measuring steel hardness

Spring 2014

Measuring Steel Hardness

Filling the Automotive Tool Capacity Gap

AMBA Conference, May 14-16

The Official Publication of the American Mold Builders Association

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FEATURESFEATURES

14

3228

contentsSpring 2014

6 TrendsManufacturing and the American Economy

10 TechnologyMeasuring Steel Hardness – Guidelines to Ensure Time and Cost Efficiencies

High-Speed Machining Mills – 5 Questions to Ask before You Buy

20 Special ReportCan the Automotive Industry Close the Future Tooling Capacity Gap?

32 FocusDesigning for Manufacturability

34 Show Preview Amerimold 2014

38 StrategiesTax Breaking the Mold: R&D Tax Credits for Mold Builders

performance is key.

As a manufacturer of high precision, complex tooling, Steve Rotman

of Ameritech Die & Mold aligns with engineering-focused suppliers

that drive innovation and exceed expectations.

“A mold builder’s reputation could be ruined with one job.

Our status as a Progressive Key Account ensures on-time

delivery of standardized components that help our molds

outperform others throughout the world.”

Get the Key Account advantage. Specify Progressive standards

to secure a globally competitive position with your customers.

align with progressive

See Progressive Components at the following industry events: K 2013 | EuroMold | PLASTEC West | Amerimold

call 1-800-269-6653 to learn more about our key account program.

On the Cover:Finished mold steel blocks waiting to be shipped from the Industeel mill located in Chateauneuf, France.

4 the american MOLD BUILDER spring 2014

How can you measure the value that the AMBA provides its members? American mold builders are unique, which makes the association that serves the industry a challenging and exciting endeavor. If you start by thinking about the problems the typical mold shop faces that are different from most manufacturing companies, the value proposition becomes clearer.

Most AMBA members struggle with ups and downs in workload. Our ability to plan the business more than four to six months out is difficult because most of us live from job to job, and with that comes uncertainty. At Commercial Tool, I call it our 12-week rolling business plan, and try as we might, we never know what’s around the next corner. When talking to people who run other manufacturing businesses or professionals who serve our industry (like bankers, accountants and attorneys), they have a difficult time understand-ing how mold builders can function in such an uncertain environment.

For example, most manufacturing companies can leverage long-term contracts for their product to gain financing for capital equipment purchases, plant expansions and growth. Most mold building companies don’t have that option because we rarely get contracts for more than the next job. The decision to grow, buy equipment or expand the plant requires the owners to take a tremendous risk and a leap of faith. While a mold builder might be able to measure his backlog four to six months into the future, the average machine tool delivery time can be 10 to 18 months and can require a signif-icant down payment. This is just one of the many unique dilemmas our members face daily. In addition, we require highly skilled employees that our education system is not capable of providing, so we have to solve that problem to be successful. American mold builders have some of the highest tax rates and compliance costs on the planet, yet we are required to be globally competitive. In the automotive industry, payment terms can be 12 to 24 months after the work is complete, which creates a significant cash-flow problem. The list of unique challenges we face goes on and on.

Back to the original question: How can you measure the value the AMBA provides? What it really comes down to is this: We get it. The AMBA only serves mold builders, so our entire focus is on providing value to mold builders. The amount of value you get with your membership is really up to you because when you participate, you gain so much more. I know it is difficult to make the time to leave the shop and attend the annual conference or a plant tour workshop, fill out the survey, take the pilot test or attend a webinar, but that is where you get the most value. I tell anyone that wants to listen that I am a better leader and run a better business as a result of being an active AMBA member. Period.

This is my last column as president of the AMBA, and I want to thank the Board of Directors for the opportunity to serve it and the AMBA member-ship – the American mold builders!

Todd Finley, Commercial Tool & Die, Inc.

The American Mold BuilderPublished by the

American Mold Builders Association 3601 Algonquin Rd., Suite 304

Rolling Meadows, IL 60008p 847.222.9402 • f [email protected] • www.amba.org

Officers and Board of DirectorsPresidentTodd Finley, Commercial Tool & Die

Vice President and TreasurerMichael Bohning, Creative Blow Mold Tooling

Secretary and Legal CounselAlan Rothenbuecher, Ice Miller LLP

Board of DirectorsMike Armbrust, Mako Mold Corp.David Bowers II, JMMS, Inc.Toby Bral, MSI Mold Builders Robert Earnhardt, Superior ToolingShawn McGrew, Prodigy Mold & ToolJustin McPhee, Mold Craft Paul Novak, South Coast MoldTim Peterson, Industrial Molds GroupScott Phipps, United Tool & MoldJim Sperber, Master Tool & Mold Mike Walter, MET Plastics

AMBA TeamTroy Nix, Executive DirectorKym Conis, Managing DirectorSusan Denzio, Business Manager

Managing Editor: Kym ConisContributing Editor: Dianna BrodineArt Director: Cara Pederson Advertising/Sales: Susan Denzio

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.

Speak Out

Todd FinleyAMBA President

TrendsTrends


Remember the headlines last summer? Motor City Goes Bust. Record Bankruptcy for Detroit. Last July, the city of Detroit went bankrupt. The news coverage focused on the role of spending, mismanagement and pension costs in this stunning collapse.

But beneath the headlines, a larger truth was ignored: the bankruptcy of Detroit was an American tragedy and an entirely preventable one. The downward spiral began decades ago when deindustrialization led to depopula-tion, crime and declining public revenues. Corruption and mismanagement may have exacerbated the problem, but they weren’t the root cause.

The gravest mistake we can make today is to believe that Detroit is an anomaly. It isn’t. The economic threats that brought down Detroit are present in other great American cities. The question is: Will we learn our lesson and prevent future harm elsewhere?

Deindustrialization – in Detroit or elsewhere – is neither desir-able nor inevitable. But as any physician will tell you, an ounce of prevention is worth a pound of cure.

I believe that same maxim applies to economies. With smart public policies, cities, states and nations can maintain diverse, sustainable economies that may bend with the business cycle but will never break.

Nations with a manufacturing strategy have a greater percent-age of their economy and employment in industry than we do in America today. In many cases, our competitors now have a stable or growing middle class and fewer budget challenges than our own cities, states and federal government.

What do they know that we don’t? Manufacturing matters.

As I point out in our book, ReMaking America, the idea that deindustrialization in America is nothing to worry about has been conventional wisdom for several decades. Thought leaders often tell us why we should be so lucky that America can just design while leaving it to the devel-oping world to produce.

But they ignore vital examples like the high-wage German economy with its sizable manufacturing sector. They say cheap imports are great for our economy, a slogan

that ignores the fact that the consumer’s buying power is limited, even at Wal-Mart, when one can’t find a job. We hear that outsourcing is a good thing, which fails to take into account that a day may come when America can’t supply its own troops. And we’re told that trade deficits don’t matter, except that they, too, have to be financed somehow and that this obligation has cost the middle class its jobs and wealth.

Clearly, the conventional wisdom has not served the people of Detroit, or any city in America for that matter,

very well at all. And it has been widely ignored by our competitors – both the high-road models (Germany) and the more mercantilist versions (Japan and China).

But is it too late for Detroit? And what of the other cities teetering on the brink? Or of America’s fiscal imbalances? If our leaders take certain lessons to heart – and voters demand this change – we can adopt policies that will grow exports, rebuild the middle class and put us on a path to a better fiscal position.

Manufacturing and the American Economy

By Scott Paul, Alliance for American Manufacturing

The economic threats that

brought down Detroit are

present in other great

American cities. The

question is: Will we learn

our lesson and prevent

future harm elsewhere?

7www.amba.org

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Here are a few policy changes.

1. Cut the trade deficit in goods in half over the next three years. This means more exports and fewer subsidized imports from China and Japan that dislocate workers in cities like Detroit. It does us little good to double exports, as President Obama stumped for during his re-election campaign, if imports are rising at an even greater rate.

2. Restore the balance of power between the industrial park and Wall Street. Financial deregulation in the late 1990s made the financial sector the master of manufac-turing. That, along with the creation of CDOs and other get-rich-quick “innovations,” was a huge mistake. Ensure that our small- and mid-sized manufacturers have access to affordable, patient capital.

3. Rebuild the connection between innovation and produc-tion. Our tax dollars fund research that helps create amazing products – products that are made overseas and sold back to us. We should insist that federally supported R&D is channeled into the design, engineering and production of goods in America. Congress should fund the $1 billion proposed by the Obama Administration to create a network of national innovation institutes.

4. Adopt policies to boost demand. That means infrastruc-ture investment and tax policies geared towards higher levels of production and consumption of domestic goods. Even with automation and productivity, higher demand means we’ll be supporting more manufacturing jobs. Don't allow Wall Street and retailers to hijack corpo-rate tax reform when only manufacturers face real global competition.

5. Scrap the “strong dollar” policy that helps US business-men find cheaper hotel rooms overseas in favor of a competitively valued dollar that will boost our exports.

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Trends


Trends

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The Institute for International Economics estimates that the dollar is overvalued, while China’s and Japan’s currencies are undervalued. We should insist those governments end policies that deliberately lower the value of their currencies.

6. Adopt smart energy policies that will position the United States as the global leader in renewable energy equipment manufacturing and boost our emerging energy cost advan-tage. Developing domestic natural gas and oil is a great thing, but exporting loads of domestic natural gas to countries that subsidize their own industries makes little sense.

7. Encourage small-scale manufacturers to embrace “urban manufacturing,” the “cloud” and additive manufactur-ing. This will localize manufacturing, reduce imports and establish a new generation of makers.

8. Rebuild our system of vocational education. Creating a seamless system of training from high school to commu-nity college and on to the factory floor for a new generation

of manufacturing workers will boost American manufac-turing’s competitiveness and provide a viable career path for millions of Americans.

