMBA, Todd Finley (Commercial Tool & Die, Inc., Comstock Park, MI). Todd is a seasoned veteran of our industry and has represented his company and U.S. mold manufactures successfully in many areas of debate most recently through conversation and negotiations with the U.S. Automotive Task Force. Todd has been, and will continue to be an excellent representative of the AMBA.

We have a busy year ahead of us! The board of directors has decided to dedicate its June 2010 board meeting to strategic planning for the Association. We feel that now is a good time to sit down and evaluate our mission and make the necessary plans for guiding the AMBA for many years to come.

Mike ArmbrustMike Armbrust

(continued on Pg 8)

Mold Builder of the YearMold Builder of the Year

Chapter of the YearChapter of the Year

2010 Convention Summary2010 Convention Summary

New Board Members/OfficersNew Board Members/Officers

AMBA NewsAMBA News

2 AMBA

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AMBA 3

The official publication of American Mold Builders Association

Leading the Future of U.S. Mold Manufacturing

3601 Algonquin Rd, Suite 304 • Rolling Meadows, IL 60008phone: 847.222.9402 •fax: 847.222.9437

email: [email protected] • website: www.amba.org

Officers and Board of Directors

PresidentMike Armbrust, Mako Mold CorporationVice-PresidentTodd Finley, Commercial Tool & DieSecretaryShawn McGrew, Prodigy Mold & ToolTreasurerKent Hanson, H.S. Die & Engineering, Inc.Executive DirectorMelissa MillhuffAssociation Legal CouncelRichard N. Mueller & Associates

Board of DirectorsSteve Rotman, Ameritech Die & MoldShawn McGrew, Prodigy Mold & ToolKent Hanson, H.S. Die & Engineering, Inc.Justin McPhee, Mold CraftRobert Earnhardt, Superior ToolingTodd Finley, Commercial Tool & DieDan Glass, Strohwig IndustriesRoger Klouda. M.S.I. Mold BuildersScott Phipps, United Tool & MoldRobert Vaughan, Fairway Injection Molding SystemsMike Walter, MET PlasticsAndy Baker, Byrne Tool & DieMichael Bohning, Creative Blow Mold Tooling

AMBA StaffMelissa Millhuff, Executive DirectorSue Daniels, Member Services CoordinatorShannon Merrill, National Chapter Coordinator

The American Mold Builder is published four times annually in spring, summer, fall and winter by the American Mold Builders Association. Editor: Melissa Millhuff; Assistant Editor: Sue Daniels; Contributing Author: Clare Goldsberry; Layout & Design: Controlled Color, Inc. phone 630/295-9210; Publishing:Your Images Group, Inc., phone 847-437-6688; Copy deadline: 25 days preceeding publication date. Contact AMBA at 847/222-9402 or email [email protected] for adver-tising information, article submission ideas, or a subscription.

Opinions expressed in this publication may or may not reflect the views of the Association, and do not necessarily represent official positions or policies of the Association or its members.

We just got back from Orlando where we had a great convention. Upon our return, we took the feedback we received from the attendees and began planning what will no doubt be our best convention yet. The 2011 AMBA Annual Convention will be held in Las Vegas! Not only will the topics be exciting, but we promise top-notch speakers that guarantee you will leave with plenty of information to execute in your own business.

In the meantime, keep your eye out for information regarding the Fall Conference. We have had a great group out in DC the last two years, but this an election year and I would really like to see more of you take a hands-on approach to what is happening in our government that affects your businesses. Our collective voices can make a difference!

Melissa Millhuff Executive Director

In this Issue:Spring Business Forecast Survey ....................................................................4AMBA Website Webinar Provides Members with Valuable Information .....6AMBA Webinar: “Mold Cooling – Reducing Mold Cycle Time by 20-40%”.......7Innovating Mold Design with Direct Metal Laser Sintering (DMLS) .........8AMBA’s Mold Builder of the Year ...................................................................9AMBA Chapter of the Year ...........................................................................10New AMBA Board Members Announced .....................................................11Board Elects Officers .....................................................................................122010 AMBA Annual Convention Wrap ........................................................13Thank You to Our Convention Sponsors & Tabletop Exhibitors ................20AMBA 2010 Annual Convention Photos .....................................................24AMBA News ..................................................................................................26Welcome New Members ...............................................................................27Members Exhibit at PLASTEC West 2010 ..................................................28Member News ...............................................................................................29Chapter News ...............................................................................................32News for Die Casters .....................................................................................34

Gibson Insurance The Risks And Responsibilities Of Hosting A Party ........................34 Teens and Texting .............................................................................35 Prompt Claim Reporting Saves Dollars and Improves Care ...........36 Safety Programs ................................................................................36

Human Resources Why Employers Need Two Sets of Employee Files ..........................37 Set the Stage for Success from the First Day! ..................................37 DOL & IRS Crackdown on Payroll Issues .........................................37 New Tax Credits for Employers with Fewer than 25 Full Time Employees ....................................................................37 New Tax Credits for Hiring Unemployed Workers ..........................38

Tax & Business Charting a Course to Increased Business Value...............................38 FLPs and How They Work .................................................................40 Bankruptcy – Advantages & Disadvantages ....................................41 College Costs Keep Skyrocketing .....................................................42

Business Success Strategies Taking Out Credit Insurance on Business Receivables ...................42 Employee vs. Independent Contractor - Brief Review of the Rules ....43 10 Ways to Reduce Supply Chain Costs ...........................................43 Peek at Your Business’ Rating! - Compare to Local Peers ...............45

4 AMBA

a slight downturn from the 38% in the Winter survey; the Same for 36% (up 3 percentage points from the Winter survey) and Down for 30% (two percentage point drop from 32% in the Winter survey). This seems to indicate that work is staying steady and not fluctuating too much in the wrong direction.

Profits in the Spring survey ticked upward once again, with 20% reporting that profits are Up, compared to 17% in the Winter survey. This category has also trended up from a low in the Spring of 2009. Profits are the Same for 49% of the respondents, identical to the Winter survey, compared with 47% in the Fall survey. However, profits are trending Down for 31% of the respondents in the Spring survey, compared to 34% in the Winter survey, a slight improvement.

Employment levels have dropped off slightly, being Up for only 14% of the respondents, compared to 16% in the Winter survey. They remained the Same for 66% of the respondents, down from 74% in the Winter survey. Employment is Down for only 20% of the respondents, double the 10% of the respondents in the Winter survey.

The current average number of shop employees held steady at an average of 22. The current average number of design and engineering employees dropped by one in the Spring survey, to five. Work-week hours for shop employees also remained steady at 45 for the Spring survey, the same as the Winter survey. For design and engineering employees the hours also remained at 45, the same as the Winter 2010 survey.

The Spring 2010 survey contained two questions. The first had to do with health benefits provided by AMBA member shops: If your company offers health benefits, what kind do you offer? Of the respondents who chose to answer the question, 49 provide PPOs; 26 provide HMOs; 39 provide HSAs (Health Savings Accounts); 2 provide FSAs (flexible spending accounts); 3 provide traditional insurance; 2 provide no insurance; 3 provide an HRA; 1 self-funded; 1 EPO, and 1 PHP. 18 provide two or more types of insurance.

The second question asked about marketing strategies. Of those responding:

• 56% are redesigning their websites;

• 23% are advertising in trade publications;

• 15% are advertising in online e-newsletters/ trade publications;

• 15% are creating an in-house e-Newsletter for customers and potential customers;

• 41% attend market specific trade shows.

21% are doing none of these things, but are doing networking, have a Thomas Net account, and several are making more efforts with personal sales calls, adding to direct sales, and making other efforts to promote business with both current and new customers.

A number of comments this quarter still show great concern about the government, taxes and regulations, as well as continued concern about the trade imbalance with China. “We need to fix the tax imbalance with China,” commented one respondent. o

Spring Business Forecast Survey Reveals Hint of Recovery

The Spring 2010 Business Forecast of the AMBA reveals a hint of recovery as business upticks lend an air of hopefulness. The quarterly survey revealed that current business conditions once again improved slightly over the previous three months, with 7% of the respondents saying that business is Excellent – up a full percentage point from 6% of respondents in the Winter 2010 survey, and putting that category back to where it was in the Fall 2009 survey. A total of 44% of the membership responded to this recent survey.

Current business conditions also improved, moving up 2% for those reporting Good conditions (35%) compared to 33% of the respondents in the Winter survey. That is up a full 12% from the Fall survey, as the outlook continues to move in the right direction. Fair business conditions exist for 43% of the respondents compared to 44% of the respondents in the Fall survey. Those reporting Poor business conditions continues to fall, with only 14% noting poor conditions, down one percentage point from the Winter 2010 survey, and a big drop from the 27% reporting poor business conditions in the Fall survey. Bad conditions exist for only 1% of respondents, yet another percentage point improvement from the 2% reporting Bad conditions in the Winter survey, and a nice decline from 5% of the respondents in the Fall survey, and a continued improvement from the 12% reporting Bad conditions in the Summer survey.

Projections for business over the next three months are a bit more pessimistic with respect to the outlook of future business among respondents. Only 4% expect business to Increase Substantially, compared to 8% in the Winter survey. Those expecting business to Increase Moderately ticked upward to 44%, compared to 40% of the respondents in the Winter 2010 survey, once again showing more optimism.

Forty-five percent of respondents expect business to Remain the Same. Respondents expecting business to Decrease Moderately again dropped by two percentage points to 7% compared to 9% in the Winter 2010 survey. None of the respondents expect business to Decrease Substantially, down 2% and marking the first time that has happened in recent history.

When asked to compare their company’s current level of business with that of three months ago, responses indicate some movement in a positive direction:

Quoting activity is again Up -- 46% of the respondents compared to 40% of the respondents in the previous survey; the Same for 35%, down from 59% in the Winter 2010 survey; and Down for just 19%, a drop of 2% from the 21% in the Winter survey. Several respondents noted that there is an increasing lag time between quoting and getting the P.O. “We are having a very difficult time getting customers to release purchase orders,” said one respondent. “They are holding them until the very last minute in most cases.”

Shipments are Up for 36% of the respondents, compared to 33% last quarter, a continued upward trend from 29% in the Fall 2009 survey. Shipments stayed about the Same for 42% of respondents; and Down for 22% of the respondents. Backlog is Up for 34% of the respondents,

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The AMBA Business Forecast Survey was developed to provide AMBA members with informationon the current business conditions and a projection of the upcoming months. The Spring 2010Survey resulted a response rate of 44% from AMBA members. Business remains "Good"for 35% of the respondents, and for 7% of the respondents it is "Excellent."

AMBA Spring 2010 Business Forecast Survey Results

AMBA Members Current Business Conditions

7%1% 14%

43%35%Excellent

Good

Fair

Poor

Bad

Projection of Business Over the Next 3 Months

45%7%

0%

4%

44%

IncreaseSubstantially

IncreaseModerately

Remain theSame

DecreaseModerately

DecreaseSubstantially

0%

10%

20%

30%

40%

50%

60%

70%

Up Same Down

Current Level of Business in Last 3 Months

Quoting

Shipments

Backlog

Profits

Employment

Current Work-Week Hours

45 45

0

10

20

30

40

50

Wor

k H

ours

Average Shop Hours Average Design & Engineering Hours

Current Number Plant Employees

22 5

0

10

20

30

40

50

Plan

t Em

ploy

ees

Average Shop Employees Average Design & Engineering Employees

0% 10% 20% 30% 40% 50% 60%

Advertising in online e-newsletters/trade pubs

None of the above

Advertising in trade publications

Attend market specific tradeshows

Redesigning my website

Your 2010 marketing strategy includes (Respondants could choose more than one):

6 AMBA

AMBA Website Webinar Provides Members with Valuable Information Creating an effective website is a key part of sales and marketing, said Todd Schuett, owner of Creative Technology, a company that specializes in photos, videos and website development. “Your website is a 24/7 ad for what your company does,” said Schuett. “We’ll be working toward a perfect website but in actuality there’s no such thing – it’s a constant evolution.”

The first thing that is needed is to analyze the company and put in place a marketing strategy or plan. Perform a SWOT evaluation (Strengths, Weaknesses, Opportunities and Threats) first. Key elements to feature are your strengths. Based on your evaluation of your company, what is your specialty? Promotional materials including the website should be designed to your strengths and speak to those markets and customers you have determined through your evaluation and marketing strategy, from which you want to capture business.

Perhaps you’ve identified some weaknesses, and one of the most common one is that mold shops tend to be small businesses – maybe with only five employees. Yet, in analyzing your sales and marketing, you discovered that because you’re small you have fast service. Perhaps you have a unique niche. Identify your special niche such as the ability to make threaded parts. Then show threaded cores and how they work to show what you do.

Schuett said that if you’re going to update your website, you should ask yourself a few questions: • Where are we right now?• Do I like my site? • Is it up to date? • Does it accurately depict what we do? • Is it visually appealing?

In order to move forward, think about who your website is for? Internal customers? External customers? Vendors? Employees? Is your site engaging?

To make your site more engaging, tell your story with photos. Text is important, but “showing” your capabilities is better than just telling. Engaging visitors to your site and getting them interested long enough to stay to learn more about who you are is the first goal. Next, you must know WHO your website is engaging? A lot of different types of people look at your website. Bankers and others such as insurance underwriters watch your site, and they are important as well. Your main target however, is probably engineers and purchasing people. While engineers generally understand moldmaking and molds, buyers may not understand what they’re buying. So your site should be educational for those who may not know exactly what a mold is or its function.

Priorities to show your audience: 1. Show them what you make: have photos of plastic parts and

mold examples. “You want to emphasize that this is important,” said Schuett. “Prospects want to know that you can do what they need done. How you portray that is important. We don’t build plastic parts but we build molds, and as such we’re a key element in making good parts. Therefore, what you make is important.

2. Business development: Show that your company is growing and include things such as news items or articles from industry trade magazines that feature your company. Show how you make your tooling, i.e. your capabilities. Show people in action. Also, don’t

just show a plastic nozzle, but show and describe a very complex, precision nozzle. If you make a mold for something that people purchase and use, put a photo of that part on your site so people can relate to it. Showing parts that everyone can relate to shows that you are part of their life and have an impact through the molds that you make.

3. Build your photo portfolio as you go so you have plenty of promo shots. When you finish a mold take a photo of it. When you do first article sampling and the parts come out beautiful, take a photo and build a file. That way you’ll have plenty of photos for your website.

4. Show detail on the photos of parts – there are ways to use your photography to leverage your strengths by taking tight shots of mold cores and cavities and plastic parts. When showing actual molds, we look at the mold and try to figure out what it makes. For a mold buyer it’s not particularly meaningful, and for a banker or insurance person it’s even less meaningful. But it can look impressive to them, and to your target engineering audience it will be meaningful.

Site organization is critical to the site’s appeal. How your tabs are arranged can appeal to different people. Some have their tabs across the top with drop downs for sub-heads. Some have the menu down the side and across the top.

Careers is an important tab, said Schuett. “Listing job opportunities not necessarily just a call for people to come and apply for jobs, but a signal that you are growing and investing in the future,”

Are you involved in politics and out lobbying for the interests of the mold building industry? “This is good to include as it shows you’re actively trying to make a difference in the world. It shows community involvement,” stated Schuett. “On one site, the company shows employees helping to build a house for Habitat for Humanity. It shows that you’re trying to make the world a better place.”

A two sentence bio on employees is interesting. It’s universally appealing, but difficult to do if you have hundreds of employees, or if you only have three or four employees. “This helps with relationship building,” Schuett said.

The point is that there is no ultimate site and you never get to the perfect site permanently. “We all look at things differently, and things at our companies are constantly changing,” Schuett noted. Tell what you do quickly because you have just seconds to lock them in or you’ll lose them. Make everything count on your site: Text and photos/illustrations. Build some things in so they have to hunt for it but give others the fast overview quickly and easily. Appeal to young and old alike – attract the young into the trade with photos of youth, and make your site photographically appealing with things like motorcycles. Text is essential not only for descriptions but for search engines, so make sure you have good text.”

Walking visitors through a quoting process as a video might help people understand why all the information that you request is actually needed. “I would not ordinarily have a quoting page on the site,” Schuett responded to a question on this topic. “While the site is there 24/7, it won’t get orders on its own, and it won’t do the closing for you. If someone doesn’t want any interaction with you – just a number – they are probably not discriminating enough to warrant your time anyway.”

Remember that ongoing updates are critical. “It can be the most important thing you do to keep it relevant, current, and interesting to visitors to the site,” concluded Schuett.

For more information contact Todd Schuett, at Creative Technology Corp., www.todd.schuett.com or phone at (847) 910-1258. o

Todd Schuett

AMBA 7

AMBA Webinar: “Mold Cooling – Reducing Mold Cycle Time by 20-40%”

Mold manufacturers need to be concerned about cycle time if they want to help their customers maintain a competitive edge, improve efficiencies, productivity and profits in order to compete on a global basis. That’s Bob Beard’s mantra which he presented at the AMBA webinar on “Mold Cooling: Reducing Mold Cycle Time by 20-40%” on February 24th.

