Demands continue to pile up
Die suppliers feel pressure to cut leadtimes and keep prices down.
By Associate Editor Jorina Fontelera -- Converting Magazine, 3/1/2005
Looking back five to 10 years ago, die makers and suppliers had a chance to breathe between the time when they received an order and when they shipped the product. Today, breathing is considered a luxury. Before, manufacturers and suppliers were given an average of four days to deliver dies—now they only have two.
"The thing I'm running into now with the customers is that they don't care if it's $80 more as long as they can have it tomorrow," said Marv Neubauer, cutting die specialist at Jamestown Container Cos. (Falconer, NY). "It's a service. The first one to get there is the first one that's going to get the account."
Companies have had to restructure their days in order to meet the demand. Shops need to run for 24 hours, manufacturers need to upgrade their tools to be faster. It used to be that the skilled operations took place on the first and second shift and the third shift was to just keep things moving until the shop opened up again, said Jim Brieg, sales manager at Lederle Machine Co. (Pacific, MO). "Now there's no stopping throughout the day."
And no one has slowed down. Converters felt the pressure to output products faster, so in turn put the pressure on suppliers to provide them with the materials more quickly. The demand for better, more durable products at faster delivery times and lower costs worked their way down from the consumers all the way to the die makers. Everyone needed to speed up while keeping quality top notch just to stay even with demand.
Suppliers have had a hard enough time making the product ready for delivery. Many also have had to worry about the time it takes for the product to leave the plant and arrive at the converter. As the marketplace grew from nationwide to worldwide, manufacturers and suppliers have had to adjust for the distance their product is traveling.
"Now it's an international marketplace and that's caused us to be much more than just a diemaker," said Lyle Archer, president of Chicago Cutting Die. "We have to collaborate with these people. There's language issues, shipping issues and support issues that we have to overcome. We have found that, in some cases, we not only have to make the tool but also be involved with producing the equipment that the tool runs on so that it runs efficiently and properly."
However, the challenges have given die makers the opportunity to make more and better dies, and business has been growing. Some die suppliers have even looked beyond their core business of box and label makers for more revenue, which was certainly needed to offset the increased cost of steel in the last two years.
"It's definitely taken a bite out of our bottom line, no doubt about it," said Bob Potratz, sales manager at Action Rotary Die (Addison, IL). "We work closely with our suppliers and they've drawn the line to a degree, but at some point you gotta bite the bullet."
By becoming more efficient, rotary diecutting suppliers have tried to spare their customers from the sting of rising costs. Tony Lewandowski, general manager at Graphic Solutions International said that they have not been affected by the price increase. Although pursuing the use of flexible diecutters for its pressure sensitive labels, the Burr Ridge, IL-based converter is still using solid steel rotary dies as its primary diecutting medium.
"Our (rotary diecutters), because we're narrow web, are not that expensive relative to the cost of steel or availability of steel," Lewandowski said. "For us it's not an issue. For someone doing wide web, a solid die is going to be very expensive."
Some suppliers noticed that converters are buying attachments instead of full dies to save money. Others have turned to using flexible dies instead of the more expensive solid steel dies. However, there has been a split in opinion as to the durability and ability of a flexible die versus a steel die. Many doubted the flexible die's ability to cut substrates beyond those used in narrow-web label applications and its resistance to abrasive materials. Another issue people have had with flexible dies was the fact that they have a shorter life than that of solid steel dies. Others, however, praised their precision.
"New tough and thinner materials require high-precision flexible dies with very tight tolerances," said Frank Hasselberg, executive vice president at Kocher + Beck (Shawnee, KS). "Those tolerances can only be achieved with a fully automated manufacturing process. Solid rotary dies are still mostly hand sharpened to this day and it is impossible to hold those required tolerances with a manual step in the work process."
Although the industry has been torn between using flexible dies and solid steel dies, all have agreed that this technology is something to be considered. "(Flexible dies) may become (a trend) if everyone is looking at it, we're all going to start (making flexible dies). Eventually it's going to come into play if (customers are) going to continue the downward pressure on our prices," Brieg said.
Currently flexible dies seem to be somewhat of a threat to the solid steel die industry, since many diemakers are still dealing with the increased costs of steel. However, the industry may be back to what it was like in 2001, when steel prices reached a 20-year low of about $200 to $325 per ton. According to "Manufacturing and Steel Prices," a paper by Peter Morici, a professor at the University of Maryland at College Park, steel prices hit a 24-year high in the third quarter of 2004. The sudden spike in prices occurred in 2003 when steel cost about $300 to $400 per ton and kept rising until it hit its high of about $550 to $700 per ton in 2004. But prices have already begun to fall, decreasing by more than 15 percent from September 2004 to January 2005.
While it seems like steel costs will be temporarily taken off the plate of demands suppliers get from their customers, many more may be added. Converters are looking for improved accuracy and quicker set-ups and run speeds with their diecutters. In order to meet these demands, diemakers must refine the dies they are currently making.
"Some of the future technology will be derived by further applying advanced technology of today," said James Smithwick, vp manufacturing and engineering for Container Graphics Corp. (Cary, NC). "Some will come from refinement of technology and innovation. The change should be exciting. Hopefully, when it comes, our ways of today will look crude."

















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