Make no mistake: This isn’t about rebuilding manufactur-ing the way it was in America, but rather about how we can restore American manufacturing leadership in this century. We need to get smart. With the right policies – including those above, which are outlined in great detail in ReMaking America – manufacturing can see a new dawn in Detroit and all across America. We can see renewed wealth and growth opportunities necessary to keep the American dream alive. And we’ll certainly see fewer headlines like we had in Detroit.

Scott Paul is president of the Alliance for American Manufacturing. You can follow Scott Paul on Twitter at www.twitter.com/ScottPaulAAM.

t page 7

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Technology


Measuring Steel Hardness – Guidelines to Ensure Time and Cost Efficiencies

By Rob Esling, Industeel USA, a Division of ArcelorMittal

Recently, I received a phone call from a customer regard-ing hardness issue concerns on three blocks measuring approximately 6x20x40" of our enhanced P20 steel product SP300 (SP P-20). This is a lower carbon content premium grade known for its increased hardness (30-34 Rc) over standard P-20 grades (28-32 Rc). The application was for three Class A interior injection-molded trim compo-nents and was at tooling kickoff intended to be a standard polished surface finish suitable for graining. The tools were four cavities each and the parts were of relatively shallow depth between 2" to 3", with minimal actions.

Upon receipt of this information, all corresponding paper-work was obtained. Original mill certifications, heat lot information, chemistry analysis and mother plate hardness readings all showed the material was well within mill specifications for this type of product.

A meeting and visit that same day were arranged to review the concerns of the end user and were held on the shop floor where hardness readings were labeled on various areas of the blocks in question. Readings showed random hardness values ranging from 22 to 30 Rc with no particular pattern. The tools in question were vibration stress-relieved; hence, tools were not subject to stress relief temperatures, nor to any kind of heat process, including welding. This infor-mation provided was very perplexing and required some additional investigation to try and understand the nature of the customer’s concerns.

After a review with the sub-contractors involved in the hardness and polishing processes, it was determined that the initial hardness readings were done erroneously and a second hardness reading was taken after the recommended conditions noted below were met, proving the material was, in fact, well within the manufacturing specifications.

Looking back at this situation, there are a couple of solutions that would help ensure better performance in the mold building process when dealing with sub-contrac-tors and when clarifying and communicating specifics.

This, in the long run, will ensure better quality by all parties concerned, reduce additional costs and program timing, avoid finger pointing as to the nature of the cause, reduce time and expense of the individuals involved and, of course, identify which party is responsible to pick up those additional costs.

Measuring hardnessIn the previous example, it was determined that hardness measurements were not taken in accordance with recom-mended procedures. In summary,

1) The surface quality of the tested areas was contami-nated with cutting fluids and protectants;

2) The surface finish was not smooth enough to ensure an adequate readout;

3) The reading was not done by a qualified individual; and4) The date of the last calibration could not be confirmed.

The use of handheld ball-type portable devices has grown over the years, as they are affordable, relatively easy to use and can provide a quick indication of the relative hardness of the base material according to the manufactur-ers, provided the following conditions are met:

5) The surface must be smooth enough to allow the device to contact a flat area free of cutter marks and cusps, etc.;

6) The area of contact must be free on any type of contaminants;

7) It is advisable to calibrate the device daily, or prior to use and adjust accordingly; and

8) The individual performing the operation should be trained and experienced.

With these conditions met, the chances of obtaining a reading within a general range will improve greatly. It is important to note, however, that these devices, while providing a semi-accurate reading, are not the same as using a more exact device. Studies done in our R&D center show that the variance can range from 3-5 Rc or more, depending on the inadequacies noted above.

page 12 u


Technology

If an end user has concerns regarding the hardness of the material in question, the following recommendations should be undertaken:

9) Send inquiries to the service center, distributor or mill, referencing the certification of that particular heat lot and asking for proof of chemistry, hardness, specs and results; and

10) Obtain a reading from the same or from a qualified testing source.

Other factors influencing steel hardness are the chemi-cal composition of the particular grade(s), which are too numerous to contain in this article; however, the addition of alloys, along with carbon and iron, can have an effect on the overall goal of achieving uniform hardness and homogeneity (Figure 1). This consistent hardness control can have beneficial effects for moldmakers in machining, drilling, polishing, welding and graining, as it reduces or eliminates variation in all of these operations.

Typically, the thicker the blocks, the more variation can be expected as a result of the processing and cooling of the master ingots (Figure 2). One must remember that major mills typically are producing ladle heats ranging from 40 to 100 tons per lot, while ensuring that some of the alloys or elements are kept in ranges as low as one part per million – not an easy task and one that requires exact testing, process and quality control.

Steel identification for sub-contracting servicesWhen utilizing sub-contractors within the mold build-ing process, i.e., heat treating or stress relieving, polishing and graining, one of the most common complaints I have heard over the years from some of the leading shops in the Midwest performing these tasks is the lack of identification of the grades sent for processing. Typically, shops will refer to the product by its generic name: P-20, P-20HH, H13, etc.

Because of the vast amount of different steels these shops process as part of their operations, what should be an easy task sometimes can lead to errors in processing. This will usually lead to a loss of hardness and less than acceptable results for color match and gloss in welding, creating a situa-tion that will have cost and timing impacts on tool shops, contracted service providers and the customer. The other aspect of this event is that it usually leads to a confronta-tion over who will pay for the services required to correct the problem and possibly the cost of compression timing to maintain program timing.

Over the years, the shops performing these services virtually have come across every grade produced, from high-quality steel mills to steels produced from low-cost countries due to outsourcing. In our case, we work closely with some of the leaders in these fields, keeping them advised of specific chemistries for different steel grades, the recommended heat treat and stress relief temperatures and preferred wire rods for welding that closely match the original chemistry of the

Figure 1 – Hardness homologation of low carbon steels

t page 10

16215.1 Bas Angle 1/4 Largeur Axe 1/4 Angle

-50mm 294 301 305 304 294

1/4 ep 291 302 301 300 290

1/2 ep 299 301 303 304 300

1/4 ep 294 300 304 298 294

-50 mm 313 313 309 314 306

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Hardness Uniformity

Typical curve of P20 HH

280

300

320

340

360

Plate thickness (inches)

Har

dnes

s (H

B)

Thickness = 23.2’’

Figure 2 – Comparison of low / high carbon grades.

base material. Samples also are furnished routinely for newly devel-oped grades to allow these contractors to gain an understanding and feel for the material so that they can develop their knowledge and processes.

It should be easy and routine to identify the material to be processed on a purchase order. By identifying the manufacturer, type of steel

grade, product designation or AISI number, you may be able to avoid costly errors and ensure better success for yourself and your customers.

Rob Esling is the North American sales and marketing manager, mold and tool steels, for Industeel USA, a wholly-owned subsidiary of ArcelorMittal group, the world’s number one steel group and the only truly global steelmaker. Indust-eel is the leader in special markets for alloyed plates, including oil and gas, nuclear, cryogenic and specialized distribution markets like steels for plastic molds (Superplast® range). As a leading specialty plate producer, Industeel puts innovation at the heart of its business through its own R&D department based in Le Creusot (France). Product and application innovation is assured by proxim-ity to its global customer base via a dedicated worldwide sales network. For more information, visit www.industeel.info.


Technology

With a high-speed machining (HSM) mill, what’s “under the hood” is critical. If a machine tool builder offers an HSM option that can be added to a regular mill, the red flags should start waving because HSM is more than just a faster spindle.

The entire machining center must be designed to adapt to the rigors of HSM. Thermal compensation, positional feedback, rigidity and motion control are all important aspects of the machine tool that need to be evaluated. The following five questions will help guide you during the purchase decision.

How are your HSM mills different from your regular CNC mills?

The obvious difference is a faster spindle, but it goes deeper than that. With a faster spindle comes faster feedrates. Faster speeds lead to friction heat, which can compromise accuracy and repeatability. Therefore, the ballscrews and linear guideways should be larger. Each of the axis motors should be directly coupled to the ballscrews to provide a quicker response to changing directions.

Additionally, the machine tool must have a robust motor control system with adequate look-ahead to handle the complex toolpaths generated for HSM. Instead of a belt-driven spindle that generates excessive heat at faster speeds, an HSM mill should use a motorized spindle.

How do your HSM mills handle thermal growth?

The build-up of friction heat is a major problem caused by HSM. Everything is moving faster and spinning faster, which causes more heat. The way the control handles this heat’s impact on the positional feedback of the axes is very important. For example, because of ballscrew growth, using a motor encoder may not be sufficient to provide positional feedback for some applications because it only monitors the number of revolutions the motor has made. Therefore, linear glass scales that monitor the actual position of the table might be necessary.

Some builders offer chilled ballscrews that have thermal compensation sensors mounted on the machine’s base casting to monitor the temperature and instruct the control to compensate accordingly. Obviously, the more elaborate the thermal compensation system, the more cost you add to the machine. The level of sophistication you need depends on your applications.

High-Speed Machining Mills – 5 Questions to Ask before You Buy

By Maggie Smith and Mike Cope, Hurco Companies, Inc.

1.

2.

High Speed Machining (HSM) is more than just a faster spindle. The entire machining center must be designed to adapt to the rigors of HSM.

15www.amba.org

What practices have you implemented to increaserigidity and ensure accuracy?

As mentioned before, the entire machine must be engineered for HSM – and that begins with a strong foundation. A heavy, well-designed casting is a must. However, simply adding weight just to add weight isn’t good either. Make sure the builder uses processing software, such as FEA (Finite Element Analysis). This type of software tells the builder how and where to add weight in order to reach the optimum balance between strength and agility. A high-speed machining center must be agile enough and respon-sive enough to handle the HSM process, but rigid enough to deliver accuracy, repeatability and high-quality surface finishes. Most builders use some type of static FEA, but dynamic FEA provides an additional layer of information to ensure the machine is optimally designed for HSM.

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Machine tool builders must use both finite and static Finite Element Analysis (FEA), which shows the builder how and where to add weight to achieve the optimum balance between strength and agility.