The buzz in the industry has been on aluminum production molds as a way to get the heat out of a mold quickly and reduce cycle times. Using high-thermal conductivity metals, like beryllium copper and aluminum, achieve cycle reductions of 20% or more. With the industry looking for every penny, there is a paradigm shift on how aluminum is viewed as a production mold. Aluminum is less expensive than beryllium copper, and with a 20% reduction in cycle time and the potential to machine the mold 10% - 20% faster, what’s not to like? However, aluminum is not for every application. It’s softer than steel and the molding people need to be trained in the care and feeding of production aluminum molds. Coatings can provide a hard surface, but the substrate will still be soft. Hard coat anodizing the aluminum will increase the surface hardness to about 58 R

c. The growth thickness above the surface will equal the

substrate penetration. Some mold coatings can reduce the coefficient of friction, between the resin melt and the mold, which produces longer flow lengths in the mold.

Optimizing the choice of metal to be used for the cores and cavities and the design of the cooling lines represents 50% of available cycle reduction. The other 50% is analyzing and optimizing how the cooling lines are connected to the plant cooling system.

In order to reduce cycle time, there needs to be an understanding of heat management. This entails thermodynamics, dynamic heat transfer and how fluid dynamics impacts heat transfer. The First Law of thermodynamics states that: “Energy can neither be created nor destroyed but only changed from one form to another.” The Second Law of thermodynamics states: “Heat is transferred from a hot body to a cold body.” How does that apply to injection molding and cycle time? If you’re molding a resin that requires a 350 0F mold temperature and the mold was hung directly to the press platens, it will be very difficult, if not impossible to hold that mold temperature at startup. The heat is going from the hot mold to several thousand pounds of the press platens that are at room temperature which is acting as a heat sink. Almost as fast as the heat is being pumped into the mold, it is escaping into the press platens. An insulation board needs to be installed between the mold and the press platens. After startup, the hot oil coursing through the mold becomes a refrigerant because the heat from the resin melt at 600 0F is being transferred to the mold and oil, which are cooler at 350 0F.

The opposite situation can also occur. If the mold temperature is at 40 0F, the heat from the hot press platens at 70 0F is being transferred into the mold just prior to startup. After the first shot, the heat from the resin melt is being transferred to the mold and the cooling lines, but is also being transferred into the press platens at 70 0F which are now acting as a heat sink.

Go beyond mold simulations by doing an “enhanced cooling” analysis as to how molds are piped up to the plant cooling system. By taking an engineering system approach, you can reduce cycle times by 20% and more on existing molds. By measuring and optimizing water flow to insure that turbulent flow is truly present in the mold cooling system and by also changing the process, significant cycle reductions can be achieved.

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The molders and moldmakers that present their clients with a financial justification for doing mold simulations and “enhanced cooling” optimization, are giving the OEM purchasing agents the tools to convince their management to spend more on the mold and process in order to save more money over the lifetime of the project. Corporations financially justify every expenditure, and molds are no different. “As a professional engineer and manager, I’ve had to become half accountant in order to financially justify every project to management that I proposed” Beard said. Molders and moldmakers need to submit quotes with options that their customers did not ask for, but yet are financially justified options. How many molders and moldmakers prepare internal rate of return analyses or simple pay back on their quotes and options?

In his AMBA webinar, Bob cited data from the SPI Financial Ratio for 2006 (the last year that data was published) that a 20% reduction in cycle time increased profit incrementally by 5% on existing molds. For molders operating at 1% profit, this represents a 500% increase in profitability. By combining an “enhanced cooling” analysis with high thermal conductivity metals like aluminum and berylium, a 40% reduction in cycle time is achievable which produces increased profit incrementally by 10%. Since each company is different, each company needs to model how a 20% or 40% reduction in cycle time would affect their profitability. Molders can use the increase in margin to increase their profitability or lower the prices they quote, in order to increase their closure rates and obtain more new business to fill idle presses.

Bob Beard is President of Robert A. Beard Associates, Inc. His webinar is tentatively scheduled to be presented again by the AMBA on Sept. 22, 2010. He will be presenting his seminar on “Virtual Workshop on Troubleshooting the Injection Molding Process” at the Pdx/Amerimold Conference on May 10-11 in Cincinnati, His website is www.Plastic-Solvers.com. o

Innovating Mold Design with Direct Metal Laser Sintering (DMLS) By: Matt Vuturo, GPI Prototype

Listening to presentations at the recent AMBA National Convention, there was an overriding theme of embracing and stimulating change within the mold industry……Mold the Future of Your Business. Not how are we going to survive, but how can we thrive moving forward in today’s increasingly competitive global economy? There were some fine, stimulating presentations. Notably, I found Ryan Pohl’s presentation on building the next generation of workers to be right on target. Constant change is here to stay; the ability to adapt as crucial as ever.

Working with that innovative theme from the convention, I’d like to present a short article on an emerging tooling technology here in the states called Direct Metal Laser Sintering (DMLS). This additive manufacturing technology has been widely embraced by mold professionals throughout Europe over the last 5-10 years, and has started to penetrate niche molding industries stateside. The unique applications offered by DMLS make the technology a viable solution for a variety of common problems inherent to molding processes.

DMLS produces solid metal parts by locally melting metal powder with a focused laser, growing geometries layer-by-layer from 3D CAD data. The parts have excellent mechanical properties, high detail resolution, and can be finished to meet virtually any project requirement. The metal powder is melted entirely to create a fully dense, fine, homogenous structure. Some available materials include tool steel, stainless steel, cobalt chrome, bronze alloy, and recently released, aluminum. DMLS can make EDM and milling obsolete in many cases, especially with complex part geometries where slides, inserts or

other tool components with complex characteristics are required. To check out a short, light hearted presentation of DMLS, check out http://www.youtube.com/gpiprototype. DMLS creates timely and cost-effective tooling, reducing turnaround times from weeks to days, providing for the rapid manufacture of tooling inserts and components. Additional value is created by the unique geometric freedom of design, which allows for the integration of conformal cooling channels that enhance the economic performance of injection molding projects. Case studies on conformal cooling have documented reductions in cycle times by as much as 50%, improving operational efficiency and lowering unit costs.

Transparency of Conformal Cooling Insert

Finished Conformal Cooling Insert

Speak Out: A Message From Our President(Continued from front cover)

Our 2010 Fall Conference will once again be held in Washington D.C. Melissa and staff have been preparing for this year’s fall conference since the day we left Washington last year! Being an election year, it is even more reason to join us September 28-30. The Fall Conference will give you the opportunity to get at real-time pulse of the issues we face and meet with YOUR representatives. You will have the opportunity to express YOUR concerns and make a difference! Remember, every vote counts.

In closing my inaugural Speakout article; I would simply like to remind everyone that the AMBA is YOU. This Association is made up of YOU the member. Together we are a group of word class innovators bringing superior performance and value to the plastics industry. I am thrilled and honored to represent the AMBA and look forward to working with you in making a positive difference for our trade, our companies, our employees, our families and our Association.

Remember, positives multiply, negatives divide and subtract. I’m proud to be an American Mold Builder!

God Bless America! o

Do We Have your Current Email Address?

Be sure to notify AMBA of any email changes, so no interruptions occur with important information from the AMBA.

AMBA 9

Benefits of conformal cooling and DMLS:

• Routing options for cooling channels are almost infinite. This makes it possible to create an ideal cooling channel that is a well defined distance from cavity walls.

• A more effective mold temperature control system saves time and costs in the process of injection molding

• Improved part quality: Minimize warp, sink, and internal stress thus minimizing internal stress; scrap rates are reduced or eliminated.

• Heat/cool critical areas inside the tool that cannot be reached by conventional methods.

• Mold cavities can be rapidly cooled, producing optimal cycle times by minimizing cool down times in tooling cavities.

• An evened out temperature level can help to improve tool life.

DMLS opens new frontiers for the implementation of highly efficient heat/cooling systems, offering designers extended possibilities for the manufacture of high perfor mance tools – all without having to consider the many limitations that characterize conventional processes. Tools created by DMLS are used to produce millions of parts in injection molding operations or many thousand metal parts in die casting. The challenge for integrating a system of this kind is to find the optimal design for the channels. Complexity of the channel design does not impact the tool manufacturing process, as the DMLS system builds channels directly into the tool.

The advantages of these systems maintain a wide range of benefits for the future of mold production.

For more information please contact Matthew Vuturo, Director of Sales & Marketing for GPI Prototype & Manufacturing Services, Inc. ; Phone: 847.234.1774; Email: [email protected]: http://gpiprototype.com o

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Andy Baker of Byrne Tool & Die Awarded AMBA’s Mold Builder of the Year

The AMBA, awarded the Mold Builder of the Year to Andrew Baker, project manager for Byrne Tool & Die in Rockford, Michigan. Andy received the award at the AMBA Annual Convention, March 24, in Orlando, Florida.

Byrne Tool has been a member of the AMBA since 2003. Andy serves on the West Michigan chapter board and on the scholarship committee, and works actively to support the chapter in a variety of ways, including organizing the first-ever chapter golf outing which was very successful in raising money for the chapter’s Scholarship Fund.He promotes moldmaking as a career at the local high school’s “Career

10 AMBA

Day” and is currently doing some beta testing for a new training company specializing in tool and die training. Andy actively lobbies to promote industry awareness through efforts such as going to Washington, D.C. and meeting regularly with local representative to share his view points. As a result of this activity, Andy receives regular weekly updates from his Congressional officials.

Andy also actively promotes employee involvement and social awareness by taking the entire company to help with Habitat for Humanity projects.

Andy’s contributions to Byrne Tool & Die’s success include helping the company increase its sales every year since 2003, and the company expected a 10% gain in 2009. In 2008, Andy was instrumental in creating a strategic sales plan to enhance sales and help the company move into new markets, while targeting new customers. Byrne Tool embraces “Lean” principles and coined it “Common Sense Manufacturing” or CSM, creating many metrics that monitor the company’s effectiveness throughout the entire system.

Byrne Tool continues to invest in new equipment, technology and employees, and works with machine tool vendors to provide the best in new tool technology. The company works with other area mold companies to learn best practices so that every shop can grow through sharing.

“Receiving this award was a real surprise,” Andy comments. “The AMBA has some great moldmakers and to receive this award was so amazing to me. Even though the award says Andrew Baker on it, it’s really a reflection of all the people here at Byrne Tool and the great work that we do here. It showcases the whole shop.”

Baker was presented with a check for $5,000 from Progressive Components to be used for an industry-related education program of his choice. He will work with the chapter to decide how the money will be used.

Byrne Tool also developed its web site (www.byrne-tool.com) to provide value-added services such as an online job-tracking system that allows customers to log in and check the progress of their new tooling, download progress reports, and more. Andy’s contribution to the company in all of these areas has helped the company achieve sustainable growth and increased profits, while reducing lead time by 30% and provide customers with a quality mold at a competitive price.

Byrne Tool received the Manufacturer of the Year Award from the Rockford Chamber of Commerce, and the small shop Lead Time Leader Award from Mold Making Technology Magazine. o

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West Michigan Chapter Named AMBA Chapter of the Year

The AMBA awarded the West Michigan chapter its 2010 Chapter of the Year Award! The award was presented to the chapter at the AMBA Annual Convention in Orlando, Florida, on March 24.

The West Michigan chapter has an extremely active membership base that promotes education and apprenticeships, with the help of its many supportive vendors. One of its member companies, Commercial Tool & Die, began an in-house training and apprenticeship program that led to the hiring of a full-time instructor. From this, Expert Technical Training LLC evolved, led by Ryan Pohl, who now works with local high school instructors, vocational centers and colleges to help develop a curriculum that can be used at those levels, along with training new hires in the industry.

When the chapter found out that the Gerald R. Ford Council of Boy Scouts was having difficulty getting a sponsor for one of their events, the West Michigan chapter stepped up and provided a $2500 check to underwrite their Silver Recognition Awards. This awards program honors volunteers who provide exceptional service to the youth in the area. “Since today’s youth are our future, our chapter members responded favorably to take this opportunity give back to our local community,” said Jill Finley, West Michigan chapter coordinator, and who works at Mold Surface Technologies Inc.

In September 2009, the first-ever chapter golf outing was held, and in spite of the economic difficulties experienced by many Michigan companies, 88 golfers attended the event which ultimately raised $6000 for the chapter’s scholarship fund. The Scholarship Fund helps children of AMBA member company employees. In 2009, the chapter awarded three scholarships totaling $4000. One particular youth was awarded three scholarships over four years based on merit alone. “The ultimate thank you came when we found out this youth will now be entering the trade, in order to give back to an industry that helped him,” said Finley.

The West Michigan chapter was presented a check for $5,000 from Progressive Components to be used for an industry-related program of their choice. The chapter is discussing how to best use the $5,000 scholarship fund.

The West Michigan chapter is active in government, and meets regularly with state and local representatives. The chapter was instrumental is closing some loopholes in the Michigan Mold Lien Law to make it more effective. Last February, a rally was held on the Capitol steps in Lansing, with a number of chapter members in attendance. The chapter follows the voting records of its representatives and sends this

AMBA 11

AMBA 2009 Fall Conference Testimonial:

I enjoyed myself thoroughly at Fall Conference. It was a real eye opening experience, and I plan to be active with the Carolinas Chapter and AMBA National office as much as possible moving forward! David Bowers II, JMMS, Inc.

information to its members to make each one fully aware of how they are being represented on the issues that directly affect the industry.

Kent Hanson (H.S. Die & Engineering, Grand Rapids), chapter pesident, also sits on the board of directors and serves as treasurer of the national AMBA. The West Michigan chapter’s Todd Finley of Commercial Tool & Die, also serves on the Board of Directors of the national AMBA. o

New AMBA Board Members AnnouncedFour directors have been elected to a three-year term.

Andy Baker, Byrne Tool West Michigan Chapter

Andy Baker is the Project Manager at Byrne Tool & Die in Rockford, Michigan. Andy currently runs all day to day operations and has helped Byrne Tool and Die transition into a sustainable business culture with annual growth over the past five years. While working at Byrne Tool, Andy has gained a vast knowledge of lean manufacturing principles and how to apply them to moldmaking. He also serves on the board for the West Michigan chapter and the Michigan Tooling Group. Andy is a journeyman moldmaker and has been in the tool & die industry since 1993. He is currently attending Cornerstone University, focusing on business administration. Andy is a Christian and avid outdoorsman. He enjoys hunting, camping

and spending time with his family. Andy lives with his wife and three children in the Rockford, MI area.

Michael Bohning, Creative Blow Mold Tooling - Non Chapter

Michael Bohning acquired Creative in 2006 after a career of more than 20 years in public accounting and management consulting. Creative Blow Mold Tooling celebrated its 25th anniversary in 2009. Michael, a CPA, spent many years working closely with owner-managed manufacturing companies on a variety of strategic issues, including business planning, financing, business process improvements, technology, and performance management. He has aggressively applied many of these lessons learned to the operations at Creative through initiatives in lean manufacturing, lean enterprise, training, performance management, quality, and customer service. Michael is active in the greater Kansas City business community.

12 AMBA

Kent Hanson, H.S. Die West Michigan Chapter

Kent started out his 35 year career as a mold polisher while attending college, then working his way up at HS Die and Engineering from a moldmaker, to Program Manager before he was promoted to General Manager where he works with other managers who follow the overall build and completion of 400-500 molds and 300 special machining projects annually. Kent feels strongly about supporting the moldmaking industry and has published many articles in trade periodicals. He has co-written and taught seminars that dealt with Basic Mold Theory. Kent has worked for nine years on the AMBA National Board of Directors, been the AMBA local chapter president for six years, and helped lobby and pass for the 2001 State of Michigan’s Bill 4812 – “Mold Lien Law”

Justin McPhee, Mold Craft, Inc.Minnesota Chapter

Justin is VP of Engineering at Mold Craft in Willernie, MN. Mold Craft just celebrated its 45th anniversary designing and building precision injection molds. He began his career in 1999 as an entry level mold designer. The skills and values he learned early in his career as he progressed up the ladder earned him an opportunity to become the VP of Engineering. Justin’s

Board Elects OfficersFollowing the announcement of the new national board of directors during the 2010 convention, the officers for the 2010/2011 term were announced. Mike Armbrust, Vice President of Mako Mold Corporation, has stepped into the position of AMBA president after serving the requisite two terms as the organization’s vice president. Armbrust will serve as the AMBA President for the next two years.

