|HK Plastics Engineering Designs its Own Competitive Advantage|
|by Dianna Brodine|
|Profile Summer 2012|
What began as the passion of a German immigrant became a rapidly growing enterprise with the addition of three sons driven to succeed in their own right. HK Plastics Engineering, Oceanside, CA, is now a top medical molding facility, a creator of its own enterprise resource system and a patent-holder for a highly efficient cleanroom molding system.
Family Provides Solid Base for Success
After 15 years as vice president of manufacturing for Schneider Engineering and Tool Corporation (Setco), Horst started HK Plastics Engineering, Inc. in 1974. He had $2,000 in savings, and he obtained the machines for his new business by trading mold work with companies willing to part with equipment. His determination was aided in 1982 by the addition of son Peter Krippner, currently CFO of HK Plastics, to the team of 15 employees. In 1990, sons Gerry and Ron also joined the business. Gerry Krippner had obtained a degree in mechanical engineering, and Ron’s degree was in marketing. The varied career interests of Horst’s three sons merged into the perfect storm of education and experience needed to take HK Plastics to another level.
Up to this point, the company had been successful in both moldmaking and precision-turned products. With three brothers looking to forge the business into a company that could sustain all of their families, an initial investment in injection molding equipment was made. “Initially, we purchased our first injection molding machine to test our molds and provide first-article parts for the tools we were building,” explained Ron Krippner, vice president for HK Plastics. “Our customers then asked how much it would cost to provide production parts, and it grew into this vertically integrated offering.”
Gerry, current president of HK Plastics, added, “There were three of us now coming back to work at the company, and we brought a new vision. We added computer CAD, CNC machining and a different way of doing quality control. Molding was a natural outcropping of the drive we had to expand HK’s impact.”
Today, the company has 140 employees, and 31 TOYO injection molding machines ranging from 35-500 tons populate the molding floor. Eighty percent of its business is in medical molding, and recent months have posted record shipments ranging from 15-20 million parts per month. These parts include syringes, biopsy devices, nebulizer parts, orthopedic bracing devices, diagnostic housings and medical packaging for the dental market. HK Plastics also produces products for industries as varied as aerospace, consumer packaging, electronics and sporting goods.
“Looking back, we were such a small little company that I can’t believe the three of us came back to work here,” said Gerry. “The company had 15 employees and a million dollars in sales. If we hadn’t grown, it would have been very difficult to have three partners involved in the company.”
While Horst is retired, he still comes in every day and often heads home at noon, carrying inserts or metal pieces. “He’s a toolmaker at heart,” Gerry explained, “so his favorite thing to do is take a job that we said would take a couple of days, tinker with it at the shop at his home and then have it back to us in the morning with a smile on his face.”
Building from the Ground Up
“We were able to incorporate many features in the construction of the building with custom molding in mind,” explained Ron. “Water, air, electricity and raw materials are fed to the machines under the floor. This eliminates piping and hoses running all around your production area.” With a concentration in medical molding, the visually clean look was important when impressing customers with concerns about particulate contamination.
The building also accommodates an overhead crane, which adds additional efficiencies and reduces the machinery needed to switch molds from the larger machines. For even more visual impact and increased natural lighting, the manufacturing area contains 38 skylights.
The unique look and feel doesn’t stop on the manufacturing floor. “When you walk into the building, there’s a glass storefront between the quality assurance area and the lobby,” Ron described. “And when you walk out through the lobby into the office area, the floor is raw concrete with a clear-coat sealing. We wanted our manufacturing floor to be nicer than our office floor.”
“All of these things show a little bit of our style and our personality, but also our seriousness in building a different type of place,” said Gerry. “We wanted to stand out in terms of the look and the feel of our business, and you can’t do that unless you’re building your own facility. Many people walk through our shop and say ‘this is the nicest operation I have ever seen.’ We love hearing that, and we work hard to avoid complacency.”
HepaCell Brings New Standards in Quality
However, the real game-changer is the HepaCell, invented and patented by HK Plastics. “We’ve always done a bit of medical molding,” Ron said, “but before the HepaCell, medical device revenue was 15-20 percent. The development of the HepaCell catapulted us into major growth in that arena.”
When HK Plastics sought to add cleanroom manufacturing services, the company’s analysis of the status quo led it to create an entirely new type of process for clean molding. Most custom molders build dedicated cleanrooms to target medical molding customers. HK Plastics evaluated the alternatives and developed a solution in-house which is less costly, more flexible and significantly more effective than traditional fixed cleanrooms.
“When we were looking at adding a clean room, we thought about how the entire volume of air inside that room has to be cleaned,” explained Gerry. “You might have eight or ten Hepa filters covering a 10,000-sq-ft room. You end up cleaning air that never sees the plastic part, not to mention the gowning and the maintenance in changing filters. We felt we could develop a better system.”
The result was the HK HepaCell, a patented process that allows HK Plastics to mold products in a Class 100 (per Federal Standard 209E) or ISO Class 5 (per ISO 14644-1) environment. Producing 99 percent cleaner air than a typical molding cleanroom, the HepaCell is portable and can be run on any machine. “We developed a system that produced clean air, so that only clean air would touch the molded part,” said Gerry. “Imagine the volume of air that is around a plastic part from the time a mold opens up through when the part falls down into a chute. Now we have one Hepa filter cleaning that small volume of air, rather than multiple Hepa filters cleaning hundreds or thousands of cubic feet of air in a room.”
The results are impressive. “When we started, we had to have a customer willing to take a chance on the process. That customer has obtained particulate bio-burden studies from batches we’ve sent them over the past seven years, and we have never failed particulate level standards,” said Gerry.
HK Management System Offers Superior Costing
The system began as a database to keep track of part numbers and revision levels,” said Gerry, who created the system. “Once that data was in a database, we started determining other ways to use the information – quality control, pricing and quoting.” The last item to be added to the system was customer order control. Once it started managing HK Plastics’ customer orders and machine scheduling, it became the company’s ERP system.
“The attraction for us was that anytime we wanted to do something, we could do it ourselves,” Gerry said. “My favorite thing is when someone comes in from the shop and says, ‘My job would be easier if the system could do this.’ Sometimes these are five minutes changes, and sometimes they take longer, but now we have a system that was developed by us to mimic the way we do things, rather than changing our methods to work with a third-party system.”
HK Plastics believes one of the primary benefits resulting from its internally developed management system is a superior costing method. “We know what the gross margin is on every part we manufacture,” Ron explained, “so we can price using a target gross profit as opposed to using a machine rate calculation.” In addition, no licensing is necessary, so 45 computers in the shop can access the software with no software, renewal or upgrade fees.
HK Plastics continually evaluates its ERP options, but so far has concluded that its proprietary software provides everything the company needs.
Vertical Integration and Automation Combine for Future
In 2010, HK added its first TOYO ET-45 VR2 all-electric vertical injection molding machine, allowing the company to quote high-volume insert molding projects. HK Plastics also works closely with its sister company, HK Precision Turning and Machining, to procure custom parts for the insert molding process, allowing HK to be a single-source supplier for its customers. In addition to molding, HK Plastics offers laser welding, sonic welding, gluing and pad printing.
The goal in all things is to create a process that serves the customer from start to finish with a high degree of technology- and knowledge-based advances. “We call it systems molding,” explained Gerry, “but it’s more about creating cells that use automation.” Ron added, “We’re an innovative shop, and we like to think outside the box in terms of a challenge. The more our company can do that, the more excited we are about the future.”