It is important to ask the sales engineer how well the control is equipped to process the large part programs that CAD/CAM software generates for HSM toolpaths.

page 16 u

Technology


How does the control handle the required look-ahead and complex toolpaths of HSM?

The toolpaths that CAD/CAM systems generate for HSM are much different than traditional toolpaths. For example, HSM toolpaths don’t have sharp corners and the depth of cut, feedrates and RPM are increased dramatically. Therefore, HSM programs are usually very large files. It’s important to make sure the control has the specifications to handle these large programs and process them quickly.

How does the spindle on your HSM mill differ from the spindle on your regular mill?

The spindle is another place where thermal growth can be an issue. The HSM mill should have a motorized spindle with a spindle chiller, rather than the traditional belt-driven spindle. With a belt and pulley spindle, the belt compresses air each time one of its cogs contacts the pulley, which produces heat that eventually heats up the spindle and can even transfer to the head casting, causing spindle growth in both the X- and Y- axes, as well as in the Z-axis.

4.

5.

Maggie Smith, media relations manager for Hurco Companies, Inc., wrote this article in collaboration with Mike Cope, senior product technical specialist for Hurco. Cope is a machinist who has acquired 30 years of experience in the manufacturing industry as a machinist, owner of a job shop and an applications engineer for two different machine tool builders. His machinist blog has grown to more than 600 subscribers. Subscribe to the blog at www.hurco.com/blog.

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Product

High-Feed Cutters from Seco ToolsNiagara MZN410R/510R solid-carbide cutters from Seco Tools, Troy, MI, deliver high-feed machining capability for reduced cycle times in moldmak-ing applications. With special designs, the tools transfer cutting forces axially into machine tool spindles rather than radially. This allows mold shops to use lighter duty machines, yet with the same benefits as would result from using heavier-duty machines. The Niagara high-feed cutters, offered in inch sizes, provide much tighter and closer access to smaller corner radii at mold cavity floors and sidewalls. There is less cutting tool pressure (wall contact) than is the case using a ballnose or round inserted tool. Plus, the cutters provide process reliability – in addition to increased metal removal rates – for unattended operation, thus freeing operators to tend multiple machines. For more information, visit www.secotools.com/US.

7800 Series Open Workspace Laser Welding WorkstationLaserStar Technologies, a US manufacturer of Nd:YAG and fiber laser welding and marking systems, recently introduced its new 7800 Series open laser welding worksta-tion. “Our new 7800 Series open workspace laser welder provides users with an excellent tool when performing general welding of large parts, tool and die repair and injection mold repair, etc.,” said James Gervais, presi-dent and COO. “Deep welding, seam welding, contour welding and complex pattern welding all can be achieved with LaserStar’s open workspace platform.” Laser-Star’s 7800 Series manual welding systems are ideal for a variety of common spot and seam welding applications ,including plastic injection mold, dies and tooling repair, complex electronic components, high-precision indus-trial assemblies, pressure-sensitive hermetic laser sealing and other unique industrial applications for the automo-tive, aerospace, aviation, computer, medical device, mold repair and consumer product industries. For more informa-tion, visit www.laserstar.net.

New Line of EXAflow Tunnel Gates from Superior Die SetSuperior Die Set, Oak Creek, WI, intro-duced a new line of EXAflow tunnel gates – the Midi Flow. These three new ‘cashew-style’ gate inserts offer the same benefits as the larger Kontour-flow products, now in a smaller size. The Midi Flow is designed for bottom (submarine) gating of plastic parts with weights up to 100 grams per insert, with suitable gate diameters up to 1.8mm. Using the Midi Flow, a gating point up to 8mm above or below the parting line can be achieved. The spherical geometry of the Midi Flow permits gating on inclines and curved surfaces. All EXAflow tunnel gates offer clean, precise and consis-tent de-gating of parts while still in the mold. Standardized sizes facili-tate interchangeability, which is ideal for balancing multiple cavities and easy replacement. EXAflow tunnel gates are in stock at Superior Die Set with models available through the company’s 3D CADlink portal at www.superiordieset.com.

GF Machining Solutions Offers New HSM 500 MoldMasterGF Machining Solutions, Lincoln-shire, IL, designed its new Mikron HSM 500 MoldMaster (MM) highspeed milling machine with today’s mold and diemakers in mind. As an all-in-one production system, the machine’s specific features and capabilities give shops

the versatility to produce a wide scope of mold- and die-related components – from 58 Rc steel mold cores to hot pressing dies and even sinker-EDM electrodes for intricate mold cavities – all with one machine tool. The HSM 500 MM packs speed, precision and rigidity. For high speed, the machine is equipped with a 42,000-rpm HSK spindle that uses ceramic hybrid ball bearings with oil-air minimal lubrication, as well as liquid-cooled stator jacket and bearings. This vector-controlled motor spindle ensures extremely fast acceleration to full speed as well as high torque at low speeds. As a complement to the high-speed spindle, the machine cuts at feedrates up to 784.4ipm (20 m/min) and rapid traverses as fast as 1,574.8ipm (42 m/min). For more information, call 800.282.1336 or visit www.gfms.com/us.


Flymarker Pro Dot Peen Marking from Equipment Sales The new Flymarker Pro hand-held dot peen marking system from Equipment Sales Co., Sioux City, IA, is a truly portable, cordless, battery-operated system. There is no electrical or compressed air line to interfere with the workplace location. The mobile dot peen marking system has high marking speed, weighs only 10 pounds and has a small physical size. Equipped with a strong magnet and a power-ful battery, the portable “power package” creates deep and durable markings. The markings even are readable after a coating process, which is not always the case with a laser marking system. The control unit is installed in the break-proof housing of the hand-held marking system. The marking files can be programmed via the self-explanatory software of the integrated control unit. Only basic computer knowledge is neces-sary for the operation. For more information, call 800.255.6046, email [email protected] or visit www.equipmentsalesco.net.

t page 17

Product

Next-Generation Productivity for Large-Part Machining from MakinoMakino, Mason, OH, is pleased to introduce the new a81nx horizontal machining center. Like Makino’s other nx-Series horizontal machining centers, the a51nx and a61nx, the a81nx extends the capabilities of its 1-series predecessor with expanded machining capacity, improved rigidity and stability, improved productivity and enhanced reliability. “The a81nx builds on the success of the original a81 platform and sets a new standard for large-part machining performance,” said Dave Ward, horizon-tal product line manager at Makino. “There have been enhance-ments made to the bed and column castings of the machine; expansions in the tool magazine and Y-axis travels; spindle design improvements for faster acceleration and deceleration times and a host of additional features and advancements to improve ergonomics, maintenance and machine uptime.” The a81nx features a 100mm extension of the Y-axis column, bring-ing full-axis travels along the X-, Y- and Z-axes to 35.4”, 35.4” and 40.2” (900mm, 900mm and 1,020mm), respectively. The increased Y-axis travel is especially beneficial for automotive parts such as engine blocks and cylinder heads, where the criti-cal mating surfaces require feed-on/feed-off milling passes for optimal sealing. For more information, call 800.552.3288 or visit makino.com.

HASCO CoolCross Z99/... The new CoolCross Z99/… from HASCO America, Inc., Arden, NC, opens up a range of completely new possibilities for the designer when it comes to designing cooling systems for injection molds. For the first time, it is possible to have cooling channels crossing each other on the same plane in a flexible and inexpensive manner without any major outlay on production. CoolCross permits an even temperature distribution at the core or insert, as well as constant cavity cooling on all four sides for the full duration of the injection molding cycle. It also prevents hot spots. 100- percent protection against rotation (achieved through a locking mecha-nism) prevents the unintended closure of the cooling channels. Different independent cooling circuits cross each other on the same plane, making it possible to incorporate smaller plate thickness and inexpensive accessory components in the mold design. By reducing the plate thickness, mold builders are able to use shorter nozzles, guidance and attachment elements. Not only are component costs decreased, but processing costs are lowered as well. The Z99/... permits a reduc-tion in the number of cooling channels since it is no longer necessary to have a cooling channel in an additional plane. If the CoolCross is used in thicker plates, the installation depth can be selected on a variable basis. The adapter Z9901/… is then used to provide support. For more information, visit www.hasco.com.

Product

19www.amba.org

New High-Performance Mold Maintenance Products from PCSPCS Company, Fraser, MI, recently announced three new high-performance mold maintenance products. Power Clean, Mold Guard and Zap-Ox are the latest additions to the mold efficiency and specialty cleaning product line. Power Clean utilizes an aggressive chlorinated cleaning agent that is low-odor, residue-free and effectively removes dirt and contaminates from surfaces and pores of the mold. Its quick evaporation cleans without wiping. Mold Guard is a true dry rust preventative that goes on dry and stays dry, preventing harmful corrosion to the mold. Additionally, the adjustable volume nozzle provides spray control and reduces waste. Mold Guard eliminates bleeding at start-up and has excellent film strength. ZAP-OX is the ultimate stain remover. This specialty cleaner will remove rust, oxidation, build-up and weld discol-oration. Its unmatched stain-removing ability brings metal back to its original state. It is safe to use on all metal surfaces and does not etch the surface of the metal. For more information, visit www.pcs-company.com.

More Flexibility with DME’s SmartSeries® Temperature Control ModuleDME Company, Madison Heights, MI, a leading manufacturer of mold technologies, has expanded its SmartSeries® hot runner temperature controller product line. The addition of the TSM15 temperature control module gives molders greater flexibility and control of their hot runners. The micropro-cessor-based temperature control module increases efficiency for molders by provid-ing enhanced control through efficient touchscreen operation. A full-color display gives users easy-to-access readouts and functionality. An informative display screen helps molders cut down on maintenance requirements by providing them with impor-tant diagnostics – including temperature, power and current readings. The TSM15 design allows for maximum flexibility, and programming can be customized and recon-figured to fit new tools and environments. Molders also can use the TSM15 controller to number zones in a logical sequence and to configure the units to run in closed-loop or open-loop configurations. The TSM15 is fully compat-ible with all Smart Series or G-Series 15 AMP mainframes. To learn more, visit www.dme.net.