Todd Finley of Commercial Tool & Die Inc. will serve as Vice President for the next two years. Shawn McGrew of Prodigy Mold & Tool will continue his role as Secretary. Additionally, Kent Hanson, of H.S. Die will continue to serve as AMBA Treasurer. o

President – Mike Armbrust Mako Mold Corporation

Vice-President – Todd Finley Commercial Tool & Die

Secretary – Shawn McGrew Prodigy Mold & Tool

Treasurer – Kent Hanson H.S. Die & Engineering

most successful achievement was to become one of the owners of Mold Craft in September 2007. Justin filled a vacant seat on the National Board of Directors in late 2009 and has attended the 2008 & 2009 fall conferences. He is secretary of the Minnesota chapter and is part of the Education Committee. Justin also volunteers in the local community to promote manufacturing to the students, teachers, and parents. o

Why I Joined the AMBA:

There are many worthwhile reasons to join the AMBA. We joined back in 1973 as their 14th member! Participating in both nationally sponsored events and those programs offered by our local chapter has provided us with solid mold builder relationships, as well as information and solutions that are specific to the mold making industry. No other association offers that! Francine Petrucci, B A Die Mold, Aurora, IL

AMBA 13

2010 AMBA Annual Convention Wrap

Orlando Convention Presentations Cover a Range of Challenges, Opportunities

The AMBA Annual Convention in Orlando, Fla., had 140 attendees that included a number of children whose parents took the opportunity to make it a “family affair.” In her opening remarks on the first day of the convention, Executive Director Melissa Millhuff, said, “We’ve had a tough year in 2009, but we need to think about the lessons learned and step outside our companies and see what we need to make our companies better by learning from each other and from our suppliers. That is what this annual convention is all about, networking with our peers and with our suppliers and learning new ideas and technologies, and finding new opportunities to run our businesses more profitably.”

Manufacturing a Better Future for America: Richard McCormack & Scott PaulRichard McCormack, editor of Manufacturing and Technology News and of the new book “Manufacturing a Better Future for America.” Each attendee received a complimentary copy of this book written by a number of authors, about the future of manufacturing in the USA. “If you don’t have a manufacturing base you don’t have a housing industry,” stated McCormack in his presentation, pointing out that most of our other industries rely on a strong manufacturing industry to create the wealth that is needed to support an economically strong America.

“Without industry to pay taxes it all falls on people who don’t have good jobs to pay the taxes,” he said. “The Department of Defense is finally linking the fact that they don’t have U.S. suppliers with the attitude toward manufacturing in this country. There is a battle being waged with economic ideologues in the U.S. that outsourcing is best for the U.S. in the long run – that ideal is still prevalent – that we can have a service industry alone and create wealth.”

Manufacturing is critical to the American economy, and that is slowly starting to be recognized – but it’s late in the game, noted McCormack. Manufacturing is high-tech. “The making of products is high-tech, even if the products themselves are low-tech,” said McCormack. “Still the policy makers remain asleep. They have the idea that we’ll just be great innovators and let someone else do the manufacturing. There’s starting to be some realization in Washington that you can’t decouple manufacturing from R&D. You don’t make money with it until you’re manufacturing millions of products – mass production is necessary.”

As to those companies who have threatened to move their manufacturing offshore, such as Emerson Electric’s CEO did last fall in a manufacturing summit, McCormack said, “Why isn’t our government asking Emerson ‘what can we do to keep you here?’ It’s crazy to invest in China! You’ve got a six-month inventory supply line and other problems. There’s no reason to invest in China.”

McCormack pointed out some of the government issues that are driving U.S. manufacturing offshore: the Environmental Protection Agency and the “Greenies;” the high social security taxes, unemployment taxes, health insurance, EEOC, OSHA, huge health insurance tabs.

Chinese consumption of machine tools was $19.4 billion in 2009. U.S. consumption of machine tools was $3.4 billion last year, McCormack pointed out. And, solar is heading to China. The U.S. solar manufacturing industry represents only 5% of global output. 84% of the stimulus dollars that went to “green” energy went to purchase foreign wind turbines, and wind installation declined 34% in the U.S.

Scott Paul is the Executive Director of the Alliance for American Manufacturing, a general voice for manufacturing in the USA. “We have lost 51,000 manufacturing facilities in the past decade and one-third of all manufacturing jobs,” Paul told the attendees. “Even during the Great Depression we eked out a positive industrial production, while in 2001, we dropped in industrial output. So this recession started well before 2008.”

The gauge of public opinion shows that people generally agree with the AAM on manufacturing, but the real challenge is “image.” Paul noted that “many think manufacturing is our past, not our future – the Archie Bunker image or the negative image of the factory. The truth about manufacturing is much different that it’s portrayed,” he said.

“We’ve built America – the defense-industrial base – we’ve led the way,” said Paul. “We can persuade people that manufacturing is important, but we can’t compete with countries that provide subsidies to their manufacturers. There’s a lot of anger out there, but if we get the angry mob focused on what we need for the future, we have a chance.”

Paul said there are several things that manufacturing needs to succeed: A manufacturing policy of reciprocal trade agreements – the Golden Rule of Trade – “we’ve given up our market access,” he said. exchange rates need to be addressed – “Either impose tariffs or stop pegging the Yuan to the dollar,” said Paul. “This would create two million jobs and cost the government nothing.”

Taxes need to be revised to incent companies to expand businesses here. “Our tax policy drives production offshore,” said Paul. “A system that screws people who want to produce here and gives incentives to companies that go offshore” does nothing to create jobs. “Simple tax reforms are needed to make it advantageous to manufacturers here to hire more workers.”

We need to provide financing for manufacturers. Paul proposed that the government “repurpose” the TARP money to go to small banks that lend to small manufacturers, or to a manufacturing loan group to give small manufacturers money they need to run their businesses. Developing workforce skills and providing training is critical as well. There will be a lot of turnover during the next decade as many of the older workers retire, and there will be a problem hiring skilled workers. Many young people are getting no training because the push is to get everyone into a 4-year college. “That’s not what we need,” said Paul.

A “Buy American” policy for the federal government is badly needed, stated Paul. “All our trading partners have this – Japan has a Buy Japan policy, as does Germany and many others.”

14 AMBA


Connect R&D to manufacturing. The idea that we’ll do the R&D here and make everything in China is of no benefit to the American economy. “Give big tax credits to commercialize products here,” Paul suggested. “We’ve basically handed the keys to the manufacturing plant to the Chinese. We’ve busted the myth that we can innovate here and manufacture it in China and have a strong economy. All good jobs are with manufacturing.

Climate and Clean Air policies need to be equal around the globe to be effective. “If it doesn’t include China and India, we’re digging our own grave for manufacturing in this country,” stated Paul. “China’s carbon foot print is three times larger than ours. If we export manufacturing to China and India, we’re contributing to a larger carbon foot print globally.”

Paul advised AMBA members to keep up the good work with the Fall Conference in Washington, D.C. every September, and “talk to your representatives in Congress, he said. “ They work for you. Invite a member of Congress to your plant and show them what you do and who you employ. They have no idea what you do, and many are shocked and surprised at what you do when they see it firsthand. Make your voices heard.”

Taking a Look at Markets:At this year’s convention, the AMBA asked three knowledgeable people to speak about the markets in which they are heavily involved. We wanted to give the ABMA attendees the opportunity to learn more about these three major markets, the challenges and opportunities in serving these markets.

Automotive Market

Laurie Harbour-Felax, President of Harbour Results Inc. (Berkley, MI), spoke about the automotive industry. As a consultant to the automotive industry, Laurie has a good handle on this market, and understands the challenges the suppliers face that serve this market.

“Flexibility is the key to being profitable in the automotive market,” she stated. “Are companies going to take advantage of change or keep the status quo?”

Laurie pointed out that there are a number of issues impacting the automotive industry, including the continued bankruptcy problems among the Tier One suppliers, and even the mid-size Tier Two suppliers due to a lack of available capital. The fuel-economy issues and government role in dictating that along with the government ownership of GM will also impact this market.

“There’s also a shifting focus in manufacturing,” she added, “with more global platforms and components.” For example, Harbour said that putting the same pedal on every vehicle reduces costs but that also results in recalling all cars when something goes wrong. While there are more common platforms and components it will result in stricter regulations. There will also be fewer tools, not great news for moldmakers who serve the automotive industry.

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There continues to be “unprecedented demand” for vehicles, but OEMs are looking for lower fixed costs. “Flexibility is critical,” Laurie reiterated, adding that the projected units over one year will be 12 million. But that fluctuates – it could be 16 million units the following year and down the year after. So flexibility among suppliers to the automotive industry is critical.

The automotive industry will continue to watch its inventories as it offers incentives to sell more vehicles. She also noted that the supplier/OEM model will change. “The model for payment terms is starting to change,” Laurie said. “If you’re a supplier to GM that company now has put purchasing under product development” so they’ll have the input from engineering on mold buying.

Laurie said that those suppliers that will survive will have the technology advantages in multiple locations to be able to serve the OEMs and the large Tier One suppliers. Her take on the Detroit Three: GM has lowered its structural costs, and will have an IPO later this year. Ford doesn’t have a clean balance sheet and didn’t get the Union concessions it was seeking. “I wouldn’t be tying up my resources building tools for Chrysler,” she added. “But Volkswagen is projecting 200,000 units at its new plant in Tennessee. Hyundai is also riding this wave.”

She projects more consolidation among suppliers, but they will be selling value, not capacity. They will achieve profitability through flexibility.

Laurie’s advice to the AMBA attendees:1) Set the “Vision” – revisit your strategy2) Define and assess your capabilities – your core capabilities

(designing and building molds) and you’re enabling capabilities (IT, financing, etc) including your competency (ability to do something) and your capacity (the maximum that can be done).

3) Build a transformation plan for your core competency and your enabling capabilities.

4) Leverage flexibility. “As you come out of the recession, grow out of this,” she advised. “Grow your profits through flexibility, not just your business. Add back in less that you take out and be flexible to accommodate the ups and downs in the automotive market.”

5) Focus on the differences that matter: Weed the garden; focus on continuous improvement; increase your throughput – do more with the same capabilities; focus on program management – “there are a lot of new programs in automotive – it’s all about new products; standardize and plan your assets for the future. Inflation will happen.

6) Leadership is a must. “You must lead, set the foundation and develop a strategy,” Laurie said. “Put the right people in the right seats. Make decisions – let the team make decisions, and get out of your own way. Eliminate barriers and set the beat.”

7) Don’t over-engineer the process! It’s about blocking and tackling. The automotive has made us more complex that we need to be.

Appliance Market

Jack Shedd is vice president of sales and marketing at Hoffer Plastics in Elgin, IL, a custom injection molder and contract manufacturer. The appliance industry is one of the company’s major markets that it serves. Jack has had many years working with the appliance industry in previous positions with another molding company and understands this market quite well.

“Why the appliance industry?” he asked the attendees. “They have high volumes. Whirlpool in Clyde, Ohio, makes 22,000 top-load washers a day, for example. They make these in the United States because they can’t make it in Mexico and ship it back into the U.S. because that’s more costly.” Whirlpool has 25 North American assembly locations and uses lots of plastics. “There are a lot of opportunities for moldmakers in the U.S. in this market,” said Shedd.

Appliance typically has a three-year “refresh” cycle in which they use the same platform but incorporate new features. Whirlpool is the dominant player with a 36% share of the market plus their subsidiaries of Amana and Maytag with 12% market share.

Appliance industry trends include:1) Pressure for low-cost tooling and hence overseas tool builds. To

be competitive, U.S. moldmakers need to “figure out a better way to skin a cat,” said Shedd.

2) Appliance manufacturers want partners who can be integrators – make the mold overseas, then finish the mold here or groom the mold here. “I have to source some low-cost countries, but we’re allowed to put 5% onto the cost to cover our participation in the program,” he said.

3) Appliance makers have a 24/7 build requirement. “They can‘t get molds fast enough, and with the time differential, they can do better building molds stateside than in China,” said Shedd. “But we can count on this industry being here because of the large items and the shipping costs.”

Medical Market

Jerry Seidelman, sales and marketing manager for Tech Mold Inc. (Tempe, AZ), provided some insight into the medical market. Tech Mold serves the medical and pharmaceutical markets, among others. “Medical markets performed well through the turmoil,” he remarked. “Medical packaging held its own at 3% growth in 2009.”

In spite of that good news, the down side is that companies began to cut back on new mold releases, and put more into the budget for mold repair and maintenance, which was good work for Tech Mold during 2009. For 2010, Tech Mold is seeing an increase in new activity. “Is the medical industry recession proof?” Jerry asked the attendees. “Well, to a point.”

Jerry pointed out that some of the factors driving the stability in the medical and pharmaceutical markets include a huge population of aging baby boomers. Other opportunities include the rising use of single-use

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disposable medical products, and more complex devices which drives a larger number of molds. “More parts means more molds,” Jerry said.

Competitors to serve the medical and pharmaceutical industries are coming from several parts of the globe – South America, Portugal, India and China.

Trends in these industries include the demand for better quality molds, molds that run higher productivity, tighter tolerances. We need to adopt the metric system in this country to lend standardization to mold building.

“There’s an intense need for engineering and project management in serving these industries,” said Jerry. “They need project management support.”

Other needs include a technical infrastructure to meet the requirements of OEMs in the medical and pharmaceutical market. All of this can put a strain on a moldmaker’s cash flow. The green initiative is driving toward the elimination of waste – runner system waste and a reduction in material content so there is more demand for thin wall parts.

Medical OEMs are looking for new product development assistance, developmental prototypes and new production molds. Jerry advised moldmakers that they: 1) Need to be flexible, nimble and ready to adapt to change. “When

the business model changes, you can be ready to change with it.” 2) Focus on self-preservation – “don’t be your own worst enemy

by trying to be the lowest price on the bid list.”3) Know your capabilities and build on your strengths. “Become

the best you can be at what you are best at,” Jerry said.4) Form Alliances and Partnerships. Network with suppliers and

customers. Be more than just a mold supplier.

Jerry also provided some business advice for attendees:1) Use the “make or buy” option – decide where your equipment is

best utilized, and make what you determine is optimum for you to make in-house, buy the rest.

2) Focus on securing work that plays to your strengths and will be profitable.

3) Customers need problem solvers - be prepared to provide solutions to OEMs in this industry.

4) Support your customers after the sale.5) Don’t underestimate China. Educate your customers on cost vs.

value; share information with your customer by sending them articles on the advantages of buying molds in the U.S. from American mold builders.

6) Have a vision and a plan. “The survival of your business requires this.

Strategically Planning Your Future

Patrick McNally from Blackman Kallick, one of the AMBA’s top resources for business planning seminars, provided attendees with some great advice on value-based planning. “There are many reasons we don’t plan,” said McNally. “But success doesn’t happen by accident.”

McNally gave us many pointers on strategic planning:1) Start with the big picture. Have a

large goal such as “I want to retire by 65 and sell my business for $5 million.” What does your business mean to you? What retirement income do you want? What legacy do you leave to your family?

2) Where are you now? You have to find your starting point.3) What is your business worth? “You need to understand what

your business is worth because people need to know what drives the value of your business,” said McNally. “Often you can’t influence outside forces, but you can influence how you react to those things.”

4) What drives the value of your business? “Show me the money,” said McNally. “Cash flow is key.” A) There is the time value of money – “I’d rather have a dollar

today than a dollar next year,” said McNally.B) The risky-ness of cash flow.C) The size of the cash flow – the process of discounting or

a rate of interest on which I’ll get cash flows – that’s the risky-ness. “Anything that impacts any of these determines value,” said McNally. “Cash flow is something you can touch.

D) Working capital needs to be in the business and that involves not inventing in a job until you have it. “You can damage the value of your business if your working capital is tied up in jobs that are on hold,” McNally stressed.

“For every dollar of improvement in cash flow, you get a multiple of that dollar when you sell,” McNally said. “When you improve your cash flow you reduce your risky-ness.”5) Diversify your customer base. Companies have an industry

and customer concentration and work closely with certain individuals at that customer’s facility or in that industry. When someone buys your business, they probably won’t have the same relationships with your customers that you do. Then the new owner is faced with the reality: “Maybe the guys at JCI loved John, but they don’t love me and if they leave, I’m dead.”

6) Spread the responsibility around. “If you’re too involved in your business, the new owner faces the risk that the business will go down when the old owner leaves,” he said.

For more information on Value-based Planning, contact Patrick McNally at 312-980-2934.

Building A Sales Team for Your Company’s FutureScott Smith has been selling for most of his career, and recently started his company, Sales Pro Inc. to help moldmakers develop their sales force. His advice to the attendees was pretty straightforward: 1) “Make the sales calls!” he stated.

“You’ve got to do the activity.”2) Be excited about what you have to

sell.

To implement a good sales program, you’ve got to get commitment from the top down. Management has to buy into the program. Next, you’ve got to have a plan for what types of business you’re going after. Then you need to set measurable goals. Recognize that selling is time sensitive. And finally, be open to change, Scott advised.

AMBA 17

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Dates To Remember

AMBA EVENTS

Online Seminar – Rapid Prototyping Options June 2, 2010, Noon CTRegistration now open at www.amba.org/Event_Calendar

Online Seminar – Calculating Your Shop Rate June 9, 2010, Noon CTRegistration now open at www.amba.org/Event_Calendar

AMBA Fall ConferenceSeptember 28-30, 2010, Washington, D.C.Hyatt Capitol Hill

AMBA ConventionMarch 2-6, 2011Las Vegas, NV

INDUSTRY EVENTS

PDx/AmerimoldMay 11 - 13 - Cincinnati, OHBuilt upon the foundation of the established MoldMaking Expo and Time Compression Expo, PDx/amerimold is a new event experience connecting buyers & sellers from all aspects of the product development lifecycle.

