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Innovation at

MEP Group – 08

Abhishek Pandey
Ajay Kamani
Deepak Chowdhary
Amruth Jamula
Madan P
Company Overview
• 5th Largest Custom Injection molder in the world. Largest in Non-Automotive domain.
• Fully aligned to customer needs with most of the plants near to vital customer locations
• Vastly decentralized organization
• Each Plant works as an company with a board of directors, usually the managers of the site
• Only SALES team is centralized reporting to HQ

Healthcare

Nypro’s 03 Divisions
Electronics

Consumer
Worldwide Locations
Background
• Started as a small molder
• Gordan Lankton joined in 1962 and changed strategy to Target large scale molding jobs
• Due to change in strategy, drop in customer base, but customer revenue increased from $60000 to
$4 M
• High Volume Low Variety jobs are targeted, Low volume high variety jobs are sub-contracted

Strategy
• Provide Custom molding and process innovation through continues improvement
• Progress through conflict. Innovation is a result of completion.
• Need to retain innovative resources in the company
• Plant works closely with customers during the entire lifecycle.
• New innovations are implemented across the company
Financial Details
(Dollars In 1,000s) July 2,1994 July 3,1993 June 27,1992 June 29,1991
Net sales 1,65,983 1,35,829 1,19,856 1,00,201
Cost of sales 1,26,512 1,04,810 93,832 78,215
Gross profit 39,471 31,019 26,024 21,986
Expenses:
Selling 7,244 6,826 5,978 5,546
General and admin. 16,807 11,481 9,972 8,035
Research and development 2,705 2,415 1,793 1,005
26,756 20,722 17,743 14,586
Operating profit 12,715 10,297 8,281 7,400
Other income (expense):
Other income, net 1,699 1,001 1,114 1,616
Interest expense -1,502 -846 -978 -1,216
Interest income 450 260 417 515
Equity in net income of unconsolidated 605 464 202 -864
aff iliates
Minority interests in (income) losses -77 -97 -13 152
of consolidated subsidiaries
1,175 782 742 203
Income before taxes 13,890 11,700 9,508 7,603
Income taxes -3,064 -3,194 -3,002 -2,450
Net Income 10,826 8,506 6,506 5,153

Net Profit / Sales 6.5% 6.3% 5.4% 5.1%


Operating Efficiency 7.7% 7.6% 6.9% 7.4%
Team Structures
1. Development Team
Benchmarking (responsible for Product idea & process
innovation)

• Nypro Engineers
• Engineer from Customer

2. Continues Improvements Team


(Responsible for continues improvement for
products under productions)

• Manufacturing
Plant Performance reports are • Quality
released on Quarterly Basis
• Material Procurement
• Marketing
• Reps from customer for similar functions
NovaPlast
• Cost Effective, Short run, low volume Production Machine
• Ultimate Quality, high precision molding
• Short lead time Cost Comparison of Nestal Vs NovaPlast
• 1 MINUTE mold change
• JIT Deliveries Nestal NovaPlast
Capital Cost 100 50
Benefits Tooling 100 25 – 30

• Suitable for Prototyping, product development Setup Time 100 <1


• Scope of Ramp up to high-Volume Production Run Time 100 50
• Low capital investment Staffing 100 20
• Concurrent engineering

Huge Improvement in Cost by implementation


Current Situation
• Several other molders have improved their processes and are giving stiff competition
to Nypro
• As per marketing team feedback, customers are becoming more demanding on
delivery timings.
• Open market scope for improvement in low volume, high mix, and quick turnaround
injection molds
• Absolutely good revenues and profits Y-O-Y
• Continuously successful in adoption of new technologies/innovation (e.g. Vistakon
project, Bi-component molding, clean room, visual factory, MRP, etc.)
• To remain competitive as well as to innovative, Nypro has started to face heat of the
completion. With “NovaPlasts” introduction in the company, Lankton has 03 options
available to him.
Option -1: Setting up a New plant with only NovaPlast machines

Strengths Weaknesses
• Popular with top management • Initial plant setup time could be very

S W
• Can easily provide concentrated high
efforts for single location and • long delivery time and high
measure its success transportation costs
• Easy to incorporate customer
views and feedback
• Managing supply chain at
separate plant would be easier
Opportunities Threats
Emerging demand for product

T
• • Working collaboratively with

O
variety by customers customer from different geography
• Scope for innovation is not possible
• Could provide service to new • Risk against decentralized success
customer with custom designs history
• Shifting focus from process • Marketing scope may get limited
innovation to product innovation across different geography
Option -2 : Install multiple NovaPlast machines at each Nypro plant

Strengths Weaknesses
• Retaining of customers • Resistance to setup of unproven

S W
demanding variety technology
• Living upto its slogan “Nypro is • Non availability of trained staff
your local source for custom • High capital investment
injection molding…worldwide”
• Still retaining decentralization in
the company

Opportunities Threats

T
• Quick response to the emerging • Losing focus due to diversity


market and setting competition in
between the Nypro plants
Increased scope for diversifying
customers from new market
O •
(volume based or variety based)
Resistance to adopt change by
employees

sector like automobile or other


areas
Option -3 : Setting NovaPlast at existing plant and make it successful and then roll out to other plants

Strengths Weaknesses
• Traditionally acceptable and • Conservative approach

S W
proven method in the company.
Easily adaptable
• Better monitoring and review by
top management and then roll
out in phased manner
• Rolling out worldwide could be
done feasibly

Opportunities Threats

T
• Proven customization process • Delayed response to market
would draw immediate attention
of customer
O requirement. May lose customers
Recommendations

Go ahead with Option 02 of implementing NovaPlast machines at each plant

• This will place Nypro at a unique position to cater to Large Volume as well
as low Volume products
• Scope of increase / regain customers lost during strategic shift to target
large Volumes
• Additionally all engineers across all plants would get a changes to exploit
NovaPlast for further innovations
• Further push to CLOSE-TO-CUSTOMER strategy
Thank You