by Chris DeMell, North American medical marketing manager, ITW Industrial Decorating Solutions
It’s a common belief that overseas production is more cost-effective than manufacturning in the US. However, when it comes to the plastics industry, more and more product decoration is being brought back to the US. Furthermore, trends such as increased automation and other technologies are offering new challenges and opportunities for the industry. Plastics Decorating sat down with Chris DeMell of ITW to discuss the most recent ways in which the industry is growing and acclimating to the global marketplace.
Product decorating has increasingly returned to the US as opposed to being done overseas. How do you account for this shift?
We have been seeing the “reshoring” trend for several years to some extent; however, this has been growing in scope and intensity over the past few years. Product decorating follows the lead of core manufacturers, assemblers and molders.
Customers mention a variety of drivers for bringing back business from overseas. Controlling quality, maximizing time to market turns, reducing WIP inventories and gaining control over the entire production process are some of the prominent drivers. Additionally, the shipping costs require parts decorated overseas to be bought and shipped in bulk, which typically indicate small, inexpensive items.
Are some decorated products more suited to production in the US vs. overseas?
This really depends on the end goal of the manufacturer. In the medical industry, for example, we see parts produced in local geographic markets for quicker turnaround to support local supply chains. China is still a very low-cost producer, and there are certain criteria people consider to determine if they will continue to use overseas sources for their decorated products or to keep that focus here.
Part size is certainly one area that will determine this. For example, you have been seeing more of the larger and even medium-sized parts for the automotive and appliance industries being decorated here in the States, where businesses have found it more economical, rather than incurring shipping costs. Also, the value of the part itself can be a consideration for some customers. Items such as industrial containers, automotive dashboards, medical devices and electrical components are all being reshored for local decoration and production.
With more decorating jobs being done stateside, how can decorators minimize labor and other costs?
Decorators are following the same trend that the rest of the manufacturing community is embracing by automating jobs as much as possible. Several factors contribute to the decorating cost, including labor rates, throughput efficiency, scrap rates, shipping cost and consumable costs. Business left the US marketplace due to the huge discrepency in labor rates that such countries as Mexico and China afforded. In order to compete, a new approach had to be taken to level that playing field.
Automations were typically done only for the high-volume jobs that did not vary significantly from part to part. Today, customers are looking for systems that will allow for automatic loading of parts, pre-/post-treating stations (if needed), decoration technology, inspection systems and off-loading – even for small and medium-sized runs. Entire production runs, handled by only one or two operators, would have required significant labor resources in the past. In many cases, these systems are placed right next to molding machines. Production plants are being optimized to reduce the number of touches a product receives, eliminate WIP inventories where possible and get product out the door as quickly as possible. This in-lining approach is growing in acceptance and significantly lowering costs for manufacturers.
The benefits of automation are clear; however, there are challenges being faced by the decorators, as well as the decorating equipment manufacturers who support them. The initial investment for fully automated systems is significantly higher than obtaining a stand-alone workstation for hot stamping, pad printing or screen printing, for example. The standard return on investment for equipment that would typically stretch from 18 to 24 months now has been squeezed down to six to 18 months in some cases. To make that work, costs must be eliminated wherever possible. Labor can be further reduced through robotic load and unload stations. Another challenge can be the operators themselves. Operators must understand the decoration technology and system maintenance, while at the same time maintaining the overall automation. This requires more highly skilled personnel and much more training than we have seen in the past.
As a provider of product decoration equipment, we have seen the percentage of projects requiring either full automation, or partial/semi-automation grow at exponential rates these past several years. This has put pressure on companies to focus on new equipment that meets high-speed production rates while at the same time minimizes maintenance and operator interaction. Quick change, modular components have allowed customers to adapt quickly to a changing marketplace. Technologies such as digital printing, digital heat transfers, in-mold labeling and other in-mold decorating processes are allowing decorators to target small-run applications with the efficiencies once only obtained by long-run, analog systems.
What specific trends are you seeing in the decorating marketplace?
Direct to surface, digital inkjet remains the most prominent “innovation” in decoration; however, there is still a long road to go to see this as a full replacement for traditional technologies such as pad printing, hot stamping, heat transfers and/or labels. Companies have been searching for more functional products that can become interactive for the consumer, such as heat-sensing coatings, reactive environments and other ideas the automotive industry has been focusing on in recent years.
Looking forward, several areas can impact the overall decoration industry. Regulation is certainly an area of interest. For example, the Food and Drug Administration is significantly increasing the tolerance demands for dosage markings; the EU requires strict recycling restrictions for products; and the food industry is looking to adopt the more rigorous regulations of the Nestlé standard for food-grade products. All of these will present challenges to the molders and decorators to ensure they can meet these requirements and still meet the demands for finished decorated products.
Other factors, such as growing automation in developing nations, will continue to place pressure on labor costs. Political implications of the new tax laws for companies, along with looming tariffs, need to be monitored to see what the fallout will be – whether good or bad. Product decoration will continue to evolve and adapt to the global marketplace with new challenges as well as new opportunities. Both molders and decorators should fully expect a vibrant future and be excited about the possibilities.
Chris DeMell is the North American medical market manager for ITW Industrial Decorating Solutions. The Industrial Decorating Solutions division provides customers around the world with a broad array of application equipment, value-added products and innovative solutions – all from one partner – creating customer-focused products for a wide array of markets, including appliance and household goods, consumer and industrial containers, cosmetics and personal care, electronics, medical and health care, and sporting goods, as well as transportation. Learn more at www.itwids.com.