C

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CM

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CMY

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UltraPolishing AMBA Ad 2009.pdf 10/6/09 3:02:05 PM

Kubotek Comparison Suite 2014 Version 12.5 Released Kubotek USA, Marlborough, MA, has released Kubotek Comparison Suite 2014 Version 2.5. Comparison Suite products include Validation Tool and ECO Manager. The engineering change identification and documen-tation tools found in the Kubotek Comparison Suite help users avoid the costs and pitfalls resulting from undetected or undocumented changes in CAD files. Comparison Suite 2014 Version 12.5 adds several new capabilities: updated translators and user-driven improvements to save time and improve user control, including CATIA V5 version-to-version compare; added ability to enter disposition text next to related geometry in validation quality documents; updated CAD interop-erability readers for Inventor 2014 and Parasolid R26; user control options for locating closed sets of curves and Geometry ToolTips to identify entity locations for all entities and entity components. Additionally, CATIA V5 import now reads Hidden Assembly Instances. A free trial of Validation Tool is available, as are free trials of ECO Manager. To learn more about either product, visit www.kubotek3d.com.


• Current Spend = the total of 10 OEMs current annual spend on vendor tooling in N.A.• Current Capacity = defined by HRI using tool suppliers that are 90% + automotive tool makers, can manufacture 100% of the

complete tool, die and mold only, and willing and able to grow with the industry.• 2018 Future Demand = based on 2012 baseline and estimated N.A. model launches (all new and major); Source: LMC

Automotive, IHS, OEM Interviews and HRI Estimates.

$ Bi

llion

$9.25$11.25

$15.20

Current Spend Current Capacity 2018Future Demand

64%

China $1B

N.A. Automotive Vendor Tooling Projection

1Copyright October 2013

Special Report

Will there be a significant gap in automotive tooling capacity within the next five years and if so, will this affect potential re-shoring or the huge demand that other industries (such as appliance, aerospace, consumer products and others) are placing on the automotive tool supplier base? This is the ultimate question that Harbour Results, Inc. (HRI) researched in 2013 with the goal of determining the answer. In last quarter’s edition of The American Mold Builder, Harbour Results highlighted the key facts. This article will explore the findings of the study and what companies can do to position themselves for these issues.

Over the 12 months of 2013, HRI did extensive research in conjunction with the Original Equipment Suppliers Association (OESA) in order to publish the 2013 Automo-tive Vendor Tooling Study. As the authority in automotive tooling, HRI got access to information that most OEMs and suppliers are not willing to share.

One of the core findings of this study is the dramatic increase in demand by the OEMs for vendor tooling over the next five years in North America, creating a significant capacity gap with tool suppliers. HRI’s in-depth analysis of the North American tool supply base uses 625 shops in the US and 125 in Canada. With the average revenue of these shops being $15M, their total capacity yield is $11.25B annually. This was compared to the current average spend with North American tool suppliers from the OEMs of $9.25B. If HRI assumes, based on OEM interviews, that another $1B of capacity comes in from China or low-cost country locations, it’s a total of $12.25B.

HRI then developed an estimate of future vendor tooling demand of $15.2B by 2018. Significant analysis went into this estimate. The premise of the data was the number of launches that have been announced and reported for the future years by each of the OEMs utilizing LMC Automo-

Can the Automotive Industry Close the Future Tooling Capacity Gap?

By Laurie Harbour, Harbour Results, Inc.

21www.amba.org

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tive data and the percentage of available sourcing that each of the OEMs reported it would have with each new launch.

The following are the key assumptions that are included in the $15.2B estimate:

• Each domestic OEM indicated that it would continue to spend the same amount on vendor tools for the next five years due to the number of launches.

• In North America over the next five years, there will be 2.8M units minimum of new assembly plant capacity that will enter the market. This capacity will be largely in the Southern US and Mexico and primarily from the foreign-owned brands. These new plants largely will make all new models – all requiring new tooling.

• In the next five years, the number of launches will reach record levels as OEMs work to capture new sales in N.A., but also work to build models for export. This significant number of launches does not address the complexity of launches. In other words, LMC counts a vehicle launch as one launch, but that vehicle might have five trim levels and three separate tools for things like bumper fascias.

• The key change is with European OEMs. They reported that today they are making approximately 20 percent of their vendor tools in North America with suppliers located here. However, the majority still is produced in Germany, with some made in low-cost countries and then shipped to North American suppliers to build parts. The Japanese said that they are producing approximately 40 percent of their tools in North America with many still coming from Japan. This made sense when they had only a couple models, but with the many models produced in N.A. and the level of complexity, it no longer makes sense to build tools in other countries and bring them to N.A. for part production. Therefore, sourcing will increase in N.A.

• All OEMs indicated that they are adding complexity to vehicles, which will increase the number of tools per vehicle 20 to 25 percent over previous models.

• It was impossible to include potential re-shoring from any of the OEMs due to rising costs in China or lead-time issues in this analysis. Second, it also was impos-sible to include the demand being placed on automotive tool suppliers today from other industries because their re-shoring is significant and many of these shops like this work because it pays higher margins, offers progres-sive payments and gives them diversification.

These estimates by HRI show an impending $6B tooling capacity gap that will hit the automotive industry in the next five years. What can the industry do to close this gap? There are many things that can and will be done to reduce and close this gap over this timeframe. However, HRI’s estimate of $15.2B actually is conservative. The OEMs indicated a much higher degree of potential re-sourc-ing of tools from overseas to N.A. than HRI actually factored into its calculations and estimates. That said, the industry knows that some programs do not come to fruition and the best-laid plans do not always get executed at the OEM level.

There will be a gap and HRI believes it is close to $6B, but even if slightly less than that, the industry is tighter than ever before. This is a great problem for tool suppli-ers because it means good demand for awhile, but a very tough one for OEMs that want to launch new vehicles in N.A. So how does the industry close the gap?

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Special Report


Special Report

Assume for a minute that the following occurs:

• Tool shops work to improve through process improve-ment and new equipment to drive efficiency. With that, a potential 10-percent improvement or $1B in additional capacity could be assumed.

• HRI anticipates new plants will come into N.A. Although many investors are not looking to jump into the tooling industry, there are other tool shops in Europe and China that want to enter the North American market. German OEMs would like to see their tool shops in this country. It’s not clear how many new plants will be built in five years, but assume another $1B in capacity, which is probably high for such a short period of time.

• Then assume China or other low-cost countries grow their production of tools in those regions for export to North America and add another $1B of capac-ity to this market. This is probably the max that can be expected in the next five years due to dramati-cally rising costs in China, the significant lead-time issues faced by N.A. OEMs and the demand from Chinese OEMs on their own tool shops in China to build for internal consumption, as production volume grows from 16M units to nearly 30M units by 2020.

• There will be some sourcing of tools from European tool shops that will build in Europe and ship to N.A., particularly on global programs where appropriate.

• One negative effect on capacity is the lack of skilled trades in N.A. With an average age of 56 in tool shops, many people will be exiting this industry in the next five years, and it will be a challenge to replace these people at the pace they will exit.

With this analysis and all the potential ways to close the gap, HRI believes that there still will be a $2 to 2.5B gap in capacity going forward. Even if this analysis is high and it is cut by 50 percent, there still is a $1 to 1.5B gap.

Closing the gapSo what can the industry do to solve this problem? Collec-tively, HRI knows that each of the three stakeholders (OEMs, Tier 1s and tool suppliers) has a critical role to play. Tool suppliers must work on efficiency and reinvent the way they build tools to make more capacity available. Additionally, they have to continue to invest in the right resources, new technology and the next generation toolmakers.

page 24 u

Tier 1 suppliers need to work more collaboratively with the OEMs and the tool suppliers. They are the critical glue that keeps the three stakeholders together. Their role is transparency through the value stream with the tool shops and OEMs. They must contribute their engineer-ing capability to support the OEMs in reducing total cost, not just of tools but the parts as well. It is true the Tier 1s have been squeezed for many years as OEMs have gone after material cost reduction, which has created some very challenging circumstances for them to be profitable. That said, it is critical for suppliers to partner with the OEMs and openly share the challenges while working together to both succeed. Yes, HRI makes it sound easy and it is not. However on the flip side, Tier 1s also can cause significant negative challenges if they do not play their role productively.

Lastly, the OEM probably has the most critical role in closing the capacity gap within vendor tooling. Many may not think OEMs could have this critical of a role given they don’t run the tool build plants. However, the decisions they make upstream and downstream steals capacity away from tool shops and is magnified across 10 North Ameri-can OEMs.

In the graphic on page 24, the HRI Tooling Study research revealed that many OEMs, particularly the Detroit Three, still are focused on those traditional elements above the water level that drive price. However, those that performed the best in the study were those OEMs that put their focus further upstream on the elements below the surface that are truly driving the waste or added cost to vendor tooling. Things like program delays, incomplete math data at kick off of the tool program, inaccurate target setting when the program is put together, lack of commonization, engineering changes and poor design requirements are stealing massive amounts of capacity from tool suppliers on a daily basis.

The chart on page 26 highlights the life of a tool supplier in an 18-month period of time. Its schedule can range from 55-percent utilization to over 100 percent as programs get delayed and pile up on top of each other. This makes for tough business conditions for a tool supplier, as it really has no visibility to future delays or the impact on its plant. Often times, the tool supplier is not even told of the delay until it is too late to smooth the curve with other tool production.

t page 21

23www.amba.org

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Focus Must be Above and Below the Surface toCapture Capacity and Truly Reduce Cost

• Program Delays• Completeness of Math Data and

Engineering Changes (D3 55% vs. A3 80%)• Inaccurate Targets• Design Requirements (parting lines)• Program Visibility / Capacity• Commonization/Re-use• Supplier Equipment & Specs• Payment/Collection Process• Finance Charges• Negotiations w/Piece Price• Bundling Pricing

• Tier 1 Mark-ups (5-30%)• EBID/OLQ Method• Reality vs. Actual LCC• Profit/SG&A• Audit

Traditional Focus has been on Tool Supplier Price

Without Consideration for Below the Surface Costs

Levers

So what can the collective industry to close the capacity gap, and what can OEMs do to capture capacity in the future if there truly is a gap? Every OEM’s focus has to be capturing capacity of the best tool suppliers in the future while balancing cost internally. Anyone can go after capac-ity and get it, but it could drive cost way up. However, the opposite also could occur: if OEMs are focused on cost, they may not capture capacity from the best shops.