PLASTEC EastJune 8-10 - New York, NYThe largest advances in primary processing machinery, computer-aided design and manufacturing, production machinery, contract services, materials, molds and mold components, automation technology, materials handling/logistics, enterprise IT...and much more. International Machine Tool Show 2010September 13 - 18 - Chicago, IL

The International Manufacturing Technology Show is one of the largest industrial trade shows in the world, with thousands of exhibitors and over ninety-one thousand visitors. The event is held every two years in September at McCormick Place, Chicago.

PLASTEC MidwestSeptember 28-30 - Rosemont, ILSOURCE the latest technologies and ideas in primary processing machinery, computer-aided design and manufacturing, production machinery, contract services, materials, molds and mold components, automation technology, materials handling/logistics, enterprise IT…and much more.

Dates To RememberK-ShowOctober 27 - November 3 - Dusseldorf, GermanyK is the world’s premier trade fair for plastics and rubber. Its scope and focal points are all-embracing, covering the full spectrum of products and innovations from basic standard to high-tech solutions.

No other event is as impressive as K with regard to volume and quality. This is the showcase for what is important today and what will shape the markets of tomorrow and beyond. From global market leader to young spin-off, K attracts everyone who wants to succeed in business now and still be up-to-date down the line.

Pack Expo International 2010October 31 - November 3 - Chicago, ILPACK EXPO International 2010 in Chicago, October 31–November 3, is the only show you need to attend next year! You’ll find everything to improve operations, increase efficiency, reduce recalls, maintain equipment and protect your brand. A world-class program with new value-added features is already shaping up.

EuroMoldDecember 1 - 4 - Frankfurt, GermanyThe 17th EuroMold, the world-wide leading trade fair for Moldmaking and Tooling, Design and Application Development will take place Dec. 1 - 4, 2010. As the international meeting point of the industrial sector, it presents products and services, technology and impulses for tomorrow’s markets.

18 AMBA


His “SMART” program is geared to help guide sales people through this process.

S = specificM = measu rableA= attainable goalsR= realisticT= timely

“You need to provide guidance for your sales people,” said Scott. “Determine a budget for the sales person. It takes at least six months to make a sale.”

Pick the players and their positions. Put people in sales functions where they can be the most effective. Don’t set them up for failure.

Scott said that he’s in favor of a large base salary and small commissions as incentives. However, he acknowledges that commissions can create problems so give your sales people some “wiggle room,” he advised.

Next, provide the Technology and the Tools needed to get the job done. A good Customer Relationship Management (CRM) software program can really help the sales people keep track of calls, follow-up, RFQs and other sales activity. Scott recommended SalesForce.com. “Once you set up the system, how can the sales people not do what they need to do?” he said. “You have to know what your sales person is doing and this is a good tracking system.”

While every company needs a good brochure, Scott recommended that the brochure be used to say “good-bye” at the end of the sales call.

Scott also recommended that companies concentrate on the most profitable areas for new business, and that is generally “farming” old customers. “The goal of every sales call is to get to the next step:1) Find decision makers within the customer2) Make your presentation3) Set the next step strategies – pin them down for the next step

• Do a needs assessment• Get a request for quote• Do the follow up• Book some business!

Preparing Your Employees for the Future

Ryan Pohl of eXpert Technical Training, a company that promotes itself as “Masters in Industrial Training and Development, really hit a hot-button with the attendees, as most are faced with the aging of their workforce.

“People will make the difference in the future of your business,” said Ryan. “They can be the determining factor in your success or failure. “

Ryan cited some figures: 40% of our skilled workers will retire in the next 5-10 years. Many shops report that the average age of their skilled workers is 53. When those skilled workers retire, mold company owners will lose the knowledge base and the skills that those employees have. As high schools shift away from career and technical educational programs, and push everyone toward a four-year college

education, it will more difficult to find young workers who want to enter manufacturing training or apprenticeship programs. “Their priorities aren’t geared to trade schools or training, and much of that is a poor image of manufacturing,” said Ryan. “There’s also a lack of government support. That means there are fewer people in the pipeline.”

Ryan expressed how much he loves manufacturing. “We need to restore pride in manufacturing workers,” he said. “Finding skilled people is a real challenge. For most industries to survive, we have to pass the trade along to the next generation.”

Ryan pointed out that the young people coming into the trade are “very complex” but extremely tech savvy. “They’re born with a laptop as their first toy, so that’s a huge asset,” he said. “They’re also extremely creative, highly flexible, and environmentally conscious. They also expect instant rewards, but demand development over the long term. They’re entrepreneurial, impatient, and information obsessed.”

While most mold shops are aware of the challenges facing them in the future, Ryan said that “it’s not too late, but we have to start today to prepare our workforce by capitalizing on their strengths, get more youth into our shops and lower that average age.

It might be noted here that one AMBA member company, Ameritech Tool & Mold in Mooresville, NC and Ormond Beach, FL, has a very active relationship with the local high schools and a top-notch training program. Steve Rotman noted that the average age at his company is 33 – 20 years less than the overall average age of 53.

Ryan said that every company needs a good employee development plan that includes: 1) Implementing a proactive worker recruiting and hiring

program. “Don’t wait for them to come to you,” he advised. 2) Implement a structured employee training program, along

with an existing employee improvement program.3) Identify non-skill (soft) success characteristics. List the skill-

related ideal employee for your shop. “Be creative in where you look,” advised Ryan. “Do you like the way the young person at Best Buy explains high-tech equipment to you? (Demonstrates technical know-how) Always keep your eyes open for the type of person you’ve identified that would be an asset to your company.”

4) Then present them with solid reasons for working in the industry. Ask them if they have a friend that might be interested. “It all starts with you,” said Ryan.

5) Provide structured employee training. “Don’t just say ‘go work with Charlie and he’ll show you the ropes,’” said Ryan. “You need planned days of orientation.”

6) Provide efficient skills development that include:• Expectations and outcomes• Mentorship – pass down the knowledge and skills• Apprenticeship program – “We need to take another

look at this,” said Ryan.

With respect to existing employee training or ongoing training, there’s much that can be done in this arena. “With new technology coming along, there’s a skills gap,” said Ryan. “Identify and fill this knowledge and skills gap. Tie the new knowledge to the existing knowledge whenever you buy new software or machinery.”Provide “Lean” training. And train the long-time employees in how to mentor the younger employees.

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Roger Klouda, president of MSI Mold Builders in Cedar Rapids, Iowa, said that one very valuable tool that he uses is teaching the younger employees how to mentor the journeymen employees. The younger people have a lot of tech-savvy that they can pass along to the older employees for who the new technology is a bit off-putting.

Ryan also suggested a “Best Practices Team” so that all employees can learn from each other. “Current employees are your greatest asset for your company to be successful in the next five to 10 years.”Ryan suggested that every shop needs continuing education plans. “The so-called professionals are always going to school,” he said. “Continuing education helps them see new perspectives. Technology is always changing and they need new ways of looking at it.”

Continuing education is “people maintenance,” Ryan said. “It helps keep them sharp.”

In conclusion, Ryan said, “We have to establish our own future by training our future. We must strategically pass on the trade.”

Tooling Technologies for the FutureAndy Bondhus, tooling engineering manager at i2Technologies, a custom injection molder and contract manufacturer in West DesMoines, Iowa, told attendees about the advances in in-mold decorating and in-mold labeling, that impacts the tooling and what it takes to build molds for this process.

“Labels have finally caught on with the in-mold labeling industry,” said Andy. “And everyone is getting better at this process.”

The various processes include: Compression back-molding; Film insert molding (FIM); In-mold Decorating (IMD) and In-mold paint film. Molds built for these processes have to be carefully designed specifically for the process. I2Tech uses mold-fill analysis to ensure that the design meets the requirements. The mold not only has to be designed and built to accommodate the label but must accommodate the automation equipment such as the robotic arm that must place the label in the mold.

I2Tech uses static electricity to hold the pre-cut labels, which are stacked in a magazine, in place while the mold closes. Typically, the end-of-arm tooling (EOAT) is purchased with the mold and designed to work together. “Getting into in-mold labeling and decorating means quoting the whole system – it’s all driven by cost,” said Andy.

The advantages to in-mold labels is that they are permanent – they actually become a part of the part, and are typically the same material as the part. Arctic Cat, one of i2Tech’s customers, needed a permanent safety label on its snowmobiles to reduce the liability that would occur should a warning or safety label fell off and someone would get hurt on one of Arctic Cat’s snowmobiles.

Today, labels have higher quality graphics and can be printed on almost any substrate material. There’s also less handling with the in-mold process, vs. the pressure sensitive labels that must be applied by hand after the part is molded. So, obviously, in-mold labeling eliminates secondary operations association with pressure sensitive labels.

It takes a lot of collaboration between all the suppliers to design and build an in-mold labeling system. “There’s not a single project that we do alone,” Andy stated. “It’s all a collaborative effort with the label printers, the label makers, the robotic company, the injection molding machine company, and the moldmaker.”

Labels have been the problem as there are not many label manufacturers in the United States. “We’ve been in the IML business for 10 years, and we’re on our fourth supplier,” said Andy. “We’re always looking for new technology such as 3D graphics, which can be tough because the pressure of the molding process distorts the 3D image.”

Another key to designing a mold for IML is keeping the gate away from the label. “Labels can present a problem with gating because you need a uniform fill front,” said Andy. “Also, you need good venting in the right area. Those are the two critical areas when building a mold for IML.”

Building Strategic Relationships With Suppliers

This panel consisted of Scott Fernandez (Vega Tool), Glenn Starkey (Progressive Components) and Todd Schuett (Creative Evolution). Scott Fernandez noted that it’s a “changing landscape” out there and all moldmakers need a supply chain they can depend upon. “Seventeen years ago we had a very focused distribution base, and a focused product and customer base,” said Fernandez. “That has changed and in the last 18 months, there’s been a global meltdown in our business world. Instead of companies that have been around for decades that had built relationships with us, those companies are gone now. Your distributor that you depended upon may not be there.”

Fernandez said that we need to look at the landscape and rethink our strategy. Many companies are downsizing or shutting down altogether, which means that moldmakers are losing their technical support from many of their suppliers, and this is impacting mold shops. “The small distributors can’t afford to supply technical support,” he said.

Moldmakers need to look at how deep their supply chain is, and what they provide in terms of support.

Glenn Starkey said that “it’s all about increasing sales – the top line.” To that end, Progressive has taken on a number of application partners, such as Roehr Tools, with it expertise in packaging tools and targeting conversion of existing unscrewing molds.

A partner means that they provide training for engineering and sales; provide presentation materials, make co-calls and do co-presenting, provide newsletters, and tooling press releases, as well as provide pre-sale engineering support and startup assistance, and more importantly post-sale support.

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Tooling Docs, another Progressive application partner, provides mold maintenance systems and training, and is a mold warranty resource. “People want a mold warranty to ensure they get what they paid for,” said Starkey.

Todd Schuett said that throughout the organization he provides “New Manufacturing Approaches” to machine tool systems. “The real problem we have is a culture of putting out fires,” he said. “Sales people are less visible, but you can lean on them to learn about new things. Through our experiences in other shops we know every-day technology is changing. Professional sales people can keep you abreast of new technology and how it can benefit your shop.”

Schuett urged AMBA members to “take a close look at your vendors” and what they can do for you. “They’re not just being sales people but are partners in helping your business,” he said. “That partnership can be beneficial to us all.” o

Thank You to Our Convention Sponsors & Tabletop Exhibitors

Agie Charmilles LLC is the world’s leading provider of machines and system solutions

to the mold making industry. Our products range from EDM and high-speed (HSM) and high-performance (HPM) milling centers to process consulting and automation solutions. Agie Charmilles produced the first commercial EDMs around 1955 and today have the clear leading U.S. EDM market share due to product performance, customer support and price. Our U.S. customer support is unmatched: 80 service engineers in 30+ locations, 95% live phone response and about 98% spare parts availability. Let us help you develop and implement your strategic plan!

Brush Wellman (NYSE:BW), a subsidiary of Brush Engineered Materials Inc., is the world’s leading supplier of high performance alloys, providing

high reliability copper, copper beryllium and spinodal alloy products with unparalleled global service. High Strength mold alloys include MoldMAX, MoldMAX XL, MoldMAX SC, and MoldMAX V® for full core and cavity, core pins and hot runner components. The proven leader in developing and growing the use of high strength – high conductivity copper alloys for molds used in the plastics industry, Brush Wellman’s mold alloys are supported worldwide through a network of Ph.D. metallurgists and experienced application engineers.

Craftsman Tool & Mold was established in 1965 and specializes in manufacturing large, high volume, close tolerance custom mold bases. We do not manufacture cavity and cores, only bases. We work with you as a partner, rather than a competitor. Other services Craftsman Tool & Mold can provide include large capacity gun drilling, grinding, punch holders, die shoes, manifold assemblies, bolster

plates and other specialty machining. Our customers include, but are not limited to, plastic injection mold builders for the medical, electrical, nuclear, cosmetic, appliance and automotive industries.

Creative Technology Corporation provides photo, video, and web services for manufacturers. Our mold-related legacy of more

than 30 years helps us hone in on key focus areas to tell your story with engaging, quality images, compelling video, and concise writing. Our depth of understanding in manufacturing techniques, coupled with a wealth of experience in multi-media production assures you of a quality job you’ll be proud of. Whether for advertising, articles, or documenting your jobs, for the web, presentations, or trade shows, Creative Technology Corporation can provide the media to help you stand out.

Crystallume, a division of RobbJack, is a manufacturer of diamond coated end mills for the machining of graphite electrodes used in the manufacture of molds. Crystallume offers the largest in-stock selection of diamond coated tools in the industry. RobbJack also offers application specific carbide cutting tools for other needs in the machining of molds.

DME Company is an essential mold technologies resource to customers worldwide. Through innovative new product development, global product

standardization and a powerful combination of in-house manufacturing centers of excellence and strategic global partnerships, DME is helping customers succeed in changing times. The company’s standard-setting, comprehensive product line — including hot runner systems; control systems; mold bases and components; mold making and molding equipment and supplies; and cold runner systems for elastomers — is backed by expert technical service every step of the way. DME also manufactures and sells standard tooling for the die-casting industry. Visit www.dme.net for more information.

DMS is a leading supplier and manufacturer of mold components, mold bases and related moldmaking supplies including our new HD mold plaques and part identification magnets. Rep.

Boride, Almo, I-Mold, Exaflow, ITC, Cumsa, NSK, Dumore, Foredom, ICS etc.

EOS, the worldwide market leader in laser-sintering systems and materials, offers you application-oriented solutions adapted to satisfy your requirements in tooling for rapid additive manufacturing and

large-pot production. Direct Metal Laser Sintering (DMLS) solutions from EOS create seamless built-in, conformal cooling channels that can be optimized to draw off heat more rapidly and more evenly; therefore: reducing cycle time dramatically, reducing or eliminating scrap, avoiding hitting injector holes due to conventional deep drilling, eliminating uneven temperature levels on the cavity surface and preventing internal

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stresses; consequently, increasing part quality by eliminating warpage and other defects.

Ellwood offers mold steel, mold aluminum and value-added machining and heat treat services from extensive ISO 9002 facilities in New Castle, PA. Ellwood is capable of providing Vacuum Arc Remelted (VAR) and Electroslag Remelted (ESR) products and is uniquely

positioned to provide these mold materials cut from stock, fast. Most tool and moldmakers throughout the Midwest and East Coast can be reached within one day’s shipping. Ellwood also specializes in producing custom shaped mold steel forgings made quickly. www.ess.elwd.com

Erowa Technology, Inc. is a full service supplier of palletization and automation systems for the North American market. Our productivity solutions begin with the unique design of standard or custom work holding products for any combination of machining operations. Once preset, the chucks, pallets and

WEDM tooling allow work pieces to move from operation to operation without time consuming re-setting. Our products are manufactured to deliver high accuracy and repeatability. Our extensive know-how in manufacturing will guarantee the best products, on-time delivery and competitive pricing.

Expert Technical provides training and education solutions for mold building companies. We offer online CNC and mold-making training, on-site seminars, consultation in workforce development, custom training program

development, and custom high-quality training and advertisement video development.

GPI Prototype & Manufacturing Services, Inc. is a premiere service provider of Direct Metal Laser Sintering (DMLS), the latest

technology in rapid prototyping and manufacturing from EOS. One of the first DMLS service providers in the country, GPI produces metal parts for applications ranging from prototypes to series products and production tools. The technology is ideal for creating complex geometries that are difficult to attain through traditional machining, such as conformal cooling channels within tools and tooling inserts. GPI & DMLS deliver unlimited potential for engineers to create previously impossible solutions, embracing a new era of design-driven manufacturing.

