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The BBC initiative also allows Mack to leverage its product design and development, sourcing, and quality management services.
Plastics molder answers offshore competitors by focusing on large, complex products and services
For many manufacturers, complexity is the enemy. But at Mack Molding Co., it’s a growth strategy that is paying off handsomely.
Ten years ago, 1,700-employee Mack saw its business begin to shrink when its computer and business equipment OEM customers began to look offshore for lower-cost parts. That’s when CEO Don Kendall decided to revamp Mack’s business model, beefing up manufacturing services such as supply management, quality management, and product design and development. Mack also sought to diversify its customer base, focusing on product categories that would be difficult for offshore manufacturers to dominate, such as medical equipment and large, complex products with lots of parts.
The strategy is working. Since 2000, Mack has grown its medical manufacturing sales from 1% of overall sales to 32.5% in 2010. And Mack expects the percentage to jump to 40% by 2012. The company is also growing and adding employees. In recognition of its successful reboot, Mack received a 2011 PM100 Award for Business Model Mastery.
The latest prong in Mack’s strategy to respond to offshore competition is what the company calls its Big, Bulky, Complex (BBC) initiative. The idea is to specialize in the design and production of large, painted parts and products that would be very difficult for customers to source and ship from offshore manufacturers. Besides reducing exposure to offshore competition, the BBC initiative would also allow Mack to leverage its product design and development, sourcing, and quality management services.
The BBC push has led to several contracts calling for Mack to produce large, complex products, including mail sorters for Pitney Bowes and solar-powered municipal trash compactors for BigBelly Solar Inc. (a 2009 PM100 Award winner).
An example of the company’s successful BBC strategy is a Next Generation Blender product that Mack is producing for F’real Foods LLC. The 100-pound blender, used by consumers in retail stores to whip up F’real frozen drinks, is a self-cleaning, mobile-enabled device that incorporates 400 parts from 63 suppliers and includes a 22-inch LCD touch screen. Besides manufacturing the device, Mack does all the sourcing and provides upfront design-for-manufacturability studies.
To date, BBC products such as the F’real blender have grown to represent 39% of Mack’s sales. They, along with the PM100 Award, also reflect Mack’s resilience.
Says Jeff Somple, Mack’s president for northern operations, “Winning the PM100 Award validates Mack’s credentials as a top-class American manufacturer worthy of standing shoulder-to-shoulder with some of this country’s best.”