In order for this balance to occur and drive a healthy tool industry, the key finding of the study highlights the need to collaborate and drive earlier involvement of tool suppliers in the part development process. Most tool suppliers from the study and in HRI’s consulting work have indicated that they would welcome early involvement because it would give them the ability to affect the design, reduce cost for the OEM and gain a clear visibility to capacity, allowing them to improve efficiency.


What’s Affecting Tool Supplier Throughput?

• Items affecting capacity :o Tool Supplier Efficiencyo Progressive Payments/Payment Termso Reasonable Targetso Forward Visibility to Capacityo Significant Annual Spend of the Customero Diversification from Other Industries/Re-Shoring

o Program Delays at the OEM and Lead Time Expectationso Design Completeness/Standards and Common

Specificationso Early Involvement/Collaborationo Ease of Working with the Customero Relationship between tool supplier and customer

50

60

70

80

90

100

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18

Perc

ent o

f Cap

acity

Months

Annualized Utilization Traditional Capacity Visibility

If the OEMs truly want to reduce cost for vendor tooling in the future while capturing the capacity of their best tool suppliers, it is critical for them to step into early involvement. By asking tool shops to reserve capacity and be globally competitive, they would in return have visibility to future programs, would see fewer delays and would receive better math data, thereby making them more productive. Then the tool shops can help optimize design, improve launch success and capture lessons learned. Lastly, it is HRI’s hope that OEMs will begin to implement progressive payments to the tool shops that are willing to work upstream in the process to drive cost reduction. This is critical to capture interest in this up-front involvement, but with it, most suppliers will be on board and will engage.

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25www.amba.org

ProductSpecial Report











• Visibility to Capacity• Reduced Delays• Better Math Data• Optimize Tool Design• Improve Launch Success• Improve Lessons Learned• Progressive Payments

Early Involvement

IncreasedTool ShopCapacity

andCost

Reduction

Capacity Cost

This is the opportunity for North America to grow manufacturing, re-engage the next generation of workforce back into manufacturing and remain the powerful center of the automotive industry. AMBA members have many of the capabilities to help close this gap, yet they have huge opportunity to improve.

At the AMBA 2014 Annual Conference in May, Laurie Harbour will talk about what tool supplier members of the AMBA can do to improve their businesses and either capture some of the volume from automotive or strengthen their sales in non-automotive.

Combining operational and strategic advisory expertise with industry analysis and thought leadership, Harbour Results delivers results that impact the bottom line. The company specializes in manufacturing, production opera-tions and asset-intensive industries, as well as a number of manufacturing processes including stamping, tooling, precision machining and plastics. For more information, visit www.harbourresults.com.

t page 24

While other suppliers turn their backs to supply other hot markets, we’re stocking inventory, investing, and servicing our customers 110%. It’s been that way for the past 100 years and will continue for the next 100 years. At ESS, we always focus on our number one priority – you.It’s what we do.

United StatesEllwood Specialty [email protected]

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We’re Focused on You.

The vendor tooling industry has been challenged throughout the years – whether automotive or otherwise. HRI does not know of an industry that has gone through more restructuring. That said, it is a very traditional industry that needs to re-invent itself. OEMs will not stop launching new vehicles over the next five to ten years as they work to rebound from the recession.

Special Report

27www.amba.org

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Wednesday, May 142:00 – 6:00 pm Registration Open

2:00 – 4:00 pm Harley-Davidson Museum® Tour (Optional)

6:00 – 8:30 pm Welcome Reception and Supplier Trade Fair

Thursday, May 157:00 am Registration Open

7:30 am Exhibitor Networking/ Continental Breakfast

8:00 am Conference Kick-Off Troy Nix, AMBA

8:30 – 9:30 am Keynote Presentation Revenue through Relationships Troy Hazard

9:30 – 10:00 am Exhibitor Networking Break

10:00 – 11:15 am Can North America Fill the Tooling Capacity Gap? Laurie Harbour, Harbour Results

11:15 am – 12:00 pm Attracting America's Youth Craig Cegielski, Eleva-Strum High School

12:00 – 1:30 pm Lunch

Association

1:30 – 2:30 pm IGNITE Sessions

2:30 – 3:00 pm Exhibitor Networking Break

3:00 – 3:15 pm AMBA Annual Meeting

3:15 – 3:45 pm AMBA Professional Certification Program Launch Ryan Pohl, Expert Tech

3:45 – 4:45 pm Do Improvements Really Exist Everywhere? Paul Akers, FastCap

6:30 – 7:30 pm Awards Reception

7:30 – 9:30 pm Awards Banquet

Friday, May 16 7:30 am Exhibitor Networking

8:00 – 9:30 am Functional Round Tables/ Continental Breakfast

9:30 – 10:00 am Exhibitor Networking Break

10:00 – 11:00 am Your Business, Your Future – 10 Economic, Political and Tech Trends That Will Affect Your Business Tomorrow Gene Marks

11:00 am – 12:00 pm The Idea-Driven Organization Dr. Alan G. Robinson, Isenberg School of Management

12:00 – 12:15 pm Convention Wrap Troy Nix, AMBA

“Power Your Connections” at the AMBA Annual Conference 2014, May 14-16, at The Pfister® Hotel, Milwaukee, WI. Last year’s annual conference in Schaumburg, IL, once again broke attendance records and plans are in place to set a new record, as mold building professionals gather from across the country to share best practices and learn ways to improve the profitability of their mold building operations!

This year’s event is packed with valuable content in a new concise format, providing greater take-aways with less time away from work! From the conference kick-off at the Welcome Reception and Supplier Trade Fair on Wednesday evening to noon on Friday when the conference adjourns, attendees will discover new ways to connect with custom-ers, suppliers and their own internal team members, while exploring what best-in-class mold building executives are doing to drive their operations forward.

For conference details, including pricing, online registration, hotel and exhibiting, visit www.amba.org.

29www.amba.org

WORLD HEADQUARTERS4930 South Lapeer RoadOrion Twp, MI 48359 U.S.A.Tel: (586) 573-9450Toll Free: 877-645-5782 877-MILLSTARFax: (586) [email protected]

Insert & solid carbide tools for conventional,high speed & hard milling. Inch andmetric sizes 0.020” to 1 ¼”& 0.5 to 32 mm

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Special AMBA rate is $159/night and includes complimentary in-room internet and fitness center. For reservations, call 877.211.9211 or for online reservations, visit www.ambaannualconference.com.

Harley-Davidson® Museum Tour (optional)$45/personWhether you were born to be wild – or mild – makes no difference at the Harley-Davidson® Museum in Milwaukee, WI. The fee covers entrance to the museum, 1.5-hour back-of-the-scenes tour and trans-portation to/from The Pfister® Hotel.

Special Thanks to our AMBA Sponsors:

page 30 u


Association

AMBA's Benchmarking Survey Links to the 2014 Annual Conference!Do you want to develop best practices? Compare your performance to your industry peers? Improve your company’s profit and cash flow? If you find yourself answering YES to any of these questions, the AMBA can help!

The 2014 Annual Conference will feature two special sessions dedicated to providing answers to all of these questions and more.

The AMBA Benchmarking Survey is a report card on performance, and we encourage you to participate. Your time investment will be well worth the ideas this report will help to generate to improve your business.

What You Should Know The process is absolutely confidential – only the survey administrator (Business Resource Services) will see your data.

• Participants will receive a network-wide report and their individual Company Consulting Report.

• Information is easy to submit online.

• NEW this year – participation is FREE to AMBA Members!

• Deadline to submit data has been extended to June 6, 2014.

Be sure to reserve your spot at the conference today to learn how this survey can be a valuable tool and increase your bottom line! To participate in the survey, visit www.amba.org and click on the Benchmarking banner on the homepage.

Help AMBA Pilot Test New Skills Certification Program The AMBA Board of Directors and Skills Certification Committee have worked diligently over the past year to put together recommended training curriculum for apprentice mold builders and CNC operators. The goal of this project was to first, develop recommended training curriculum for apprentice mold builders and CNC operators and second, to develop a method to test and validate these skills to an AMBA-approved level of high achievement.

In order to put together the AMBA recommended training coursework, a DACUM was put together and standard-ized tests were developed in three areas: Primary Skills, Moldmaking Skills and CNC Skills. A group of AMBA members (expert moldmakers and CNC operators) volun-

t page 29

teered many hours of their time and resources to help construct three tests. From these tests, the training curric-ulum was created. These tests now are ready to be pilot tested by AMBA members through an independent testing company, Nocti Business Solutions (NBS).

We are asking our AMBA members for their assistance in taking the pilot tests, helping us validate the three tests and establishing the passing scores.

If you would be able to designate any number of individu-als (even one) to take any of the three pilot tests, please visit www.amba.org and click on the Pilot Testing banner on the homepage for more information.

$1,000 Scholarships for AMBA Member EmployeesAMBA’s National Scholarship Program to date has awarded over $225,000 nationally since the program’s inception in 1991, and the program continues to demonstrate AMBA's commitment to the industry, education and offering valuable member benefits.