Founded in 1958, INCOE® Corporation designs and manufactures hot runner systems with exceptional performance for processing of all injection moldable plastic materials. As a pioneer in the plastics industry, our original patented

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design was the first commercial hot runner nozzle available. The development and use of hot runner systems has led to the advancement of injection molding in productivity and cost savings on a global basis. INCOE® systems deliver the best price/performance ratio for any molding application. Our proven DIRECT-FLO™ (DF) Gold systems are ideal for technical part molding. QUICK-FLO™ systems are designed with complete hot halves for hi-cavitation molding of commodity grade resins.

Industeel is a subsidiary of ArcelorMittal, the largest steel producer in the world today. Specializing in advanced technology carbon steels, alloy, and stainless steels, Industeel produces a line of premium mold and

tool steels: Superplast® SP300, SP350, and SP400. SP300, SP350, and SP400 offer significant production advantages and benefits over traditional mold and tool steels in the areas of: machinability, thermal conductivity, welding, graining, and guaranteed hardness throughout the block. In today’s market, this translates into improved productivity and competitiveness for toolmakers. Superplast® products are sold and available through an exclusive global network of distributors.

Michigan Mold & Maximum Mold, both well respected companies in the Southwestern Michigan area and members of the American Mold Builders Association (AMBA) & The Berrien Tooling Coaltion (BTC) merged in 2008 to establish M & M

Polishing. Together the companies have over 26 years of mold polishing experience, giving our customers the best possible quality for all of their innovative mold requirements. Merging together was the best thing that happened for our customer’s high demand on fast turn-around time and quality 2nd to none. Our master bench hands have years of qualified experience in the fields of benching and polishing to serve all of your needs.

Makino is a global provider of advanced machining technology and application support, where new thinking takes shape for the metalcutting industries. Makino manufactures a

full line of high performance CNC horizontal and vertical machining centers in 3, 4 or 5 axis, as well as Ram and Wire EDM machines, for die and mold applications. Makino manufacturing and service centers are located in the United States, Japan, Germany, Singapore, Italy, France, Korea, Taiwan, Turkey, China, Mexico, Brazil, and India, and are supported by a worldwide distributor network. For more information call 1.800.552.3288, or visit Makino on the web at www.makino.com.

MILLSTAR is a global manufacturer and supplier of high performance cutting tools with special focus on manufacturing in the die and mold, automotive, aerospace and medical

industries. MILLSTAR products are manufactured in the USA under ISO 9001 and are designed for conventional as well as high speed and hard

milling of die/mold steels, aerospace materials, non-ferrous metals and carbon graphite. MILLSTAR’s very extensive range of tools offer the latest in profile and contour milling technology, providing to the user a competitive edge of shorter machining and through-put lead time, and the advantages of higher milling accuracy and true, smooth contouring results. MADE IN MICHIGAN!

Since 1972, Mold Base Industries, Inc. manufactures quality standard and custom mold bases; rough or finish ground plates, also available we have a full line of Self-lube components. Each base is built to your specs and completed in the shortest possible lead time. We do not precut plates enabling our customer to have the size base that fits their mold. Or do we stock standard bases allowing

our customers to relocate components without extra costs. Mold bases are finish-machined so you simply install cavities, cores, and auxiliary items, making your mold ready for testing. Nothing is too complicated for MBI! Send your files to [email protected].

MoldMaking Technology magazine is the only trade publication dedicated exclusively to the engineering, building and repairing of molds as well as the management and

business issues, challenges and strategies associated with today’s mold manufacturing facilities through technical articles and application reviews. The magazine also presents an annual technical conference on mold manufacturing technologies and strategies at the PDx/amerimold event (MoldMaking Expo Expanded); its monthly e-newsletter, MMT Insider and its Web site, www.moldmakingtechnology.com.

Osco Inc. has been providing hot runner services to the injection molding industry since in 1982. Headquartered in Rochester Hills, MI, Osco has primarily been focused

on the North American Market. The value that Osco can add to your program is a proven hot runner system that is robust, reliable, and is reasonably priced. All engineering and manufacturing is in the USA so in addition to the attractive pricing, we offer responsive applications & technical help along with a quick delivery. In addition to a wide selection of standard systems, Osco offers innovations for special and custom applications as well.

PCS Company is a leading full line supplier of high quality molding components, standard and special mold bases, hot runner systems, custom made products and Nano Technology products. The industry standard PCS

Hardened Throughout Pin (made in the U.S.A.) is known for consistent quality and strict adherence to tight specifications. Volastic Hot Runner Systems include technology that reduces both cycle times and operating costs, while increasing profitability. PCS Integrated Hot Runner-Mold Base Systems simplify the tool manufacturing process and reduces tooling cost. NanoMoldCoating and NanoCeramicMoldGrease lasts10x longer than conventional products, solves sticking problems, increases part quality and reduces scrap. Learn more at www.pcs-company.com.

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Progressive Components will present an array of recently released products at AMBA’s

Annual Convention, including its new Plate Lock Systems and expanded sizes of Expandable Cavities. Other featured products will include the Friction Puller, Needle Bearing Locks, SRT Slide Retainers and Roller Pullers from the exclusive FrictionFree™ line, the VersaLifter, Alignment products, Date Stamps, Collapsible Cores, UniLifters® and more. Based in Wauconda, Illinois, Progressive continues to design and develop industry-leading standards that speed mold building and reduce costs and downtime. Our complete catalog, including product demos, may be viewed at www.procomps.com, or email us at [email protected] for a copy.

Roehr Tool Corporation is a manufacturer and supplier of patented Collapsible Core, Minicore and Expandable Cavity technology

for molding threaded parts or parts with undercuts, protrusions or cut-outs. Through distribution with DME Corp. and Progressive Components, Roehr Tool’s products are available worldwide.

Sescoi creates software solutions suitable for the moldmaking market. WorkNC is the most advanced CAM package for moldmaking with 2D through simultaneous

5-Axis machining functions, including the innovative and unique Auto-5 automatic 5-axis module for cutting deep parts with short tools. MyWorkPLAN is the shop management program designed around the individual job instead of the accounting system. This makes MyWorkPLAN ideal for custom manufacturers such as moldmakers. WorkXPlore is a 3D CAD viewer for viewing, analyzing, marking and collaborating on 3D models. Sescoi is Manufacturing Software Solutions.

Vega Tool Corporation has been actively selling cutting tools to the metal cutting industry since 1967 and with the introduction of Hitachi Tool Engineering to the US market

in 2001 we continue to the tradition of supplying the die mold industry with innovative substrates, cutting geometries and coatings that allow our tools to expand the limits of your machine’s potential.

Lower costs and increase margins when you ship with YRC! Yellow and Roadway have integrated to give you

YRC - the genuine heavyweight expert with the most comprehensive network available. As a benefit of your AMBA membership, you receive a 70% discount on qualifying less-than-truckload (LTL) shipments. YRC offers flexible, efficient solutions, including comprehensive regional and national coverage with a full suite of guaranteed, expedited and specialized services. More customers rely on YRC than any other provider. Take advantage of your YRC discount today by contacting your association benefits coordinator at 800.647.3061 or [email protected]. o

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AMBA NewsAMBA News

Save the Dates! 1. AMBA Fall Conference – September 28-30For the third year in a row AMBA will be going to Washington, D.C. for it’s Fall Conference. AMBA members will go in teams to visits their senators and Representatives to discuss issues important to our industry and their businesses. More registration information and details will be coming soon. Mark September 28-30 on your calendar and join the AMBA in Washington.

2. 2011 Annual Convention – March 2-6, 2011The AMBA Annual convention will be held from March 2-6, 2010 in Las Vegas, NV. Expect a phenomenal lineup of topics and speakers! Set aside these dates for an event that you won’t want to miss!

AMBA Exhibits at PLASTEC West 2010AMBA exhibited at this years PLASTEC West trade show in Anaheim, CA on February 9-11. The main goals when exhibiting at the trade shows is to promote AMBA members and the U.S. mold manufacturing industry. We also speak with attendees about membership and the AMBA Partner program.

The attendee traffic at the show was some of the busiest we’ve seen in years, and a lead list of potential mold buyers was made available to all members after the show. It’s available to download on the Members Only page at www.amba.org.

A special THANK YOU is deserved by the members listed below who volunteered their time to help staff the booth and assist with answering technical questions from show attendees.

* Alan Petrucci, B A Die Mold * Matt Vuturo, GPI Prototype * Steve Muhonen, Mold-Tech * Shawn Pecore, Prestige Mold* John Demakis, Duro-chrome

AMBA Receives $500 Donation to Scholarship Fund

Adam Simons (left) of MGS Mfg Group in Germantown, WI, is presented with a $500 scholarship award by Todd R. Steinhoff of Progressive Components. Adam designated the AMBA as the organization he wished to receive the funds for use in AMBAs own

scholarship program. Progressive awarded two such scholarships at the recent Plastec West trade show as part of its Tooling for Tomorrow program, which promotes the education of young people entering the trade.

More Online Seminars from AMBA1. “How Will the Federal Healthcare Changes Impact Your Company?”- May 19, 2010, Noon CT (Webinar fee: $25 for AMBA members, and $45 for non-members.)Brian Whitlock, CPA, JD, LLM, a Tax Partner at Blackman Kallick will explain how the current Federal healthcare changes will impact your company over the next few years as the full impact of the law phases in. Brian will discuss not only 2010 and 2011 tax law changes, but he will focus on the new Obama Health Care Law, including: the Small Business Tax Credit for Health Insurance; higher Medicare Taxes; Employer requirements to provide “Free Choice Vouchers”; employer penalties for failure to provide “affordable” coverage; new information reporting requirements and 1099 reporting for payments to corporations.

2. “Rapid Prototyping Options” - June 2, 2010, Noon CT Prototyping has been around since the development of the first product. In reality, all products are just prototypes as they continue their evolution from the product that exists today to the product it becomes tomorrow. The great news is that in today’s world, the tools available to make product development faster and better are very accessible. With powerful and inexpensive CAD software for design combined with the ability to output the digital representation of the product, we’re able to feed this information into rapid prototyping machines that will make your product a reality. Patrick Hunter of Quickparts will tell you how the power of rapid prototyping is just a click away and will allow a designer to transform the virtual, digital product into a real, physical product that can be touched, used, tested, and modified. This power has a significant impact on the overall life of the product. There are three very important points that every manager and executive should keep in mind when it comes to leveraging rapid prototyping for their product development process. 3. “Calculating Your Shop Rate”- June 9, 2010, Noon CT More details available soon. o

AMBA Member Benefit:

Annual Membership Directory – Listing of AMBA members and their specialties/markets, with circulation to OEMs through direct mail and AMBA participation in trade shows.

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Welcome New Members

The American Mold Builders Association welcomes the following new and returning members:

Class Tool and Die Inc.2920 W. Main St.East Troy, WIContact: Josh Rogosienski, Operations ManagerWeb site: www.classtd.comClass Tool and Die is an ISO 9001:2000 certified company specializing in the building of investment casting tools and plastic injection molds. The company, founded in 1992, is based in a 5,600-square-foot facility and has nine employees. Josh said that the reason the company joined AMBA is that they are looking to network with other mold shops and keep up with current trends in the industry. Also, they are looking forward to taking advantage of conferences and seminars that AMBA provides.

Le Bac Plastic Mold Inc.403 W. Kay Ave.Addison, ILContact: Ronald Backman, PresidentLe Bac Plastic Mold is a family-owned moldmaking business, specializing in working with its customers as if it were their own, in-house mold builder. “We work to stay aware of our customers’ schedules and deadlines so they can meet their production needs on time,” said Ron. “We combine traditional mold making with the newest technology in an effort to be cost effective and have timely deliveries.”

Le Bac Plastic Mold’s customer base include the appliance industry, construction, sporting goods, hand-held tools and garden tools, medical

products. The company also worked with the U.S. Navy on a project to develop new technology products in the energy storage and sensor measurement fields.

Le Bac Plastic Mold was founded in 1978, and operates in a 7,600-square-foot facility, with six employees. Le Bac is a returning member, and wanted to rejoin the AMBA to once again be part of the moldmaking community.

R S Design6351 46th St. NPinellas Park, FLContact: Richard Smith, Presidentwww.RSDesigninc.comR S Design Inc. is a manufacturer of custom injection molds, and also does injection molding (7 presses) for a variety of markets. The company was founded in 1990 and is ISO 9000-2008 certified. R S Design operates in a 6,300-square-foot facility and employs 10. President Richard Smith says that his primary reason for joining AMBA is for networking and keeping up to date on current affairs that impact his business.

South Coast Design & Manufacturing160 Calle de IndustriasSan Clemente, CAContact: Daniel Gomez South Coast manufactures tooling for many diverse industries. They manufacture injection molds, compression molds, thermoform and RIM molds. They also manufacture forming dies, stamping dies and hydroform tools. South Coast was founded in 1997, and is also a returning AMBA member and wants to continue to support the industry. o

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PLASTEC West 2010AMBA Members and Partners Exhibit at

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LaserSalesLaserSales

Member NewsB A Die Mold (Aurora, IL)B A Die Mold was recently awarded a patent for its exclusive PERC System, a green alternative to conventional hydraulics for molders of threaded parts. The PERC System revolutionizes the way manufacturers mold plastic threaded parts. It is a compact, high speed, high torque and high precision system utilizing programmable servo motors in place of hydraulics for unscrewing applications.

Advantages include:· Accurate, fast and efficient core positioning with unlimited turns & programmable speed profiles· Virtually maintenance free· Scheduling is not dictated by the availability of auxiliary hydraulic equipment· PERC’s compact size makes for fast, easy set-ups· Eliminates messy hydraulic oils· Complements the efficiencies of electric molding machines; allows use of smaller presses

“Our medical OEM customers specify the PERC system for every unscrewing mold, even when hydraulic systems can accomplish the same ends,” states Francine Petrucci, B A Die Mold’s president.

“PERC delivers not only cutting edge molding technology, but it fits into today’s pursuit of energy management and green manufacturing initiatives. Just the elimination of the messy hydraulic cylinders used in conventional unscrewing is a plus. Maintenance techs love the PERC System and their molding facilities simply look better because they are cleaner!”

For more information on how PERC can revolutionarily improve production times for your threaded part application, call (630) 978-4747 or visit B A Die Mold online at www.badiemold.com.

Cavaform International LLC, (St. Petersburg, FL)Cavaform International LLC recently opened a new 22,000-ft2 facility next to its current mold manufacturing plant in St. Petersburg, FL. The new company, Modern Technical Molding & Development LLC, will provide molding sampling capabilities using the company’s five injection molding presses that range from 75-375 tonne capacity. “We can also install a customer’s molding press up to 500 tonnes in pre-prepared sites,” says Robert (Chuck) Massie, VP of Cavaform. “This allows us to test and provide process documentation in any and all aspects of an OEM’s startup needs.”

Modern Technical Molding & Development also offers training in setup and processing the molds, inspection services, assembly and mold maintenance, robotics integration, and part handling. “Some customers also have us run extended parts molding to provide product for their startup or development needs,” says David Outlaw, molding operations manager.

Commenting on the company’s decision to open a business that reaches further upstream with services, Massie says, “We have to provide more services and technical support to retain our clientele. It’s not even just a mold test anymore, but more so providing scientific analysis on the molds we build, including process parameters, first article, and CPK documentation.”

Cavaform, which serves primarily the medical industry, has been providing these services for quite some time, Massie explains, but decided to create a business unit around them. Modern Technical

30 AMBA

Molding & Development is bringing in OEMs’ molding machines from Husky, Toshiba, Engel, and Sumitomo, and is working with Arburg as well as other injection press manufacturers. “We perform all the startup, processing, and mold qualification on the customer’s machines so that it becomes plug-and-play at their end,” Massie says.

Short-term plans call for the company to add two dual-purpose LSR and injection thermoplastic machines this year. Modern Technical Molding & Development can accommodate up to 16 presses, depending on tonnage size.

Industrial Molds (Rockford, IL)U.S. Representative Don Manzullo (R-IL, 16th District) paid a personal visit to Industrial Molds’ facility on Monday, February 8, following an invitation from Tim Peterson, Vice President of Industrial Molds Group. The Industrial Molds Group has been active in the American Mold Builders Association for a number of years and during the AMBA’s Fall Conference last year in Washington D.C., Peterson was able to visit Manzullo’s office and issue the initial invitation. “While I extended the invitation to him as a courtesy, I never expected him to take time from his busy schedule to actually come and tour our plant,” said Peterson. “But six months later, after I sent a follow up email, his office called and arranged a visit, he’s very pro-manufacturing.”

Manzullo has an office in Rockford, IL and another one in Crystal Lake, IL, which are in the District he represents. Manzullo has always shown an interest in manufacturing and has been acquainted with the AMBA, since the organization began its activities in Washington, D.C. to bring the plight of U.S. manufacturing to the attention of Congress.

