Small-scale parts add up to big success for Accumold
Roger Hargens glances around the small-parts production floor and smiles in satisfaction as he hears the chaotic roar of automated machinery turning out thousands of intricately designed plastic parts.
“We like to keep the process moving all the time, to keep the cost down,” said Hargens, president and CEO of Accumold Corp., raising his voice a bit above the din.
Located on Southeast Oralabor Road near the Interstate 35 interchange, the company designs and manufactures molded plastic parts to the exacting standards required in high-tech products ranging from jetliners and hand-held wireless devices to fiber-optic systems and hearing aids.
Already a key outsourcing destination for a number of Fortune 150 companies, Accumold is currently negotiating several large contracts that could quickly propel it from less than $10 million in annual revenues currently to more than $100 million in annual sales, Hargens said.
Founded in 1985 by a small group of Central Iowa investors, Accumold is one of a handful of U.S. companies that can design, tool and produce the type of micro parts that are so small that their details can be examined only under a specialized microscope.
The company, which currently has 62 employees, weathered a slump in the electronics industry in the past few years and is now seeking higher visibility in the industries it supplies, which include the military-aerospace, medical technology, telecommunications, automotive and general electronics industries.
“The No. 1 challenge we’ve had is visibility in the marketplace,” said Hargens, who recently returned from an automotive show in Detroit highighting the use of microelectronics in the industry. “We’re now going to the trade shows, doing the print advertising and mailings; doing the things to get our visibility where it needs to be.”
Late last year, Accumold attained ISO 9001-2000 certification, an internationally recognized benchmark for companies that maintain high-quality manufacturing standards. The recognition has resulted in a corresponding uptick in business and has brought several more large companies to the company’s door.
Seventy percent of Accumold’s sales are overseas, to companies with operations in Mexico, Costa Rica, Ireland, Japan, Taiwan and Malaysia. Within the past several years, its markets have expanded to Germany, Hungary and China.
“Some of our major customers now are in China; we ship almost weekly to China,” Hargens said. “It’s a niche market of super-small parts that at this time we’re able to provide that they can’t.”
Though it has some U.S. competitors, most of Accumold’s competitors are major companies producing parts for their own products in-house that Accumold could more economically produce, he said. Handling those companies’ outsourcing needs will be a key area for fuure growth, and Accumold is positioned to fill that need, Hargens said.
The company’s staff of five engineers and 17 toolmakers design and build all of the molds used, as well as the highly automated production machines, including 37 micromolding machines that use proprietary processes developed by the company.
“The largest area that helps us to be competitive is our ability to automate all of our processes right here in-house,” Hargens said. “The automation is what’s key to our success both short and long term, so our customers can get into production quickly and maintain a very competitive price over the long term.”
Prices of components vary from 1 cent per part to about $8 for highly specialized assemblies.
Accumold operates 24 hours a day on three shifts and ships products out seven days a week. Many of its operators receive their initial training through Des Moines Area Community College’s tool and die program and begin working in the production areas at $10 an hour, with the ability to move up to toolmaker positions that pay as much as $25 hourly.
“They’re one of the top tooling places around in terms of how nice it can be,” said Mark Rosenberry, one of three tool and die instructors at DMACC. “We like to take our students out there and show them what they can do.”
More than 50 percent of Accumold’s toolmakers graduated from the two-year DMACC program, Rosenberry said. “And usually two or three of our students are working out there.”
DMACC’s program typically graduates about 10 students a year, and there are currently more tool and die positions available statewide than people to fill them, he said.
“One problem is recognition,” he said. “Not many people know what tool and die is. I don’t think people realize how much business is out there. Almost every manufacturing place has machinists that keep it working.”
The employees’ education continues through the company, which provides on-the-job training, generally advancing production workers to toolmakers within two years. Additionally, nearly all of the employees have completed courses in “lean management,” a philosophy of continual process improvement embraced by many manufacturers.
Accumold, which more than three years ago relocated to the 38,000-square building that it designed, recently purchased adjoining land that gives it 15 acres on which to grow. Its plans include expanding the building in three phases as production demand increases.
“The growth plans for our company are significant,” Hargens said. “We’re working on seven major contracts right now; any one of those could cause us to add one or two additional buildings very quickly.” The largest potential contract would give the company orders for design and production of 1.2 billion parts per year, on a multiyear basis.
“We see the highest growth areas being the medical component sector, as well as the military-aerospace leading the way,” he said. “Automotive sensors has had steady growth for us as well. Both the general electronics and fiber optics sectors are continuing to improve.”