Scholarships will be awarded to your employees or employee dependents. The employee has to be working full-time for your company for at least one year in order to participate in the program. Previous scholarship recipients are eligible to apply for the 2014/2015 scholarships. Authorized by the Board of Directors, AMBA will grant up to ten (10) $1,000 scholarships depending on the number of qualified applicants for the 2014/2015 school year. Scholar-ships are paid directly to the educational institution. Appli-cations must be submitted/postmarked by May 2, 2014. For the application or more information on the AMBA scholarship, visit www.amba.org/scholarship.

Welcome New Members and Partners

Members

North American Lighting, Inc., Indiana Tool PlantEberfeld, INMark Kinsella, Plant Manager 812.983.2663 www.nal.comNorth American Lighting, Inc. is the largest non-affiliated lighting supplier in North America. The Indiana Tool Plant designs and builds plastic injection molds for automotive head lights and tail lights.

31www.amba.org

“turning steel into enhanced productivity”

847.806.9800 [email protected] ntm.com

In Stock Steel: 4130/4140/420SSPH/P20/A36

Custom Mold Bases

Precision Ground, Squared & Machined Plates

Fast Quotes and On Time Delivery

Precision Mold & Tool, Inc. San Antonio, TX Domingo Auces, Vice President of Production210.525.0094 www.precision-group.com Precision Mold & Tool Group is equipped with the ability to design, create and repair molds for all different industries. If a mold needs repairing, Precision Mold can provide transportation to and from its customers’ facilities for convenience. The molds are repaired in-house using top quality, high-performance equipment. Precision Mold also performs on-site mold repair, if necessary.

Partners

Vincent Tool Chippewa Falls, WIDean Haase, Owner • 715.720.8066 www.vincenttool.comVincent Tool specializes in custom injection mold bases: revisions, end of arm tooling, core/cavity roughing and fixturing. Its skilled staff is capable of building many types and sizes of mold bases with the use of modern CNC machin-ing centers and up-to-date computer software from 3D models. Vincent Tool’s close focus on injection mold bases teamed with the staff’s expertise provides the company the unique ability to excel in producing the highest quality, most competitively-priced, on-time mold bases within the US.


Focus

Vision and communication are the driving forces behind the highly technical skills of precision moldmaking. For AMBA members, the process of designing for manufac-turability is an evolutionary science at the core of success.

Competitive interests rarely share the secrets to their operations. But on Thursday, February 20th, members of the AMBA gathered for a unique, unfiltered look at the systems and processes developed by Tech Molded Plastics, Inc., in Meadville, PA.

Plant tour workshops facilitated by the AMBA are gaining significant ground as plastics professionals realize the extreme value in sharing best practices. The association has inspired confidence with company stakeholders that the plant tour code of ethics and summary of feedback produce value beyond comparison. The process, led by industry leadership, includes a red card/green card system of identifying areas of missed opportunity and recognition of advanced procedural strength.

Tech Molded Plastics at a glimpseA 40+ year evolution built on the foundation of creating high-precision, complex, multi-cavity molds has yielded the reputation that Tech Molded Plastics (TMP) carries in the marketplace today. The company has been recog-nized by industry peers and international organizations as a processing leader in the technical world of precision molded plastics. As testament to this on February 25, 2014,

Designing for ManufacturabilityBy Mark Hanaway, Tech Molded Plastics

Attendees examine intricate mold details and discuss machining techniques.

Tech Molded Plastics team member presents advances in programming for hard milling, speeds and feeds.

Photo credit to Creative Technology Corp.

33www.amba.org

Tech Molded Plastics was honored with the distinguished Processor of the Year award organized by PlasticsNews and sponsored by the Washington-based Society of the Plastics Industry.

By combining craftsmanship, leading-edge technology and the competitive spirit, Tech has developed a disciplined strategy to build the most sophisticated molds in the business. The skilled teams of designers, toolmakers and master molders at Tech have created a feasibility and planning process that tackles each of its complex projects through systematic detail of vision and communication. The steel and mold components are manufactured by design to produce long-life, low-wear tooling that make the best molded plastic parts possible in the industry.

During the tour and review of Tech’s feasibility and planning process, the logic of systematic vision and communication was on display and open for discussion. The history behind the process centered on lessons learned. It documented and captured the methods used in previous experiences to solve problems. The scope didn’t just focus on the build side! It also took into consideration the long-term care and preventative maintenance of a mold running harsh compounds found within engineering-grade resins. The vision and communication of each new mold build extended well into the life of the mold where productivity, quality and profitability are made or lost in the production environment.

Designing systems and processes where the human factor remains an essential component requires a blend of detailed discipline and simplicity. Tech’s feasibility and planning process was reviewed and analyzed. The plant floor was open for a hands-on view of work-in-progress. The flow and channeling of information was presented. Organization, line supplies and operational techniques were all on display. From design review through to the packaged molded part, systems and processes, as well as the manufacturing environment, were critiqued for oppor-tunities to improve and praised for areas of excellence.

Tour participants shared ideas and suggestions that expanded the thinking for all participants. Methods central

Predictive mold maintenance and production threshold plans are established in the design phase, leading to longer-life production capabilities.

to immediacy of information, “right-sizing” multi-axis technology, automation for bill of materials and space optimization were points to consider for improvement. Tech has expanded its use of pressure-sensing trans-ducers, RJG technology and centralized eDART data management. Applying the knowledge gained from data analysis without diving in too deep requires balance. The blend of technology and applied value is a fine line. The pros and cons of rapid development in any environment are compounded when vision and communication lack clarity.

Toolmakers and engineers have honed their skills by performing the tasks needed to create precision tooling. They’re not often called to public speaking or to present a detailed description of what they do and how they do it. At the AMBA tour, Tech’s personnel hosted its peers from industry insiders that know when smoke is blown and marketing language clouds reality. This is where keeping it real produces far better results. The skilled technicians that served as speakers and presenters were praised for their ability to discuss in real terms – real challenges and how Tech developed a cross-functional approach to feasi-bility and planning.

Tour participants noted that Tech’s design review process actively solicited feedback from each of the core functions of mold design, tool build, quality management and production processing. Visual details at Tech encompass the practical nature of a precision moldmaking environ-ment where Lean feels like common sense manufactur-ing. The AMBA tour reinforced the value of vision and communication techniques. The shared sense of purpose in an open, unfiltered setting made friendly competition one of the key successes in an industry that’s highly competi-tive on a global stage.


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The following amerimold exhibitors may be of interest to The American Mold Builder readers:

Alro Steel Booth #420 www.alro.comAlro Steel is the ‘One Stop Shop’ for metals, industrial supplies and plastics. Family owned since 1948, Alro has over 60 locations in 12 states. With the Alro Online Store, customers can enter quotes and orders and receive next-day delivery including processing.

American Mold Builders AssociationBooth #433 www.amba.orgAMBA is the premier trade association for the US mold manufacturing industry, serving its members with financial and operational metrics, cost-saving programs, educational resources and so much more. Membership information, the AMBA Sourcebook and the latest issue of The American Mold Builder will be available at the AMBA booth.

Boride Engineered AbrasivesBooth #506 www.borideabrasives.comBoride Engineered Abrasives is a leading USA-based manufacturer of bonded abrasives products, including mold/diemaker polishing stones, mounted points, industrial sharpening stones and other specialty abrasive products. For more than 40 years, Boride Engineered Abrasives has developed and manufactured abrasive products for indus-trial and consumer applications in its Michigan manufac-turing facility.

CAE Services CorporationBooth #431 www.caeservices.comCAE Services Corporation is a solutions-based moldflow service provider that evaluates all aspects of the part design

and molding process, from gate size/location to reducing cycle times to identifying warpage issues. Its services are ideal for those who want to reduce mold sampling costs and eliminate trial and error methods.

CGS North America Inc.Booth #203 www.camtool.comCGS North America will be demonstrating the latest version of its Elite CAD/CAM Software CAM-TOOL Version 10.1. CAM-TOOL’s world-renowned ability to machine a mold or die with minimal to no polishing will be shown through the parts on display. In response to users request for a more simplistic job start up, an expansion of the EZ Launcher has been added. For SolidWorks users, CG CAM-TOOL, an add-in to SolidWorks, has released Version 4.1 and also will be available for demonstration.

DMS ComponentsBooth #703 www.dmscomponents.comDMS Components will feature I-Mold and Exaflow tunnel gate inserts, REDE VAULT, Koolflow water manifolds, full-color mold plaques, PlatenGuard locating rings, HMMS hydraulic locking cylinders and Slide lubricants. DMS also will introduce an innovative patented concept – adjustable leader pins for reducing/eliminating mold align-ment issues.

IncoeBooth #130 www.incoe.comIn addition to Direct-Flo Gold hot runner systems, Incoe will display a sample of a 3mm thick, in-mold labeling (IML) part created using its SoftGate valve-pin velocity-control technology, and interior car pillars that showcase how SoftGate technology produces highly cosmetic finishes, eliminating visible weld /flow lines.

amerimold returns to Novi, MI, June 11-12, 2014, with an event that offers solutions for every aspect of the mold business. From product technology to process improvement, business development to management strategies – amerimold 2014 offers something for any part of mold manufacturing. Connecting mold manufacturing and plastic injection molding, amerimold’s show floor will feature exhibitors displaying products used for designing, machining, repairing and injec-tion molding molds. Products on display include machine tools, cutting tools, CAD/CAM, 3D printers, mold components, materials, mold/die/tool services and more.

The technical conference will deliver expert insights into the production and management challenges facing die/mold machining and injection molding businesses. Topics will include 5-axis machining, conformal cooling, mold mainte-nance, material selection, injection molding and customer and workforce development.

35www.amba.org

LaserStar Technologies CorporationBooth #310 www.laserstar.netLaserStar Technologies is one of the leading suppliers of laser welding and marking machines to the industrial, tool and die and mold repair marketplaces. LaserStar is the only US manufacturer designing and manufacturing a complete range of Nd:YAG and fiber laser systems for micro-welding, marking, engraving and cutting applications. Customers receive superior service, education and technical support from any one of its national LaserStar centers in RI, FL and CA. Made in USA.