“I believe Rep. Manzullo is genuinely interested in manufacturing - coming out of Rockford you would have to be,” stated Peterson. “I think it is important to get our members of Congress involved on a personal level, so they can see that we do offer good paying jobs. With all the focus on improving the employment outlook, understanding what we do and how we do it is critical, especially among small companies that are the major source of jobs in this country. It is well documented that the payback of a manufacturing job vs. a service job is greater, as manufacturing jobs have a trickle-down effect to create many more jobs.” Peterson noted that Rep. Manzullo’s office has been very helpful to Industrial Molds, informing the company about his plans for this local community program where companies like Industrial Molds can hire trained people to help fill job openings the company has available. “It opened my eyes as an employer to the value that a program like this could provide us,” said Peterson.

Peterson noted that Congressional members from the Chicago area know about the extensive amount of manufacturing that goes on in the area, but seeing it up close and personal can help influence their decisions in the House or Senate. “If everyone who has a manufacturing facility would take their Representative or Senator through their company’s plant, when it comes time to vote in Washington, D.C., they’ll truly understand the impact of that vote,” Peterson concluded.

M.R. Mold & Engineering, (Brea, CA)In February, M.R. Mold & Engineering announced the launch of its new website, with the assistance of DezTech Consulting LLC of Huntington Beach, CA, featuring a number of improvements to coincide with its 25th Anniversary year and to showcase its proprietary line of molding accessories. The project was completed in only three week’s time so that the new website would be up in time for the MD&M West show in Anaheim, CA.

Rick Finnie, founder and president of M.R. Mold & Engineering, opened his company’s doors in 1985 with the goal of providing

customers with a distinct competitive advantage over others in the industry. The company, located in Brea, CA, first occupied a 1,500 square foot building. Today, the plant has grown to occupy 15,000 square feet including a 4,000 square foot Technology Center. The Technology Center houses two Engel presses and one Negrabossi press, allowing M.R. Mold to sample molds, assist in R&D, make immediate customer revisions in material and processes, sample various materials, and develop automation for customers’ tools. Currently, about 50% of the molds built by M.R. Mold are for liquid silicone molding, while 25% are for manufacturing rubber products and 25% are built for molding plastic products for various industries. Most LSR molds are for the medical industry. “What we offer is the depth of knowledge required to assist our customers in the achievement of their goals,” said Finnie. “We offer advice, make suggestions and make sure that the tools they are purchasing are going to meet their needs in the most effective ways.” For more information, visit www.mrmold.com

Pyramid Mold & Tool, (Rancho Cucamonga, CA)Pyramid Mold & Tool has invested about $200,000 for a second injection molding press, a water temperature controller and a material dryer for its year-old technical center.

The Rancho Cucamonga-based firm now anticipates investing about $350,000 during 2010, primarily for moldmaking equipment.

Pyramid installed and began operating the electric 220-ton Arburg 570A press, Frigel Microgel RCD60/12 dual zone high precision water temperature controller and Maguire LPD 100 low pressure vacuum material dryer with dry air conveyor prior to the end of 2009, to take advantage of tax incentives, said Tony May, director of business development and technical sales.

The Arburg has a Selogica direct controller and is equipped with dual core pulls and RJG interface, similar to Pyramid’s first injection molding press, a 110-ton Arburg 470A electric. The new press also has an eDart conx process stabilization system from RJG.

The company’s tech center occupies 1,200 square feet within Pyramid’s 31,000-square-foot building with adequate space for internal expansion. “Our next addition will require moving a wall to expand the [tech center] room,” May said. “The projection at that time will be approximately 3,500 square feet.” With tech center capabilities, Pyramid can provide in-house sampling and first articles to customers.

“Tools are scheduled for sampling seamlessly and immediately upon being completed,” May noted. The center can sample tools as small as single cavity unit die prototypes on the 110-ton machine and as large as those able to fit within the 22.4-inch tie bar spacing of the 220-ton machine.

Since mid-2009, Pyramid added three employees bringing its total to 35. “The employees were added in the shop,” May said, and included a computer-numerical-control-machine operator, a moldmaker and an apprentice.

South Coast Mold (Irvine, CA)South Coast Mold, Inc. is not your typical mold shop, but a small sub-set (niche) of the broad injection mold business since its specialty is castings. Not only is it committed to providing the highest quality, most reliability and best performance for the moldmaking industry in

AMBA 31

32 AMBA

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precision castings—a worthy option for moldmakers to explore—the company also received the 2009 Energy Start Small Business Award by the U.S. EPA for reducing greenhouse gas emissions through effective energy management practices and innovative efficiency solutions. Serving the aerospace, electronic, medical, marine and commercial markets, the company has been able to boost efficiency on the shop floor by carefully analyzing and implementing energy-saving measures.

According to South Coast Mold President Paul Novak, three major events propelled him to develop an energy-saving strategy back in late 2000 and early 2001. “California had a severe electricity crisis with erratic supply, regional rolling blackouts and price spikes,” he recalls. “In 2005, we moved and doubled our manufacturing size—which also doubled our electric bill. Then when the global oil and energy crisis came along in 2007 and 2008, costs increased dramatically and we realized we could no longer take electricity for granted.”

Novak sought assistance from ENERGY STAR—a joint program of the U.S. Environmental Protection Agency and the U.S. Department of Energy that helps companies save money and protect the environment through energy-efficient products and practices. The company’s website provides tools and resources that are free. Novak registered as an ENERGY STAR small business participant and used programs from the company’s website like “Putting Energy into Profits: ENERGY STAR Guide for Small Business” and “Energy Management Basics for Small and Medium-sized Manufacturers.”

Novak also counted on Southern California Edison (SCE) for a number of tools and resources to streamline energy-efficient practices. “The monthly billings itemize energy usage and compare current usage with the previous month and previous year,” Novak explains. “SCE’s website

offered details on energy usage, available rebates and incentives, and success stories. The energy usage history goes as far back as the start of the account—which makes analysis easy. The rebates and incentives can be a real bonus for equipment upgrades. o

Chapter News

CaliforniaThe chapter has a tentative mid-June timeframe for the next general chapter meeting. More details will be announced as soon as they are available. For more information go to www.amba.org/Chapter_Affiliations.

The chapter also welcomes returning member: South Coast Design and Mfg. of San Clemente, CA.

ChicagoThe Chicago chapter is proud to announce its first annual Mold Your Career Apprentice Award! One award in the form of $1,000 gift card will be presented to an employee with one or more years of on-the-job experience who shows excellent promise as a mold builder, mold designer, CNC machinist, or die maker. Chicago chapter members will receive further details, including nomination forms, deadline information, etc., at the end of May.

AMBA 33

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The chapter also held a meeting on March 3, Scott Smith, managing Partner of SalesPro, Inc. Presented a discussion on effective sales techniques. A cocktail hour was sponsored by Cimatron.

The chapter participated in the annual Illinois Manufacturing Association’s Business Day in Springfield, IL. The event gave business leaders the opportunity to discuss issues relevant to this industry with state senators and representatives. The chapter has a tentative June2 date for the next general chapter meeting. More details will be announced as soon as they are available. For more information go to www.amba.org/Chapter_Affiliations

The chapter also welcomes returning member: Le Bac Plastic Mold of Addison, IL. Minnesota The chapter is hosting their annual golf outing on July 22nd at Oak Glen Golf Course.

Southwest Michigan In cooperation with the BTC and the NTMA, the chapter hosted a Technology Fair on February 18 at the MTech Center in Benton Harbor. It included a breakfast meeting and presentations on advances in the industry by Dynamic International, and Kiser Tool.

34 AMBA

West Michigan The chapter recently won the 2010 AMBA Chapter of the Year award. They received a $5000 scholarship grant from Progressive Components that will be given to the industry related school or program of their choice. (See the article titled, “West Michigan Chapter Named AMBA Chapter of the Year”, for more details)

WMI will be having their annual scholarship meeting on May 18th in Belmont. Also, they are hosting a golf outing on August 27th in Ada, MI.

WisconsinThe chapter held a co-sponsored event with SPE on February 16. Mary Perry from the WI Department of Commerce Business Development Programs. And Tim Nolan and Bob Beard spoke on the technical and industry issues of “Managing Bankruptcy through the Eyes of the OEM/Molder/Moldmaker.”

On May 18th the chapter will host a general membership meeting with speaker Ryan Pohl. o

Why I Joined the AMBA:

I believe our AMBA membership is the most beneficial organization we belong to. This is due to the pinpoint focus on issues which affect the moldmaking industry and constant stream of information from events, webinars, weekly newsletter, legislative notifications and activities as well as the monthly magazine. Being a non-chapter member in Oregon a long way from most of the action, we still are engaged and kept up to date via the AMBA media. Thanks for doing a great job for our industry! Jonathan Buss, Buss Precision Mold Inc., Clackamas, OR

“I joined because AMBA is the largest and best lobby group fighting for us!” Doug Northup, CEO, A&O Mold and Eng., Vicksburg, MI

News for Die Casters

NADCA Industry Awards On Tuesday, March 23, the North American Die Casting Association (NADCA) recognized individuals and companies for their significant contributions to the die casting industry. A broad range of these prestigious awards were presented at the Die Casting Industry Awards Banquet during CastExpo‘10 in Orlando, FL. The winners of these prominent industry awards are as follows: Douglas R. Taylor will receive the Austin T. Lillengren Award in recognition of his extraordinary service and loyalty. This award was established in 1960 in memory of Austin T. Lillegren, whose devotion and leadership exemplified unselfish service in the die casting industry. Richard H. Bauer will receive the Herman H. Doehler Award in recognition of his outstanding contributions to the advancement of the die casting industry and to the art of die casting. Allied Metal Co. will receive the Edward A. Kruszynski Supplier Excellence Award in recognition of being a supplier to the die casting industry that has demonstrated a long-standing record of participation in NADCA and support of its activities. Diran Apelian will receive the Nyselius Award in recognition of his exceptional technical contributions to the industry. Interzinc will receive the Gullo & Treiber Award in recognition for their successful marketing activity, resulting in the expansion of knowledge of die casting. In addition to these awards, the recipients of the annual safety awards and the congress awards will be announced at the event. o

The Risks And Responsibilities Of Hosting A PartyWith wedding and graduation season in full swing, many of us are hosting or attending parties, open houses, and receptions with little thought as to who is liable if guests drive under the influence, get food poisoning, damage property, or are injured on the host’s property. A recent survey asked homeowners if they believed they were legally liable if a guest caused an alcohol-related traffic accident after leaving a party they hosted. Additionally, they were asked about their responsibility if a guest was injured on the sidewalk in front of their property or suffered food poisoning from food served at their party. Alarming percentages of homeowners either thought they could not be held liable or did not know the answer. In most states, hosts can be held responsible for the actions and negligence of their guests while attending and following such a social

AMBA 35

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event. Many courts have found hosts liable for the damages their party guests cause as a result of consuming alcohol at a social gathering and then operating a motor vehicle. Most homeowner’s policies include liability coverage for these types of events, including host liquor liability. With many companies, however, the maximum amount of liability that can be included on a homeowners or tenants insurance policy is $500,000. Purchasing a personal umbrella policy for excess liability limits may be prudent for the frequent host, especially if alcohol is served. A homeowner can be liable for anything that happens on their property. Homeowners should understand that having a pool, trampoline, recreational vehicle, or even certain breeds of dogs or exotic animals can significantly raise their potential for liability; and may even make them ineligible for coverage with certain insurance companies. In some cases, an insurer may choose to restrict or exclude coverage for undesirable risks. Any unusual or unique liability exposures should be disclosed to the insurance company so that appropriate coverage can be obtained.

Taken from the Spring 2009 issue of the Insurance Advisor newsletter. o

Teens and TextingText messaging is cited as one of the biggest distractions for teens while driving. We tell our teens to buckle-up and obey the speed limit, but do we tell them to turn off their cell phones? Recent studies show that text messaging has become just as dangerous as drinking and driving for teens in regards to inhibiting their ability to concentrate on the road. A recent study has shown that almost 80% of crashes and 65% of near-crashes can be attributed to some form of driver inattention within three seconds before the event. Add the fact that 46% of teens text message while driving and you have a deadly combination. Many states are taking legal action to prohibit texting while driving, since it has been cited as the likely factor in fatal accidents across America. Police officers state that it is difficult to enforce a texting ban because it is often done with the phone held where it’s difficult to see. In addition to setting a good example for your teens, here are some guidelines you may want to consider when dealing with a teenage driver:

• No cell phone usage while operating a vehicle.

• Consider whether or not your teen is ready at age 16 to obtain their license.

• Not all teens are mature enough to take on the responsibility of driving.

• Parents should set driving and car usage rules and consequences and stick to them.

• Create ownership in the vehicle by having the child share in the cost of maintenance, gas, and insurance.

As parents, it’s important to enforce safety rules when your teen is first learning how to drive, so that it becomes a habit. Always pull over before using your cell phone while driving. By simply setting a good example for your teen, you may save their life.

Taken from the Spring 2009 issue of the Insurance Advisor newsletter o

36 AMBA

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Prompt Claim Reporting Saves Dollars and Improves Care

Q: I’ve heard that employers should report a workplace injury within 48 hours, no matter how serious the injury. Why is it so important to report claims within that time frame?

A: To ensure the best care for your injured worker and the highest cost savings for you, early reporting makes good sense. Prompt claim reporting triggers medical-management processes that can save money and minimize the amount of time your employee is off work.

Early reporting can dramatically reduce the severity of an injury and will result in the employee’s earlier return to work. The quicker case managers get the injured employee to the right doctors or specialists, the more likely the injury will be treated correctly and efficiently.

A recent study of nearly 40,000 Accident Fund lost-time claims has shown that waiting to report a claim after 10 days costs 27.1% more than reporting it within two days. Bottom line? By reporting an injury in 48 hours or less, you can reduce the cost to your business and increase the quality of care for your employee.

Taken from the first quarter 2010 issue of The Workforce Forum, from Accident Fund. o

Safety ProgramsSafety programs are designed to keep employees safe in all their job tasks and responsibilities. They are also designed to keep people safe while performing work in accordance with the General Duty Clause in the Occupational Safety & Health Act (OSH Act) of 1970. The act states that it is the employer’s responsibility to provide a workplace that is free from recognized hazards that are or are likely to cause death or serious physical harm. OSHA sponsors national programs every year, why not create this for your company? Look back to 2009 to see what caused the most problems and questions to better understand where to focus in 2010. What were the primary nature and causes of injuries or illnesses in 2009? What body parts were most frequently injured? What department or work area was most besieged by injuries or illnesses? As you focus on 2010, categorize your 2009 data into major blocks of information to find the common causes and links. For example, if repetitive motion injuries topped the list of accident causes, look to see where people are performing repetitive tasks and take time to fully evaluate work station design and body motions. If frontline workers do a lot of lifting, is there an opportunity for lift assists? If there is a lot of repetitive motion involved in a given task, is there a chance that job rotation may alter the muscle groups used and reduce fatigue? Or if contusions are the primary cause of injuries, are people working in tight areas with little opportunity to safely move about? If one particular work area or department has the highest number of incidents, consider what is making the work or the area more hazardous than any other area. How well are safety programs integrated into the daily operation? Are proactive safety activities performed such as safety audits and inspections? And how well prepared are leaders to manage the safety responsibility? The key to accomplishing this is to identify the needs of the worker. This likely involves leadership: the supervisor and/or union steward for a specific work group or area. A successful safety program will focus on making sure all employees have the information they need to be safe and successful.

Taken from the Spring 2010 issue of the Safety Network Newsletter from Gibson Insurance. o

AMBA 37

Human ResourcesHuman ResourcesBy: Karla Dobbeck, PHR, Human Resource Techniques, Inc.

Why Employers Need Two Sets of Employee FilesRetaining certain information about your employees is required by law. Also required is maintaining your employee’s privacy.

For this reason, it is best to maintain two sets of employee files. Supervisors and management personnel should have access to one of the files; the other should be locked up without access to anyone who has the ability to make an ‘employment related decision’.

The first file should contain any information that is job related. Application form and resume, training records, attendance records, quality records, warnings, commendations, performance reviews and anything else directly related to work are all items a supervisor or manager might need to see and use to make decisions about promotions, terminations or layoffs, etc.

The second file should contain medical. Items such as wage assignments, lawsuits, requests by the department of Health and Human Services, unemployment claims, etc. should be kept separately as well. By keeping these records separate, you ensure that privacy laws are followed and employment decisions are not based on protected information.

Employee files need to be maintained for six years after termination. At the conclusion of the six year period, employers should take care to destroy the files so as not to release personal information about the former employee.

Workers’ Comp. claims should be stored separately. A file should be created and maintained anytime an employee is injured or reports a work-related illness. These files need to be maintained for 30 years! o

Set the Stage for Success from the First Day!Your newly hired employees deserve the best chance for success at your company. You can help each become a valued member of your team by planning a well thought out New Employee Orientation.

The EEOC and OSHA require that employees receive specific training before entering the workplace and if you are ISO, QS or TS certified, additional competency work is also required.

