Published in Manufacturing

Raising the performance of tool and die companies

BY Melissa Anderson Sunday, June 12, 2016 03:06pm

Tool and die shops are practitioners of highly skilled craftsmanship, doing the rigorous and precise work needed to build tooling for high-volume production of automotive components. 

Because of the craft nature of their work, these shops historically tended to be smaller than component suppliers and have a different management style. As the auto industry has evolved over the past decades, however, so have the demands on these companies, and there are some new tools of a different sort that they are finding helpful.

The tooling supply base in West Michigan has long been ahead of the curve in increasing the sophistication of its approach to the market. Companies like Autodie LLC, which at one time was the largest tool and die maker in the country, and Riviera Tool, acquired by Tesla in 2015, were bold in investing in technology and capacity to offer a more comprehensive level of service to automakers and other customers. 

In another example, local companies Riviera Tool, Enterprise Tool & Die, Precision Jig & Fixture, and Master Precision were all members of the United Tooling Coalition, a 10-company Michigan-based consortium formed in 2002 by The Center for Automotive Research. The coalition gave customers a single source for a complete range of die/mold/automation/jig and fixture services, and opened up more opportunities for the individual member companies.

Bold initiatives to create critical mass, gain scale, and address globalization sometimes run their course. They do not always have lasting benefits as market conditions change. And some companies prefer to find incremental methods of improvement rather than take game-changing steps. Whatever the management’s style, it is important to keep moving forward to cope with tool and die trends.

In recent years, the macro trends have been largely favorable for the tool and die industry. Automotive OEMs picked up the pace of new model introduction following the 2009 recession, triggering strong demand for the tooling and dies that are purchased at the beginning of the production cycle. Similarly, they have been refreshing vehicles mid-cycle with more frequency, another driver of tooling demand. 

A proliferation of model variants to serve narrower customer segments has led to more tools being built for smaller volumes (e.g., multiple tools for 100,000 units rather than one tool to make 500,000). And, the last point in this quick summary, some indicators suggest a slow return of some tooling to North America from low-cost country sources. 

Opportunity is high, but that does not mean that life is easy for tool and die companies. 

Industry observers point to the challenges of short lead times, product and tool complexity, lack of skilled labor, and more. Every company needs to look at ways to improve. Fortunately, there is a resource that can help with that.

Harbour Results Inc. (HRI) was established in 2005 to help North American small and medium-sized manufacturers compete in the global manufacturing environment. Over the years, the consulting work of company founder Laurie Harbour and her colleagues has generated a treasure trove of raw data on the performance characteristics of companies. The firm recently invested considerable effort to get that data into a commonized, searchable format. Access to the data and more is now available through a service called Harbour IQ.

Harbour IQ is a business intelligence tool providing real-time access to valuable information for the tool and die manufacturing industries. The contents provide performance benchmarking, operational data, financial insights, sales and marketing information and industry trends, delivered through user-friendly proprietary software. 

For tool and die companies, this is a one-stop shop for deepening their understanding of the broader context in which they operate. By studying comparative data about the experience of their peers, and asking questions about why some are performing at a higher level, tooling companies can set out on their own journey toward better results.

In our experience, a key characteristic of successful companies is the drive to be conscious and deliberate about every aspect of their business. Implicit in that is the simple desire to know many things — about markets, customers, internal company processes, technology, and more. 

Curiosity might be an unheralded business virtue, but companies that value information are able to construct a framework, a point of view about their environment, that guides coherent decision-making. 

Fortunately, the market also stimulates development of information resources and services, so companies that want to become even smarter do not have to go that route alone. 

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