Makino Booth #317 www.makino.comMakino is a global manufacturer of high-performance milling and EDM machines with patented technologies that help tool, die and mold manufacturers meet custom-ers’ increasingly stringent specifications and lead times. Visit Makino in booth #317 to discuss unique moldmaking challenges and discover advanced manufacturing solutions to help produce what matters.

Materion CorporationBooth #603 www.materion.comMaterion Corporation is one of the world’s leading suppli-ers of high-performance alloys, providing high reliabil-ity copper, copper beryllium and spinodal alloy products backed by unparalleled global service. Materion’s high-strength mold alloys include MoldMAX®, MoldMAX XL®, PROtherm® and MoldMAX V® for full core and cavity, core pins and hot runner components.

Moldex3DBooth #530 www.moldex3d.comSince 1995, Moldex3D has provided professional simula-tion solutions for the plastics industry. Committed to providing advanced technologies and solutions for indus-trial demands, Moldex3D has extended its network to provide local, immediate and professional services. Its innovative technology helps customers troubleshoot from product design to development, optimize design pattern, shorten time-to-market and maximize ROI.

PCS CompanyBooth #421 www.pcs-company.comPCS is proud to announce three new high-performance mold maintenance products. POWER CLEAN, MOLD GUARD and ZAP-OX are the latest additions to the Mold Efficiency and Specialty Cleaning product line. See these products and many others at amerimold 2014.

Progressive ComponentsBooth #503 www.pcic-group.comProgressive will feature its standard Z-Series Align-ment Locks with new lifetime warranty, plus lifters,

CamActions and parting line sequence control devices. Co-exhibitors include Roehr Tool Corporation and AST Technology that will feature the new, Sub-10mm DT Collaps-ible Core, as well as new advancements in mold monitoring using the CVe Monitor System.

SelfLubeBooth #316 www.selflube.comSelfLube is the leading US manufacturer of mold and die components. Its offerings include bushings, pins, wear strips, gibs, side locks and related items. With its 10,000 standard part numbers and the ability to make specials, SelfLube generally can accommodate any special size or configuration a customer might have. SelfLube sells direct to save customers time and money and has a strong reputa-tion for customer service. SelfLube’s quality is backed by five zero-non-compliance ISO 9011:2008 audits.

Single Source Technologies (SST)Booth #314 www.singlesourcetech.comAs a distributor of advanced machinery and consumables, SST understands the unique challenges of today’s tool, die and mold applications. Its experienced process engineers and technologists deliver the highest caliber manufacturing systems to support customers in their pursuit of excellence.

Slide Products, Inc.Booth #126 www.slideproducts.comSlide Products offers a full line of processing aids for moldmakers and plastic processors. The Slide line includes tapping fluids, mold cleaners, rust preventives, specialty lubricants, mold releases and purging compounds. Free samples and technical support are available by visiting Slide's booth. Slide works with a national network of local stocking distributors, providing customers with local support that no other product line offers.

TST Tooling Software TechnologyBooth #211 www.tst-software.comTST Tooling Software Technology, LLC is the master North American distributor of VISI CAD / CAM / CAE and VISI-PEPS Laser/ Wire Software. TST is world renown for the competitive advantage it provides to the tooling industry in the design and manufacture of plastic injection molds, 2D through 5-axis milling, electrode production and others.

ToolingDocs LLCBooth #120 www.toolingdocs.comToolingDocs, a leading authority on mold maintenance, features multi-level maintenance certification training, including for hot runner systems, at its Training Center in Ohio, plus newly expanded training capabilities in Canada, Mexico, South America and the EU. Look for ToolingDocs and its Technology Partners to exhibit along the “Mold Maintenance Highway.”


Industry

Delcam Donates Courses to SkillsUSADelcam has donated over 1,000 Delcam University courses, with a total value close to $300,000, to the SkillsUSA partnership of students, teachers and industry representatives who are working together to ensure that America has a skilled workforce. SkillsUSA is a national organization serving teachers and high school and college students who are preparing for careers in technical, skilled and service occupations, including health occupations and further education. SkillsUSA, which was formerly known as VICA (the Vocational Industrial Clubs of America), helps every student to excel. SkillsUSA programs also help to establish industry standards for job-skill training in the lab and the classroom and to promote community service. SkillsUSA is recognized by the US Department of Education and is cited as a “successful model of an employer-driven youth development training program” by the US Department of Labor. Full details are on the www.skillsusa.org website. SkillsUSA programs include local, state and national competitions, in which students demonstrate occupational and leadership skills. At the annual national-level SkillsUSA Championships, nearly 6,000 students compete in 99 occupational and leadership skill areas. The Delcam University courses will be awarded to the top three participants in the Automated Manufacturing, CNC Milling, CNC Turning and Precision CNC Machining competitions. For more information about Delcam University, visit www.delcamuniversity.com.

Reshoring Initiative® Wins 2014 Manufacturing Leadership AwardThe Reshoring Initiative, led by founder Harry Moser, was honored by Frost & Sullivan’s Manufacturing Leadership Council as one of the winners of the 2014 Manufactur-ing Leadership Awards (ML Awards) in the category of Industry Advocacy. Now in its 10th year, the Manufac-turing Leadership Awards program honors companies and individuals that are shaping the future of global manufacturing. Nominations are entered into 11 catego-ries and are evaluated and scored by a panel of expert judges. The categories are for outstanding projects under-taken and completed by a manufacturing company. “It is an honor to be included in this distinguished group of world-class leaders and companies that are forging new paths for innovation and opportunities in manufacturing. I am personally grateful to the Leadership Council for focusing on the timely and vital topic of reshoring,” said Moser. “The efforts of the Council are helping to improve US competitiveness, thus accelerating reshoring.” The Reshoring Initiative, recognized for its industry-led effort to bring good, well-paying manufacturing jobs back to the United States, assists companies to more accurately assess

their total cost of offshoring and shift collective thinking from ‘offshoring is cheaper’ to ‘local reduces the total cost of ownership.’ To help manufacturers further understand total cost of ownership, the Reshoring Initiative devel-oped the Total Cost of Ownership Estimator™, which is available for free at www.reshorenow.org/TCO_Estima-tor. To learn more about the Reshoring Initiative, visit www.reshorenow.org.

Eisenring Named General Manager at HASCO AmericaHASCO America Inc., a member of the Berndorf Group based in NC, has named René Eisenring as its new general manager. A mechanical engineer graduate born in Switzerland, Eisenring has lived and worked in Europe, Africa and Asia and since 1990, in the US. He brings the under-standing of multiple cultures and languages to HASCO, which will enhance the company’s global strategy. In his last function, Eisenring was responsible for customer sales and service in the field of extrusion and die casting. In his new role, he will bring a wealth of know-how in management, sales and customer service. For further information, visit www.hasco.com.

Surfacetec Opens New FacilitySurfacetec Corp., Franklin Park, IL, recently announced the opening of its new suburban Chicago production facil-ity and corporate headquarters. This new 30,000 sq. ft. facility enhances production capabilities in line with the growing needs of regional and national markets. Per Takao Nagai, CEO, “This milestone represents the culmination of progressive efforts to expand our scope, and scale the expertise and proficiency of our production team to meet increasing market demands of large-scale injection molds and dies for automotive and heavy equipment sectors. These sectors were out of reach at our previous facility. Now, we are positioned to become the regional source for large tool polishing and plating.” Surfacetec’s new facility accommodates large-scale tools with a dedicated 20-ton crane bay and hard-chrome plating capacity for parts up to 12x8x6'. Capabilities for small and medium scale projects, including specialty fasteners and microparts, also have been enhanced with 10-ton and 5-ton overhead cranes and a doubling of polishing workshop capacity. Electroless nickel plating production also has been expanded and now incorporates new high-efficiency process chemistries. For more information, visit www.surfaceteccorp.com.

René Eisenring, General Manager

37www.amba.org

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Hybrid Online Video Courses from Expert TechExpert Technical Training, Comstock Park, MI, is excited to announce it has partnered with Art Hedrick of Dieology to develop and provide a new series of hybrid online video courses beginning April 28, 2014. The new courses will target topics like foundational stamping die knowledge, advanced metal studies and group-oriented leadership training. Each online course provides a full curriculum of video lessons and testing materials. This easy-to-use system tracks progress and can provide participants with immedi-ate access to lessons and guides, as well as standardize document and procedure management. For a full listing of the courses available along with a description of each course, follow this link: http://experttechdieology.yolasite.com/ or contact Jon Chaney at Expert Technical Training for registration information at [email protected] or 616.785.5733. For more information on Expert Techni-cal’s training and education solutions for mold building companies, visit www.expert-technical.com.

M&M Tooling Installs Horizontal Machining CenterM&M Tooling recently installed a Mazak H-630 horizontal machining center, which will allow the company to better serve its customers and complement its business of build-ing custom mold bases. The installation further will allow M&M to keep all mold base building operations in-house, resulting in better scheduling flexibility and quality control. For more information, visit www.mmtooling.com.

INCOE Appoints General Manager for MI Headquarters INCOE Corporation USA, Troy, MI, recently announced the promotion of Kurt Curtis from his current position of director of global manufacturing to INCOE North America general manager. Curtis is assuming respon-sibility of all operations at INCOE’s North American facilities and will provide leadership and direction for INCOE’s North American division to achieve its business objectives for long-term, sustainable growth and profitability. In his new role, Curtis will report directly to Bob Hoff, president of INCOE. “Kurt has consis-tently demonstrated his extensive knowledge of manage-rial and operational experience during his 29 years with INCOE. INCOE’s management team and I have no doubt Kurt will continue to exhibit his strengths as a leader in his new role as general manager of INCOE’s North American operations,” stated Hoff. Curtis joined INCOE in 1985 and has worked in several areas of the company during this time. For more information, visit www.incoe.com.