Start your employees out right by ensuring they have the tools they need to be successful. Before sending an unsuspecting new hire into your facility, make certain he or she knows about the following:

•Administrative procedures for calling in, payroll, timekeeping and requesting time off, etc.

•Benefits, eligibility requirements and how to access, etc.•Safety and emergency evacuation procedures

•Job expectations as stated on the job description.•How to get additional information and who to see with questions,

concerns or issues.

If you want to reduce the turnover in your facility take some proactive steps to get employees started on the right foot. o

DOL & IRS Crackdown on Payroll IssuesOver the past several months, I have received calls from companies faced with a DOL or IRS audit. Several other consultants and benefit providers with whom I work have seen an increase as well. And it makes sense - as budget issues continue to plague the government, it is only natural that agencies are looking for ways to increase revenues. One method is to conduct more audits.

Although these audits cover several areas, there are three in particular employers should carefully review.

Independent contractor status – If you use independent contractors, several rules apply. For instance, the ‘contractor’ cannot do work that your regular employees do. Examples would include machine operators in a machine shop or bank tellers in a bank. Also, the contractor must be free to set his/her own hour and make a profit. Tests for independent contractors are available.

ERISA – Your group benefits such as your health and retirement savings plans are governed by regulations. Make certain you have procedures in place for coordinating benefits for new hires and terminated employees, communicating benefits, making timely deposits and holding down costs for administration.

Exempt vs. non-exempt status - Which employees are paid ‘hourly’ or ‘salary’ is not the company’s decision; instead the Fair Labor Standards Act regulates which employees are entitled to overtime. Then, if someone is considered ‘exempt’ additional rules apply to docking pay and sick leave. Tests, rules and worksheets are available. Beyond these three, don’t forget all required posters and recordkeeping requirements.

Taking a proactive step now to review your practices and get your business house in order will help to avoid penalties and fines later. o

New Tax Credits for Employers with Fewer than 25 Full Time EmployeesThe following three questions and answers are copied directly from the IRS website. For more detailed information, please visit http://www.irs.gov/newsroom/article/0,,id=220809,00.html?portlet=6 there are 22 questions and answers there.

Q. Which employers are eligible for the small employer health care tax credit?

A. Small employers that provide health care coverage to their employees and that meet certain requirements (“qualified employers”) generally are eligible for a Federal income tax credit for health insurance premiums they pay for certain employees. In order to be a qualified employer,

(1) the employer must have fewer than 25 full-time equivalent employees (“FTEs”) for the tax year,

(2) the average annual wages of its employees for the year must be less

than $50,000 per FTE, and (3) the employer must pay the premiums under a “qualifying arrangement” described in Q/A-3. See Q/A-9 through 15 for further

38 AMBA

information on calculating FTEs and average annual wages and see Q/A-22 for information on anticipated transition relief for tax years beginning in 2010 with respect to the requirements for a qualifying arrangement.

Q. What is the average premium for the small group market in a State (or an area within the State)?

A. The average premium for the small group market in a State (or an area within the State) will be determined by the Department of Health and Human Services (HHS) and published by the IRS. Publication of the average premium for the small group market on a State-by-State basis is expected to be posted on the IRS website by the end of April.

Q. What is the maximum credit for a qualified employer (other than a tax-exempt employer)?

A. For tax years beginning in 2010 through 2013, the maximum credit is 35% of the employer’s premium expenses that count towards the credit, as described in Q/A-3. (03/31/10)

Because this legislation is so new, forms and detailed directions are not yet available. HRT will continue to monitor and keep you informed. Always contact your accountant for tax advice! o

New Tax Credits for Hiring Unemployed Workers

Below is more information copied directly from www.irs.gov. Again, no forms or procedures are available yet – when available, HRT will add them to the Posters & Links section of www.hrtechniques.biz

Two new tax benefits are now available to employers hiring workers who were previously unemployed or only working part time. These provisions are part of the Hiring Incentives to Restore Employment (HIRE) Act enacted into law today.

Employers who hire unemployed workers this year (after Feb. 3, 2010 and before Jan. 1, 2011) may qualify for a 6.2% payroll tax incentive, in effect exempting them from their share of Social Security taxes on wages paid to these workers after March 18, 2010. This reduced tax withholding will have no effect on the employee’s future Social Security benefits, and employers would still need to withhold the employee’s 6.2% share of Social Security taxes, as well as income taxes. The employer and employee’s shares of Medicare taxes would also still apply to these wages.

In addition, for each worker retained for at least a year, businesses may claim an additional general business tax credit, up to $1,000 per worker, when they file their 2011 income tax returns.

The two tax benefits are especially helpful to employers who are adding positions to their payrolls. New hires filling existing positions also qualify but only if the workers they are replacing left voluntarily or for cause. Family members and other relatives do not qualify.

In addition, the new law requires that the employer get a statement from each eligible new hire certifying that he or she was unemployed during the 60 days before beginning work or, alternatively, worked less than a total of 40 hours for someone else during the 60-day period. The IRS is currently developing a form employees can use to make the required statement.

Employers claim the payroll tax benefit on the federal employment tax return they file, usually quarterly, with the IRS. Eligible employers will be able to claim the new tax incentive on their revised employment tax form for the second quarter of 2010. Revised forms and further details on these two new tax provisions will be posted on IRS.gov during the next few weeks. o

Tax & BusinessTax & BusinessCharting a Course to Increased Business ValueBy: Michael Bohning, Trajectory Consulting

Most small business owners recognize the fact that a majority of their net worth is tied up in the company. The business represents their most significant asset and the best opportunity to create the wealth required to meet their long-term personal objectives. A Cornell University study states that the majority of baby boomer wealth is held in 12 million privately -owned businesses, of which more than 70% are expected to change hands in the next 10-15 years.

However, many small business owners spend a majority of their time working in the day-to-day operation of the business instead of on the challenges of growing the value of the business. These owners do not have an exit strategy or a timeline for leaving the business and they may not know what they need to take out of the business when they leave to achieve their future objectives. They are content with letting business happen instead of developing and working a plan that grows the value of their business through its lifecycle. Then they wake up one day and decide it’s time to sell the company or perhaps transition it to a family-member; without ever achieving the full potential of the business they own.

So, how do we avoid such a fate?

It begins with an honest assessment of the company’s current value. One method used to value small businesses is a multiple of EBITDA (earnings before interest, taxes, depreciation and amortization). These multiples will vary by industry and the type of prospective buyer. The multiple is also dependent on other factors in your business such as the strength of your management team, the diversity of your customer base, or the presence of a unique technology or innovation. Your business advisors can assist you in determining a reasonable multiple for a simple, but materially accurate valuation.

Once you have determined a current value, you must then determine what you want to get out of the company when you leave (target value) and how long you have until that day arrives. The gap between the current value of the company and your target value will set the trajectory required to grow the value of your company over that planning horizon. For example, an owner knows they need to sell the company for at least $2 million in three years to meet their financial objectives in retirement. When they calculate the current value it’s worth $1.25 million. So, they need to grow the value at more than 15% annually in order to reach their goal in 36 months. If the current value is only $1 million, the annual growth rate must be more than 25%. After completing this exercise, the business owner may decide to modify their target value or their timeline in order to chart a rate of annual growth that is more realistic.

Once the business owner has determined the annual growth rate required to meet their objectives it’s time to get to work building a plan that will help achieve their goals. The good news is that EBITDA is a financial metric and is fairly easy to track and the financial variables

AMBA 39

The specialty steel industry is not as big as somemay think. In reality, buyers only have 2 choiceswhen it comes to specialty steel suppliers in North America.

One supplier is posing as three separate compa-nies, but operates as a joined enterprise. And theother is a bit more nimble.

Ellwood Specialty Steel is the number-one choicefor fast service and faster delivery, on the day promised or earlier. Whether you need a quote orhave a question, ESS stands ready to meet andexceed expectations, every time.

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that impact EBITDA are easily identified. They include sales, direct manufacturing costs, manufacturing overhead, and your general and administrative costs. These components are “levers” that must be moved over time to make improvements to EBITDA and increase the value of your company.

But, numbers on paper do not deliver actual results. It takes a well formulated plan and consistent execution to successfully move these levers and create the desired results that positively impact profitability and the value of the company. As Laurie Benson, the SBA’s 2009 National Woman in Business Champion stated, “Growth should be approached in a business-like manner. So why wouldn’t you want to have a crystal clear plan about how you are going to grow, when you are going to grow, and in what way?.”

A good place to start the planning is to understand the current situation. This includes benchmarking the company financially and operationally. Financial benchmarks are easy to find and use, including ratios measuring profitability, liquidity, leverage, and other key management elements such as inventory and receivable turns. In most cases good data is available specific to company’s industry and size.

Operational benchmarks are a bit more subjective and are usually based on best practices rather than metrics. Most companies have made and continue to make efforts to realize operational improvements through initiatives such as ISO certification, lean enterprise, and six sigma initiatives. However, companies must also assess other key areas within their organization including sales, marketing, supply chain, accounting, workforce development, and technology. Improvements in these areas will boost financial performance and increase company value.

Benchmarking current financial and operational performance provides a starting point in prioritizing the opportunities for improvement

available to the company. Those areas that show the largest gap between current performance and the benchmarks represent the greatest potential to positively impact a company’s future profitability and value. For example, a $5 million company may find that its gross margin percentage is 2% lower than the industry average. If that company increases gross margin up to the industry average they will add $100,000 to the bottom line and increase the company value by a multiple of that amount. A company may find its employee turnover rate is much higher than its peers. By reducing its turnover the company can improve its bottom line through decreased personnel administrative costs.

Once the priorities are identified, the company’s management team works together to develop future goals in each of these areas. These goals must be measurable and include a meaningful timeline for completion. The team completes more detailed planning to develop several action items to be executed over time in pursuit of each separately stated goal. These action items are assigned to members of your management team and include timelines for completion.

In order to ensure that the company is executing against its plans, the management team should meet at least monthly to analyze financial and operational performance. Members of the team will report progress against specific activities included in the plan and discuss any modifications or changes that should be considered. Remember that business planning and business plans should be a dynamic process. Business conditions change from month to month and the planning process and its execution should be flexible enough to accommodate these changes. Company benchmark analysis should be updated with actual financial data, operational performance statistics, and new industry and other comparative data as it becomes available.

A savvy owner understands the value of their business will not grow on its own. It takes a well-managed process for business planning and

40 AMBA

FLPs and How They WorkThe Family Limited Partnership (FLP) is a partnership consisting of general (control) partners and limited (nonvoting) partners, which is flexible and thus can be amended to meet the changing needs of family. The FLP fits most situations as the centerpiece for tax avoidance planning, and an entity to place such assets as real estate, equipment, marketable securities and closely-held businesses.

The FLP has become extremely popular as a planning tool due to our progressive income and estate tax systems, to facilitate ease of asset management and the flexibility of partnership laws that can be changed as families and situations change. Additionally, the FLP allows its members to leverage the assets by using reasonable discounts.

How to begin and how it worksJohn and Carol have accumulated various types of real estate (worth $6 million) during their lifetime in Illinois, Iowa, and Missouri. Their holdings include farm land, commercial rental property, resort property and residential rental property. John and Carol collect the rents, keep their own books, and contract with third parties for the maintenance and repairs on the residential properties. The tenants of the other properties are responsible for all such items under “triple net leases.” John and Carol have five children and eighteen grandchildren spread throughout the country. John and Carol have a number of concerns. They would like to:

1. Preserve the real estate values through proper coordinated management, after their lifetimes;

2. Allow the children to be able to diversify the real estate holdings over time in an orderly manner;

3. Minimize potential conflicts among the children;4. Help their children and grandchildren financially; and5. Lower their potential income and estate taxes.

To begin:

1. A written LP agreement is prepared. General partnership interests have less than 10% ownership, and limited partnership interests have 90% ownership.

2. John and Carol transfer the $6 million of real estate or closely-held securities to the partnership in exchange for both the general and limited partnership interests.

3. General partnership interests are retained by John and Carol for their lifetime, while the limited partnership interests are gifted over time to the children, grandchildren, or trusts for the benefit of….

4. The limited partnership interests have no control value, so they become eligible for valuation discounts of between 30-35%.

5. John and Carol, co-general partners, control investments and management of partnership assets, and must receive adequate compensation for their services.

6. John and Carol intend to make 23 gifts per child and grandchild each year they are alive. Results: In the years that both John and Carol are alive, they can gift upwards of $460,000 (23 x $20,000) of limited partnership interests. With appropriate discounts, 7% of the partnership can be gifted each year. If they use their lifetime exclusion ($1 million each going up to $3.5 million in 2009) nearly 40% can be transferred TAX-FREE in the first year.

execution to drive growth in company value and navigate the course toward future goals and objectives. So, instead of waking up one day and deciding it’s time to sell, smart business owners sleep well knowing what they need to accomplish and how they plan to achieve it. For more information contact Mike Bohning at HSMC Consulting, LLC. Website is hsmcpa.com. Phone is 816.525.9699. o

If we consider a 4% growth on assets within the partnership in 10 years, it would take John and Carol 12 years to transfer $8,875,000 tax-free.

How is the partnership taxed?

1. There is NO income tax recognized when the contribution is cash or appreciated assets to the partnership. (Exception: If more than 80% of the assets consist of stocks, bonds, treasury securities, then capital gains are taxable.)

2. Each item of income or loss flows through to the individual partner, regardless of the distribution of cash or property in accordance with the terms of the partnership agreement.

3. Partnership allocation of income or loss must have a substantial economic impact upon the capital accounts of the partners.

4. What is this capital account? Partnerships must maintain books, which trace the relative investment of capital of each partner. This is the capital account. Thus, your capital account is increased or decreased by the tax cost of what you contributed to the partnership and your percentage of income or loss.

The Passive Loss rules known as the “passive loss limitation” rules basically state that losses from any investment in which you do not actively, continually, and materially participate cannot be used to offset any type of income except income from other similar investments. The General Rule for all real estate rental income is treated as a passive activity, even if you participate in managing the property. Exception: If your adjusted gross income is less than $100,000, you can deduct up to $25,000 of losses as long as you actively participate in the rental activity and have at least a 10% ownership in it.

How the passive loss rules impact partnershipsLosses and credits not deducted in the current year are carried forward and treated as deductions and credits from passive trade or business activities in the following year. Losses from a particular passive activity are allowed in full when you dispose of your entire interest in that activity.

One example of FLPC Corporation Asset “Roll Out”. Regular tax-paying corporation (C Corporations) are also permitted to create freeze interests (i.e., cumulative preferred stock). However, very few C Corporations use this strategy. In order to pay the preferred stock dividend required under Chapter 14, the corporation must earn income, pay tax on the income, and distribute the dividend to the preferred stock shareholder. The preferred stock shareholder must then pay a second level of income tax. The partnership freeze has a significant advantage over the preferred stock recapitalization, or double taxation, since it avoids one level of income tax. A C Corporation roll out involves the transfer of the corporation’s assets into a partnership in exchange for a preferred interest in the partnership. The preferred interest acts to freeze the value of the older family members’ interests. Younger family members holding common limited partnership interests benefit from the growth of the partnership.

If you want control, flexibility, keep more income, liability protection, estate and gift tax advantages, you must seriously consider the use of the FLP.

This article appeared in Mike Henning’s Family Firm Advisor newsletter, for more information our company, visit us at our website: www.mikehenning.com, email: [email protected], or call (217)342-3728. Mike Henning is a nationally and internationally respected consultant and speaker on family business issues. o

AMBA 41

JEMENTERPRISE, Inc.

A Cut Above the Rest

Bankruptcy – Advantages & DisadvantagesIf bankruptcy is the only viable business solution, a business generally can use two types of bankruptcy proceedings. Under one, the business is liquidated, so that at the conclusion of the process the business no longer exists. Under the other, the business is reorganized and, hopefully, comes out of the bankruptcy as a viable business structure. Each type of bankruptcy has its unique set of advantages and disadvantages.

Chapter 7—liquidating bankruptcy. The biggest advantage to filing bankruptcy to liquidate is that the debtor gets a fresh start. All dischargeable debts are eliminated, and the creditors are absolutely prohibited from going back to the debtor to try and collect the debt. In addition, the liquidation is orderly when under the supervision of a single, independent third party. The debtor’s assets are marshaled, the creditor’s claims verified and accepted, the property sold, and the proceeds distributed based on the priority of the claims. Creditors cannot increase their take by taking preemptive collection action. In fact, under the preference rules, payments made to a creditor within 90 days of filing the petition can be recovered from the creditor.

The court will also ensure that a reasonable price is obtained for the assets, thus maximizing the value received. This can be particularly important when there are co debtors or other guarantors that have an obligation to pay the debt if the debtor cannot. The debtor is spared the costs of responding to multiple collection actions, including lawsuits, since the bankruptcy court has jurisdiction over the entire case.