Kurt Curtis, INCOE North America General Manager


Strategies

Enacted in 1981 by the Economic Recovery Tax Act, the Credit for Increasing Research Activities [also known as the Research & Experimentation (R&E) or Research & Develop-ment (R&D) tax credit] rewards companies for the develop-ment or improvement of its products, processes, techniques, formulas, inventions or software applications.

As a temporary provision of the Internal Revenue Code, the R&D tax credit enjoys bi-partisan support and is one of the most lobbied tax provisions of the Internal Revenue Code. The credit has expired over a dozen times and is regularly reinstated on a retro-active basis as part of various “tax extenders” packages1.

The R&D tax credit is a dollar-for-dollar credit against the taxpayer’s federal income tax liability. Taxpayers benefit from the deduction in the year the expenditure is paid or incurred (or subsequent amortization expenditure in the event the taxpayer elects to capitalize its research costs for federal income tax purposes) and by claiming the credit2.

Approximately 35 states also have incentives for research and development, based upon the federal definition of quali-fied research. The various state R&D tax credits range from 1.5 percent to 40 percent of the eligible research expen-ditures, with some states requiring taxable income as a prerequisite for utilizing the credit and others refunding any unused credit to the taxpayer irrespective of the existence of taxable income. Each state has its own requirements, and state credits are only eligible for research conducted within the respective state.

Eligible research activities and its applicability to mold buildersThe R&D tax credit is calculated based upon the expendi-tures attributed to a taxpayer’s qualified research activities. There are four basic requirements for a qualified research activity. The activities outlined below go beyond the labora-tory and R&D departments and demonstrate how compa-nies’ engineering, quality and production departments engage in or directly support qualified research activities. The following overview discusses the requirements and how these activities apply to a typical mold builder:

1. Development or Improvement of a Business ComponentIn order for an activity to qualify, mold builders must be developing a new business component or improving an exist-ing business component that is held for sale, lease or license, or used by the taxpayer in its trade or business. Business components are defined as products, processes, techniques, formulas, inventions or software applications.

Applicability to Mold Builders:

Generally, mold builders are in the trade or business of manufacturing new molds to meet their customers’ specifi-cations. In order to do so, they may assist their customers in developing alternative mold designs to evaluate or improve manufacturability; develop specialized fixturing or other tooling related to the manufacturing process; develop and test new mold designs; experiment with different alloys or materials of construction or invest in advanced machinery to expand upon machining capabilities. Many times, these products or processes qualify as business components and the development and testing of these business components may qualify as a research activity.

2. Eliminating uncertainty that is technological in natureIn order for an activity to qualify, the research must be undertaken for the purpose of eliminating technological uncertainty concerning the development or improvement of a business component.

Uncertainty exists if the information available to the taxpayer does not establish the capability of developing or improving the business component, the methodology of developing or improving the business component or the appropriate design of the business component.

Taxpayers are not required to be seeking information that exceeds, expands or refines the common knowledge of skilled professionals in the particular field of science or engineering in which the taxpayer is performing the research. Rather, taxpayers may rely upon existing engineering principles in order to solve the technological uncertainty. Thus, multiple design alternatives may establish the uncertainty required.

Tax Breaking the Mold: R&D Tax Credits for Mold Builders

By Michael J. Devereux II, CPA, Mueller Prost PC

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Mold builders are rarely provided with the information necessary to produce a mold to specifications. They are, sometimes, provided with a mold design, and it’s the mold builder’s responsibility to develop a manufacturing process that will produce a mold that meets the customers’ speci-fications. The development and testing of this process is regularly the focus of many mold builders’ research activities.

Clearly, the process of experimentation employed by mold builders relies upon the engineering sciences. Thus, the development of the new processes or improvements to exist-ing processes is technological in nature.

3. Qualified purpose of researchIn order for a research activity to qualify, the research must relate to new or improved functionality, performance, reliability or quality.


Strategies


A mold builder’s research efforts often relate to improved functionality, performance, reliability or quality. For example, during the development process, a mold builder may develop numerous hypotheses regarding, but not limited to, the following activities:

• Development of new mold designs

• Development of specialized fixturing or other tooling

• Development of prototypes or models (including computer-generated models)

• Automation of manufacturing processes

• Development or testing of new concepts or technology

• Implementation of robotics or production logic control (PLC) programming

• Streamlining or improving production or manufactur-ing processes to achieve higher standards in quality and productivity

• Performance of certification testing

4. Process of experimentationIn order for an activity to qualify, a taxpayer must elimi-nate technological uncertainty by engaging in a process of experimentation. Treasury regulations define a process of experimentation as modeling, simulation or systematic trial and error.


After hypothesizing one or more of the above develop-ments or improvements, a process of experimentation would commence to determine whether the hypotheses could be proven and integrated into the design. Frequently, this exper-

imentation is not limited to the research of just one of the aforementioned alternatives, but extended to several alterna-tives as decisions related to one development or improve-ment often lead to a design conflict with another develop-ment or improvement.

Frequently, mold builders rely upon CAD modeling and systematic trial and error, often in the form of prototype (First Article) construction and testing. These activities regularly qualify for the R&D tax credit.

In reviewing the four requirements of a qualified research activity, it is apparent that mold builders engage in qualified research in the course of business operations.

Employees across numerous departments may be engaging in or supporting qualified research activities. For instance, the following activities may meet the definition of qualified research activities:

• New mold design using computer-aided design (CAD) software

• Prototyping using 3-D printing and/or SLAs

• Experimenting with part-specific PLC programming

• Experimenting with new core technology

• Improving manufacturing processes through automation

• Developing or designing new, part-specific fixturing

• Performing First Article inspections on new molds

It is important to note that while Congress wished to reward companies for investing in research and development, it did not intend on all activities associated with its research to be credit-eligible activities. Therefore, the Internal Revenue Code and its regulations disallow the following activities:

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Strategies

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• Research after the taxpayer has proved the function-ality of a new product

• Adaptation of an existing business component to a particular customer’s requirement or need where the research is not aimed at improving the business component’s functionality, quality, performance or reliability

• Duplication or reverse engineering of an existing business component

• Surveys, studies, market research, routine data collec-tion or routine quality control

• Research conducted outside of the United States

• Research in the social sciences, arts or humanities

• Research funded by grants, contracts or otherwise by another person3

On September 5, 2013, the Treasury Department issued proposed regulations clarifying numerous concepts related to research and experimental expenditures. These treasury regulations are applicable for all tax years.

The most notable clarification provides that if expenditures qualify as research or experimental expenditures, it is irrel-evant whether a resulting product is ultimately sold or used in the taxpayer’s trade or business. This provision may have tremendous impact for mold builders. For instance, taxpay-ers may be able to include labor and supplies (materials) used in the construction of a novel, unique, one-of-a-kind pilot model (mold) if the design is still uncertain at the time of the mold construction.

Documentation is keyTaxpayers claiming the credit must capture information necessary to prove that qualified research is taking place, while connecting the employees that perform qualified research to the activities themselves. Business documents that many mold builders already prepare as part of the engineering or reporting systems are the best place to begin. Many times, these documents – including, but not limited to, drawings, iterative designs, pictures, notes, emails and meeting minutes – create nexus to the employees perform-ing or supporting qualified research.

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Stategies

The R&D tax credit may provide a competitive edge to companies investing significant resources in the develop-ment or improvement of its products or processes. Taxpay-ers that have not claimed the credit in the past should review prior years’ tax returns to determine whether amending its US income tax returns is warranted. Taxpay-ers already claiming the credit should periodically review its credit methodology, documentation supporting the research expenditures, and the underlying activities to ensure it is claiming the proper amount of R&D tax credit. This approach is prudent to ensure that taxpayers are in line with the IRS’ documentation requirements, recent court cases and ever-changing treasury regulations.

Mike Devereux is Mueller Prost PC’s director of manu-facturing and distribution services, located in St. Louis, MO. His primary focus is on the R&D tax credit

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More info: www.erowa.comWith EROWA, the machine operator has the production cell under control at all times.With EROWA, the machine operator has the production cell under control at all times.With EROWA, the machine operator has the production cell under control at all times.With EROWA, the machine operator has the production cell under control at all times.With EROWA, the machine operator has the production cell under control at all times.With EROWA, the machine operator has the production cell under control at all times.With EROWA, the machine operator has the production cell under control at all times.With EROWA, the machine operator has the production cell under control at all times.With EROWA, the machine operator has the production cell under control at all times.With EROWA, the machine operator has the production cell under control at all times.With EROWA, the machine operator has the production cell under control at all times.With EROWA, the machine operator has the production cell under control at all times.With EROWA, the machine operator has the production cell under control at all times.

Stategies

and other tax incentives available to manufacturers. Mueller Prost’s Tax Incentives Group is nationally recognized and has assisted hundreds of companies in the manufactur-ing sector identify and utilize these incentives. For more information, contact Mike Devereux at 314.862.2070 or via email at [email protected].

1The R&D tax credit is currently eligible for research expen-ditures incurred on or before December 31, 2013. On April 3, 2014, the Senate Finance Committee reported a bill out of committee to extend (retro-actively) the credit for two years, through December 31, 2015.

2Depending upon whether the taxpayer claims the credit on its originally filed income tax return, the taxpayer may be required to reduce its research expenditures by the amount of the credit.

3Amounts payable under any agreement that are contingent on the success of the research and thus considered to be paid for the product or result of the research are not treated as fund[ed]. Treasury regulation §1.41-4A(d)(1).

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


AD INDEX

Ad IndexA. 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Inside Front CoverRocklin Manufacturing Co. ........................................www.rocklinmanufacturingco.com ...........................................45 SCHMOLZ + BICKENBACH USA, Inc. ..................www.schmolz-bickenbach.us ....................................................31Superior Die Set Corporation ......................................www.superiordieset.com ...........................................................39Ultra Polishing Inc. .....................................................www.ultrapolishing.com ...........................................................19Wisconsin Engraving Co. Inc. / Unitex ......................www.wi-engraving.com ............................................................45YRC ............................................................................www.yrc.com ............................................................................39

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