But Chapter 7 has disadvantages as well. Perhaps the biggest disadvantage is the cost. Bankruptcy is an expensive process, and the monies paid in professional fees, filing fees, and other costs could arguably have been better spent in reducing the debtor’s liabilities. This may be particularly true when there are few creditors or when related parties have agreed to guarantee the debtor’s liabilities. Another disadvantage is the time and effort of the bankruptcy process. Since the court will direct the liquidation, it is the court, not the debtor that sets the schedule. If the creditors are also arguing over various issues, thetime it takes to liquidate can be increased. This can prove to be inconvenient and frustrating, particularly if the debtor is trying to operate a new business.

Chapter 11—reorganization. The biggest advantage to using Chapter 11 to reorganize a business is the ability of the court to control the process. The debtor is given breathing room and is normally left in charge of the business. The debtor is also given the opportunity to develop the reorganization plan free of creditor pressure, although the creditors must ultimately approve it. Furthermore, the automatic stay provisions prevent creditors from taking legal action outside the bankruptcy reorganization that could harm the debtor or jeopardize a successful reorganization. Unfortunately, many reorganizations simply do not work and end up converting to liquidating bankruptcies. The main disadvantage of Chapter 11 is the cost of the proceedings and the oversight that will be provided by the court and creditors. The debtor is under a duty to the court and the creditors to operate the business and must seek approval for any action outside the course of business. The debtor effectively operates in a fishbowl, which can be an unpleasant experience since most business owners are not used to having every decision scrutinized and second-guessed. Obviously, tax and legal advice should be sought when contemplating bankruptcy. Please your tax professional for further guidance on this topic.

Taken from the February 2010 issue of the Tax & Business Alert. o

42 AMBA

Business Success StrategiesBusiness Success Strategies

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College Costs Keep Skyrocketing

The cost of attending college continues to climb at an accelerated rate. The College Board (www.collegeboard.com) reports that 2009–2010 tuition and fees have risen significantly: private four-year colleges are up 4.4% (to an average of $26,273) from 2008–2009, public four-year colleges are up 6.5% (to an average of $7,020) from last year, and even public two-year schools are up 7.3% (to an average of $2,544) over the prior year.

The average surcharge for full-time out-of-state students at public four-year institutions is $11,528. However, the report indicates that $168 billion in financial aid is available, and about two-thirds of all full-time students receive grant aid (not counting loans or work-study programs). The College Board estimates that, on an annual basis when tax benefits are included, students at private four-year schools received an average of $14,400 in aid, students at public four-year schools received $5,400, and students at two-year schools received about $3,000.

If you have children or grandchildren who are planning to attend college, let your tax professional help you develop a savings plan to cover those costs and show you how to take advantage of the appropriate federal income tax incentives.

Taken from the February 2010 issue of the Tax & Business Alert. o

Taking Out Credit Insurance on Business ReceivablesBy: Susan Brown

Taking out a credit insurance policy on customer receivables is an important risk management tool for businesses that reduces exposure to bad debt and helps to stabilize cash flow. Generally, credit insurance is targeted to big businesses with an extensive, often multi-national customer base. But under difficult economic conditions, even smaller businesses should consider using this insurance product as part of their risk management strategies.

What is credit insurance?Credit insurance (also known as trade credit insurance) is an insurance policy that protects the insured business from clients who fail to pay their invoices due to insolvency or bankruptcy. Credit insurance usually covers a portfolio of the business’ customers. But it is also possible to cover single transactions or trade with only one customer. Moreover, a business can insure against the chances that a customer will refuse to accept the goods that have been produced.

Though coverage varies from company to company, credit insurance policies generally cover about 90% of the insured debts as long as the insured business maintains a credit limit on each of its customers.

The premium charges for this product generally reflect the average credit risk of the insured group of customers. It should be noted, however, that credit insurance premiums vary greatly depending on the size of a business and its industry as well as on the credit terms that the business extends to its customers. Payments are made on a monthly basis and are calculated as a percentage of monthly sales or as

AMBA 43

a percentage of all outstanding receivables. Many companies choose to pass these costs on to their customers.

How credit insurance on receivables can help a business Credit insurance provides an all important safety net that protects businesses from the financial strain of a customer’s protracted default, insolvency or bankruptcy. Though this can be a great benefit on its own, this “safety net” becomes all the more important when a company must do business within a weakened domestic or global economy.

Moreover, to protect their own interests, credit insurance companies have access to an enormous amount of financial and economic data. It is common for a credit insurer to advise a company on whether or not it should do business with a particular customer or region.

Finally, when used properly, credit insurance can be an important element in a company’s debt management strategy, ensuring safe and steady growth. In short, credit insurance is an important risk management tool that should be considered among businesses big and small.

Taken from the March 2010 issue of The Stellar Journal. o

Employee vs. Independent Contractor - Brief Review of the Rules

Classifying a worker as an employee versus an independent contractors is not always clear. This classification will impact the amount of tax that you pay as well as affect the additional costs a business may incur (most of these costs could be employee benefits rather than payroll taxes). The first step in determining how to treat payments that you make for services provided is to determine which category an individual falls into: statutory nonemployee, statutory employee, independent contractor or employee. The key to making this decision is to consider all factors in the relationship between the service provider and the business, to consider the extent of the right to direct and control the worker, and lastly, to document the factors that are used in making the determination.

1. The first step in determining the classification of a worker is to test for statutory nonemployee occupations. There are two categories of statutory nonemployees: direct sellers and licensed real estate agents. These individuals are treated as self-employed for all federal tax purposes if:

• Substantially all payments for their services as direct sellers or real estate agents are directly related to sales or other output, rather than to the number of hours worked

• Their services are performed under a written contract providing that they will not be treated as employees for federal tax purposes

If your worker fits into the above categories then he or she is considered an independent contractor. However, this is intended to be a rather narrow class of employees.

2. The statutory employee classification is only relevant to a few classifications of employees. Even if workers are classified as independent contractors under the common law rules, they still may be treated as employees by statute for certain employment tax purposes.

• Compensated corporate officers are considered statutory employees for Federal Income Tax Withholding statutes.

• Compensated corporate officers, agent drivers, full-time traveling

sales persons, full-time life insurance sales persons and home workers are considered statutory employees for FICA tax statute purposes.

• For FUTA statute purposes all workers mentioned above for the FICA statute except full-time life insurance salespersons and home workers are statutory employees for FUTA purposes.

3. Workers are usually considered employees when the employer controls what services they provide and how they provide them under common law rules. If the worker is indeed an employee, then the employer has the right to control the manner in which services are performed. Common law rules, or factors to consider when classifying an employee are detailed in the following link. See the Common Law rules at http://www.blackmankallick.com/articles/2010/02/20-factor-common-law-test-for-employee-classification/index.php. Note the IRS has combined these into three broad classifications.

4. A worker may be classified as an employee under the tests noted above but still be properly classified as an independent contractor for payroll tax purposes because of a provision in law known as Section 530 relief.

To qualify for relief under Section 530 the employer must satisfy three conditions: Reasonable Basis, Substantive Consistency and Reporting Consistency. First you have to be able to confirm that you had a reasonable basis for treating your workers as contractors and not employees. To confirm this you can provide the IRS with a court case about Federal Taxes, a ruling issued by the IRS that you followed, or other “evidence” that the IRS had previously audited your business with respect to this issue and made no changes. You may also show that you relied upon reasoned advice of a business lawyer or accountant (just their statement on its own won’t work). After a reasonable basis is proved, you must show that your business treated both the workers in question and any similar workers as independent contractors and have been consistent in such treatment over the years. The last requirement that must be met is the reporting consistency; you must have filed all required federal tax returns consistent with your treatment of each worker as an independent contractor. Taken from the February 2010 issue of the Blackman Kallick 2010 Tax Highlights. o

10 Ways to Reduce Supply Chain CostsCompanies are under pressure to design and execute an efficient, productive, predictable supply chain, working in a business environment that is creating unprecedented challenges. Shippers often ask us how they can save money. Most frequently this comes as a request for a lower price on shipping, but as we talk with shippers, we often find that simply lowering the transportation price is not always the best way to lower overall costs. In fact, by understanding how they use transportation and work with service providers, most companies can lower their costs beyond what they could by simply finding a lower price. What follows are the ten ways we have seen companies reduce their supply chain costs beyond a lower price for shipping:

1. Check with your association. AMBA has partnered with YRC to bring you shipping benefits that leverage the full scale of the association, passing savings along to you. It comes as a benefit of your paid enrollment, and usually saves thousands of dollars per year on shipping. Enroll in the YRC shipping program at www.enrollhere.net to take advantage of your discount.

2. Properly complete the bill of lading. The bill of lading (BOL) states exactly what is being shipped, where it’s coming from, and

44 AMBA

where it’s going. It is important to accurately complete the BOL to insure your shipment is not delayed or acquire extra charges. One of the important fields on a BOL is freight class. Freight classes are rough estimates of a product’s density and value. In general terms, the more dense a product, the more favorable the transportation rate. Likewise, the lower a product’s liability, the less a provider will charge you to move it. Accurately noting the shipment’s class and release value on the bill of lading ensure that you are paying the lowest rate possible for your transportation. Class a shipment too high and you’ll pay unnecessarily for product density less than what yours actually is. Class it too low, and the shipment may be subject to an inspection charge to correct the mistake. If you have any questions, contact YRC customer service to verify that you are classing your shipments correctly.

3. Time is money…so pay the attention to your shipping that will eliminate delays. Label your shipments properly, so that the consignee (destination and recipient) is unmistakable and impossible to miss, regardless of the angle from which a dockworker is looking at your shipment. On international or cross-border shipments, make sure that the appropriate paperwork has been completed and is moving with the shipment. If you have questions on how to prepare a shipment, YRC is more than willing to help.

4. …And money is time. If a shipment doesn’t need to arrive the next day, don’t ship it overnight. In other words, communicate with the receiver of the shipment to understand exactly when it needs to be there, and ship based on that schedule. While you may hear, “I’ve got to have it”, your customer may mean, “I’ve got to have it, no later than Monday after next.” Knowing the urgency will help you save costs from unnecessarily over-delivering on a promise.

5. Make the carrier your customer service agent. Using my.yrc.com, you can establish automatic email notifications for both you and your customers when shipments pass major status events, keeping everyone associated with a transaction up to date on its fulfillment. Some services also have a proactive notification capability. The carrier will monitor your shipment’s status and inform you when a possibility arises that it might not arrive on time. Finally, most carriers have an arrival notification service. It’s not likely free, but it will be less expensive than a redelivery charge for a consignee that wasn’t present to receive their shipment on the first delivery attempt. Use YRC’s free my.yrc.com and 800-610-6500 services. Available 24 hours a day, these services save you time and give you complete visibility of your shipments.

6. Package products properly to avoid damage. While damage happens from time-to-time, you dramatically reduce the likelihood that it will happen when you ensure the shipment is packaged, stacked and seated on the pallet properly. Damage from poorly packaged or stacked product is preventable, and eliminating it reduces delays in fulfillment, claims costs and administrative costs, and improves customer satisfaction.

7. Carpooling for shipments. Often, your shipment will not need the space of a full trailer. Shipping less-than-truckload lets you share space with other merchandise moving to the same destination in order to reduce the cost for each shipment that rides. Even if you need your shipment to be separated from other products, innovative solutions such as YRC Sealed Divider™ allow your shipment to travel behind a secured bulkhead within a trailer, so that you still only pay for the space you use.

Millstar Tools take the HEAT — Increase Mold-Making Production.

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With Millstar cutter strategies and high-speed machining solu-tions mold makers produce more finished molds and dies in less time.

Millstar cutting tools provide mold makers:

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AMBA 45

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Peek at Your Business’ Rating! - Compare to Local PeersHere is a very interesting website: www.yelp.com, INC Magazine just featured an article about this start-up founded in 2004 by two 20-year old guys. According to INC, Yelp is “the rambunctious and burgeoning customer-review website, (which) can make or break a business...” We recently used this site to get a pulse on the airline, Air India, as our family is planning to travel to Germany this summer. Air India is offering round-trip rates of $860 compared to $1300 for other airlines. When reading the reviews, you get a sense of truthfulness . . . (even though there are always some that seem too extreme...) Although Yelp is used most popularly in the metropolitan areas, it is slowly moving to rural areas as well... Check it out to see if your business has been “yelped!” Customer reviews can be a “scary” thing, but they can be managed with the tools that Yelp provides along with some good customer service. Yelp.com owners want to be sensitive to business owners’ concerns and provide the ability for owners to respond privately (or publicly) to reviews. The article told of one business owner who through making a private apology yielded a customer rating from a 2-star to a 4-star. It is now easy for our customers/clients to “rave” or “complain” on the web. Just being aware of “Yelping” is important in business today! o

8. Understand your true supply costs. If your supplier adds freight costs to your orders, you can request that they bill you collect so that your discount applies to the shipments. It’s not uncommon for suppliers to up-charge their shipping costs to increase their margins on customer orders. Have the supplier run a quote without shipping costs and comparison shop using your available discount to see if you’ll benefit from this method.

9. Don’t forget about accessorials. Accessorials are services provided to you in addition to the linehaul transportation. These include lift gate trailers, residential delivery, limited access delivery, shipment notification, HAZMAT, and COD. You can save time and money by choosing the needed accessorials for your shipments. For example, if you’re shipping to a location without a dock, make sure that a lift gate trailer is requested. If the request is not made, redelivery fees will apply and the delivery of the shipment will be delayed.

10. Consider consolidation. If you ship many parcel-sized shipments to the same destination, consider whether you could combine them into a single less-than-truckload shipment to save on multiple parcel shipping charges. If your service requirements to your customers allow for it, overall cost will generally go down.

These ten ways have helped many companies reduce their supply chain costs beyond just a lower price for shipping. Now that you’ve seen how to use transportation efficiently and work with service providers, you can start lowering your costs with YRC. For more information, please call 800.647.3061. o

[email protected]

Wisc_Engraving.indd 1 10/23/08 1:33:02 PM

For Breaking News and the Latest AMBA Activities

Be sure to read the Weekly Beat email News Bulletin & Market Report!

46 AMBA

Advertiser’s Index

Alba Enterprises, Inc . ..................................... 32

Alliance Laser Sales ......................................... 29

Alliance Specialties ...........................................27

Bico Steel Service Centers ................................47

Crystallume Engineered Diamond ................. 33

CVD Diamond Corporation ............................41

DME Company ................................................ 42

DMS ..................................................................45

Duro-Chrome Industries ................................21

Edro Specialty Steels, Inc. .............................. 17

Ellwood Specialty Steel ....................................39

A. Finkl & Sons Co. ......................................... 11

Graphic Products North America ................... 12

The Gund Company .........................................36

Hasco America ................................................... 9

Incoe Corporation ............................................. 7

JEM Enterprise, Inc. .......................................41

M & M Tooling ................................................ 46

Makino ............................................................. 31

Millstar, LLC .................................................... 44

OMNI Mold Systems, LLC .............................. 48

Osco .................................................................33

PCS ....................................................................46

Proceq USA, Inc. ............................................... 9

Progressive Components .................................. 2

Rocklin Manufacturing Co. ............................ 36

Ultra Polishing ................................................. 23

Vega Tool Corporation .................................... 35

Wisconsin Engraving Co., Inc. / Unitex ......... 45

Yellow Transportation, Inc. ............................14www.pcs-company.com | P: 800-521-0546 | www.buyatpcs.com | F: 800-505-3299 | [email protected]

Member

M&M Tooling Inc., is a complete Custom Mold Base manufacturing facility with capacity up to 35” x 80”. We employ top journeymen mold-makers, utilizing Mazak CNC machining centers maintaining tight tolerances, to achieve high quality results.

M&M Tooling Inc’s mission is and always will be, to provide follow-through on commit-ments to our customers, with personal attention that exceeds expectations.

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AMBA 47

BICO STEEL SERVICE CENTERS

SINCE 1896

BICO AKRON, INC.Mogadore, Ohio330-794-1716 800-321-0983Fax: [email protected]

BICO MICHIGAN, INC.Grand Rapids, Michigan616-453-2400 800-962-4140Fax: [email protected]

BICO SOUTH, INC.Spartanburg, S. Carolina864-595-1025 800-998-1025Fax: [email protected]

48 AMBA

American Mold Builders AssociationP.O. Box 404Medinah, IL 60157-0404(Change Service Requested)

PRSRTU.S. Postage

PAIDMedinah, IL

Permit No. 20

• (2) New series of slides

• A total of (18) new sizes

• In stock ready to ship

• CAD files are available on our website

• Call for more information

Proudly madein the USA

OMNI Mold Systems customers have been asking for more size options for our Versa-Slides®.We have listened and are now stocking two new series (45 series) and (55 series).

• The (45 Series) will fill the gap between the 40 and 50 series slides with a 4.375”slide face width.

• The (55 Series) will fill the gap between the 50 and 60 series slides with a 7.125”slide face width.

That’s 18 new sizes in all! No more need to custom build those in between sizes.

OMNI MOLD SYSTEMS™

Toll Free Ph 888-666-4755 www.omnimold.comToll Free Fax 888-816-2850 [email protected]

2010 The American Mold Builder - Spring

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Transcript of 2010 The American Mold Builder - Spring